1. Move forward with early childhood education. A recent analysis reports that California’s children are behind before they even enter Kindergarten.
2. Make more moves toward universal health care. In the recent election cycle health care was a central issue — and candidate Gavin Newsom promised to make single-payer coverage a reality for Californians.
3. Lay the groundwork for a broader conceptualization of portable employment benefits that can go between jobs in an economy in which job-churning has become the norm.
4. Begin changing the rules by which we can raise taxes. California doesn’t have an inheritance tax or an oil extraction tax; it does have Proposition 13, passed in 1978, which requires a two-thirds majority vote to raise state or local revenues through taxes.
5. With an aging population we need a more caring economy — more family-leaning benefits for people who want to provide care for their elders.
6. Keep racial equity and economic equity in view at all times. We need to ensure that labor opportunities not only propel people into middle-class jobs, but also that they’re reducing racial disparities.
7. Plan ahead for an economy in which there may be fewer jobs due to technology and artificial intelligence.
8. Put some real resources into a major expansion of the state earned income tax credit. It’s a proven program that helps low-income working families.
9. Stabilize funding for the state’s community colleges. There’s good evidence that these institutions can be very effective if workers and students can get to them and get through their programs — but they’ve really suffered from underfunding.
10. Set the standard for what it means to live in a well-off country. California’s actions don’t only affect people who live here, but also how the rest of the country understands what should be done, and what kind of society we want to live in.
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The Tests Facing California’s New Governor
In one month Gavin Newsom will lead the state with the nation’s biggest economy and largest population — and one riven by economic inequality. What will be his most important challenges?
Gavin Newsom inherits a state that should be any governor’s dream: A California that is the cradle of the tech revolution and brims with prosperity, a one-party state with supermajorities in both chambers for Newsom’s Democrats. But there are clouds darkening the horizon: Daily prophecies tell of coming economic storms; legislative initiatives taken on behalf of immigrants, retirement security and the stemming of global warming are increasingly thwarted by a bellicose White House. And that Democratic Party monopoly in Sacramento masks a deepening ideological fault line dividing pro-business moderates and progressives – the latter of which have largely chafed for the last 16 years under the thrifty administrations of Jerry Brown and Arnold Schwarzenegger, and are eager to burst out with far-reaching (if pricey) legislation.
Then, there are memories of three high-riding liberal governors (Pat and Jerry Brown, and Gray Davis) whose programs or careers were derailed by resentful taxpayers. There are more recent memories, too: Of an impulsive, hard-partying San Francisco mayor whose blunted ambitions led him to spend eight years in the ceremonial wilderness of the lieutenant governor’s office. Newsom is said to have matured into a more circumspect, pragmatic politician, although some of the old doubts were fanned back to life by an unflattering New Yorker profile that appeared shortly before his landslide victory November 6.
Perhaps overriding all these auguries is the undeniable fact that despite its enviable economy, its abundance of billionaires-in-residence and laudable array of social services, California still has the highest poverty rate in the U.S., nearly half of its children live in poverty or near-poverty, and merely finding an affordable place to live has become an existential challenge for many. These and similar factors superimpose on the state another kind of fault line, that of economic inequality. Most of the new governor’s time will be spent wrangling crises that spring from this disparity. Which is why, in this week’s new series about the problems faced by Newsom, Capital & Main primarily focuses on the inequality that separates so many Californians from one another.
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Can Newsom Make a Dent in California’s Affordable Housing Crisis?
Most experts don’t believe that the governor-elect’s target of creating 3.5 million new units by 2025 is achievable. Still, they are energized by his bold plans.
Newsom may not be able to slay the housing hydra during his tenure as governor, but he has advantages over Governor Jerry Brown.
Governor-elect Gavin Newsom made tackling California’s housing and homelessness crisis a centerpiece of his campaign, and set a goal of adding 3.5 million units to the state’s supply of housing by 2025.
“You have to be bold as this problem is big,” candidate Newsom told attendees at a conference held by affordable housing advocates in March.
As mayor of San Francisco, Newsom vowed to end homelessness in 10 years. His controversial “Care Not Cash” program—approved by voters in 2002—repurposed welfare grants to fund the construction of thousands of new supportive housing units for homeless San Franciscans, but homelessness in the city persists.
Still, housing advocates appear energized by the prospect of a new administration bent on addressing the state’s housing emergency.
“[Governor] Jerry Brown never really wanted to be involved in trying to negotiate deals around housing development,” says Randy Shaw, author of Generation Priced Out. Shaw’s book blames the housing crunch in U.S. cities, in part, on wealth-hoarding baby boomers who regularly fight new housing proposals that they fear will alter the character of their neighborhood, as well as lower their property values.
Advocates say the new governor can use his bully pulpit to support affordable house — and to build on 15 housing bills Jerry Brown signed in 2017.
California’s housing crisis could be viewed as a hydra whose many heads separately represent the failure to build enough housing to match the growing number of jobs in the state, historic underfunding of affordable housing, limited land availability, lengthy approval processes, local governments with little political or financial incentives to plan for more housing and inadequate protections for tenants who have not seen wages keep pace with rising rents.
Newsom may not be able to slay the beast during his tenure as governor. The crisis has been decades in the making, and solving it may take just as long. But he has advantages over Governor Brown, who faced a $27 billion budget deficit when he began his second stint as governor in 2011. By the end of the fiscal year, California’s “rainy day” surplus fund is expected to reach nearly $14 billion, a sum that nearly matches Kansas’ entire state budget. And in November, voters approved two measures that will provide $6 billion in bond funding to pay for infrastructure and affordable housing, including housing for homeless people with mental health problems. Also, Democrats will go into 2019 holding super-majorities in both houses of the state legislature.
Finally, Newsom can build on a package of 15 housing bills Brown signed in 2017, which Michael Lane, policy director of the Non-profit Housing Association of Northern California (NPH), calls “a down-payment and a first step” toward addressing the state’s housing predicament. The package provides new funding sources for affordable housing construction, as well as a measures to streamline the housing approval process and increase the state’s enforcement power over cites.
So what can Newsom do?
“He can use his bully pulpit,” said State Senator Jim Beall (D-Silicon Valley) and he can “identify his parameters.” Beall spoke to me in mid-November as a four-hour-long committee hearing on California’s affordable housing crisis, held in downtown Los Angeles, was winding down. The real sausage-making will happen in the legislature. “[Newsom] wants to move pretty quick,” said Beall, who foresees a package of bills emerging by June, although that may prove to be an optimistic timeline.
State Sen. Wiener’s controversial Transit Zoning bill won over millennials but took a beating from enviros and others. A new version has been introduced.
What will that package include? Talk to housing advocates long enough and the subject of State Senator Scott Wiener’s recent, failed bill to encourage mid-rise apartment development around transit hubs surfaces. The bill drew condemnation from local governments and environmentalists concerned that it was a blunt instrument that stripped localities of planning authority. It was also opposed by equity advocates who decried the lack of tenant protections in the bill and feared it would lead to more gentrification and the demolition of existing affordable housing around transit stops. His Senate Bill 827 drew support from tech industry leaders and a burgeoning movement of pro-housing millennial activists.
Newsom said in March he supported the intent of Wiener’s so-called Transit Zoning Bill. In general, home-building around train and bus stations could account for as much as half of the new housing units generated in the state by 2025, according to the McKinsey Global Institute study that inspired Newsom’s housing goal. From an environmental perspective, such development is also preferable to sprawl, especially if occupants of those new homes actually use public transportation. The redevelopment of the Hollywood neighborhood, which gained three new Metro stops almost two decades ago, provides a cautionary tale. The investment in the area boosted property values, but displaced low-income renters and led to a 32 percent decrease in households without a car, according to a 2012 study.
Wiener, whose bill died an early death in committee in April, has brought it back in the form of SB 50, and this time he appears to be consulting with a broader range of stakeholders.
“There’s a fundamental problem with people in the Capitol deciding what works best in a particular neighborhood in Los Angeles.”
Kathryn Phillips, director of Sierra Club California, supports Wiener’s goal of encouraging development near bus stops and train stations, but says she “wouldn’t start out with Scott’s bill.” Rather, she prefers legislation that is “more incentive based.”
“There’s a fundamental problem with people in the Capitol deciding from here what works best in a particular neighborhood in Los Angeles, and that was one of the problems you saw with the Wiener bill,” she adds.
But Joan Ling, a former non-profit housing developer who teaches at the University of California, Los Angeles’ Luskin School of Public Affairs, disagrees that local governments always know best. She testified at the mid-November State Senate hearing that they have squandered their chances to build housing under the current rules. “We’ve been 40 years [of] not zoning enough to provide housing for our population at the local level,” she told the hearing. Ling believes a new bill that ensures the development of homes near transit hubs while also protecting vulnerable communities is possible.
Ling tempered the sense of urgency felt by housing advocates like herself with a note of caution, however. “We need to craft policies that do no harm, particularly to low-income and minority communities who have borne the side effects of well-intentioned policies,” she said.
For Shaw, the author of Generation Priced Out, that means “upzoning,” or allowing for denser development primarily in neighborhoods that are already upscale.
“It opens up middle-class housing opportunities in those otherwise off-limits communities without any risk of displacing low-income residents,” writes Shaw, who also directs San Francisco’s Tenderloin Housing Clinic, a provider of supportive housing for homeless adults.
When it comes to encouraging affordable housing, the state must offer some carrot with its stick. “Mandates come down from the state, but all the financing and other tools have been pulled away,” observed NPH’s Lane.
Governor Brown led a successful bid to abolish the state’s local redevelopment agencies upon taking office in 2011. Newsom has promised to revive a version of redevelopment, which was once the second-biggest source of funds for affordable housing, after the federal government. (Under redevelopment, local governments can keep a portion of additional property taxes generated by new development in designated districts.) He also proposes a dramatic increase in the $85 million in annual tax credits that go to developers who invest in housing for low-income residents.
Finally, Newsom has made another bold pledge: to tackle the perverse fiscal incentives that cause cities to chase sales-tax-generating big box stores and car dealerships, instead of zoning land for housing. Residential development offers local governments few rewards in terms of local taxes and typically requires more infrastructure investment. Proposition 13, a 1978 constitutional amendment approved by voters, capped residential property tax rates, one of a handful of funding sources for cities.
“Mayors may claim they care about housing, but mayors really care more about retail because they capture sales tax increment,” Newsom said at the March conference, sponsored by the advocacy group Housing California.
The state must explore ways to make housing development less of a “fiscal loser” for cities, says Lane. “I think if you don’t attack that, then everything else would be… not completely useless, but would be less impactful.”
Of course, incentivizing more home building without a plan to protect tenants and preserve the affordable housing that currently exists could be disastrous for California’s low-income residents.
Coalition for Economic Survival’s executive director Larry Gross points to the city of Los Angeles’ loss of more than 24,000 rent-stabilized housing units since 2001 through evictions sanctioned by the Ellis Act. Under Ellis, landlords can evict tenants if they exit the rental business. The act, passed in 1985, in response to a California Supreme Court case, was intended to help small, mom-and-pop landlords covered by rent control. But advocates say the law has been abused by larger landlords wishing to evict low-income tenants.
“There is no way they can address the affordable housing crisis or the homeless crisis unless they shut off the faucet of what’s pushing people out on the street, and out of their homes, and [the] Ellis Act is one of the main vehicles for that,” says Gross, who hopes to see a repeal, or at least a reform, of the law.
Then there is the contentious question of expanding cities’ abilities to adopt rent control policies. Tenant advocates failed to repeal the Costa-Hawkins Rental Housing Act at the state ballot box in November, leaving in place a decades-old law that prevents cities from applying rent control to post-1995 construction and to the growing number of single-family homes that are rented out by major Wall Street landlords, such as Invitation Homes. Newsom opposed Proposition 10, but not as vociferously as his Democratic Party rival, former Los Angeles Mayor Antonio Villaraigosa, who appeared in ads funded by the No campaign.
Any attempt to expand cities’ capacities to regulate rents is likely to meet with pushback from a real estate industry emboldened by Prop. 10’s lopsided defeat. But the tenant movement has grown in strength and gained new allies in labor and in the environmental movement after its face-off with landlords, who poured almost $80 million in the campaign to defeat the measure.
“That’s where a package of bills comes in, where there is something for everyone,” says Brian Augustus, legislative advocate for the California Rural Legal Assistance Foundation, which supports expanded rent control. He believes strong tenant protections—and expanded funding sources for affordable housing—will require “real estate groups at the table agreeing to some compromise,” he says. “There’s going to have to be some leadership on that.”
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Great Expectations: California’s First Steps Toward Universal Health Care
Gavin Newsom’s gubernatorial campaign was buoyed by his aggressive position on a single-payer system. Now comes the question: How far can–or will–Newsom take it?
Before California sees universal health care coverage, thorny constitutional and tax issues must be resolved. Then there’s the Trump administration.
In September 2017, Lt. Gov. Gavin Newsom stood in front of a crowd of 1,500 nurses in San Francisco and pledged his support for bringing universal health care to California. The nurses, members of the California Nurses Association, were the principal supporters of Senate Bill 562, which sought to replace the state’s patchwork insurance system with a single-payer model in which the state would finance health care for all residents. (Disclosure: The union is a financial supporter of this website.) At the time, the bill was stalled in the Assembly—where it would eventually die—a fact that pleased neither the nurses nor Newsom. “It’s time to move 562 along. It’s time to get it out of committee,” Newsom told the crowd, which triggered a standing ovation.
Newsom capped off his remarks with a promise: “If we can’t get it done next year, you have my firm and absolute commitment as your next governor that I will lead the effort to get it done. We will have universal health care in the state of California.”
During an election year in which health care was a central issue—with GOP threats to the Affordable Care Act (ACA), anxiety about coverage for people with pre-existing conditions, and a renewed push on the left for Medicare for All—Newsom’s campaign was buoyed by his aggressive position on a single-payer system. Speaking about health care to the Los Angeles Times this year, Newsom said that as governor he was “going to push the envelope, lean in on this and see how far we can take it.”
Now comes the question: How far can–or will–Newsom take it?
Advocates and policy experts are optimistic, though they can differ as to the significance of the hurdles the state will face if it attempts to transition to a single-payer system. Among the most bullish is the CNA, whose members crisscrossed the state during the campaign in a red bus with “Nurses Trust Newsom” emblazoned on its sides. “We believe Newsom has the tools and courage to get this done,” said Stephanie Roberson, CNA’s director of government relations. She said that the union will introduce new legislation early next year, modeled largely after SB 562, and that she expects Newsom to be “an enthusiastic partner” in the project.
At times, Newsom has sought to tamp down expectations that his election would lead to a quick victory for single-payer health care.
While Roberson acknowledges that an undertaking as massive as the shift to single-payer will take time, she doesn’t see that as a reason to hold off on passing legislation. “We understand that with big policies we need transition periods built into the bill,” she said. “We are by no means approaching this project thinking that we are going to flip a switch and move to single-payer.”
There are certainly a number of thorny issues to resolve. For starters, says Scott Graves, the research director of the California Budget & Policy Center, a single-payer system will require a “high degree of collaboration” with the federal government. This collaboration could involve changes in U.S. law and waivers signed by the federal government that would allow the state to redirect federal health care funds. Under a Trump administration that has rightly viewed California as a base of resistance, such collaboration is highly unlikely.
There are also potential conflicts with California’s state constitution that would need to be addressed. And, although a single-payer system that would eliminate premiums could eventually result in significant savings to taxpayers, two studies last year estimated that implementation of SB 562 would require new taxes in the range of $100 billion to $200 billion.
The complications of transitioning to a single-payer system don’t mean that it is impossible—or that there isn’t plenty that can be done before California has a willing federal partner.
Passing a hefty tax increase is challenge enough, but there is an additional complication: In 1988, California voters passed Proposition 98, which requires that approximately 40 percent of the state’s general revenue go toward K-12 funding. If new taxes are raised to pay for universal health care, it’s likely that the state’s constitution would mandate that a significant amount of that new revenue flow to education. Fixing this conflict could require a statewide ballot to protect health care taxes from Prop. 98’s requirements.
At times, Newsom has sought to tamp down expectations that his election would lead to a quick victory for single-payer health care. In April, he told the editorial board of the San Francisco Chronicle that the undertaking would require years, and that it was “not an act that would occur by the signature of the next governor,” noting both the federal issues and potential conflicts with the state constitution.
There are still approximately three million uninsured Californians; 1.8 million of those are undocumented immigrants.
But the complications of transitioning to a single-payer system don’t mean that it is impossible—or that there isn’t plenty that can be done before California has a willing federal partner. (The ACA didn’t begin to go into effect until four years after its passage.) The state has already made notable gains in covering its residents: In the last four years, the uninsured rate has dropped from 17.2 percent to 7.2 percent, the largest decrease in the nation. Yet there are still approximately three million uninsured Californians; 1.8 million of those are undocumented immigrants. Newsom has expressed support for expanding Medi-Cal–the state’s version of Medicaid, which provides insurance to low-income residents–to cover undocumented adults. California already covers undocumented youth, and last year, bills were introduced to expand coverage to adults but stalled. Advocates hope that with a new governor championing the expansion, the result next year will be different.
Policy analysts also point to the need to increase affordability for individuals insured under Covered California, the health care exchange created after the passage of the ACA, which could be done by providing additional state subsidies. “There are people out there who don’t have job-based coverage and struggle to afford individual coverage,” says Laurel Lucia, director of the Health Care Program at the University of California, Berkeley’s Labor Center. Lucia notes that this is a particular problem in California, as the ACA doesn’t adjust subsidies based on the cost of living.
Earlier this year, the state set up a council to study how California could move towards what it calls a “unified financing system,” otherwise known as single-payer.
Taken together, these steps—the expansion of Medi-Cal to undocumented adults and increased subsidies from the state—could move California closer to providing universal health care, if not through a single-payer model. “With additional state action and investment, we could get down to one or two percent uninsured, approaching European levels of universality,” said Anthony Wright, the executive director of Health Access, a statewide health care consumer advocacy coalition.
But Wright doesn’t believe that these sorts of improvements should stand in the way of a movement towards a single-payer system. “If we take that vision and goal seriously, we have to take the barriers seriously, including the federal barriers that might be included in the next two years,” he said. “We don’t want the work of taking tangible steps in the next year or two to be in any way an alternative to the broader planning for single-payer. At the same time, that vision should not get in the way of the demand by voters for urgent help now.”
Earlier this year, the state set up a council to study how California could move towards what it calls a “unified financing system,” otherwise known as single-payer. That council will begin meeting in 2019 and is due to deliver its findings by October 2021. But there is hope that Newsom, who will appoint three of the five council members, could push for a speedier timeline.
Whether the California Nurses Association is able to push a new single-payer bill this year, Wright says that he expects Newsom to take “big tangible steps in his first two years” to improve health care access and affordability. “You don’t have the kind of election we just had and say, ‘We’re going to have a planning process and then will maybe do something in several years.’”
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Will California’s New Governor Drop the Hammer on the Fossil-Fuel Industry?
Co-published by Newsweek
So far, Gavin Newsom has only affirmed his support for a ban on hydrofracturing, although activists are hopeful he will be more aggressive on environmental issues than Jerry Brown.
If Newsom intends to brand himself a climate hero, he’ll face fierce political opposition from the state’s redder counties.
Co-published by Newsweek
“The fossil-fuel era is ending, and California is not interested in the boom-or-bust oil economy.” So wrote California Lieutenant Governor Gavin Newsom in a February 7 letter to Kelly Hammerle, national program manager at the federal Bureau of Ocean Energy Management. At issue was the Trump administration’s proposal to resume drilling in federal waters off the California coast, which Newsom, in his role overseeing the State Lands Commission, was determined to quash. Advocates for a clean California economy, however, are hoping that it means even more.
“He’s going to be the pioneer of a thoughtful oil-and-gas phaseout in California,” says Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute. “He’s going to stop approving new oil and gas wells and fossil-fuel projects in California, implementing the safety buffer [around oil and gas wells] that we need to keep communities safe.”
Those goals had long been what climate and environmental justice activists wanted from Gov. Jerry Brown. As Brown began to wrap up his fourth term early this year, pressure from a coalition of environmental groups coalesced around a single campaign, #BrownsLastChance, to urge the governor to begin a “just transition” away from fossil fuels as a final salvo before he leaves office. This transition would involve job training for workers who depend on oil, as well as a blanket denial of future drilling permits, combined with a gradual step-down of fossil-fuel extraction operations in the state.
Decisions about oil-well permitting are mostly made at the local level in Kern County — whence comes roughly three-quarters of the oil California produces.
Despite Siegel’s optimism, Newsom hasn’t explicitly signed on to that campaign’s agenda. So far, he has only affirmed his support for a ban on hydrofracturing, the most controversial method of stimulating stubborn wells to draw out California’s singularly carbon-heavy oil, which is sometimes trapped within rocks that require an injection of sand-and-chemical slurry to access the crude. He also refused donations from the oil industry during his gubernatorial campaign — but so did every other Democratic candidate.
Whether he’ll do what Brown would not, dashing the hopes of the spendy industry lobbyists at the Western States Petroleum Association, and fulfilling the dreams of environmental activists, is still anyone’s guess. And Newsom’s people, both those in his current office of the Lieutenant Governor and among his campaign staff, aren’t talking. (At least not to us.)
If Newsom does intend to brand himself a climate hero, he’ll face fierce political opposition from the state’s redder counties. California oil doesn’t matter much to the state’s overall economy — it accounts for less than three percent of its gross domestic product. But it means a great deal in Kern County, whence comes roughly three-quarters of the oil California produces. The day after the midterm elections, on November 7, the Kern Economic Development Corporation held its annual energy summit in the Bakersfield DoubleTree Hilton.
Newsom could slow down the well-permitting process, denying new applications and requiring that existing ones be subject to environmental reviews.
Though representatives from solar and wind were present — including from one company that builds solar plants for the steam necessary to coax out stubborn oil deposits — most of the room had come from the county’s $14 billion petroleum extraction business, which accounts for fully one-fifth of Kern’s total gross domestic product. A panel of state regulators was asked whether any of them had an inkling about Governor-elect Newsom’s plans. “Newsom has made some interesting comments about the oil and gas industries in his campaign,” said one questioner. “What are your thoughts about which policies he wants to institute or continue?”
Cameron Campbell, the inland district deputy for the state’s Division of Oil, Gas and Geothermal Resources (DOGGR), took care to calm the nerves in the room, and dismissed some of Newsom’s statements on the industry as campaign rhetoric. “Once he’s in office and up to speed, he might think, ‘Oh, jeez, this does have an effect,’” said the former Chevron geologist, who was appointed to the agency by Brown last May. Even if Newsom has no such moment, “One person doesn’t make the change,” Campbell assured his listeners. “Government doesn’t have all the power.”
“Brown fired oil regulators for trying to do the right thing. The first thing Newsom needs to do is to actually start regulating.”
Which is true enough — decisions about well permitting are mostly made at the local level in Kern County, which has independent authority to conduct environmental and land-use reviews. “Although the Division frequently corrects operators’ planned operations to ensure adherence to regulation and best practice, it would be very unusual for the Division to completely deny proposed drilling operations for a physical location already approved by the local land use authority,” wrote James Pierce, senior staff counsel at DOGGR’s parent agency, the Department of Conservation, in a letter to Capital & Main.
Very unusual, but perhaps not impossible. Back in 2011, when Brown infamously fired two state regulators — Derek Chernow, the head of the Department of Conservation, and Elena Miller at DOGGR — he did so because they were exercising oversight over the oil and gas industry according to already existing laws, the California Environmental Quality Act (CEQA) and the federal Safe Drinking Water Act. Those laws require transparency, and for petroleum companies to submit detailed information about their plans. Rather than divulge that information, drillers simply withdrew their permit applications — and complained to the governor, who intervened by installing more sympathetic personnel.
“Newsom could go in and reverse all of that,” says Liza Tucker, consumer advocate at Consumer Watchdog, a California nonprofit that advocates in the public interest. He could start by instituting transparency, granting the public access to information about spills and chemicals. “The public needs to know where there are oil wells and where they’re leaking,” Tucker says. “Don’t just pretend it’s not happening.”
He could also slow down the permit process, denying new applications and requiring that existing ones “actually follow the law” and conduct environmental reviews.
“Brown fired oil regulators for trying to do the right thing,” Tucker says. “The first thing Newsom needs to do is to actually start regulating.”
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The Golden State’s Fight Against Economic Inequality
How can the new administration best help California’s neediest residents?
In his first 100 days as California’s new governor, what programs should Newsom prioritize to create a kind of New Deal against economic inequality? We asked three experts in the fields of inequality and poverty for their ideas. Responses have been edited for length and clarity.
Manuel Pastor, Professor of Sociology and American Studies & Ethnicity at the University of Southern California, where he directs the Program for Environmental and Regional Equity (PERE) and USC’s Center for the Study of Immigrant Integration (CSII). He is the co-author of From Resistance to Renewal: A 12-Step Program For Innovation and Inclusion in the California Economy, and sits on Capital & Main’s board of directors.
What should Gavin Newsom do the first day he wakes up as governor?
Manuel Pastor: It’ll be very important for Newsom to move forward with the early childhood education work that he’s talking about. This will have a lot of support from [State Assembly Speaker] Anthony Rendon, a lot of support from teachers, parents, etc. Probably some support from elements of the business community as well, particularly when they think of future workers.
Another thing that probably needs to be done early on is to start making more moves toward universal health care. One of the firsts would be to make forward progress on insuring access to Medicaid of undocumented Californians – that’s crucial.
I do think that Newsom should begin to lay the groundwork for a broader conceptualization of portable benefits that can go between jobs in an economy in which job-churning has become the norm. Portable savings accounts — there’s a good start on that with the CalSavers program that [State Senator] Kevin de León [introduced]. I [am also for] revamping our unemployment and insurance to be more like wage insurance. Right now unemployment’s low, but it’s because people are taking on multiple jobs in order to get by.
And moving beyond those first 100 days?
There are two big things that Newsom should be thinking about. The first is how do we lay the groundwork to change the rules by which we can raise taxes? We’re locked in by Prop. 13. It’s completely anti-democratic to require a two-thirds vote at a state level to be able to raise taxes. Surely there’s some sort of movement that could happen there.
Newsom is also going to, in the medium term, need to think about how we actually grow jobs in the middle of the economy. If we’re giving everybody early childhood education but we still have an economy that’s generating high-tech jobs on the one side, and low-wage service jobs on the other, what are we educating people for? There needs to be more of an industrial policy strategy to bring advanced manufacturing and good middle-skill jobs to California. Some of that is what Jobs to Move America is doing, by ensuring that the layout of the transit system and purchase of rail cars and new electric buses finds those goods to be manufactured in California.
All of this plays out against a White House that regards both California and immigrants as threats.
In the 1990s, when the California economy was being fundamentally restructured by the de-industrialization prompted by the collapse of defense spending, and then aerospace, we should have been paying attention to what we needed to do. Instead, people were blaming immigrants and affirmative action and people learning Spanish in school. And the same thing is happening at the national level. Which is that racism is being used to distract people from the fundamental challenges.
One of the things that is really crucial to keep in mind is to keep up racial equity and economic equity in the same breath at all times, or we’ll be led astray again. We need to be looking at these policies not only to whether or not they’re propelling people into jobs in the middle class, but whether or not they’re reducing racial disparities.
Newsom will have his hands full from the start with these challenges – but what lies just beyond the horizon of his first year?
In the year 2010, 11 percent of our population was 65 years old or older. By the year 2060, 26 percent of our population will be 65 years old or older. We have an aging population. We’re going to need a more caring economy, meaning more family leaning benefits for people who want to provide care to their elders. And also better working conditions and training for those who will be taking care of those elders. And we’re going to be facing a big challenge here because immigration into California is actually very slow – and that’s been a large part of that workforce. That’s a big issue.
Another big issue is technology, artificial intelligence, and the changing nature and ubiquity of work: Planning ahead for an economy in which there may be fewer jobs — and certainly an economy where there will be more frequent job changes. Planning ahead for an economy that increasingly relies on innovation and not just replication, not just stamping out the same product but inventing new cutting-edge products. What does that mean in terms of where the state’s research and development dollars go? What does that mean in terms of the public benefits from those research and development dollars to support innovation? How does that get threaded with our efforts to address climate change and promote a green economy? There is an immediate need to think long term.
Do you have any personal advice for Newsom?
We like things neatly tied into, “What’s the one thing Gavin can do?” Here is my answer: He better not just do one thing.
What kind of programs should Newsom be looking at?
Ann Stevens: I would pick three areas. First, it would be extremely easy and extremely smart to put some real resources into a major expansion of the state earned income tax credit. It really is a program that works. California is a very high-cost state but we still have a lot of fairly low-wage workers. Taking the federal EITC and adding onto it – making California’s [share] 50 percent of the federal [EITC], or matching the federal, would be kind of revolutionary but also really easy. It’s not complicated to do and everyone understands it.
The second is the state also has an incredible structure with its system of community colleges. There’s good evidence that these institutions can be very effective if workers and students can get to them and get through [their] programs — but they’ve really suffered in terms of funding. Increasing funding and really stabilizing funding to the state’s community colleges, especially if we end up in another recession, is another critical investment.
The third is more traditional, but over the course of the Great Recession the state allowed or chose to let its very basic safety net fall — in particular CalWORKs — and so restoring those grant levels to something that gets a family in short-term need closer to the poverty line is, again, kind of a no-brainer. We’ve reformed welfare so [that] we have work requirements, we have time limits. At the same time we let it dwindle so that it barely provides subsistence income.
Can a new governor tackle the poverty afflicting many undocumented immigrants?
Until there is some change in federal immigration policy, the best the state can do is try to protect [these] populations as best we can — but I don’t think the state can be that effective at moving the dial on the undocumented population as long as we have a really aggressive federal policy.
What happens if income inequality, which affects undocumented immigrants and others on the lowest rungs, isn’t addressed? Are we just stuck with a permanent underclass?
I think the national political moment we’re seeing is a bit of a warning that inequality has unexpected consequences and it can be incredibly polarizing. My own view is that if you’re stuck with it, those problems are going to show up in other places. So for example, single-payer health care and health care in general. As long as you have undocumented people — people who, even despite the expansions, don’t have access to health care — the state and our hospitals and health system will end up paying for that, whether we do something or don’t do something.
How do we motivate our elected leaders to act — through appeals to common sense or moral outrage?
I am not sure moral outrage is effective these days. I would argue there has been a growing consensus at the federal and state levels that the way we should — and can — address poverty is by getting people into work, getting people higher wages. And all of these things I’ve suggested can be tied to people who are taking personal responsibility, people who are in the workforce, or who are trying to get in the workforce. And here is how we can be a partner to those people. Maybe it’s a new New Deal where it’s not just programs that write checks but it’s programs that recognize that even in a healthy economy there are people at the bottom, and we are a state where it’s very hard to live if you’re at the bottom of the earnings distribution.
David Grusky, Professor of Sociology, Senior Fellow at the Stanford Institute for Economic Policy Research, Director of the Stanford Center on Poverty and Inequality, and coeditor of Pathways Magazine. He is the founder of the Cornell University Center for the Study of Inequality and served on California’s State Poverty Task Force.
Can the new governor rely on continuing with the same programs that existed under his predecessor, Jerry Brown?
David Grusky: He should consider some new initiatives. I would think this is something that he ought to want to take on, and we have the tools to take it on. In fact, there’s been a State Poverty Task Force that’s been working for nearly a year trying to cull the best evidence of what works and what doesn’t.
The task force, set up under Assembly Bill 1520, recommends immediately spending $1.6 billion to help poor children in California. Would these new initiatives also entail major investments?
There’s an increasing line of evidence that shows that, although it sounds obvious, money really matters — not just in taking the parents out of poverty but it matters — even more importantly — for their children. [Spending has] long-term downstream consequences for children, when parents have enough money to ensure high-quality health care, to ensure that children are not growing up under stress.
What kind of state is Gavin Newsom taking charge of?
The backdrop here is that we think of California as the land of plenty, and it is, but what is not as well known for those who are from Wisconsin, is that there are highly segregated neighborhoods here with lots of well-off folks — and lots of poverty.
Since most poor families in California are working families — and most poor children come from working families — should Newsom push to raise the minimum wage again?
That wasn’t one of AB 1520’s recommendations, but I think mainly because the task force thought it was outside our charge and effectively covered by other constituencies. My own view is that the evidence on behalf of a higher minimum wage, although not entirely uncomplicated, is on balance very strong. It’s not going to solve all problems but will do a lot of good.
What would we be looking at if Newsom loses this chance to attack inequality — say, because of a new recession or political expediency?
That is a question that I hope he’s asking and that all of us should ask. One of the important roles that California has historically played is being involved in the world. It’s an opportunity to set the standard for what it means to be in a well-off country. But he’s a smart guy, he’s going to resist that pressure.
Can what California does in dealing with inequality be useful elsewhere, or won’t our state’s solutions travel well?
I think that we have a very special role in California. People look to us. Our actions don’t only affect people who live in California, but affect how the rest of the country understands what should be done, and what kind of society do we want to live in. And if California is not leading the way on this issue, who will? We’re gonna lead — I’m confident that we will embrace that role.
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The Early Education of Gavin Newsom
Gavin Newsom’s most dramatic break from the Jerry Brown era is the governor-elect’s fierce commitment to high-quality child care and universal preschool.
A Stanford-PACE analysis found that “California’s children are behind before they enter Kindergarten.”
When Gavin Newsom moves into the governor’s office next month, he will immediately have to confront the continuing legacy of Proposition 13, the 1978 referendum whose property tax cuts have slashed spending on California’s public education. In the 40 years since its passage, class sizes have ballooned while arts, driver ed and afterschool programs have vanished. Newsom will come armed with a cradle-to-career program he calls “California Promise,” which expands and integrates existing programs while making strategic investments in new infrastructure.
Newsom’s most dramatic break from the Jerry Brown era is the governor-elect’s fierce commitment to high quality child care and universal preschool, a product of overcoming his own boyhood dyslexia and a deep appreciation for the pivotal role played by early infancy and the first five years in student achievement and, ultimately, adult success.
A credible and comprehensive plan to recover public education’s promise of putting opportunity within reach of all Californians can’t come too soon for the state’s 6.2 million K-12 students. Getting Down to Facts II, a sweeping collection of prescriptive policy briefs recently published by Stanford University and Policy Analysis for California Education (PACE), found that “California’s children are behind before they enter Kindergarten” and that while California’s students learned at rates equal to or better than the national average, the gap in achievement between low-income and middle-income kids didn’t close.
The election of Newsom may be the most unambiguous sign that Californians have had enough with the damage wrought by Proposition 13.
“I think there are a host of answers [for that], but one of them is that we have not invested substantially in early-childhood programs,” said Stanford education professor Deborah Stipek, a lead researcher on the Stanford-PACE study. “Early childhood has not been Governor Brown’s priority. If we could do it for free, I’m sure it would have been done, but early childhood is competing with K-12, and with the prison system, and with many other demands on state finances.”
The required investment called for turns out to be considerable, at least in terms of California’s rigidly constrained budget. Though Newsom hasn’t released any estimates for the early education package, which includes relatively low-cost prenatal screening, home nurse visits and expanded family leave programs, the nonprofit education site EdSource priced affordable, high-quality child care and universal preschool at roughly $1 billion and $1.97 billion to $2.35 billion per year, respectively.
The election of Newsom as governor and Tony Thurmond as state schools superintendent, who both campaigned on pledges to pause further privatization and double down on public education, may be the most unambiguous sign that Californians have had enough with the damage wrought by Proposition 13 and years of education budget cuts. In the wake of the measure’s passage, California’s seventh place national ranking in per-student spending quickly fell to the bottom third, where it has since languished (one measure put it at 43rd last year).
To surf the Rainbow Wave, Newsom will need to navigate Sacramento’s hazardous budgetary riptides and policy-shredding political reefs.
Meanwhile, child poverty in the state, which rose from 13 to 23 percent during the same four-decade period, became the highest in the nation as a corresponding drop in student performance and rise in English language learners produced the era’s most distinctive feature — the reform-immune achievement gap between Asian and white students on the one hand, and their black and Latino peers on the other.
“I think the public just rejected that neoliberal narrative, that sort of privatization of public resources in education, and of other social problems that we have in California,” said Julian Heilig, professor of Educational Leadership and Policy Studies at California State University Sacramento, and director of CSUS’s Doctorate in Educational Leadership. “Gavin and Thurmond both clearly laid out an agenda that’s community-driven, focusing on solving issues within communities. I think that’s part of the Rainbow Wave that we saw here in California.”
To surf that wave in Sacramento, however, Newsom will need to navigate the capital’s hazardous budgetary riptides and policy-shredding political reefs. The big-ticket components of his broader agenda, which includes tackling what Stanford-PACE says is California’s $25.6 billion public schools funding insufficiency, are especially vulnerable. His campaign pledges to pay for them through overdue tax revenue reforms has already riled neoliberal anti-tax organizations and conservative business groups, who vow an epic fight. Stipek worries that a compromise could leave Californians with preschool-on-the-cheap.
Early clues to how much local autonomy Newsom is prepared to support will be found in his major state board appointments.
“All of the studies that have found long-term benefits were conducted in places where they have very, very high-quality preschool programs,” she noted. “And we could invest a lot in increasing the number of children who can go to preschool, but it may not give us the benefits we want, because we haven’t made a substantial investment. We really need to do both.”
Part of the challenge will be answering the question of how one even defines “quality preschool.” According to Getting Down to Facts, California’s current, dizzyingly complex and uncoordinated system of federal, state and locally funded early-childhood services is riddled with holes and chronic shortages. Child care tends to be prohibitively expensive, and program standards and training requirements are all over the map, with low-income children disproportionately in programs exempted from any standards at all. Wages are so low that nearly 60 percent of child-care workers rely on some form of public assistance, and teacher turnover is consequently high.
So merely creating a cohesive regulatory framework will be a long and politically fraught process. To also make it equitable, insists education professor John Rogers, director of the Institute for Democracy, Education, and Access (IDEA) at the University of California, Los Angeles, requires nuanced conversations about the role and strengths of the community-based educators who are already in place.
“Some of them don’t have advanced degrees but oftentimes know and understand the young people and parents that they’re working with,” he explained. “As the agenda for high-quality preschool moves forward, it’s going to be really important to [include] people that have worked in this field for a long time and have deep roots of care, and affection and love in those communities. Many of them are women of color [who] sustain their communities both through their work and through the fact that they’re getting employed.”
Seeing public schools as “anchors” of healthy communities is at the heart of Newsom’s plan to expand the creation of full-service community schools. The approach has been an unsung game-changer in closing opportunity gaps for California’s highest needs neighborhoods. What isn’t so clear is how far the governor-elect is willing to go in dismantling an increasingly dated barrier to implementing that model.
“It’s time for the state to work on having charter rules and regulations that are explicitly aimed to promote the state’s interest in creating a system that works for all students,” Rogers argued. “Schools should be sites that strengthen the communities in which they reside and then also draw upon [their] strength.”
That could be a tall order for a governor girding for political battle with the state’s most powerful corporate interests on issues like climate change, affordable housing and health care. Though California voters soundly rejected statewide charter school candidates, the charter lobby’s big-dollar patronage of the Assembly’s “Mod Dem” caucus still gives it plenty of bill-blocking leverage. Heilig, however, points to last year’s explosive AP report on charter school racial segregation and the California Charter School Association’s recent backing of the state’s for-profit charter ban law as a sign that the organization “may be finally turning a corner” on accepting more transparency and accountability.
Under Jerry Brown, education policy often got tangled up in mixed messages of local autonomy (i.e., the Local Control Funding Formula) and centralized authority (as when Sacramento would override local school district decisions on matters like charter authorizations). Newsom has pledged that local control should extend to the establishment of new schools. Early clues to how much local autonomy he is prepared to support will be found in his major state board appointments.
The first hint may be Ann O’Leary, who as his new chief of staff will have a big say in hires. A former top adviser to Hillary Clinton, O’Leary was also deeply implicated in disastrous, reformy wrong turns like No Child Left Behind. How much she has matured will be reflected in who gets the nod to replace outgoing State Board of Education president Michael Kirst, who was widely seen as pro-charter.
“I suspect now he’s going to have something like an early childhood specialist or maybe a cradle-to-career point person,” Rogers offered. “I think that personnel question of who gets appointed in the governor’s orbit and what role that person is designated with will be very interesting.”
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Diane Ravitch on Gavin Newsom’s Three Education Challenges
California is one of the richest states in the nation but spends about the same on its students as states like Iowa, Kansas, Louisiana and South Carolina, where the cost of living is far less than in California.
As Gavin Newsom prepares to take office, education looms large on the list of California’s top priorities. The nation’s most populous state faces major questions on everything from the cost of higher education to growing demands for increased oversight of charter schools. Capital & Main asked education scholar Diane Ravitch what advice she would give Newsom. Here is her response.
The incoming administration of Governor-elect Gavin Newsom will not be cleaning up a mess. Governor Jerry Brown has been a good steward of the state during his time in office.
But Newsom faces three distinct challenges in the field of education. Although Governor Brown significantly increased spending for education, California has large unmet needs and much catching-up to do to maintain its edge as an incubator of talent and innovation, and of equal opportunity for all.
First, the state must substantially increase funding for K-12 education, which would enable districts to pay teachers better salaries, reduce class sizes and assure that all children, regardless of where they live, have access to a well-equipped, well-staffed school. The latest federal data (2016) show that California spends somewhat less than the national average per pupil. California’s per-pupil spending is $11,420, compared to a national average of $11,841. California is one of the richest states in the nation but spends far less than states such as New York, New Jersey, Connecticut, Massachusetts, Maryland, Wyoming and North Dakota. California spends about the same on its students as states like Iowa, Kansas, Louisiana and South Carolina, where the cost of living is far less than in California.
Second, California must recommit to the long established tradition that tuition for higher education must be free to all residents of the state. This principle was reiterated in the state’s Master Plan in 1960, but ended by Governor Ronald Reagan. The low-cost availability of higher education and the large pool of educated talent it created were the principle drivers of the state’s economic development and success. The primary reason that students drop out of college is cost, not ability. The state should recommit to provide higher education to all who wish to pursue it, by removing cost as a barrier to their opportunity and ambition.
Third, California must regulate the charter school industry, whose lobbyists have defeated all efforts to hold charter schools accountable and transparent. Where public money goes, public accountability must follow.
Charter schools now enroll 10 percent of the children in the state, and their representatives should have no more than 10 percent of the seats on the state board. Charters should be made subject to open-meetings laws and laws prohibiting conflicts of interest and nepotism. The law governing charters should be revised so that they are authorized solely by the district in which they are physically located, with no appeals to the county or state board. If there is no need for them, they should not exist.
Before any charter is authorized, there must be a determination of its fiscal impact on the host district. The host district should supervise the charter to assure that it is operating in accordance with state laws and serving the needs of students in the district. Every charter should enroll at least the same proportion of students with disabilities and English language learners as the district in which it is located.
Charters should be as accountable for their enrollment, discipline policies, finances and academic performance as district public schools. Charters should complement, not compete with, district public schools. They are all working towards the same goals, which is the development of every child’s abilities, equal opportunity and preparation for citizenship.
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