Oakland Unified Besieged by Skyrocketing Pension Costs, Declining Enrollment

OaklandIt’s been a tumultuous era in Oakland. The Police Department has been enmeshed in an ugly scandal surrounding officers’ involvement with an underage sex worker that led to an officer’s suicide, firings and turnover in the chief’s office. City Hall was unable to prevent the Oakland Raiders from agreeing to move to Las Vegas. And in the past month, Mayor Libby Schaaf has engaged in a high-profile war of words with President Donald Trump and Attorney General Jeff Sessions over her opposition to federal immigration control efforts in her city.

But now Oakland is also wrestling with a painfully familiar story: financial turmoil in local schools. The state took some of Oakland Unified’s autonomy in 2003 after the Legislature approved an emergency $100 million loan to the then-reeling district. With $40 million of the loan still unpaid, the state continues to oversee district spending, though with a smaller role. Now there are new indications that even Oakland Unified’s limited autonomy could disappear for another long stretch as school officials struggle to make ends meet yet again.

In recent months, district officials had to approve what were described as “emergency” $9 million cuts in the district’s $521 million general fund 2017-18 budget and to authorize potentially greater reductions in 2018-19 as well. The cuts were widely denounced in public meetings as unnecessary and indicative of poor management.

This criticism has been buttressed by the Fiscal Crisis Management Action Team (FCMAT), the state agency that works with struggling school districts. In an August report, FCMAT warned that a “fiscal emergency” loomed if Oakland Unified officials didn’t quit spending reserve funds to cover budget shortfalls. FCMAT depicted the Oakland school board as irresponsible for approving cumulative raises for teachers of 14.5 percent in the 2014-15, 2015-16 and 2016-17 school years in a three-year span in which the cost of living went up by less than 2 percent. These pay hikes were the biggest drain on district reserves.

Oakland board members brought more criticism on themselves in January when they approved 5 percent pay raises for themselves. While the total amounts were small – $39 per board member per month – San Francisco Chronicle columnist Otis Taylor Jr. wrote that district students and parents were appropriately “livid” about the salary boost at a time when schools often lacked funds for basics like toilet paper.

A recent East Bay Times analysis suggested there was plenty of blame to go around for Oakland Unified’s fiscal headaches. It largely absolved district Superintendent Kyla Johnson-Trammel, who took over in January 2017, noting her predecessor had failed to follow through on plans to lay off 42 employees because declining enrollment had left the district with less than 37,000 students. Since enrollment directly determines how much state aid comes to districts, well-run districts usually reduce employees when enrollment drops. With enrollment down 33 percent from its 1999 peak of 55,000, Oakland Unified has thus faced constant pressure to downsize.

Pension costs grow 132% per teacher by 2020

But information distributed by the district before Oakland Unified trustees approved the recent $9 million in cuts pointed to another budget culprit – one that is hammering districts statewide. That is the bailout of the California State Teachers’ Retirement System approved by the Legislature and Gov. Jerry Brown in 2014. It phases in an 80 percent increase in annual contributions to CalSTRS from fiscal 2014-15 to fiscal 2020-21 – going from $5.9 billion a year to $10.9 billion.

More than two-thirds of this additional cost must be borne by local school districts. In 2014-15, they were required to pay 8.25 percent of teacher payroll to CalSTRS. Beginning in fall 2020, that amount will be 19.1 percent – a 132 percent increase in per-teacher pension funding obligations. Even in districts with high numbers of English-language learners – which receive additional funding under the Local Control Funding Formula, a 2013 state law – pension obligations have created major headaches.

School Services of California – a consultant which advises a large majority of the state’s 1,000 school districts – estimated last July that at least 280 districts would struggle to pay bills in the 2017-18 school year. A San Jose Mercury-Newsanalysis at the time suggested that the just-ended 2016-17 school year might be looked back on in 10 years “as the last good year in recent times for public education.”

The August 2017 FCMAT report on Oakland Unified raised additional concerns about why the district would struggle with its finances in coming years beyond inadequate funding. FCMAT faulted the district for inadequate internal budget controls, for allowing significant expenditures without board approval and for inadequate training of officials with budget responsibilities.

This article was originally published by CalWatchdog.com

When do We Finally Say ‘No’ to Tolerating the Damage and Chaos of Homelessness?

What’s the best way for a free country to make decisions about how to spend tax money?

One way to do it is to hold elections to choose public officials who will make decisions on behalf of the people who elected them, then hold a fully public process to create budgets and appropriate the money that taxpayers are required to hand over.

Another way to do it is to find the people in society who are totally unable to manage their own lives and put them in charge of public spending.

That’s how we do it in California.

Our government at all levels has accepted the argument that the moment people self-identify as having “nowhere else to go,” they acquire a civil right to pitch a tent and live on public property ansanfranciscohomelessywhere, including streets, sidewalks, plazas, parks, stormwater channels and freeway embankments.

Then it’s your responsibility as a taxpayer to pay whatever it costs to mitigate the damage and clean up the chaos.

The cost is rapidly becoming incalculable, from the $17 million needed by the L.A. Bureau of Sanitation for homeless encampment cleanups, to the staggering damage from wildfires caused by cooking in the midst of dry brush, to the catastrophic toll of a hepatitis A epidemic that took 20 lives in San Diego and put hundreds of people in the hospital.

Taxpayers in Orange County are paying for month-long motel vouchers for hundreds of people as the price of reclaiming the intended public use of the Santa Ana River trail. It’s not clear what will be different in a month, but that was the deal reached in the courtroom of U.S. District Judge David O. Carter. He was involved because attorneys for seven homeless people filed a federal lawsuit alleging that their civil rights were violated by the eviction from the huge encampment.

Judge Carter personally walked the river trail with county and city officials to see the problem first-hand, and he acknowledged that the offer of shelter would be rejected by many. “Some who want to wander will wander,” he said.

Justice William O. Douglas said something similar in 1972, when the U.S. Supreme Court threw out a vagrancy law in Jacksonville, Florida. This was the text of Jacksonville’s ordinance:

“Rogues and vagabonds, or dissolute persons who go about begging, common gamblers, persons who use juggling or unlawful games or plays, common drunkards, common night walkers, thieves, pilferers or pickpockets, traders in stolen property, lewd, wanton and lascivious persons, keepers of gambling places, common railers and brawlers, persons wandering or strolling around from place to place without any lawful purpose or object, habitual loafers, disorderly persons, persons neglecting all lawful business and habitually spending their time by frequenting houses of ill fame, gaming houses, or places where alcoholic beverages are sold or served, persons able to work but habitually living upon the earnings of their wives or minor children shall be deemed vagrants and, upon conviction in the Municipal Court shall be punished as provided for Class D offenses [90 days imprisonment, a $500 fine, or both].”

The law was “unconstitutionally vague,” Douglas wrote for the court in Papachristou v. City Of Jacksonville, criminalizing activities that “by modern standards are normally innocent.”

The justice defended night walking. He wrote that in his personal experience, “sleepless people often walk at night, perhaps hopeful that sleep-inducing relaxation will result.”

Douglas also cited poets as authority to throw out Jacksonville’s ordinance. “Persons ‘wandering or strolling’ from place to place have been extolled by Walt Whitman and Vachel Lindsay,” Douglas wrote, “They are embedded in Walt Whitman’s writings, especially in his ‘Song of the Open Road.’ They are reflected, too, in the spirit of Vachel Lindsay’s ‘I Want to Go Wandering.’”

And that’s federal law now, if you’re wondering how we got where we are today.

No matter how much money we choose to spend on services or housing — and the tax increases are stacking up — the public has no right to demand that people get off the streets. We’ll pay for the services and housing and still have to pay for the damage and the chaos.

Eventually some city or county official will have the courage to reject a settlement in one of these lawsuits, and he or she will fight all the way to the Supreme Court in defense of the public’s right to preserve public spaces for their intended use.

By then, five of the justices may recognize that Walt Whitman didn’t write “Song of the Open Sewer.”

This article was originally published by Fox and Hounds Daily

olumnist and member of the editorial board of the Southern California News Group, and the author of the book, “How Trump Won.”

Trump receives mixed welcome in visit to California-Mexico border

A mix of protesters and supporters greeted President Donald Trump on Tuesday during his first visit to the California-Mexico border since taking office.

There he inspected prototypes for his promised “big, beautiful border wall.”

Hundreds of people, on both sides of the border participated in rallies – cheering, booing and waving Mexican and American flags as rows of police acted as barriers while Trump’s motorcade sped down the road.

U.S. Army veteran and Trump voter Mark Prieto, 48, shook his head as he walked past protesters.

“People are so narrow-minded,” the firefighter told AP. “Finally we have someone who is putting America first.”

Despite the Trump administration’s near-constant battles with California state officials, and the recent Department of Justice lawsuit against the state over its immigration policies, the president’s visit was, for the most part, peaceful. …

Click here to read the full article from Fox News

L.A. Rolls Out The Unwelcome Mat For Trump

President Donald Trump will be met with protesters when he makes his first visit as president to the Los Angeles area Tuesday, and police said they are prepared to respond to any troubles.

“We are working with all of our local and federal partners to ensure that all security safeguards are in place for the president’s visit, both along his route of travel and at the locations where events will take place,” Los Angeles Police Department Detective Meghan Aguilar said. “We are not aware of any threats against the president’s safety.”

Aguilar said the president’s travel route, details of which are never fully disclosed for security reasons, will be set by the U.S. Secret Service. Local police generally issue an advisory to the public to alert motorists about areas to avoid during presidential visits, but those details have not yet been determined.

Trump is scheduled to fly into Marine Corps Air Station Miramar in San Diego County at 11:30 a.m. Tuesday, then head to Otay Mesa to view the 30- foot-tall border wall prototypes that have been erected there. …

Click here to read the full article from the SoCal Patch

Loss of local control a big issue in new water tax fight

Shower head water droughtThroughout his tenure as governor, Jerry Brown has consistently pursued new revenue for transportation, housing and water. The Legislature, whose default reaction to any problem is to raise taxes on middle-class Californians, has only been too happy to oblige. As a result, California drivers were hit last year with an annual $5 billion gas and car tax and property owners were burdened with a new tax on real estate recording documents to fund affordable housing. As if those tax hikes were not bad enough, now comes the third in a trifecta of tax insults: a new tax on water used by homes and businesses. That’s right, the Legislature is preparing to tax a public good that is essential to life, a precedent-setting tax that is unheard of anywhere else in the nation.

Supporters of the bill will argue that the tax is needed because roughly one million people (mostly in the Central Valley) don’t have access to consistently clean drinking water. This is a legitimate problem due to decades of neglecting basic infrastructure, contamination of water supplies and the failure to make access to water delivery the priority it deserves.

But raising taxes is the wrong solution to this problem. It is unconscionable that California, which has a record-high $130 billion General Fund budget with a $6 billion surplus, can’t provide clean drinking water to a million people using existing resources. Is this not the first role of government, providing a public good essential to life? Moreover, why should taxpayers in Los Angeles, San Francisco and Sacramento have to pay higher water bills for a problem that is mostly limited to groundwater contamination in the Central Valley?

Most Californians haven’t even heard of this proposed tax hike. But that’s only because the Legislature is going out of its way to keep it hidden. Originally introduced as Senate Bill 623, the bill failed to advance last year because of widespread opposition. Nearly all residential homeowners would pay a dollar a month if this tax went through. The tax works on a sliding scale based on meter size — heavy commercial and industrial water users could pay up to $10/month. Not content to just abandon the bill, the governor has now decided to drop this tax in a budget trailer bill. These bills, often dozens of pages long with multiple topics, is the perfect place to hide a tax. If the bill moves forward, taxpayer advocates will watch carefully to ensure that the two-thirds vote requirement for tax hikes is enforced. Because most budget bills only need a majority vote, a lawsuit will quickly follow if the higher threshold is not met.

Our concern is that the governor has become so obsessed playing the “hide the tax” game that he hasn’t bothered to look at other alternative funding sources to solve this problem. If using a $6 billion surplus is off the table, there’s an option to tap into federal funding which is available for precisely this purpose. Or there are billions of dollars of unspent bond funds, including the recently voter-approved Propositions 1 and 84 that can be used to provide clean drinking water. Bond dollars are perhaps the best vehicle to provide major infrastructure improvements needed in the Central Valley. …

Click here to read the full article from the Orange County Register

Trump’s repeat attacks on Maxine Waters’s IQ are familiar

Congressional Black Caucus Holds Press Conference On Stimulus BillJabs between President Trump and Rep. Maxine Waters (D-Calif.) aren’t new. But Trump’s latest comments are a reminder of how often he will go out of his way to personally attack the black women who challenge him.

The liberal lawmaker has been one of the most vocal critics in Congress of the president’s policies and made comments deeming him unfit for office before he entered the White House.

But while campaigning for Rick Saccone, a Pennsylvania state legislator running for Congress, the president directed his attention toward the West Coast politician.

“Did you ever see her? Did you ever see her? ‘We will impeach him. We will impeach the president,’ ” Trump told the crowd.

” ‘It doesn’t matter, we will impeach him.’ She’s a low-IQ individual,” he added. “You can’t help it.”

Waters told the crowd at the California Democratic Convention last month that “it is time to get ready for impeachment,” based on the latest updates from special counsel Robert S. Mueller III’s investigation of the relationship between the Trump campaign and Russia. …

Click here to read the full article from the Washington Post

Left and Lefter in California

california-flagThe California Democratic Party’s refusal to endorse the re-election of Senator Dianne Feinstein represents a breaking point both for the state’s progressives and, arguably, the future of the party nationwide. Feinstein symbolizes, if anyone does, the old Democratic establishment that, while far from conservative, nevertheless appealed to many mainstream businesses and affluent suburban voters. The rejection of Feinstein reveals the eclipse of the moderate, mainstream Democratic Party, and the rise of Green and identity-oriented politics, appealing to the coastal gentry. It offers little to traditional middle-class Democrats and even less to those further afield, in places like the industrial Midwest or the South. In these parts of the country, bread-and-butter issues that concern families remain more persuasive than gestural politics.

To its many admirers back east, California has emerged as the role model for a brave new Democratic future. The high-tech, culturally progressive Golden State seems to be an ideal incubator of whatever politics will follow the Trump era.

Certainly, California is an ideal place to observe this shift, as radicalism faces no restraints here. The Republican Party has little to no influence in politics and culture and not much even among business leaders. For the Democrats, this vacuum allows for a kind of internecine struggle resembling that of the Bolsheviks after the death of Lenin. And just as happened then, a new Stalinism of sorts seems to be emerging—in this case, to the consternation not only of conservatives but also of traditional liberals and moderates of the Feinstein stamp.

Yet as California Democrats exult in what they see as a glowing future, they are turning away from the models that once drove their party’s (and the state’s) success — a commitment to growth, upward mobility, and dispersed property ownership. California’s current prosperity is largely due to the legacy of Governor Pat Brown, who, a half-century ago, built arguably the world’s best transportation, water, and power systems, and created an incubator for middle-class prosperity. Ironically, the politician most responsible for undermining this achievement has been Pat’s son, Governor Jerry Brown. Long skeptical of his father’s growth-oriented, pro-suburban policies, Brown the Younger put strong constraints on growth, especially when these efforts concerned the fight against global warming — a quasi-religious crusade. Battling climate change has awakened Brown’s inner authoritarian; he has lauded the “coercive power of the state” and embraced “brainwashing” on climate issues.

Brown’s stridency on climate, however, does not extend to all leftist issues. Like Feinstein, Brown has some appreciation of the importance of infrastructure, such as the need to increase water supplies, and he exercises at least a modicum of caution on fiscal matters like the state’s gargantuan pension debt. He is not a strict identitarian, having vetoed an attempt to enact Title IX standards of evidence for campus sexual-assault cases, a measure embraced by the state’s vocal feminist leaders.

As Brown prepares to depart, and Feinstein struggles to retain office, a new dominant coalition — led by tech oligarchs, identity politicians, and Greens — is rising to usurp control of the party. This new coalition of the privileged and aggrieved marks a departure both from Pat Brown’s social democracy and his son’s more elitist but still measured politics.

State senator Kevin de León, the emergent leader of this new configuration and cat’s paw of billionaire Tom Steyer, the San Francisco hedge-fund billionaire epitomizes the new approach. Having made much of his fortune in oil sands and coal, Steyer is now the Democratic Party’s prime bankroller, and his largesse extends to the drive to impeach President Trump. He has made common cause with hard-Left politicians like de León, and even embraced unionism—as long as labor follows his extreme position on climate change.

Steyer and other oligarchs are working to eliminate the last vestiges of the old Democratic Party. Climate activists have been targeting, with some success, the so-called Mod Squad — centrist Democrat legislators from the state’s less-prosperous interior and working-class suburbs. This shrinking group, occasionally financed by energy, homebuilding, and other pillars of the old economy, sometimes holds the balance of power in Sacramento, and has managed to slow some of the most draconian climate measures.

De León’s enthusiastic embrace of climate-change dogma may seem odd for a politician whose impoverished district suffers from Los Angeles’s continued de-industrialization, hastened by strict environmental regulation and high energy costs. Instead of backing policies that would create more high-wage jobs, de León’s priorities are largely redistributive. This jibes with his support among public employees and from the militant California Nurses Association. He endorsed the union-backed single-payer health-care plan, a measure that assembly speaker Anthony Rendon tabled as impossibly expensive (it would more than double the state budget). Immigration is another key de León issue. He is a fervent supporter of illegal immigrants, in a state that houses one in fourof the nation’s total, bragging about his own relatives’ use of false IDs.

Lieutenant Governor Gavin Newsom, the former San Francisco mayor and frontrunner in the governor’s race, also embraces these policies. After briefly trying to appeal to mainstream business, Newsom has fallen into line with Bay Area-dominated progressives and the big public unions on virtually every issue, including single-payer. His likely election suggests a continuation of California’s current drift, but without Brown’s occasional restraint and intelligence.

The Golden State’s progressive tilt would not be possible without demographic change. The state’s majority-minority makeup has made the capture of middle-class and moderate voters less important. As middle-class families leave California, the electorate is increasingly dominated by racial minorities — with whites, 70 percent of the population in 1970, now less numerous than Hispanics and destined to be roughly one-third of the population by 2030. California’s demography is more and more dominated by the poor and near-poor (roughly one-third of the population), the young and unattached, and a residual population of older whites, many luxuriating on generous state pensions or inflated property values.

What makes all this work is the growing power of the tech oligarchs and their more glamorous cousins in the Hollywood glitterati. The tech boom of the last decade has obscured the decline of California’s basic industries, such as energy and manufacturing. California’s above-average job performance since 2010 is almost entirely a combination of high-income employment growth in the Bay Area and the swelling ranks of low-wage service workers who serve them. The oligarchs, including tech investor Sam Altman, LinkedIn co-founder Reid Hoffman, and philanthropist Laurene Powell Jobs, widow of the late Apple founder, have lined up behind de León. Tech will likely bankroll the pliable and well-heeled Newsom, who already gets cash from Airbnb, Twitter, and Salesforce.com.

This marriage of the poor and the new rich appears to be the dominant theme emerging in California. The oligarchs, as Greg Ferenstein has reported, don’t even pretend to believe in upward mobility for the masses. Instead, they favor policies — such as forced densification — that will house their largely young, childless workers, including the nation’s largest population of H1-B visa-holders. Measures such as State Senator Mark Wiener’s SB 827 would largely strip cities of their ability to control development anywhere near transit stops. Civil rights groups, mainstream environmental organizations, neighborhood associations, and cities themselves have come out in opposition, and even Los Angeles mayor Eric Garcetti, a dedicated densifier, fears a backlash in the city’s remaining single-family neighborhoods. Yet the oligarchs and their YIMBY (“yes in my backyard”) allies, whom they generously fund, have backed the bill.

At its core, the oligarchs’ vision for California represents a kind of high-tech feudalism. Tech companies are starting to dominate sectors like electric and autonomous cars, even seeking monopolies in dense urban areas. They support limiting ownership and consumer choice, even as the bulk of automobiles remain gas-powered. In the longer term, the oligarchs have little interest in creating blue-collar jobs and would prefer to replace employment with algorithms. Deprived of work and unable to pay for housing, the working class and an ever-shrinking middle class would be bought off with income-maintenance payments — twenty-first-century alms for the poor.

Opponents of this new gentry agenda should appeal to the remnants of the middle class and the unsubsidized portions of the working class. Feinstein could win reelection by rallying such voters; her name recognition and ample campaign war chest could help her fend off de León this year. But even if she wins, it will likely be a last hurrah for the old Democrats. Tech oligarchs and activist CEOs have committed themselves to extreme environmentalism, identity politics, and open-borders immigration policy. California’s bevy of clueless celebrities, now celebrated by Time as “suddenly serious” for following the identitarian party line, have also climbed aboard.  As anyone knows who has suffered through awards shows or listened to interviews with stars, the entertainment industry—much like tech — has become homogeneous in its views.

The key issues for the glitterati are not income inequality, upward mobility, or the preservation of middle-class neighborhoods but the feverish pastimes of the already rich: gender and racial issues, climate change, guns, and anything that offends the governesses and schoolmarms of intersectionality. To the ranks of these over-exposed but influential voices, you can also add California’s media and most of its intelligentsia, who seem to get their talking points from progressive sources and work assiduously to limit the influence of moderate (much less conservative) views. With Silicon Valley increasingly able to control content and ever more willing to curb debate, the policy agenda of the state’s new elite may well become reality — a nightmarish one for millions of ordinary Californians.

California’s middle class is in decline, despite the state’s immense wealth

Middle classCalifornia’s lush coastline, balmy climate and post World War II economic promise made it an easy sell as America’s middle class paradise in the 1950s.

“The California Dream of two or three generations ago was, `I’m going to move from a place that’s cold and flat to a place where there’s lots of opportunity,’” said Joel Kotkin, a presidential fellow in Urban Futures at  Chapman University in Orange. “`I’ll get a job in an aerospace factory, in an oil company. I’ll buy a house with a pool. I’ll die and go to heaven. And I’ll do it all in good weather.’”

Today the weather remains. But access to the California dream is being choked off.

Stratospheric housing costs, the exit of key companies and the failure to replace the jobs that left with them have downsized the state’s middle class.

Since 1970, California’s share of the middle class fell from 60 percent to just over half the population. That trend almost mirrors patterns across the country. The number of middle-income Americans slipped from 61 percent in 1971 to 50 percent in 2015, according to the Pew Research Center.

In California, some have risen to the upper class and others have slid down. And some have left the state.

“The key group leaving is basically in their 30s, 40s and 50s tending to be making about $100,000 to $200,000 a year,” Kotkin said, citing Internal Revenue Service data.

Between 2007 and 2016, California lost 1 million more domestic residents than have come into the state, according to the IRS. Many are moving to Texas, Arizona, Nevada and Oregon.

“California opened their doors and basically kicked us out,” Kelly Rudiger said. “We couldn’t afford to live there with almost half of our income paying for our housing, our property taxes, our utilities so my husband and I both being full-time employees, we could keep up but we could never get ahead.”

Rudiger and her husband, Tony, moved their two children to Texas last year.

“We sold an 1,800 square-foot home in San Diego and now live in a 4,000 square-foot home and are still paying less on our mortgage,” Rudiger said.

She said her middle class income goes a lot further in Texas than in California.

The Public Policy Institute of California classifies middle income earners  as those making between $49,716 and $174,006 based on 2017 calculations.

Kotkin said California families used to pay three times their income for a home in 1970. Sometime over the next decade, it changed and now that figure has jumped to as high as 10 times.

“Who has got that kind of money?” asked Kotkin. “Where I live, all the older people keep complaining, `My kids keep visiting me just waiting for me to drop dead so they can have the house.’ ”

Peter Brownell, research director at San Diego’s Center on Policy Initiatives, said the inability of California’s middle class to afford homes, exposes a vulnerability in the state’s economy.

“Even though as a whole, our economy is successful in terms of what it’s producing and the amount of wealth it’s producing, we’re not seeing that translate into incomes that will support families here in San Diego and across California,” he said.

And he believes that is not economically sustainable.

“When people have stable, middle-class incomes, it means they have money in their pocket to consume all kinds of goods, whether that’s purchasing housing, buying new clothes, buying cars, buying refrigerators,” Brownell said. “Our economy is driven by consumer spending.”

Kotkin said California’s middle class started to dwindle when the Cold War ended in the 1990s, devastating the state’s aerospace industry. California has lost 280,000 aerospace jobs over the last 30 years, according to the book “Blue Sky Metropolis: The Aerospace Century in Southern California.”

Kotkin said real estate and construction jobs also went away. More recently, jobs in the business sector have taken a hit.

“Toyota, Occidental Petroleum, Nissan, companies that employed a large number of middle class people, are going,” Kotkin said. “These were companies that had a lot of good paying jobs — $80,000, $100,000, $120,000 —  enough to support a middle class lifestyle.”

And he said many companies that remain are not expanding because of California’s land, energy, housing and regulatory costs.

The Center on Policy Initiative’s Brownell said the companies that are expanding are contributing to the state’s income inequality.

“Here in California, we’ve had great success in creating highly skilled, high paying jobs in the tech industry in Silicon Valley and in San Diego the biotech industry,” Brownell said. “A lot of those really successful and well-paying industries have built into them a structural demand for low-wage work as well, the nannies, the restaurant workers and the drycleaners.”

Brownell said it is important to note that even people earning more than workers in low-wage jobs are struggling to survive.

Sharon Mintz runs a floral arrangement business in San Diego. She said she offers free meals to her employees and has increased their pay from $15 to $20 an hour over the past few years but still cannot hold on to them.

“It works and then the rent goes up,” Mintz said. “And then we offer a little bit more and then groceries go up. It feels like we’re always trying to catch up.”

Brownell said a middle class revival lies in the hands of government, strong unions and companies.

He said policymakers need to encourage the creation of quality jobs in the state. Unions set standards for wage and working conditions. And Brownell said companies with healthy profits should pay their employees more.

“The more prosperous a company becomes, the more of an obligation it has to share its success across the company,” Brownell said.

Without any fixes, Kotkin said California is headed away from the enchantment of the 1950s toward a more primitive time.

“Today, we have a society which over time is becoming more and more feudal with the very rich, very successful — some of the richest people in the history of the world — at the very top, and then a diminishing middle class,” Kotkin said. “And what’s more frightening is you have young people, some of them with college educations working at Uber, working at Starbucks, essentially barely making it.”

The California Dream series is a statewide media collaboration of CALmatters, KPBS, KPCC, KQED and Capital Public Radio with support from the Corporation for Public Broadcasting and the James Irvine Foundation.

This article was originally published by CALmatters

Senate fellow harassment shows how bad Sacramento culture was

One of the most dramatic moments in the far-reaching fallout from last fall’s revelations about Hollywood producer Harvey Weinstein’s appalling history of sexual misconduct came on Oct. 16 with the release of a letter signed by more than 140 women who worked or had worked in Sacramento. The letter condemned a state Capitol in which men “leveraged their power and positions” to create a culture in which sexual harassment was taken for granted — all but a routine part of the job.

One claim that really illustrated the scope of the problem was the case of a 23-year-old aspiring legislative staffer who worked last year for then-state Sen. Tony Mendoza, D-Artesia, as part of the California Senate Fellows program, which is run in partnership with Sacramento State University. The woman told David Pacheco, director of the fellows program since 2005, that Mendoza had invited her to his home on at least two occasions to “review résumés” and had invited her to come to his hotel room. But the Sacramento Bee reported in November that instead of Pacheco notifying officials at Sacramento State of this awful conduct — as required by university policy — he advised the fellow not to take immediate action to leave the office and noted that she may yet get a job with Mendoza.

This is stomach-turning. Instead of acting decisively to protect a young woman in his charge, Pacheco’s first instinct was not just to look away from gross behavior by Mendoza toward the woman but to see a situation where she went to work for the lawmaker as something positive. …

Click here to read the full article from the San Diego Union-Tribune

Who’s Really to Blame for Orange County’s Housing Affordability Crisis?

house-constructionThis past week, three separate media outlets sought my comment on Orange County’s housing affordability crisis and high-cost of living. The inquiries came on the heels of a host of news stories chronicling sky-high rents, the dismantling of homeless encampments in Anaheim, and the adequacy of wages paid by the county’s largest employers.

These were the questions news folks wanted answered: What is business doing to get more homes built? What is business doing to eliminate poverty? What is business doing to end homelessness?

Let’s get real.

Do we face a growing housing affordability and cost-of-living crisis here in Orange County and throughout California? You bet. Hardworking residents are struggling to make ends meet, and housing costs stand at the center of their paycheck-to-paycheck existence. Orange County Business Council has been arguing this for years and objective data backs it up.

A recent USC Gasden Family Forecast shows the average rent for a two-bedroom apartment in Orange County at a whopping $1,813 a month. For the typical renter, that’s a number that swipes more than half of their monthly take-home pay.

But the problem isn’t a lack of quality jobs or even skimpy paychecks. The problem is a lot of workers in a strong economy chasing too few available homes or apartments. That drives up housing costs and takes more of their paycheck.

Indeed, OCBC’s own Housing Scorecard reports that Orange County needs 65,000 more homes today to meet the housing needs of the people who already live and work here. But get this: Orange County has added only one new home for every 5.26 residents since 2010. And it’s not just Orange County that’s falling down on the job. Anaheim reportedly approved only 8 percent of its low-income housing needs, for example.

The crisis statewide is even more pronounced. A recent report found that more than 500 counties and cities failed to meet their mandated housing goals. So it’s no wonder that California has a housing shortage exceeding 3.5 million homes. That’s what you get when your population has increased every year since 1950, but you’ve failed every year since 1989 to build enough homes to meet the need.

So who’s to blame?

Homebuilders — in an industry that has fueled California’s economy for more than half a century — are as eager as ever to build the American Dream in the Golden State. But here’s the problem: lawmakers, regulators, local governments and anti-development activists — who already own their own home — won’t let them.

Overly restrictive land-use regulations, abuses of California’s environmental laws, local ballot box initiatives that neuter good planning, and city councils that won’t say “yes” are fueling the bottleneck in new-home delivery. Sure, some recent, minor actions were taken by the state legislature to streamline approvals, but ultimately local political leadership controls land use and housing decisions.

The systemic flaws that eat away at the paychecks of Orange County residents and threaten California’s economic prosperity are not caused by business but by the folks you elect to serve you in public office. The role of business is to offer goods and services, and thus create jobs, not to act as a substitute for local government or its elected officials who benefit from the significant tax revenue generated by business.

So here are the questions that need to be asked: What are your elected leaders doing to see that a good supply of affordable housing is built? What are your elected leaders doing to assure the end of homelessness in your community? What are your elected leaders doing to help grow good middle class jobs?

If you don’t like the answers, vote them out.

resident and CEO of the Orange County Business Council

Originally published in the Orange County Register.