Stopping Unemployment Fraud Isn’t Really That Hard

As news of the unimaginable scale of California’s unemployment fraud continues to break, it’s necessary to understand why this state has been so particularly vulnerable to fraud, and what can be done, now, to prevent it from continuing.

On the low end, we may be looking at $11 billion in fraud (already identified), while on the high end, some estimate the fraud could amount to $31 billion. To put that in perspective, that is 10% of the entire budget for the state of California.

Beyond the budget-breaking loss to all California taxpayers, each individual whose identity was stolen will now be facing a tax bill, since unemployment benefits are fully taxable as ordinary income. This is not a victimless crime by any means, and now the onus is on each person whose identity was stolen, many of whom are not even aware that benefits were filed in their name, to prove they were not the recipient. If somebody is unaware and doesn’t disclose the income, they may face an audit.

It is well known that the data management systems the EDD uses are built with antiquated programming languages. And because of that, modernizing these systems has become a daunting task that some believe would take considerable time and hundreds of millions of dollars to implement – thereby making any short-term fix impossible. That notion is flawed for two reasons:

1.     No cloud-based software and data-management system should cost hundreds of millions of dollars, let alone billions. That may have been true in the 1990s perhaps, but today, so many of the components needed to build a secure platform already exist that it simply won’t cost that amount. Startups that support millions of users, and securely manage their healthcare and financial data, are able to launch and scale – without problems – for investments in the low millions or tens of millions (at most). There simply isn’t any platform that requires hundreds of millions to build – unless it’s a new AI or hardware tool, which is not the case here.

2.     Even if overhauling the EDD data-management system and platform did require a monumental capital investment, the identity-verification piece can operate as a stand-alone solution.

To read the entire column, please click here.

New Bill Would Stop State Prison Employees From Transferring Immigrant Criminals to ICE Custody

Wednesday, a bill that would stop state or local law enforcement from arresting or assisting in arresting in transferring prisoners for immigration enforcement reasons was given tentative Assembly committee dates.

Assembly Bill 937, authored by Assemblywoman Wendy Carrillo (D-Los Angeles) would prohibit state and local agencies, such as state prison employees and law enforcement, from arresting or facilitating the arrest, confinement, detention, transfer, interrogation, or deportation of an individual for an immigration enforcement purpose. Immigration status would also not longer be a factor in denying placement in certain probation or credit earning programs while in prison.

AB 937 will also no longer require the California Department of Corrections and Rehabilitation (CDCR) to identify inmates in state prisons who are undocumented felons subject to deportation, nor will they require reporting of those statistics to the state Legislature. State and local criminal offender information systems will also see a major change, no longer requiring that place of birth be listed as it would help more easily identify immigrants.

Assemblywoman Carrillo largely wrote the law to stop CDCR prisons from transferring inmates to U.S. Immigration and Customs Enforcement (ICE) custody as federal law currently allows the deportation of immigrants who have been convicted of certain crimes. While local law enforcement is currently prohibited from working with ICE on certain crimes due to the passage of SB 54, also known as the California Values Act, in 2017, it did now extend to state prison officials, allowing federal deportations to continue from the state level of California for the last four years. According to the Asian Prisoner Support Committee, this allowed more than 1,400 immigrant criminals to be deported in 2020 alone.

“It is time to end the double punishment of immigrant Californians,” noted Assemblywoman Carrillo last week. “We do not need to devote valuable time and resources on unnecessary ICE transfers.”

AB 937, also called the VISION Act, quickly gained support since being introduced last week, getting 6 additional co-authors in as many days and moving up quickly for committee introduction despite not being COVID-19 affiliated like most other bills this session. An online conference on Wednesday with Carrillo, Senator Scott Wiener (D-San Francisco), and other lawmakers further bolstered support numbers.

“Let’s do this,” tweeted Assemblywoman Carrillo on Wednesday. “The [VISION Act] will be a game changer for immigrants and restorative justice. Proud to author this legislation and work with so many incredible advocates.”

Problems with AB 937

While many have opposed the bill, including many prison workers groups, experts note that even with the passage of AB 937 the federal government still has many other ways to deport immigrants with criminal records.

“This is one loophole on a string filled with loopholes,” former immigration lawyer James Van Horn told the Globe. “So state prisons can’t get them directly. It’s still federal law though. So once they are out they can be nabbed. Or if they’re out on bail. Basically what the state is doing is basically giving them time in prison before being deported with this bill.”

“California legislators like to think that they’re defeating ICE this way, but they really aren’t. They like to say that they are stopping deportations, but the reality is that they still happen all the time and have gone up in the state since 2017. They only dropped last year due to the pandemic, not because of policy. And even that 100 day deportation block that President Biden installed when he was sworn in. That’s being fought back and forth in the courts right now, and once that is over with in the 100 days or less, ICE is going to have a field day. I know from talking with ICE officers before that they work up lists during down time, so it’s only going to climb right back up.”

“All the state is doing with this bill is saying that the immigrants who committed crimes need to serve time in jail first before being deported. It’s just another step. So when they are deported, they go in to that country not only with a criminal record, but also several years of down time from whatever they had done for work. If they were looking for a way to hurt immigrants more, they found it.”

AB 937 is due to be assigned a committee in the coming weeks.

This article was originally published by the California Globe.

Power Outages: California, Texas, next the U.S?

California was the object of ridicule last year when residents experienced widespread power outages due to high temperatures and wildfires.  Now, during an historic cold spell, Texas is under fire for an energy infrastructure that left much of the state without power.

The finger pointing will go on for months in Texas, just as it did (and still does) in California.  AOC was among the first, blaming state lawmakers for not pursuing Green New Deal policies.  She and other progressives were probably still smarting from comments made by Texas Sen. Ted Cruz, who made fun of California for not being able to “perform even the basic functions of civilization, like having reliable electricity.”

But you don’t have to be a civil engineer – much less a politician — to know that the more power options we have to choose from, the better off we’ll all be.

Take Texas. The snowstorm froze gas wells and windmills alike, but it was unable to tap into the energy grid of neighboring states because the Lone Star State relies almost entirely on its own energy grid.

California also suffered from a lack of power diversity. During its heatwave in August, the high demand for air conditioning forced rolling blackouts across the state.  Moreover, the threat of electricity-sparked wildfires made it unsafe for PG&E to operate in areas around Northern California and the Central Valley.   And to pile on more misery, the state couldn’t rely on its renewable energy sources – solar and wind – to step up.

The irony is that for more than a decade now, California’s progressive lawmakers have made it their mission to increase solar energy and wind power to the state’s power source mix.  PRI senior fellow Wayne Winegarden, in his study “Legislating Energy Prosperity,” points out that in 2007, solar energy comprised of 0.3 percent, while wind was at 2.3 percent.  By 2018, solar increased to 11.7 percent of the state’s power source, while wind grew to 6.3 percent.  All this was at the expense of other power sources.  For example, nuclear energy fell from 16.6 percent to 9.2 percent. The state’s last remaining nuclear power plant, Diablo Canyon, is set to close in 2025.

The sunsetting of the state’s nuclear power plants is why Winegarden believes that despite the state’s green policies, emission declines in California have not exceeded the average declines in the rest of the country.  From 2007 to 2016, California’s carbon intensity declined by 3.8 percent, while states who did not participate in the Regional Greenhouse Gas Initiative (mostly Northeastern states), declined 9.7 percent.  States in the RGGI saw their carbon intensity fall by 10.4 percent.  Extinguishing one of the state’s most reliable and cleanest energy source – nuclear energy – reduced any gains it might have made, to say nothing of the economic cost to low-income Californians who have been subjected to higher energy costs due to greater reliance on renewables.

Diversifying the U.S.’s sources of energy – including its most reliable forms such as coal, natural gas, and nuclear energy – will provide us consistent, inexpensive energy to fuel growth after the pandemic and beyond. Unfortunately, the Biden administration seems to be following California’s lead.  If Pres. Biden gets his way, we will see outages like we’ve seen in California and Texas throughout the country.

Rowena Itchon is senior vice president of the Pacific Research Institute.

California’s High-Speed Rail Project Still Under Construction As Delays And Costs Pile Up

California’s bullet train has become a nearly forgotten source of trouble, eclipsed in the public eye by Covid-19, a gubernatorial recall, and out-migration from the Golden State. But it’s still out there, sucking up time and money, and as empty as it ever was.

The California High Speed Rail, its formal name, was a hobby-ego project for former governor Jerry Brown that was supposed to move passengers between Los Angeles and San Francisco at 220 mph by 2020. Instead, the project is moving at the speed of the museum piece it sometimes appears destined to be. Not a single train has run, with train testing still six to seven years away, amid seemingly never-ending delays.

The news regarding the project is, as usual, dismal. As the Los Angeles Times reported in January, Ghassan Ariqat, vice president of operations at bullet-train contractor Tutor Perini, sent a “scorching” letter to California officials criticizing persistent construction delays, “contradicting state claims that the line’s construction pace is on target,” and warning that the project could miss “a key 2022 federal deadline.” “It is beyond comprehension that as of this day, more than two thousand and six hundred calendar days after [official approval to start construction], the authority has not obtained all of the right of way,” Ariqat wrote. Because of the sluggish construction pace, he added, his company “will have to lay off a significant number of its field workers in the very near future” after already letting 73 walk.

Ariqat has good reason to be agitated. If there’s been a more poorly run public works project in California history, nobody can remember it. Two years ago, a senior fellow at the Eno Center for Transportation, a nonpartisan think tank, called California’s high-speed rail an outright “failure” that has “suffered from at least seven identifiable ‘worst practices,’” causing it “to be indefinitely delayed.”

Confidence in the original timeline was once high, but setbacks have mounted. One high-speed rail blogger wondered in 2009 if the state itself should make a bid for the 2020 Summer Olympics, since California was “on track” for “fast, high-capacity public transportation” that would allow events and venues easily to be “spread out over a much wider area.” Twelve years later, as the Los Angeles Times has noted, the project “may run out of money” before the “171-mile starter system between Bakersfield and Merced” can be completed. And this month, rising costs forced the High Speed Rail Authority to reduce the planned pair of tracks between Bakersfield and Merced to a single track, saving $1.1 billion but likely coming at the expense of train speeds.

The project, which has gone through at least a half-dozen business plans, is the definition of a money pit. When voters approved it via 2008’s Proposition 1A, they were told it would cost $33 billion. The Los Angeles Times editorialized that the cost was “not too much to wager on a visionary leap that would cement California’s place as the nation’s most forward-thinking state.” Several other newspapers favored the train, but a few came out against it, with the Orange County Register warning that Prop 1A was “a fast track to bankruptcy” and a “boondoggle.”

The original projection has proved far too optimistic. Cost estimates have bounced around since 2008, landing at various times at $64 billion, $77 billion, $98 billion, and $117 billion before settling, for now, at $100 billion for a scaled-back version that links Los Angeles and San Francisco. That’s $20 billion more than the price tag of a year ago when Governor Gavin Newsom, in one of the political understatements of the year, said that “the current project, as planned, would cost too much and take too long.”

Yet even Newsom’s revised plan has hit snags. At roughly the same time that the governor acknowledged the obvious, the nonpartisan Legislative Analyst’s Office (LAO) reviewed the 2020 business plan, finding that its near- and long-term schedules “appear ambitious” and identifying “some near- and long-term funding challenges confronting the project.” The train’s ridership is now predicted to be so light that operating subsidies will be needed “to cover its day-to-day financial losses.” As the LAO pointed out, the train’s need for subsidies “does not appear to be consistent with the spirit of” Proposition 1A. Initially, passengers, “rather than the general public,” were expected to “pay for the full cost of its ongoing operations and maintenance.”

Like so much else about the California bullet train, that, too, has changed.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

This article was originally published by City Journal Online.

Controversial Voter Outreach Sweetheart Deal

Photo by Element5 Digital on Unsplash

No one who is younger than 40 will remember the late legendary radio commentator Paul Harvey.  Every afternoon, he would begin his daily radio program by promising to tell us “the rest of the story.”

Thanks to a provision slipped into a budget trailer bill last week, Californians now know “the rest of the story” on a questionable voter outreach contract awarded last year during the “fog” of the Covid-19 crisis.

With the 2020 presidential campaign taking place during a global pandemic, there was much discussion over adapting longstanding voting practices to safeguard the public health while also ensuring the people’s voices were heard in an important election.

California and other states shifted much of last year’s voting process from a traditional, in person voting at polling places to absentee ballots.  First by executive order, and later by legislative action when the legality of the Governor’s executive powers was challenged in court, California moved to send an unsolicited absentee ballot to every registered voter in the state in 2020.

It is common for the California Secretary of State’s office to conduct large-scale voter outreach campaigns to encourage as many Californians to vote as possible.  What is not common is that the voter outreach contractor would also be a consultant for the Democratic presidential ticket.

“Under the contract, SKD Knickerbocker, a Washington, D.C.-based public affairs firm, will help run the ‘Vote Safe California’ campaign, which will urge people to vote during the pandemic.,” wrote the Associated Press in August when the contract was awarded.

“Anita Dunn, the firm’s managing director, is a senior strategist for Biden’s presidential campaign. The firm’s work for Biden is highlighted on its website, with a headline saying the company is ‘proud to be a part of Team Biden,’” the AP also noted.

Then-Secretary of State Alex Padilla, now a U.S. Senator, says he personally played no role in awarding SKD Knickerbocker the contract.

Then things got interesting. State Controller Betty Yee refused to pay the $35 million bill. According to CalMatters, the dispute was “over whether Padilla’s office had the budgetary authority to pay for a $35 million contract.”

“The secretary of state’s office maintained that it did have budgetary authority. The controller’s office, which approves payments, maintained that it did not,” Calmatters noted.

The Howard Jarvis Taxpayers Association also filed a lawsuit over the contract, noting in a press release that, “the contract is unsupported by any line item in the state budget.”

Since then, the firm’s invoices to the state for its Vote Safe California television, radio, and social media campaigns have gone unpaid.

Between November and February, there’s been a lot of huffing and puffing between the Newsom administration, the Secretary of State’s office, and the Controller’s office over paying the bill.

Now, the Legislature is poised to weigh in on behalf of paying the contract.  According to the Sacramento Bee, “an amendment to a state budget bill introduced by Democrats on Wednesday would allow for the state to pay for the voter outreach by using money earmarked to help counties conduct last year’s election.”  Through a tweak of legislative language and a couple of fund shifts, Yee would seemingly now have the authority to pay the bill once the new legislation is signed into law.

Republican Senators Pat Bates and Jim Nielsen cried foul over the move.

“Changing state law retroactively to pay for a sweetheart deal with a partisan political firm is an abuse of power,” they said in a statement.  “Taxpayers should not have to pay for the shady deal that was executed by the previous Secretary of State.”

The whole affair makes clear one thing – imagine how much time, money, and effort could have been saved had the Secretary of State’s office awarded this contract in an honest, transparent manner and to a non-partisan firm as it should have done in the first place.

Tim Anaya is the Pacific Research Institute’s senior director of communications and director of PRI’s Sacramento office.

This article was originally published by the Pacific Research Institute.

Gov. Newsom’s Cruel, Indefinite Lockdown of Californians 340 Days Later

The statewide confusion and anger over California Gov. Gavin Newsom’s coronavirus lockdown vs. re-opening orders has only heightened with every day this drags on.

It was March 4, 2020 when we were told to shelter in place for two weeks to flatten the curve… that was more than 340 days ago.

“Compliance is not punitive,” Gov. Newsom said in November, after being exposed for violating his own lockdown restrictions, imposed on the 40 million California residents. It was revealed that Gov. Newsom and his wife attended a large birthday dinner party in Napa Valley with several lobbyists at The French Laundry in Yountville, California Globe reported.

As he praised California’s 40 million residents “for the good work you have done,” he rewarded the state with more restrictions, a curfew and ordered businesses closed again ahead of the holidays.

One of the lobbyists at The French Laundry dinner coincidentally orchestrated exemptions from the governor’s COVID lockdown restrictions for the entertainment industry, while restaurants remained under the most severe restrictions.

This coincided with millions of dollars in behest contributions from big business to Newsom’s personal initiatives. There was an “overlap of at least a half-dozen companies that made substantial contributions to Newsom and received no-bid contracts from the state, influential appointments, or other opportunities related to the state’s pandemic response,” according to a CapRadio report. This prompted Assemblyman Kevin Kiley (R-Rocklin) to call for a legislative investigation into Governor Gavin Newsom’s no-bid contracts awarded during the COVID-19 State of Emergency.

The year-long lockdown is also shakedown.

CPR found:

an “overlap of at least a half-dozen companies that made substantial contributions to Newsom and received no-bid contracts from the state, influential appointments, or other opportunities related to the state’s pandemic response.”

A list of major Newsom donors who have received no-bid contracts or other opportunities during the pandemic: Blue Shield of California – Contributed over $300,000 since 2018, received a $15 million no-bid contract; UnitedHealth – Contributed over $200,000 since 2018, subsidiary received multiple no-bid contracts totaling over $400 million; Bloom Energy – Contributed nearly $100,000 since 2018, received a $2 million no-bid contract; BYD – Contributed $40,000, received a no-bid contract totaling over $1 billion; FivePoint – Contributed over $50,000, CEO received appointment to task force; Pacific6 – Contributed nearly $50,000, state approved reopening of a hospital they operate.

When COVID hit California, Newsom told the state that within eight weeks, 25 million Californians – more than half of the state’s population – would become ‘infected” with the virus. He was quickly corrected by prominent physicians who said there was no science or data available at the time to make such a hyperbolic statement.

Newsom was also simultaneously conducting daily news conferences outside of the Capitol, away from the press and public, and signing executive orders making new laws under his new found emergency powers.

By April 2020, Newsom’s Department of Public Health suspended nursing home relegations allowing COVID-19 patients to be housed in nursing homes, but few in the media covered this, as the Globe did. In June, COVID patients were still being sent to skilled nursing facilities, the Globe reported. We wanted to know why the California Department of Public Health was directing skilled nursing facilities to take in COVID-19 patients, and at what cost and why with plenty of hospital beds throughout the state available? Our request to the CDPH received a response:  CDPH acknowledges that the elderly patients already in skilled nursing facilities are “California’s most vulnerable,” but they never answered why would they send any COVID-19 patients to facilities with the most frail and vulnerable patients. To this day, the question remains unanswered.

Since the Globe reported this, hospital data no longer includes nursing home statistics.

Schools originally remained open, until the governor caved to the closure demands of the California Teachers Association labor union, sent students home for “distance learning” on computers via Zoom calls, despite the virus showing no scientific evidence of targeting young people.

School sports, shut down. School clubs, shut down. School bands, shut down. School graduations, shut down. School testing, shut down.

Then came the “essential” jobs and business orders: all government employees were deemed “essential,” and continued working remotely.

Home Depot, Walmart, COSTCO, and other big box stores were deemed “essential” by the governor.

Small businesses, small restaurants, hair and nail salons and barber shops, boutiques and clothing shops, all were shut down and deemed “non-essential…” except to the owners and employees of these businesses.

Remember the near hysteria about the lack of ICU beds in the state? Strangely, Newsom is silent now about ICU beds, yet he continues to conflate positive COVID tests as “infections” and “cases.”

All of this is because this isn’t about a health crisis, otherwise every state in the country would be in lockdown (or not); this is about controlling the citizens, and our rights to move about freely as we did prior to the COVID crisis.

Gov. Newsom unconstitutionally restricted the right to worship in churches. He closed public schools while his children attended private school in person. He ordered hospitals, nursing homes and skilled nursing facilities locked down, and restricted family from visiting. He even ordered no travel.

And the media greatly assisted him in this endeavor.

Yet the number of positive tests, hospitalizations, and deaths due to COVID are dropping daily. But the state has drastically limited access to actual data.

California has conducted 47,043,348 COVID tests. Of those, 3,441,946 tested positive, leaving 43,601, 402 testing negative. The data available shows 36,177 or 74% of the 49,105 COVID deaths are over the age of 65.

However, California schools are still closed, as are most school sports. While some schools and teams are starting up again, many schools are choosing to keep sports closed down.

The governor’s sports guidelines are just bizarre:

Inter-team competitions (i.e., between two teams) resumed in California beginning January 25, 2021.The guidelines outlined in this document shall take effect on February 26, 2021.

The status of return-to-competition is subject to change at any time given the level of COVID-19 transmission in California.

Sports Risk Profiles

In general, the more people from outside their household with whom a person interacts, the closer the physical interaction is, the greater the physical exertion is, and the longer the interaction lasts, the higher the risk that a person with COVID-19 infection may spread it to others.

These are the governor’s General Sports Requirements:

  • Face coverings to be worn when not participating in the activity (e.g., on the sidelines).
  • Face coverings to be worn by coaches, support staff and observers at all times, and in compliance with the CDPH Guidance for the Use of Face Coverings.
  • Observers maintain at least 6 feet from non-household members.
  • No sharing of drink bottles and other personal items and equipment.
  • Mixing with other households prior to and post any practice or competition must strictly adhere to current gathering guidance.
  • Limit indoor sports activities (practice, conditioning) to comply with capacity limits (which shall include all athletes, coaches, and observers) indicated in current CDPH Gym & Fitness Center Guidance Capacity.
  • Associated indoor activities for the team (e.g., dinners, film study) are prohibited if engaged in competition given evidence that transmission is more likely to occur in these indoor higher risk settings.
  • Teams must not participate in out-of-state games and tournaments; several multistate outbreaks have been reported around the nation, including California residents.

Shouldn’t the general requirements be the responsibility of the coaches and parents?

These absurd guidelines demonstrate this is purely about Gov. Newsom controlling the state’s citizens.

Katy Grimes, the Editor of the California Globe, is a long-time Investigative Journalist covering the California State Capitol, and the co-author of California’s War Against Donald Trump: Who Wins? Who Loses?

This article was originally published by the California Globe.

Cleaning Up A $35 Million Sacramento Mess

(Gage Skidmore /Flickr)

Only in California. Sign a shady multimillion-dollar state contract with a politically connected consulting firm to do “voter outreach,” get sued over it and not only will your friends in Sacramento paper over it, but they will also appoint you to the United States Senate.

Or at least that is how it worked for Sen. Alex Padilla.

In this column last year, we told you about the attempt of then-Secretary of State Padilla to execute a $35 million contract with a political consulting firm, SKDKnickerbocker, whose website prominently stated that it was on “Team Biden.”

But the contract was fishy from the start. Not only did the secretary of state’s office not comply with the Public Contract Code, only a handful of partisan political consulting firms, rather than nonpartisan advertising agencies, were solicited to bid and, most importantly, the contract was not supported by any line item in the state budget.

Even the state controller’s office cried foul and rejected the contract. The Howard Jarvis Taxpayers Association sued, media scrutiny followed, and Padilla and Gov. Gavin Newsom got egg on their faces just as Newsom was appointing Padilla to the U.S. Senate.

On a call with reporters in December to discuss Padilla’s promotion, the two were quick to downplay the contract.

“The Controller’s office, the Department of Finance — everyone is sharpening their pencils and working it out,” said Padilla.

“We’re working with legislative leadership and (the Department of) Finance and we’ll get that paid,” said Newsom.

Well, the fix is in and the governor and Democrats in the state Legislature intend to get SKDK paid even if it comes at the expense of the counties.

To read the entire column, please click here.

Mike Levin, please return my phone call! What is your position on HR 51 – D.C. Statehood?! Note: Updated – see postscript.

Dana Point where I live is in the 49th Congressional District.  Formerly a reliable Republican stronghold, Democrat Mike Levin is now my Congressman.  Levin flipped the seat in 2018 and managed to win a pretty strong re-election in 2020.  But the district still has a dominant Republican registration and could be a targeted district again for both parties in 2022.

I actually thought Levin was a decent representative, for a Democrat.  While there is no denying my Republican and conservative bias, and the fact that I have been an elected official in the district (once a member of the Dana Point City Council), I had been impressed with his work with the Surfrider Foundation and in cleaning up the mess at the closed San Onofre nuclear power plant nearby.  I know several Republicans who like me, have liked what Levin has done on San Onofre, and some voted for him because he had taken the problems at San Onofre seriously and worked for solutions, while his Republican opponents really hadn’t seemed to have embraced the environmental concerns presented by the closure of the nuclear plant with the same enthusiasm.

However, I now can’t say Levin is doing a good job as a Democrat in a Republican seat.  I almost could, but now I cannot.  And this is because I called his local office, in Oceanside, on Thursday, February 11 at 3 pm in the afternoon to ask a simple but important question: “What is your position on HR 51?”  I had to leave a voice mail message, as no live person answered the phone, but it is now February 21, and after 10 days of no follow-up, I am pretty sure my important question, one I am entitled as a voter in the district to have answered, is going to be ignored.  I don’t know what my Congressman’s position is on a piece of legislation he is being asked to consider.

HR 51 is the proposal that would make the District of Columbia a full-fledged state.  To be enacted, all it needs is a majority vote in the House of Representatives (218 votes) and a majority in the US Senate (51 votes).  If that happens, residents of Washington, DC will then elect two new members of the US Senate and a voting member of the House.

There are a lot of problems with HR 51.  The first is that if it is enacted, California’s influence in the Senate would be diluted.  The next is that the two new Senators would very likely reflect the very liberal politics of D.C.’s voters for generations to come, ensuring liberal policies and giving the Democrats a rather unfair and perhaps even underhanded advantage in the Senate.  Other problems include intrusion on several constitutional provisions that intend for the District to be a Federal district free of politics and not a state.  A 16-page report detailing why admitting the District of Columbia to the union is a bad idea can be found here: https://usjf.net/2020/07/28/d-c-statehood/.

I lived in the District when I worked in the Reagan and Bush I Administrations and as a self-governing entity it was a total disaster then.  I have so many negative stories I can impart about living in the District.  The rampant riots and disorder of last year are a continuing witness to why the District should not be given statehood.  But brazen politics are at play here…

HR 51 is cosponsored by 210 members of the House, all Democrats.  It only needs 8 more votes to pass the House.  Mike Levin is one of 11 Democrats who have not joined as cosponsors of the D.C. statehood bill.  Thus, his position on HR 51 is really, really important, because Levin could make a difference.

I have done some polling and I am pretty sure that the majority of residents of the 49th Congressional District are skeptical of adding the District of Columbia as a full-fledged state to the union.  Mike Levin would be “voting his district” and doing the right thing in my mind, to oppose HR 51.  He is a critical vote than can make or break this awful legislation.  Congressman Levin – please tell us – what is your position on HR 51?!  We deserve to know.  Your constituents deserve an answer.  And you ought to have the decency to return calls from an actual constituent in your district on the people’s business before you.

P.S. – Update: I received a cordial call from Congressman Levin’s office today (Monday 2/22). The staff member kindly apologized for the delay in getting back to me and confirmed that Congressman Levin was not a cosponsor of HR 51 in this Congress. The staff member also confirmed that Congressman Levin supported DC Statehood in the last Congress and research indicates he voted in favor of a similar bill in 2020. But the staff member said he would be willing to read a 16-page report I offered on reasons why DC Statehood is a bad idea. Now that DC Statehood is more of a possibility in this new Congress, I truly hope that Mike Levin will resist the pressure from his caucus and not support this awful bill.

Pandemic Hazard Pay Laws Are Putting Grocery Stores Out of Business

Gemma/Unsplash

Hazard pay ordinances mandating wage premiums for grocery store workers during the pandemic are spreading across the West Coast. Following them are store closures and complaints from owners that these new laws will soon put them out of business.

On Tuesday, Quality Food Centers (QFC), a Kroger-owned supermarket chain, announced it would be closing two of its Seattle locations. The decision, the company says, was “accelerated” by the city’s new mandate that large grocery stores pay their employees an additional $4 per hour.

“When you factor in increased costs of operating during the COVID-19, coupled with consistent financial losses at these two locations, and this extra new pay mandate, it becomes impossible to operate a financially sustainable business,” said the company in a press release.

That ordinance was passed unanimously by the Seattle City Council in late January and went into effect earlier this month. It is set to last as long as the city’s declared COVID-19 emergency is in effect. It applies to all grocery stores that are larger than 10,000 square feet and are operated by companies with more than 500 employees globally.

Kroger’s store closures in Seattle mirror its actions in Long Beach, California, where the company also closed two poorly-performing stores following the city’s passage of a near-identical $4-an-hour “hero pay” law for grocery store workers.

Those aren’t the only stores that could be on the chopping block. Everywhere pandemic hazard pay policies have passed, store operators are warning they’ll soon be out of business too.

In court filings in a federal lawsuit challenging Seattle’s hazard pay ordinance, two owners of Grocery Outlet stores, a discount grocery chain, said the city’s mandated $4-per-hour wage premium is forcing them to operate at a loss.

Steve Mullen, an owner of a Grocery Outlet in Seattle’s Madrona neighborhood, said that the hazard pay law is costing him an additional $20,000 in labor costs each month.

“The store does not make that much on a monthly basis and [the hazard pay ordinance] will push the store into a significant deficit,” said Mullen in court filings tweeted out by independent Seattle journalist Kevin Schofield. “I cannot continue to operate a store that is consistently unprofitable. If losses occur as predicted, I will likely be forced to close the Madrona Grocery Outlet store.”

It’s the same story for Michael Sandberg, the owner of a Grocery Outlet in Seattle’s Lake City area, who said the city’s new law will increase his costs of employing his current 22 employees by about $10,000 a month.

“The store does not make nearly that much” per month, wrote Sandberg in a court filing for the same lawsuit. “Paying the mandatory hazard pay will cause the Lake City Grocery Outlet store to go into the red.”

Mullen and Sandberg’s declarations are part of a lawsuit being brought by the Northwest Grocery Association and the Washington Food Industry Association, two trade groups representing grocers, against the city of Seattle in the U.S. District Court for the Western District of Washington.

Their complaint alleges that the city’s hazard pay ordinance is preempted by the federal National Labor Relations Act (NLRA), which the grocers argue leaves it to companies and unions, not local or state governments, to hash out compensation agreements.

The two groups’ complaint also says the city’s hazard pay ordinance violates the Equal Protection Clause of the U.S. Constitution’s 14th Amendment and the Washington Constitution by arbitrarily requiring only grocery stores to pay out these wage premiums.

The California Grocers Association (CGA) is making identical arguments in six separate federal lawsuits it’s brought against cities in that state which have passed their own hazard pay ordinances for grocery store workers.

Those lawsuits have also sparked identical claims of hardship from grocery store owners and operators.

John Franklin, chief financial officer for Northgate Gonzalez Markets, a Southern California grocery chain, declared in court filings in the CGA’s lawsuit against the city of Long Beach that had the pay ordinance been in effect during all of 2020, its three Long Beach locations would have lost between $47,000 and $74,000 each month.

Defenders of hazard pay for grocery store workers, sometimes called “hero pay,” say that grocery chains are using store closures as a scare tactic to discredit these policies and avoid pay increases they can easily cover with their record pandemic profits.

United Food and Commercial Workers (UFCW) 21—the union representing grocery store workers in Washington—called the latest QFC store closures “a transparent attempt to intimidate other local governments” from passing similar laws. The union notes that Kroger ended its voluntary $2-an-hour hero pay bonus in May 2020, even as the company’s profits “soared.”

Teresa Mosqueda, a Seattle City Council member, said in her own statement attacking the QFC closures that one of the company’s stores was already slated for redevelopment.

The city of Long Beach has a made similar argument when defending its hazard pay ordinance from the CGA’s lawsuit. Included in one of the city’s court filings were links to news articles reporting that Kroger’s net earnings doubled year-over-year during the first three quarters of 2020.

The grocery industry has countered that its increased profitability still leaves it with razor-thin profit margins that would be more than erased by these hazard pay policies.

report from economic consultancy firm Capitol Matrix Consulting, prepared for the CGA as part of their lawsuits, found that a $5-per-hour hazard pay premium—which was passed in Oakland and is being considered in Los Angeles—could increase stores’ average labor costs by 28 percent and overall costs by 4.5 percent. That’s about three times the normal profit margin for grocery stores, and twice the profit margin grocers were making at the height of the pandemic.

Were a $5-per-hour hazard pay law to be applied to the entire state of California, grocery stores would have to cover those costs either with a collective $4.5 billion increase in prices or shed 66,000 jobs, the report says.

Viewed in this light, hazard pay laws look less like a free reward provided to grocery store workers and more like a massive transfer program from consumers to workers, or from some grocery store workers to others.

Of course, companies aren’t limited to just raising prices or cutting staff positions. More likely, they’d do some mix of both, making other cost savings and maybe accepting slimmer profit margins.

Even when it comes to grocery store regulations, there’s no free lunch.

This article was originally published by Reason.com

New CA Bill to Require Gender Neutral Retail Departments

On February 18, Assembly members Evan Low and Cristina Garcia introduced Assembly Bill 1084 to require gender neutral retail departments. The bill would add Part 2.57 (commencing with Section 55.7) to Division 1 of the Civil Code.

Section One of the bill would add Part 2.57, which would be titled “Gender Neutral Retail Departments.” The bill would specify legislative findings and declarations that there are unjustified differences in similar products that are traditionally marketed either for girls or for boys can be more easily identified by the consumer if similar items are displayed closer to one another in one, undivided area of the retail sales floor. In addition, keeping similar items that are traditionally marketed either for girls or for boys separated makes it more difficult for the consumer to compare the products and incorrectly implies that their use by one gender is inappropriate.

The bill would specify that a retail department store that offers childcare items for sale is required to maintain one undivided area of its sales floor where the majority of the childcare items being offered shall be displayed, regardless of whether a particular childcare item has been traditionally marketed for either girls or for boys. In addition, a retail department store that offers children’s clothing for sale, as well as toys for sale, would be required to maintain one undivided area of its sales floor where the majority of the children’s clothing being offered shall be displayed, regardless of whether a particular article of children’s clothing has been traditionally marketed for either girls or for boys. The bill defines the terms “childcare item,” “clothing,” and “toy.”

AB 1084 would also specify that it is not to be construed to constrain how a retailer promotes, displays, or presents a particular item within each undivided area of its sales floor where either childcare items, children’s clothing, or toys are being offered for sale. However, no signage is allowed to be used within any undivided area where either childcare items, children’s clothing, or toys are offered for sale indicating the items are for either girls or for boys.

In addition, a retail department store located in California that maintains an internet website through which it sells childcare items, children’s clothing, toys, or anything that could be considered a combination thereof, is required to dedicate a section of the internet website to the sale of those items and articles that must be titled, at the discretion of the retailer, “kids”, “unisex”, or “gender neutral”.

This proposed law would only apply to retail department stores with 500 or more employees. Beginning on January 1, 2024, a retail department store that fails to correct a violation of this law within 30 days of receiving written notice of the violation from the Attorney General is liable for a civil penalty of $1,000 which may be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General in any court of competent jurisdiction.

Chris Micheli is a lobbyist with Aprea & Micheli, as well as an Adjunct Professor of Law at the University of the Pacific McGeorge School of Law.

This article was originally published by the California Globe.