Last night, a national movement to create public banks had its eyes on the city of Los Angeles, where a down-ballot initiative, if passed, would have paved the way for the country’s second-largest city to explore the creation of a municipal bank, which advocates say could save taxpayers money by redirecting the interest the city pays to Wall Street bondholder to investments in infrastructure, housing and other local priorities.
But by a decisive 58 percent, L.A. city voted against Measure B and decided against asking the city to amend its charter to allow it to operate a municipal financial institution. The bank proposal was billed by advocates as a socially and environmentally responsible alternative to the large banks whose risky investments contributed to the financial crisis in 2008.
“Most voters vote ‘no’ on initiatives, which is not a bad instinct,” said David Jette, legislative director of Public Bank LA, the advocacy organization that has bootstrapped the campaign for Measure B. Jette, whose day job is financing tech start-ups, was sipping beer at The Old Chalet, a bar in the Eagle Rock neighborhood of Los Angeles, where a group of millennial-age activists had gathered to wait for election results.
A long list of endorsements, including from Mayor Eric Garcetti and L.A. Council President Herb Wesson, and the $44,643 that the Yes on B campaign committee raised in support of the measure, proved inadequate to the task of convincing Angelenos to vote for the charter amendment. Still, supporters noted that victories do not always come right away and celebrated the growth in awareness of public banking since the start of the campaign in July.
Los Angeles advocates will work next with public bank supporters in Oakland, San Francisco and other California cities to pass state legislation that would pave the way for the formation of public banks, according to Trinity Tran, co-founder of Public Bank LA.
“Public banking presents a real, viable solution to Wall Street and it’s an idea that isn’t going to go away,” she wrote in an email on Wednesday morning.
Copyright Capital & Main
Election 2018: A California Reckoning
Our reporters analyze how a dozen key congressional races and ballot measures played out.
CA-48: Harley Rouda Leads Dana Rohrabacher in Orange County Squeaker
The election of 2018 has fundamentally changed the comfortable district’s politics, engaging voters who either sat out previous elections or voted without thinking too hard.
You might say 2018 is the year Rep. Dana Rohrabacher became notorious. Not that he wasn’t well-known before: Rohrabacher’s political life has been riven with controversy, including a check-kiting scandal and an open alliance with disgraced lobbyist Jack Abramoff. But until now, none of it seemed to matter: His coastal Orange County constituents have elected him for 15 consecutive terms through three rounds of redistricting, always by healthy-to-landslide margins.
Then came Trump, Russia and Robert Mueller. The special counsel’s investigation of Russia’s interference in the 2016 election put an uncomfortable spotlight on the former Reagan speechwriter and his longstanding affection for the Kremlin. Last May, The New York Times revealed that the congressman even has a code name.
Rohrabacher’s hold over his district continued to weaken. Despite opposing the 2017 tax cuts — crafted by his Republican colleagues but unpopular in his upper-middle-class district — Rohrabacher secured less than a third of the vote in the June top-two primary. Democrats feared that their votes would be too diluted among eight candidates to grab a berth in the general election, but businessman Harley Rouda finished second, securing a spot for the Dems. Subsequent events — including a spoof documentary by Sacha Baron-Cohen in which Rohrabacher seemed to endorse arming school children — eroded the incumbent’s popularity even more.
By the time the polls closed in California Tuesday night and Rouda pulled ever so slightly ahead, the U.S. House of Representatives was firmly within the Democratic Party’s grasp for the first time since 2010. To some, Rouda’s apparent 1.4 percentage-point win (the race had not been officially called at press time) might have been anti-climactic. Not so for activist Bethany Webb, who has spent every Tuesday afternoon since January 2017 protesting on the idyllic promenade in front of Rohrabacher’s Huntington Beach office. “There are so many of us who have been on the ground working so hard for so long,” she says. “To us, it means everything.”
Even putting aside Rouda’s success, Webb says, the election of 2018 has fundamentally changed the comfortable district’s politics, engaging voters who either sat out previous elections or voted without thinking too hard. “Many, many more people know who their congressperson is, know who their assemblyperson is — their sheriff, their D.A. We think 2020 could be even better.”
Copyright Capital & Main
California’s Schools Chief Race Remains Too Close to Call
Assemblymember Tony Thurmond has gained a slender edge over his opponent, former charter school operator and businessman Marshall Tuck, who is making his second try for state schools chief.
UPDATE, Nov. 14: Late-ballot counting has given Tony Thurmond a significant lead over Marshall Tuck. According to the California Secretary of State’s website, Thurmond is currently ahead of Tuck by 73,188 votes.
It began as a referendum on California public education and concluded as the most expensive schools race in history. As of Wednesday morning, the election of a new California Superintendent of Public Instruction was too close to call.
In California, where about 30 to 40 percent of mail-in ballots are typically still en route on election night, a clear winner now hinges on the U.S. Postal Service and a tally of provisional ballots over the coming days.
Though the nonpartisan race featured two ostensibly liberal Democratic challengers vying for an influential, albeit “soft power” job as head of the California Department of Education, the candidates campaigned from opposite sides of a vast ideological divide. Progressive Assemblymember and former social worker Tony Thurmond, who was backed by teachers and around $13 million in union independent expenditures, ran as a champion of low-income families and as the best bet for traditional neighborhood public schools, operating in fiscally strained districts, to get the resources they need to succeed. (Disclosure: Teachers unions that supported Thurmond are financial supporters of this website.)
Former charter school operator and businessman Marshall Tuck was making his second try for state schools chief after being defeated by incumbent Tom Torlakson in 2014 by some 260,000 votes. In that race, Tuck’s embrace of charter schools and the Vergara v. California lawsuit’s attack against teacher workplace protections earned him the support of the charter school lobby — and a then-record breaking $10.4 million in super PAC spending by some “school choice” billionaires. This time out, two billionaire PACs upped that ante to a titanic $28.8 million, which together with a strategy of appealing to Republicans and the California Trump base, today gives Tuck a 1.4 percent edge over Thurmond.
Even should Tuck ultimately prevail, it will put him at odds with much of the K-12 education agenda of governor-elect Gavin Newsom, who campaigned on a pledge of greater charter accountability and transparency. During the primary season, Newsom earned the bitter enmity of the charter industry by supporting curbs on its unregulated proliferation. With nearly 1,300 schools and a deregulation climate that has invited fraud and been likened to the Wild West, California is already the largest charter state in the nation, albeit with little unambiguous evidence that the schools are delivering promised equity for the state’s most disadvantaged students.
Copyright Capital & Main
Proposition 10: Was California’s Rent Control Fight Worth the Blood, Sweat and Cash?
Even in defeat, tenant advocates say their campaign brought new organizing energy and new allies who will help with upcoming battles to strengthen renter protections.
Proposition 10’s decisive defeat on Tuesday came as no surprise to anyone who had been observing the rent-control measure’s declining popularity in the polls in recent weeks. By Election Day, wealthy real estate interests had dropped a cool $76 million on the No campaign, worried that the ballot initiative threatened their bottom lines.
Tenant advocates, nonetheless, say that the campaign brought new organizing energy and new allies who will help with upcoming battles to strengthen renter protections and preserve affordable housing legislation in Sacramento and at the local level.
“We now have tens of thousands more people in the state who have learned about rent control, who have been part of the campaign to win and are outraged at what they see as the buying of the vote by Wall Street corporations that are taking over our housing market,” said Amy Schur of the Alliance of Californians for Community Empowerment (ACCE), a non-profit community organization that organizes tenants throughout the state.
“We’re coming out this campaign with a much broader coalition,” added Schur, pointing to endorsements of Proposition 10 by the California Democratic Party, the American Civil Liberties Union and the Sierra Club.
“Los Angeles is . . . a hotbed of tenant activism,” Randy Shaw, director of San Francisco’s Tenderloin Housing Clinic, acknowledged in Beyond Chron, the publication he edits. “There’s a reason Mayor Garcetti, the Los Angeles City Council and . . . L.A. Board of Supervisors all endorsed Prop. 10: pressure from the city’s tenants’ movement made it happen.”
The Yes campaign was outspent three-to-one and outvoted by a 62-to-38 percent margin. The measure would have repealed the 23-year-old Costa-Hawkins Rental Housing Act, which restricts a local government’s ability to apply rent control to post-1995 construction and exempts single-family homes from regulation.
The main source of financial support for the Yes on 10 campaign was Michael Weinstein, president of the AIDS Healthcare Foundation, who has shown himself willing to finance costly statewide initiatives that have taken on powerful interests groups, including drug companies, against all odds and have failed to gain passage.
Massive “No” spending wasn’t the only challenge to the campaign.
Having to run a “Yes” campaign is always hard, says Parke Skelton, a veteran Pasadena-based campaign consultant who, in 1980, managed a statewide campaign to beat back a ballot measure, sponsored by landlords, that was intended to curb rent control statewide. “You don’t have to defeat it on the merits. You just have to confuse people, and they vote no,” said Skelton.
That’s what the No campaign did with ads that portrayed the ballot measure as a threat to military veterans and homeowners’ property values – issues that have little to do with the much more complex debate around rent control.
Skelton remains skeptical that Costa-Hawkins’ repeal, which would simply free up cities to adopt more expansive rent control policies than currently are allowed under state law, can be attacked through voter initiatives because, he says, the law’s rollback would impact too few voters and provide benefits too far in the future. “The history of passing rent control by initiative in California is pretty spotty anyway. You really can only do it in jurisdictions that are majority renter,” he added.
But the fundamentals that drove the campaign and that make California’s high cost of living such a central issue for so many Californians have not changed. The increase in rent has been outpacing the growth in income over the last decade, more than half the state’s renters pay 30 percent of their income toward housing costs, and the increasingly visible homeless population that has ballooned in recent years has been attributed to increasing rents.
Shaw also points to support garnered from labor for the measure that can help with a legislative agenda to protect tenants, and proposes a return to the ballot “with another tenant-related measure” in 2020.
Copyright Capital & Main
Proposition 6: California Keeps Its Gas Tax — And Infrastructure Repairs
Decades of ballot-box budgeting and artificial constraints on lawmakers’ authority have created a kind of vice grip around Sacramento. With Prop. 6 the voters decided not to tighten the screws.
By soundly defeating Proposition 6 by more than 10 points, California voters decided to let the legislature govern for once. Funding for the state’s decaying roads, highways and transit systems will not be wiped out, a year after the popularly elected legislature collectively decided, by a super-majority, to modestly increase gas and vehicle taxes to pay for it. Moreover, the voters decided that the legislature should keep the responsibility of determining gas and vehicle taxes, rather than taking over that responsibility themselves.
Conservatives explicitly put Prop. 6 on the ballot to boost votes for Republican members of Congress – a tactic that appears to not have worked, as at least three and maybe four California House seats will flip to Democrats once all votes are counted. There’s anger in conservative circles over “misleading” ballot language that is perfectly accurate; indeed, Prop. 6 would have “eliminate[d] road repair and transportation funding by repealing revenues dedicated for those purposes.” Conservatives may not like it when dedicated taxes that fund something specific are described as… dedicated taxes that fund something specific, but that doesn’t mean the rest of us have to indulge them.
That’s what public investment is: We pay collectively to maintain the common resources we all use. This will result in over 68,000 annual jobs from 6,500 infrastructure projects, and indirect economic benefits from the improvements. Just as important, a tax measure decided by the legislature will stand. Decades of ballot-box budgeting and artificial constraints on lawmakers’ authority have created a kind of vice grip around Sacramento; with Prop. 6 the voters decided not to tighten the screws.
We should go further. It shouldn’t take two-thirds of our elected representatives to make the routine decision to tax, and only a simple majority to cut programs. That wrongly biases a state that regularly votes for activist government toward austerity.
Copyright Capital & Main
CA-45: Katie Porter Pulls Ahead of Incumbent Mimi Walters
On Election Night the incumbent, a former investment banker who sounded all the GOP notes, enjoyed a slight edge. But as of November 13, her Democratic challenge has pulled ahead with a slim lead.
UPDATED November 13: Continued ballot counting by the Orange County Registrar of Voters tonight shows Democratic challenger Katie Porter passing two-term Congresswoman Mimi Walters in the race to represent the 45th District in the House. Porter currently has a 261-vote lead.
Since she emerged from the June primary as the Democratic challenger in the race to represent California’s 45th District in the U.S. House of Representatives, Katie Porter cut a careful path through the issues dividing her typically conservative inland Orange County district. She hit her opponent, incumbent Republican Rep. Mimi Walters, hard on her ties to the National Rifle Association, on her many votes to repeal the Affordable Care Act, on her ties to President Trump. She played up hard Walters’ support for a new federal tax law that might end up costing many of her mostly upscale constituents money.
But she also supported Proposition 6, a state ballot measure that would have repealed the 12-cent gas tax levied to raise money for road repairs and transportation. Republicans had used the gas tax to cut short the state Senate tenure of at least one Orange County politician, Josh Newman. Porter, who called the tax “regressive,” knew that supporting the tax could pre-empt her political career altogether.
Will it be enough? As of Wednesday afternoon, Walters was leading her progressive challenger by more than three points. It might also have been too much: Porter’s Medicare-for-all, common-sense gun law, anti-tax reform message may have galvanized the liberal base in the traditionally conservative district, bringing out college students and Latino voters who might otherwise have stayed home. But many voters rejected the law professor’s egalitarian agenda and stuck with Walters, a former investment banker who sounded all the GOP notes on the immigrant threat and Nancy Pelosi’s socialism. In a district Trump lost by five points, Walters’ margin looks decisive if it holds.
Decisive, but not necessarily auspicious, says Alexa Macias, a political science professor at California State University, Northridge who leads a nonpartisan research team that studies and polls the district. “In her last race Mimi won by 17 points,” Macias says. In Walters’ first race two years earlier, she won by slightly more than 30 points. “Her margin has gotten narrower and narrower in every race,” Macias says. “That’s not what you expect from an incumbent that has not had a scandal.”
Win or lose, Macias says, Porter’s candidacy has established a beachhead. In the past, Republican candidates in the region haven’t faced much of a challenge, knowing all too well the reality of the area’s political tilt. This year, Porter was one of five primary candidates to line up for the chance to challenge an incumbent. “She’s opened the field to better and better candidates,” Macias says. “Mimi can expect 2020 to be even closer.”
Capital & Main
CA-49: A GOP District Realigns With Democrats After Mike Levin Victory
Republican Diane Harkey ended her dispirited campaign by attempting to distance herself from Trump’s personality but supporting him on “substance.”
Was the victory of Democrat Mike Levin in the 49th Congressional District race a decisive one? It seems so. Levin’s roughly seven point victory over Republican Diane Harkey might make newcomers to the district – running from southern Orange County down the coast to northern San Diego – wonder how Republicans have dominated that stretch of California for so long.
Demographic shifts explain part of what happened. Educated high-tech workers have moved into the area, and Levin targeted Latinos and women in this “year of the woman.” Levin was also blessed with a weak opponent plagued by her husband’s financial scandals.
But perhaps something beyond political math was also taking place. Decades ago political scientist Walter Dean Burnham worried that American political parties had deteriorated to such an extent that they could not deal with critical national and international issues. Burnham lamented the decline in voting participation, particularly among the lower classes, and trained his analytical eye on “realignment” elections that led to durable shifts in political coalitions and public policy. The results in the 49th district could be such a realignment where a general political crisis can force a breakthrough and renewal.
One sign of how much has changed in the 49th is that Levin brought Bernie Sanders to campaign with him in the final week of the campaign, a risk in what most political observers regard as a “centrist” district. Sander’s message denouncing the state of our health care system and the cost of higher education is neither scary nor politically costly when it resonates with the realities of so many people’s lives.
Harkey ended her dispirited campaign by attempting to distance herself from Trump’s personality but supporting him on “substance,” meaning the “booming” economy she said he created.
For many voters, the “substance” now is their aesthetic and existential disgust at how President Trump is attempting to re-create our country.
The current battle may lead to the rebuilding of a political force on the progressive side that is able to fight more effectively by forging broader, more sustainable coalitions. That rebuilding is certainly under way in the 49th Congressional District.
Copyright Capital & Main
Proposition 5: Real Estate Industry’s Tax-Break Measure Stopped in Its Tracks
The failure of this homeowners’ tax-break measure might have been predictable–its creators didn’t mount much of a campaign, and evidently left it for dead.
Proposition 5 sunk at the polls Tuesday night with a 57 percent No vote. It had gotten little notice in the recent welter of ballot propositions– even though it had everything to do with two California obsessions—taxes and housing.
State homeowners over 55, or who are disabled, are currently entitled to a onetime opportunity to transfer the property tax set by 1978’s Proposition 13 when they sell their home.
Prop. 5 would have expanded that tax break—making it transportable no matter how many moves and no matter the price of the new property. Someone wealthy enough to purchase beach-front property would still have artificially fixed low tax rates.
The California Realtors Association qualified Prop. 5 for the ballot and backed it with $13, 204,875—chump change in the world of California initiative politics.
Yes on Prop. 5 and No on Proposition 10 were prominent on the C.A.R website; spending on the soundly defeated Prop. 10, which would have expanded local governments’ ability to enact rent control, exceeded $45 million.
A California State Legislative Analyst’s report shows 85,000 homeowners 55 years or older sell property and move without extra tax enticements that drain state revenues and projected Prop. 5 would have drained $1 billion annually from schools and local government budgets.
Proponents tried to play the housing-shortage card, arguing that Prop. 5 would create more home ownership opportunities by increasing the sale of existing homes as previous owners move on.
“It would be a generous thing to say that Prop. 5 has anything to do with addressing the housing crisis,” Chris Hoene of the California Budget and Policy Center told Capital & Main. “The Realtors Association has tried to say that this will help with housing mobility but the economists and the housing experts agree that it won’t.”
Media representatives for Prop. 5 did not respond to requests for interview or to e-mailed questions.
But its failure might have been predictable–any campaign strategist will tell you it’s easier to get voters to mark “no” when confused or unsure. The industry itself didn’t mount much of a campaign, qualifying the measure but then evidently leaving it for dead to concentrate money on defeating Prop. 10.
Real estate interests evidently anticipated Prop. 5’s electoral failure—in October the Secretary of State’s office cleared a modified version of the 2018 model for circulation for the 2020 ballot. It’ll have company: A 2020 measure, potentially threatening to real estate interests, seeks to assess commercial and industrial property taxes at current market values rather than keeping them at low Proposition 13 levels.
Copyright Capital & Main
CA-10: AP Calls Election for Josh Harder Over Republican Incumbent
Four-term Central Valley Congressman Jeff Denham appears to have been defeated after a week of ballot counting.
UPDATE, Nov. 13: The Associated Press tonight has declared Democratic challenger Josh Harder to be the winner over GOP incumbent Jeff Denham in the hard-fought 10th District race. According to AP, “With votes continuing to be counted, Harder’s edge has grown after Denham grabbed a slim lead on Election Day. After the latest update, Harder had a 4,919-vote lead out of about 185,000 votes counted, a margin too large for the congressman to overcome with remaining votes.”
A TV ad
A TV adfor incumbent Republican Congressman Jeff Denham stated that his Democratic challenger Josh Harder “shares Nancy Pelosi’s liberal San Francisco values.” The ad, running in the Sacramento media market and on digital platforms throughout California’s 10th District, went on to state that Harder, if victorious, would leave residents of this Central Valley district with dramatically worse health care options.
It was a puzzling claim, considering Denham voted with his party to repeal the Affordable Care Act, or Obamacare, several times, and voted for the Republican replacement, the unpopular American Health Care Act.
As of Wednesday morning, Jeff Denham clung to a lead of 50.6 percent of the vote, with Harder claiming 49.4 percent. While 100 percent of precincts had reported, the race had not been called, pending the counting of mail-in and provisional ballots. Democratic activists said enthusiasm and campaign cash were up. Harder raised more than $7 million in this cycle to Denham’s $4.4 million.
Back in February, most of the volunteer canvassers trying to boost Democratic registration in Modesto, the heart of the district, were from the Bay Area. They said they had driven east to turn this purplish district solid blue. CA-10, which voted for Hillary Clinton by three points in 2016 while giving Denham a similar margin of victory, was one of the top Democratic targets for flipping in 2018.
Whether Denham or Harder end up winning, the trend of people relocating from the pricey Bay Area could end up re-shaping the electorate in the district. New research from BuildZoom and the Terner Center for Housing Innovation at the University of California, Berkeley shows a growing connection between the Bay Area and its neighbor to the east, CA-10. “More than 55 percent of Bay Area out-migrants in households earning less than $50,000 a year stayed in California, [heading to] more affordable markets, such as the Sacramento region or Central Valley metro areas, like Modesto or Fresno,” the study said.
Copyright Capital & Main
CA-21: Valadao’s Win Defies Demographics and Democratic Headwinds
Incumbent David Valadao grew up in the district, and has given unwavering support to agribusiness interests, a very important position in this largely agricultural region.
California’s 21st District seemed like a plausible target to flip from red to blue in 2018 even though incumbent Republican Congressman David Valadao had beaten his Democratic challenger Emelio Huerta by 13 points in 2016. Hillary Clinton handily carried the district, and the demographics also looked good for a Democrat. The district is 71 percent Latino, a group that gave Clinton 66 percent of its vote nationwide two years ago. Republicans account for 27 percent of registered voters in CA-21, 16 points lower than Democratic registration. According to the political forecasting site FiveThirtyEight, Valadao voted with Trump policies nearly 99 percent of the time.
Despite those headwinds for Valadao, and visits from Obama, former Vice President Joe Biden and Lt. Gov. Gavin Newsom, Democratic challenger TJ Cox fell far short. By early Wednesday, Valadao claimed 53.7 percent of the vote to 46.3 percent for Cox with provisional and mail-in ballots still to be counted.
Throughout the campaign, Cox was on the offensive, blasting Valadao’s votes for the unpopular Republican tax reform bill, and the even more unpopular American Health Care Act (ACHA) or “Trumpcare.”
Valadao claimed the Republican tax plan saved families thousands of dollars in a district with a far lower median household income than California as a whole. He also touted his willingness to break from Trump in a failed attempt at immigration reform earlier this year.
Valadao’s strong ties to the district may have given him an advantage. A dairy farmer, small-business owner and son of Portuguese immigrants, Valadao grew up in the district, and has given unwavering support to agribusiness interests, a very important position in this largely agricultural region. Cox, an engineer who has never held elected office, owns a home just outside the district in Fresno and earlier in the election cycle claimed a home in suburban Washington, D.C. as his principal residence.
Capital & Main
A Come-From-Behind Win for Tony Thurmond?
Philanthropic Sector Leader Aaron Dorfman Joins Capital & Main Board of Directors
ICE’s Stealth Campaign to Expand Its Budget
Randy Shaw on Los Angeles’ Lost Housing Generation
Los Angeles Renters Fight Back to Keep Their Pets — and Homes
Reed Hastings: Netflix CEO Goes Nuclear on Public Schools
Feds Charge Violent Neo-Nazis — But Orange County D.A. Only Charges One of Their Victims
Drug Users Fight for Acceptance in California’s Deep North
Energy Giants Choose Nuclear Option in Election’s Biggest Fight Over Fossil Fuel
Will New York Fund Amazon Subsidies or Student Debt Relief?
Central American Caravan: Militia Members Head for the Border
Video: Rising Rents Force a Choice Between Eating or Shelter
A Law Ending Cash Bail Gives Judges Enormous Power Over Defendants
Video: Los Angeles Rejects Spy Program
Video: Make California Hate Again
- Labor & EconomyNovember 16, 2017
Robert Reich on Trump’s ‘Dangerous Tax Bill’
- Labor & EconomyNovember 20, 2017
Saving Private Enterprise: Director Jacob Kornbluth on His New Robert Reich Film
- Judging JanusNovember 16, 2017
Judging Janus: Organizing 79 Million Millennials
- Labor & EconomyAugust 29, 2018
Ohio, NJ and California Pension Funds Invested $885 Million in Hedge Fund That Controls National Enquirer Parent
- Judging JanusNovember 17, 2017
Judging Janus: What Happens to California’s Progressive Legislation?
- Labor & EconomyNovember 30, 2017
How the GOP Tax Bill Would Hurt Californians
- EnvironmentNovember 22, 2017
Study Shows Limits of Cap-And-Trade in California
- Labor & EconomyDecember 20, 2017
How a Reporter Got a Corker of a Scoop About the GOP’s Tax Bill