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What to know about money waiting in CalKIDS state-funded savings accounts | Quick Guide

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Photo: EdSource.org

Webinar April 17

By Lasherica Thornton, EdSource.org

Over 3.6 million school-aged children across the state qualify for at least $500 in savings with the California Kids Investment and Development Savings program (CalKIDS), a state initiative to help children from low income families save money for college or career.

Just 8.3% of eligible students, or 300,000, have claimed their accounts as many families are unaware of CalKIDS or face challenges accessing the accounts once aware.  The money is automatically deposited into the savings account under a student’s name, but families must claim the accounts by registering online.

Here is information you should know about the state-funded accounts:

What is CalKIDS?

The CalKIDS program was created to help students, especially those from underserved communities, gain access to higher education. It helps families save for post high school training by opening a savings account and depositing between $500 and $1,500 for eligible low-income students in the public school system. Gov. Gavin Newsom, who launched the program in August 2022, invested about $1.9 billion in the accounts.

Who qualifies?

Low-income students and all newborns qualify.

According to program details, low-income public school students are awarded $500 if they:

  • Were in grades 1-12 during the 2021-22 school year
  • Were enrolled in first grade during the 2022-23 school year, or
  • Will be in first grade in subsequent school years.

An additional $500 is deposited for students identified as foster youth and another $500 for students classified as homeless.

For newborns,

  • Children born in California after June 2023, regardless of their parents’ income, are granted $100.
  • Those born in the state between July 1, 2022, and June 30, 2023, were awarded $25 before the seed deposit increased to $100.
  • Newborns get an additional $25 when they claim the account and an additional $50 if parents link the CalKIDS account to a new or existing ScholarShare 529 college savings account.

The California Department of Education determines eligibility based on students identified as low income under the state’s Local Control Funding Formula or English language learners. The California Department of Public Health provides information on newborns.

How can students use the money?

The money can be used at eligible higher education institutions across the country, including community colleges, universities, vocational or technical schools and professional schools, according to CalKIDS.

The funds can be used for: tuition and fees, books and supplies, on or off-campus room and board as well as computer or other required equipment, according to the CalKIDS program guide.

Click here to search for schools that qualify as an eligible higher ed institution. 

Does the CalKIDS account have restrictions similar to those for a 529 savings account?

CalKIDS accounts are a part of the ScholarShare 529 program — California’s official tax-advantaged college savings plan — and administered by the state’s ScholarShare Investment Board.

Transportation and travel costs are usually not considered qualified expenses for 529 savings accounts.

According to the guide for CalKIDS, if a student has no account balance with their higher education institution — which receives the CalKIDS distribution check —  the institution can pay the funds directly to the student.

Does the money in the CalKIDS accounts earn interest?

The deposits grow over time because CalKIDS accounts are interest-bearing.

How aggressive that growth is depends on the age of the student, said Joe DeAnda, communications director with the California State Treasurer’s Office, which oversees the CalKIDS program.

“If it’s a newborn, (the seed deposits are) invested in a fairly aggressive portfolio that assumes 18 years of investing time,” DeAnda said. “If they are school-aged, they’re invested in a more conservative portfolio that assumes a shorter investing timeline and is a more secure portfolio.”

Even among students, the younger a child is, the more aggressive the savings portfolio will be. The investment provides “opportunity to grow savings while the child is younger and better safeguard savings against market fluctuations when the child nears college age,” according to the CalKIDS program guide.

Specifically, accounts for newborns, each new class of first graders and students in grades 1-5 during the 2021-22 school year are invested in a portfolio that corresponds to the year that they’re expected to enter a program after high school, or at age 18. The portfolio will become more conservative as the child gets older.

For students in grades 6-12 during the 2021-22 school year, the accounts are invested with a guaranteed, or fixed, rate of return on the investment.

Can I add to the account?

No, you cannot add money to the CalKIDS account. Parents or guardians can open a ScholarShare 529 account, which can be linked to the CalKIDS account so they can view the accounts in one place.

In fact, CalKIDS encourages families to open a ScholarShare 529 college savings account, which is a way for families to save even more money for their children, DeAnda said.

What if my student already graduated? What happens to unclaimed money?

The accounts remain active under a student’s name until the student turns 26 years old. Up until that age, students can claim the money.

If the account is not claimed by age 26, the account closes, and the money is reallocated to others in the CalKIDS program, DeAnda said.

What if I’m not sure if my child is considered low income?

CalKIDS has sent notification letters of program enrollment to over 3.3 million eligible students and nearly 270,000 students in last school year’s class of first graders.

Without the letters, to check student eligibility, families must enter students’ Statewide Student Identifier (SSID), a 10-digit number that appears on student transcripts or report cards, according to the CalKIDS website.

The California Department of Education provides CalKIDS with data on first graders in the late spring or early summer and asks parents to wait until then before checking for their child’s eligibility.

How do I access that SSID number to check eligibility or to register the account?

The SSID may be found on the parent’s or student’s school portal, transcript or report card.

The CalKIDS website instructs families to contact their child’s school or school district if they’re unsure of how or unable to locate the number.

How do I access or ‘claim’ the account?

The notification letter that CalKIDS sends families contains a unique CalKIDS Code that can be used to register the accounts. Even without the code, families can register the accounts.

To claim the student account:

  1. Visit the CalKIDS registration page to claim the account. Click here to register. 
  2. Enter the county where the student was enrolled (for a student in grades 1-12 in the 2021-22 school year; for a first grader, where the student was enrolled in 2022-23 or subsequent years)
  3. Enter student’s date of birth
  4. Enter the SSID or CalKIDS Code from the notification letter
  5. Click Register
  6. Set up the account, either as the child or as the parent/guardian, with a username and password

To claim the newborn account, which should be available about 90 days after birth:

  1. Visit the CalKIDS registration page to claim the account.
  2. Enter the county where the child was born
  3. Enter child’s date of birth
  4. Enter the Local Registration Number on the child’s birth certificate or CalKIDS Code from the notification letter
  5. Click Register
  6. Set up the account, either as the child or as the parent/guardian, with a username and password

I still need help. How do I get additional support?

Contact CalKIDS at (888) 445-2377 or https://calkids.org/contact-us/

The CalKIDS team is also hosting an April 17 webinar to outline the program, eligibility, account registration, fund distribution and benefits. To sign up for the webinar, click here. 

How does my high school graduate make a withdrawal to use the money?

According to the CalKIDS program guide, to request a distribution, log into the claimed CalKIDS account and request a distribution, which doesn’t have to be for the entire amount. The funds are tax-free for the qualified expenses of tuition, books, fees, computers and equipment.

The student must be at least 17 years old and enrolled at an eligible institution.

The CalKIDS money, which will be sent to the institution, is considered a scholarship from the state of California.

 

 

Wilson has large fundraising lead in 15th Assembly District race

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Monica Wilson (Source: Wilson for Assembly campaign) and campaign finances in 2024 through Feb. 17th. Source: Cal-Access

Avila Farias in second, Mitchoff a close third, Ledo a distant fourth

Antioch Mayor Pro Tem voted to appoint 3 residents to new Police Oversight Commission after receiving contributions from them

By Allen D. Payton

According to the latest required campaign finance reports Antioch Mayor Pro Tem Monica Wilson has a commanding lead in fundraising over her three rivals in the 15th Assembly District race on Tuesday’s primary election ballot.

The reports, known as Forms 460 and 497 on the California Secretary of State’s Cal-Access website, show Wilson has raised over $300,000 almost three times what her next closest rival, Contra Costa School Board Trustee Anamarie Avila Farias has, who raised a little over $108,000. Former County Supervisor Karen Mitchoff has raised close to $90,000 and Realtor Sonia Ledo, the only Republican in the race, has raised about $7,300.

In addition, as of Feb. 17th, their reports show Wilson’s campaign spent two-and-a-half times what her closest opponent did with $267,491.18 to Avila Farias’ $104,542.71, Mitchoff’s $75,757.72 and Ledo’s $16,260.33.

The most unique contribution was made to Wilson’s campaign from the Jane Fonda Climate PAC for $4,000.

Wilson Outpaces, Outraises, Outspends Opponents With Help From Unions & Attorneys

The reports for Wilson, who is serving as treasurer for her own campaign committee, show she has raised $129,068.64 last year, $203,555 total with $275 of non-monetary or what are referred to as in-kind contributions $203,280 in cash. In 2023 as of Feb.17 she raised $94,440.51 this year with $94,222.77 in cash contributions and $217.74 of in-kind contributions. Since then, according to several Form 497 Late Contribution Reports, Wilson’s campaign has received an additional $38,600 in contributions after Feb. 17 for a total of $306,091.18 in contributions to date, including $492.74 of in-kind contributions.

$11,000 from the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers Local 549 PAC with $5,500 reserved for the general election;

$10,900 each from American Federation of State, County & Municipal Employees-CA People Small Contributor Committee, California Nurses Association PAC (CNA-PAC) Small Contributor Committee, California State Council of Service Employees Small Contributor Committee, Service Employees International Union Local 1000 Candidate PAC Small Contributor Committee, Standing Committee on Political Education of the California Labor Federation AFL-CIO Small Contributor Committee, State Building and Construction Trades Council of California PAC Small Contributor Committee, SEIU Local 2015 State PAC Small Contributor Committee, State Building and Construction Trades Council of California PAC Small Contributor Committee, Northern California Carpenters Regional Council Small Contributor Committee, and United Domestic Workers of America Action Fund Small Contributor Committee;

$10,500 from International Brotherhood of Electrical Workers (IBEW) Local Union 302 PAC Small Contributor Committee;

$5,500 each from Sheet Metal Workers Local Union 104 Political Committee, Steamfitters U.A. Local 342 PAC, United Association No. 159 Consumer Protection Fund sponsored by Plumbers & Steamfitters Local 159, American Federation of State, County and Municipal Employees – Council 57 PAC, California African American PAC, Consumer Attorneys of California PAC, affordable housing activist and former Planned Parenthood leader Karen Grove of Menlo Park, IBEW Local 551 PAC, Operating Engineers Local Union 3 Statewide PAC Small Contributor Committee, Service Employees International Union (SEIU) United Healthcare Workers West PAC Small Contributor Committee, IBEW Local 595 PAC Small Contributor Committee, IBEW PAC Educational Fund, and International Union of Painters and Allied Trades Political Action Together Legislative & Educational Committee (MPO) i.e. multipurpose organization;

$10,217 from the International Brotherhood of Electrical Workers Local Union No. 617 PAC;

$5,000 each from Corey Jackson for Assembly 2024, Faculty for our University’s Future, a committee sponsored by the California Faculty Association Small Contributor Committee, and Service Employees International Union Local 1021 Candidate PAC Small Contributor Committee;

$4,500 from IBEW Local Union 1245 PAC;

$4,000 from the Jane Fonda Climate PAC;

$3,000 each from California SMART (Sheet Metal Air Rail Transportation) TD (Transportation Division) (formerly United Transportation Union) PAC, Sprinkler Fitters Local 483 Legislative PAC and Bryan for Assembly 2024, and California-Nevada Conference of Operating Engineers PAC Small Contributor Committee;

$2,500 each from Ash Kalra for Assembly 2024, California Federation of Teachers COPE Small Contributor Committee, Cathryn Campbell of El Cerrito, a Berkeley Unified School District teacher, Electing Climate Champions Fund sponsored by California Environmental Voters, Lori Wilson for Assembly 2024, District Council of Iron Workers of the State of California and Vicinity PAC Small Contributor Committee, Lola Smallwood-Cuevas for Senate 2026, International Brotherhood of Electrical Workers Local No. 11 PAC Small Contributor Committee, and Republic Services LE03-AWIN Management Inc., United Food and Commercial Workers Western States Council Candidate PAC Small Contributor Committee,

$2,417 from Progressive Era PAC, which works “to elect governing majorities of leaders in California committed to building a progressive era for people of color;”

$2,000 from International Brotherhood of Electrical Workers Local #6 Political Account Small Contributor Committee, political campaign consultant Melody Howe Weintraub of Lafayette, United Food & Commercial Workers Local 5 PAC, Marysville Central Labor Council PAC;

$1,600 from The California Women’s List PAC;

$1,500 each from DRIVE (International Brotherhood of Teamsters Democrat, Republican, Independent Voter Education) Committee, Sprinkler Fitters Local 483 Legislative PAC, United Food and Commercial Workers Western States Council Candidate PAC Small Contributor Committee, and a variety of personal injury attorneys including: Altair Law, LLP in San Francisco, Baron & Budd, P.C. law firm of Dallas, TX, Gregory Bentley from Newport Beach of Bentley & More, LLP, Michael Bidart from Claremont, CA of Shernoff Bidart Echeverria Bentley, LLP, Elizabeth Cabraser from from Sebastopol of Lieff Cabraser Heimann & Bernstein, LLP, Brian Chase from Newport Beach of Bisnar, Chase Trial Lawyers, LLP, Cotchett, Pitre, & McCarthy, LLP of Burlingame, Dreyer, Babich, Buccola, Wood, & Campora, LLP of Sacramento, Don Ernst of the Ernst Law Group in San Luis Obispo, Greene Broillet & Wheeler, LLP of El Segundo, Knight Law Group of Los Angeles, Law Offices of Walkup, Melodia, Kelly & Schoenberger of San Francisco, McNicholas & McNicholas, LLP of Los Angeles, Panish, Shea, Boyle, Ravipudi, LLP of Los Angeles, Rizio Lipinsky Law Firm of Santa Ana, Robinson Calcagnie, Inc. of Newport Beach, Singleton Schreiber, LLP of San Diego, Mickel Arias of Arias, Sanguinetti, Wang & Torrijos, LLP in Los Angeles, and Elizabeth A. Carazolez from San Diego,  Director of Management of Casey Gerry Schenk Francavilla Blatt & Penfield, LLP;

$1,000 each from former Assemblywoman Joan Buchanan, Melony Wilson, Controller for advertising agency LIDA NY, LLP of New York, Terrance Wilson of Brentwood, National Union of Healthcare Workers Candidate Committee for Quality Patient Care and Union Democracy, Gipson for Assembly 2024, Black Elected Officials of the East Bay PAC, and Dallas Fowler of Los Angeles, a business development and political consultant;

$750 from Contra Costa District Attorney Diana Becton;

$600 from former City of Antioch public information officer Rolando Bonilla;

$500 each from International Association of Heat and Frost Insulators, Allied Workers Local 16, AFL-CIO PAC, Teamsters Local Union No. 315 PAC, and UA Local No. 228 Building Corporation PAC Small Contributor Committee of Marysville.

Wilson also received contributions of $200 from Antioch resident Devin Williams and $100 each from Antioch residents Harry Thurston and Leslie May, all of whom the councilwoman recently voted to appoint to the City’s new Police Oversight Commission.

As of Feb. 17th, Wilson had spent $267,491.18, with no outstanding debts and had $51,077.94 cash on hand.

Anamarie Avila Farias (Source: Avila Farias for Assembly) and her campaign finances for 2024 through Feb. 17th. Source: Cal-Access

Avila Farias Files Financial Forms, Funded by Faculty, Firefighters, Cops, Casino Indian Tribes & Healthcare Workers

The list of Assembly District 15 candidates on the Cal-Access website, as of Sunday, Feb. 3, 2024, incorrectly shows Avila Faria’s name not highlighted to access her campaign financial information and reports.

In spite of the fact that Avila Farias’ name is not highlighted on the State Assembly candidates page of the Cal-Access website, making it appear that her campaign failed to file the required financial forms, a search of her name on that website reveals she has.

Avila Farias’ campaign raised $48,195.23 last year, $50,598 as of Feb. 17th and an additional $9,500 since then, for a total of $108,293.23 with just $43 of in-kind contributions. Her largest contributions were:

$12,900 from Peace Officers Research Association PORAC PAC

$10,900 from California Teachers Association For Better Citizenship;

$5,500 each from Western Manufactured Housing Committee PAC, California Professional Firefighters PAC, PACE of CA School Employees Association, California Latino PAC and Pechanga Band of Indians, owners of a Southern California casino, and Housing Contractors of CA PAC;

$5,000 from redistricting lawyers Shenkman & Hughes PC of Malibu, CA;

$4,000 from International Association of Fire Fights Local 1230 PAC;

$2,500 each from California Federation of Teachers COPE, Cal Fire Local 2881 SCC, Morongo Band of Mission Indians owners of another Southern California casino, and Bianca Rubio for Assembly 2024;

$2,000 each from California Financial Services Association PAC, Construction Employers’ Association PAC and California Nations Indian Gaming Assoc.

$1,500 from Eli Lily and Company PAC;

$1,324.23 from Yazmin Llamas-Morales from Martinez of Allied Mortgage Group Finance;

$1,000 from National Union of Healthcare Workers, Manuel G. Avila & Domitila Avila Trust of Martinez, Blanca Pacheco for Assembly 2024, James Cervantes of Lafayette, Assemblymember David Alvarez of San Diego, and real estate developer William Schrader, Jr. of Alamo, owner of The Austin Group LLC.

Her Form 460 report ending Feb. 17th shows Avila Farias spent $77,848.32 this year for a total of $104,542.71 during the campaign, had $41,215.02 in accrued expenses and an ending cash balance of $49,051.87.

Karen Mitchoff (Source: Mitchoff for Assembly) and her campaign finances for 2024 as of Feb. 17, 2024. Source: Cal-Access.

Mitchoff Backed by Big Oil, Business, Beer & Builders

Mitchoff raised $68,769 in 2023 and as of Feb. 17 has raised $23,399 this year for a total of $92,168 of which $3,063 were non-monetary contributions. Her largest contributions were:

$5,500 each from Chevron Policy Government & Public Affairs, Phillips 66, PBF Holding Company LLC (Betsy Brien) of Parsippany, New Jersey, which owns the Martinez Refinery, Western States Petroleum Association California PAC, Walmart, Inc., Yasef Pinson of Yasef Pinson Real Estate in Los Angeles, and Devora Pinson, Executive Office Manager of Boardwalk West Financial Services, also in Los Angeles;

$5,000 each from California Family Beer Distributors Association PAC, Marathon Petroleum Corporation and its Subsidiaries/Affiliates, Build Jobs PAC, Sponsored by the Building Industry Association of the Bay Area, Mt. Diablo Resource Recovery (MDRR) PAC and MDRR’s owner, Sil Garaventa;

$4,000 from American Property Casualty Insurance Association California PAC;

$3,000 from the California Building Industry Association PAC;

$2,500 from Concerned Americans for Responsible Government, Sponsored by the California Trucking Association (CARGO PAC);

$1,500 each from California Permanente Medical Groups PAC and Walnut Creek-based retail developer Brian Hirarara;

$1,000 each from former Antioch Mayor Donald Freitas, Joseph Garaventa, Sil’s brother, John McPeak, former County Supervisor Sunne McPeak’s husband, and Sheila Stokley, Property Manager of Stokley Properties in Pleasant Hill and Zell & Associates of Point Richmond.

Mitchoff’s campaign also received in-kind contributions of $1,800 from Brandon C. Bjerke, a Legislative Analyst for the California State Assembly, for website design and maintenance, as well as $1,164 from lawyer Patricia Curtin of Lafayette for fundraiser event costs.

As of Feb. 17th, Mitchoff’s campaign committee had spent $50,205.74 this year for a total of $75,757.72 during the campaign, had no outstanding debts and an ending cash balance of $17,185.74 as of Feb. 17th.

Sonia Ledo (Source: Ledo for Assembly) and her campaign finances for 2024 through Feb. 17, 2024. Source: Cal-Access

Ledo Lends Herself, Raises Least

Ledo’s campaign finance reports show she has raised $1,655.88 in 2023 and $5,664 in 2024 as of Feb. 17 for a total of $7,319.88 of which $99 was non-monetary contributions.

Besides herself, Ledo’s largest contribution was from the BART Police Officers Association for $2,000. As of Feb. 17th, her campaign had outstanding debts of $7,315.26 most of which is owed to herself for the filing fee for her candidate’s statement and the balance is owed to a Christos Moulis of Concord for Ledo’s filing fee. Her campaign had spent a total of $16,260.33 and an ending cash balance of $5,898.19.

The top two candidates in the primary election will face off in the November general election to replace outgoing Assemblyman Tim Grayson who is running for the 9th State Senate District instead.

 

PAC opposing Wilson in Assembly District 15 race spends over $200K to defeat her

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The Leadership for California: East Bay Committee financial disclosure reports show expenditures for three mailers against Monica Wilson in the Assembly District 15 race and two mailers supporting Tim Grayson in the State Senate District 9 race. Source: Cal-Access

Same PAC is supporting Grayson in Senate District 9 race

By Allen D. Payton

So far, a political action committee named “Leadership for California: East Bay Committee, Sponsored by Californians for Jobs and a Strong Economy” has spent $214,162 to oppose Antioch Mayor Pro Tem Monica Wilson in her campaign for the State Assembly District 15 seat.

To date, the PAC has paid for three mailers against Wilson between Feb. 7th to 15th, ranging in cost from $58,569 to $77,492, according to the PAC’s Form 460 financial disclosure report from Jan. 1 thru Feb. 17, 2024.

The Leadership for California East Bay Committe Form 460 report dated Feb. 17, 2024 shows expenditures for polling, research and a mailer against Wilson. Source: Cal-Access

According to Cal-Access, the California Secretary of State’s political campaign finance website, the PAC raised $333,392.50 as of Feb. 17, including:

$260,000 from Californians for Jobs and a Strong Economy ID# 1275549;

$49,000 from American Beverage Association California PAC;

$10,000 from Keeping Californians Working, a Coalition of Insurance Agents, Technology, Energy, and Health Care Providers; and

$14,392.50 as an in-kind non-monetary contribution by Brighter Future for All ID# 1463665 for polling and research.

The Leadership for CA East Bay Committe Form 496 report dated Feb. 22, 2024, shows expenditures for another mailer against Wilson. Source: Cal-Access

Californians for Jobs and a Strong Economy Supported By Medical, Business Interests

According to Cal-Access, contributors to The Californians for Jobs and a Strong Economy PAC include the California Medical Association PAC, Target, Dart Container, Cooperative of American Physicians State PAC, Californians Allied for Patient Protection PAC, California Cable Telecommunications Association, Davita, Lyft, Peace Officers Research Association of California (PORAC) PAC, Fresenius Medical Care, In-N-Out Burgers, California Real Estate PAC, Chevron, PG&E, Walmart, Chime Financial, Inc., Anheuser-Busch Companies, McDonald’s Corporation and California Bankers Association State PAC.

The Leadership for CA East Bay Committe Form 496 report dated Feb. 28, 2024, shows expenditures for a third mailer. Source: Cal-Access

Same East Bay PAC is Supporting Grayson for Senate

The same Leadership for California: East Bay Committee PAC also spent $72,350 on two mailers supporting Assemblyman Tim Grayson, for whose seat Wilson is seaking, in his campaign for State Senate District 9.

Wilson is facing three opponents in the race for Assembly District 15, including two fellow Democrats, County Board of Education Trustee Anamarie Avila Farias and former County Supervisor Karen Mitchoff, and one Republican, Realtor Sonia Ledo. The election is next Tuesday, March 5th and the top two vote-getters will face off in the November general election.

 

 

 

Unions backing Wilson in Assembly race spend $253K attacking opponent Mitchoff

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The Opportunity PAC’s financial disclosure reports show expenditures for three of the four “hit piece” mailers against Karen Mitchoff in the Assembly District 15 race. Source: Cal-Access

By Allen D. Payton

One of four mailers opposing Mitchoff paid for by Opportunity PAC with funds form by unions.

Some of the same unions backing Antioch Mayor Pro Tem Monica Wilson in the Assembly District 15 race on the March primary ballot have spent almost $253,000 attacking one of her three opponents, former Contra Costa County Supervisor Karen Mitchoff.

At least four mailers have been sent to Democrat voters in the district criticizing Mitchoff’s pay raise she voted for while on the board, and her votes against pay raises for county employees.

Two of the mailers obtained by the Herald show they were paid for by “Opportunity PAC – A coalition of teachers, health care givers, faculty members, school employees, and public and private employee organizations.” The political action committee’s Top Funders for the mailers are listed as SEIU (Service Employees International Union) California State Council, California Faculty Association (of the UC and CSU systems) and California School Employee Association.

Another of four mailers opposing Mitchoff paid for by Opportunity PAC with a similar message about her vote for a pay raise for the Board of Supervisors.

When asked about the mailers Mitchoff said they’re all pretty much about the same issue. The same group with the same message. My decision was made over 10 years ago and I wanted to make sure the county supervisors were paid to make it a full-time position.” She also pointed out that she did vote for pay raises for county employees, “in 2022, giving them 5% a year for four years, for a total increase of 20%.”

The interesting part is that some of the state teachers’ unions including college and university faculty and staff are helping pay for the mailers, even though as a member of the Board of Supervisors, Mitchoff had no say about education funding.

According to Cal-Access, the California Secretary of State’s campaign finance reporting website, so far, the PAC has made three expenditures of $46,446.03 each for three mailers opposing Mitchoff, two on Feb. 1 and one on Feb. 13, 2024. The cost for a fourth mailer that appear under the PAC’s Accrued Expenses show an additional $46,446.03. That totals $185,784.12. In addition, the PAC spent $37,000.00 on polling and consulting and $30,126.43 on research in their effort against Mitchoff.

Other Opportunity PAC Expenditures opposing Mitchoff were for polling, consulting and research. Source: Cal-Access

Contributions to PAC Total Over $2.5 Million

The PAC is supporting and opposing a variety of candidates throughout the state. Their most recent Form 460 financial disclosure report dated Feb. 17, 2024, shows they have raised $1.715 million this year and their report ending Dec. 31, 2023, shows $803,500 was raised last year for a total of $2,518,500. They had cash on hand of over $1.1 million as of Feb. 17th.

Contributions include the following amounts and sources:

$750,000 from the California Teachers Association Independent Expenditure Committee;

$534,500 from SEIU California State Council for Working People;

$225,000 from PACE (Political Action for Classified Employees) of California School Employees Association;

$190,000 from Smart Justice California Action Fund;

$150,000 from United Food and Commercial Workers Western States Council Independent Expenditure PAC;

$150,000 from California Federation of Teachers COPE (Committee on Political Education);

$150,000 from Service Employees International Union Local 1000, Keeping California Healthy, Safe and Strong;

$100,000 from Service Employees International Union Local 721 CTW, CLC Workers’ Strength Committee;

$75,000 from SEIU United Healthcare Workers West PAC;

$59,500 from Faculty for Our University’s Future, a committee sponsored by California Faculty Association;

$59,500 from Standing Committee on Political Education of the California Labor Federation AFL-CIO;

$50,000 from the LGBT (Lesbian, Gay Bisexual & Transgender) Caucus Leadership Fund; and

$25,000 from SEIU California State Council (nonprofit 501 (c)(5))

Opportunity PAC Accrued Expenses as of their Feb. 17, 2024 report includes $46,446.03 for a fourth mailer opposing Mitchoff. Source: Cal-Access

Wilson’s Backers Funding Mitchoff Opposition Effort

Wilson’s campaign has been the beneficiary of support from many of those same unions. On her campaign website, Wilson shows endorsements by the California Faculty Association, SEIU California, National Union of Healthcare Workers (NUHW) and United Food & Commercial Workers Local 5, as well as unions that are members of the AFL-CIO.

Wilson and Mitchoff also face two others in the race, including County School Board Trustee Anamarie Avila Farias and Realtor Sonia Ledo in the March 5th primary election next Tuesday. The top two will face off in the November election.

 

CA Legislative Analyst’s Office increases state deficit by $15 billion to $73 billion

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The 2024‑25 Budget

Deficit Update

Under LAO Revenue Update, Budget Problem Grows by $15 Billion

February 20, 2024

From the California Legislative Analyst’s Office, The California Legislature’s Non-Partisan Fiscal and Policy Advisor

The state already faces a significant deficit this year—we estimate it totaled $58 billion under the administration’s revenue forecast at the time the Governor’s budget was proposed in January. However, recent revenue collections data reflect even further weakness relative to those estimates. Specifically, our forecast is about $24 billion below the Governor’s budget across 2022‑23 to 2024‑25. All else equal, this means the budget problem is likely to be higher at the time of the May Revision. The actual increase in the state’s budget problem will depend on a number of factors, including formula-driven spending changes, most notably Proposition 98 spending requirements for schools and community colleges. (Due to specific circumstances this year, changes in revenues are unlikely to have a significant effect on the state’s other major formula-driven spending requirements, specifically related to Proposition 2.) Roughly, a $24 billion erosion in revenues corresponds to a $15 billion increase in the budget problem. This would expand the $58 billion estimated deficit to $73 billion under our updated revenue forecast.

Options to Address $15 Billion in Additional Budget Problem

If the budget problem increases by $15 billion, the Legislature will need to find a like amount of new budget solutions to ensure the budget is balanced for 2024‑25. Budget solutions include, for example: revenue increases and spending reductions (on both a one-time and ongoing basis), as well as other tools, like reserves and cost shifts. As the Legislature considers how to address this increased budget problem, we have put together a set of tables identifying one-time and temporary spending that could be pulled back or reduced in order to achieve budgetary savings. Below, we explain why we set forth these amounts as a possible first option to addressing a larger budget problem and then walk through our method for estimating the amounts potentially available in more detail.

Why Reduce One-Time and Temporary Spending?

The Legislature will weigh the implications of each possible solution—including increasing revenues and spending reductions—against others and, ultimately, choose a mix of solutions based on its priorities. We recommend the Legislature start by reviewing whether recent augmentations for one-time and temporary spending could be pulled back or reduced. We recommend this approach for two key reasons. First, when this one-time and temporary spending was adopted, it was understood that doing so would provide a cushion for future budget problems. For example, the administration frequently displayed “operating surpluses” in its multiyear forecasts excluding this type of spending—implying that the administration understood that the state could not afford all of the commitments under its own projections, but the state could afford the ongoing budget.

Second, the more the Legislature reduces one-time and temporary spending this year, the more other tools it can preserve for future budget problems. Reducing one-time and temporary spending is a “use or lose” tool for addressing the budget problem—once the funds are disbursed to recipients, pulling them back becomes practically impossible. Other tools, like reserve withdrawals and cost shifts, also can be used only once, but at any time. Saving them to deploy in the future can help the Legislature avoid cuts to ongoing services—which involve very difficult decisions. For example, in the Great Recession, the programs with some of the largest expenditure reductions were in health and human services, including to Medi-Cal, which provides health coverage to low-income individuals and the California Work Opportunity and Responsibility to Kids (CalWORKs) program, which provides income assistance to low-income individuals. Although the federal government has certain requirements for minimum state participation in these programs, California provides services well above these minimums. As a result, reductions tend to be concentrated in these areas because they are the ones where the state has the most flexibility to reduce spending without raising issues related to requirements imposed by courts, the voters, and the federal government. As such, maintaining other tools like reserves and cost shifts now could help mitigate reductions in these areas in the future.

Options Possibly Available to Reduce One-Time and Temporary Spending

State Allocated Large Shares of Surpluses to Temporary Purposes, Although Some Has Been Disbursed or Already Proposed for Reduction. Recent budgets allocated tens of billions of dollars in surpluses to one-time and temporary spending, including in 2023‑24, 2024‑25, and 2025‑26. Some spending, most notably for 2023‑24, has already been disbursed or encumbered. This means, for example, that grants have been awarded, funds have been transferred to other entities of government, and contracts or leases have been signed. (In some cases, funds have also been committed for 2024‑25 and 2025‑26, for example, through grant awards.) In addition, the Governor has already proposed pulling back much—but not all—of the undisbursed spending associated with these augmentations.

State Has Nearly $16 Billion in Recent One-Time and Temporary Spending That Could Possibly Still Be Pulled Back or Reduced. After setting aside disbursements and Governor’s budget proposals, we estimate the state possibly could pull back and reduce one-time and temporary augmentations by as much as $6.4 billion in 2023‑24, $4.1 billion in 2024‑25, and $5.1 billion in 2025‑26. Figure 1 shows the distribution of these amounts by program area, while the Appendix includes a complete list of them. These figures represent our current estimates of the amounts for which the Legislature has broad authority to make reductions, which could help the state address a larger budget problem in May. (In some cases, however, further disbursements could occur between now and May, such smaller amounts would be available for reduction at that time.)

Figure 1

Summary of Possible Remaining One‑Time and Temporary Spending

(In Millions)

2023‑24 2024‑25 2025‑26
Business and Labor $266 $284 $198
Criminal Justice 130 40 —
Education 602 1,195 1,109
Health and Human Services 867 301 701
Housing and Homelessness 1,599 — 260
Other 1,752 557 432
Resources and Environment 1,049 1,005 1,377
Transportation 146 739 1,000
Totals $6,411 $4,121 $5,076
Note: Amounts reflect one‑time and temporary spending adopted in the 2021 and 2022 budget packages.

This Information Reflects Our Best Current Understanding. While these estimates reflect the best information we have available, in many cases we do not have perfect information from the administration about the current status of funds. As such, we would view this list as a starting place for the Legislature as it begins crafting the final budget package. For any specific reductions, particularly in 2023‑24, the Legislature could ask the administration for detailed and up-to-date information on disbursements and encumbrances.

More Could Be Pulled Back From Earlier Years. For the purposes of this analysis, we only reviewed disbursements and encumbrances authorized for 2023‑24 and later. There is, however, additional spending attributable to 2022‑23 and earlier that has not yet been disbursed. The Legislature could ask the administration to provide information about the amount of unspent funds from these earlier years.

Appendix Tables

Appendix Figure 1

Possible Remaining One‑Time and Temporary Spending:
Business and Labor

(In Millions)

Department/
Program Area		 Description 2023‑24 2024‑25 2025‑26
EDD New IT overhaul—EDDNext $99 — —
GO Biz California Competes Grants 10 — —
HCAI Health and home care workforce package 85 $259 $198
HCAI Behavioral health workforce capacity 52 — —
HCAI Various other health care workforce initiatives 20 25 —
Totals $266 $284 $198
Note: This table includes allocations from the 2021 and 2022 budget packages that remain after accounting for Governor’s budget proposals and known disbursements and encumbrances, as of February 2024. In some cases our office does not have full information on disbursements from the administration, which means these estimates reflect our best understanding at this time.

Note: Amounts reflect one‑time and temporary spending adopted in the 2021 and 2022 budget packages.
EDD = Employment Development Department; IT = information technology; GO Biz = Governor’s Office of Business and Economic Development; and HCAI = Department of Health Care Access and Information.

Appendix Figure 2

Possible Remaining One‑Time and Temporary Spending:
Criminal Justice

(In Millions)

Department/
Program Area		 Description 2023‑24 2024‑25 2025‑26
BSCC Adult Reentry Grant $20 — —
CDCR Expansion of community reentry centers 40 $40 —
CDCR Various capital projects at San Quentin Rehabilitation Center 20 — —
OES Nonprofit Security Grant Program 40 — —
OES Family Justice Centers 10 — —
Totals $130 $40 —
Note: This table includes allocations from the 2021 and 2022 budget packages that remain after accounting for Governor’s budget proposals and known disbursements and encumbrances, as of February 2024. In some cases our office does not have full information on disbursements from the administration, which means these estimates reflect our best understanding at this time.

Note: Amounts reflect one‑time and temporary spending adopted in the 2021 and 2022 budget packages.
BSCC = Board of State and Community Corrections; CDCR = California Department of Corrections and Rehabilitation; and OES = Governor’s Office of Emergency Services.

Appendix Figure 3

Possible Remaining One‑Time and Temporary Spending:
Education

(In Millions)

Department/
Program Area		 Description 2023‑24 2024‑25 2025‑26
CSAC Golden State Teacher Grants $91 $128 $1
CSU CSU Dominguez Hills Dymally Institute facility 15 — —
DGS State share for school construction projects 472 994 485
DGS Construction and renovation of transitional kindergarten, State Preschool, and full‑day kindergarten facilities — — 550
OPR California College Corps Program — 73 73
UC Cancer Research Relating to Firefighters 7 — —
UC UC Berkeley School of Journalism Police Records Access Project 7 — —
UC UC Los Angeles Ralph J. Bunche Center 5 — —
UC UC Davis Equine Performance and Rehabilitation Center 5 — —
Totals $602 $1,195 1,109
Note: This table includes allocations from the 2021 and 2022 budget packages that remain after accounting for Governor’s budget proposals and known disbursements and encumbrances, as of February 2024. In some cases our office does not have full information on disbursements from the administration, which means these estimates reflect our best understanding at this time.

Note: Amounts reflect one‑time and temporary spending adopted in the 2021 and 2022 budget packages.
CSAC = Student Aid Commission; DGS = Department of General Services; and OPR = Governor’s Office of Planning and Research.

Appendix Figure 4

Possible Remaining One‑Time and Temporary Spending:
Health and Human Services

(In Millions)

Department/
Program Area		 Description 2023‑24 2024‑25 2025‑26
CalHHS Health innovation accelerator initiative — — $43
CDPH Carryover from certain one‑time funds in previous years $268 — —
CDPH COVID‑19 response 25 — —
CDPH Public health IT systems 9 — —
CDPH Public education and change campaign — $40 5
Aging Modernizing the Older Californians Act — 37 37
DHCS Behavioral Health Bridge Housing program — — 235
DHCS Behavioral Health Continuum Infrastructure Program — 100 381
DHCS Evidence‑based and community‑defined behavioral health programs — 109 —
DSS CalFresh minimum nutrition benefit pilot — 15 —
HCAI Carryover from certain one‑time funds in previous years 565 — —
Totals $867 $301 $701
Note: This table includes allocations from the 2021 and 2022 budget packages that remain after accounting for Governor’s budget proposals and known disbursements and encumbrances, as of February 2024. In some cases our office does not have full information on disbursements from the administration, which means these estimates reflect our best understanding at this time.

Note: Amounts reflect one‑time and temporary spending adopted in the 2021 and 2022 budget packages.
CalHHS = Health and Human Services Agency; CDPH = California Department of Public Health; Aging = Department of Aging; DHCS = Department of Health Care Services; DSS = Department of Social Services; and HCAI = Department of Health Care Access and Information.

Appendix Figure 5

Possible Remaining One‑Time and Temporary Spending:
Housing and Homelessness

(In Millions)

Department/
Program Area		 Description 2023‑24 2024‑25 2025‑26
BCH Agencya Homeless Housing, Assistance, and Prevention Program (HHAPP) $1,100 — $260
BCH Agency Encampment Resolution Grants 299 — —
HCD Portfolio Reinvestment Program 100 — —
HCD Multifamily Housing Program 75 — —
HCD Infill Infrastructure Grant Program 25 — —
Totals $1,599 — $260
aBy the time the HHAPP costs are incurred, the program will have transferred to from BCSH Agency to HCD.
Note: This table includes allocations from the 2021 and 2022 budget packages that remain after accounting for Governor’s budget proposals and known disbursements and encumbrances, as of February 2024. In some cases our office does not have full information on disbursements from the administration, which means these estimates reflect our best understanding at this time.

Note: Amounts reflect one‑time and temporary spending adopted in the 2021 and 2022 budget packages.
BCH Agency Business, Consumer Services, and Housing Agency and HCD = Department of Housing and Community Development.

Appendix Figure 6

Possible Remaining One‑Time and Temporary Spending:
Other

(In Millions)

Department/
Program Area		 Description 2023‑24 2024‑25 2025‑26
CDT Broadband infrastructure—increased middle‑mile network costs $420 $250 —
CPUC Broadband infrastructure—last‑mile projects 900 100 $200
CPUC Broadband infrastructure—Broadband Loan Loss Reserve Fund 175 150 175
GO‑Biz Fresno Infrastructure Plan 50 — —
OPR Establish new office of public outreach 60 57 57
SCO California State Payroll System 147 — —
Totals $1,752 $557 $432
Note: This table includes allocations from the 2021 and 2022 budget packages that remain after accounting for Governor’s budget proposals and known disbursements and encumbrances, as of February 2024. In some cases our office does not have full information on disbursements from the administration, which means these estimates reflect our best understanding at this time.

Note: Amounts reflect one‑time and temporary spending adopted in the 2021 and 2022 budget packages
CDT = California Department of Technology; CPUC = California Public Utilities Commission; GO‑Biz = Governor’s Office of Business and Economic Development; OPR = Governor’s Office of Planning and Research; and SCO = State Controller’s Office.

Appendix Figure 7

Possible Remaining One‑Time and Temporary Spending:
Resources and Environment

(In Millions)

Department/
Program Area		 Description 2023‑24 2024‑25 2025‑26
CalEPA Environmental Justice Initiative (Community Resilience Package) $5 — —
CalFire Post‑fire reforestation and regeneration (Wildfire Resilience Package) 50 — —
CalFire Emergency surge (helitanker contract component) 45 $45 —
CalFire Forest Improvement Program (Wildfire Resilience Package) 13 — —
CalFire Tribal engagement (Wildfire Resilience Package) 10 — —
CARB FARMER program 75 — —
CARB Clean Cars 4 All (ZEV Package) 50 — —
CARB AB 617 (Community Resilience Package) 50 — —
CARB Equitable Building Decarbonization (Energy Package) 20 — —
CEC Clean Energy Reliability Investment Plan (SB 846) 100 400 $500
CEC Distributed Electricity Backup Assets (Energy Package) 100 25 25
CEC Demand Side Grid Support (Energy Package) 95 — —
CEC Equitable Building Decarbonization (Energy Package) — 53 92
CNRA Water resilience projects (Drought‑Water Resilience Package) 171 — —
CNRA Tribal nature‑based solutions program (Nature‑Based Solutions Package) 30 — —
CPUC Residential Solar and Storage (Energy Package) — 50 100
DTSC Brownfield cleanups — 85 15
DWR Flood and dam safety (Drought‑Water Resilience Package) 53 — —
DWR Oroville Pump Storage (Energy Package) 4 10 20
DWR American River flood project — 27 —
DWR Urban flood risk reduction — 35 —
DWR Strategic Reliability Assets (Energy Package) — 75 75
DWR Water conveyance, water storage (Drought‑Water Resilience Package) — — 500
Go‑Biz or CNRA Diablo Canyon land use planning — — 50
IBank Transmission Financing (Energy Package) 25 — —
OPC Ocean protection (Coastal Resilience Package) 13 — —
OPC Coastal resilience SB 1 implementation (Coastal Resilience Package) 1 — —
OPR Community‑Based Public Awareness Campaign (Extreme Heat Package) 14 — —
SWRCB Water recycling, groundwater cleanup (Drought‑Water Resilience Package) 17 — —
SWRCB Drinking water and wastewater projects (Drought‑Water Resilience) — 200 —
Various Misc Nature‑Based Solutions Package 9 — —
Various Misc Wildfire Resilience Package 5 — —
WCB Protect fish and wildlife from changing conditions (Nature‑Based Solutions) 49 — —
WCB Various WCB programs (Nature‑Based Solutions Package) 46 — —
Totals $1,049 $1,005 $1,377
Note: This table includes allocations from the 2021 and 2022 budget packages that remain after accounting for Governor’s budget proposals and known disbursements and encumbrances, as of February 2024. In some cases our office does not have full information on disbursements from the administration, which means these estimates reflect our best understanding at this time.

Note: Amounts reflect one‑time and temporary spending adopted in the 2021 and 2022 budget packages
CalEPA = California Environmental Protection Agency; CalFire = California Department of Forestry and Fire Protection; CARB = California Air Resources Board; CEC = California Energy Commission; CNRA = California Natural Resources Agency; CPUC = California Public Utilities Commission; DTSC = Department of Toxics and Substances Control; DWR = Department of Water Resources; Go‑Biz = Governor’s Office of Business and Economic Development; IBank =California Infrastructure and Economic Development Bank; OPC = Ocean Protection Council; OPR = Governor’s Office of Planning and Research; SWRCB = State Water Resources Control Board; and WCB = Wildlife Conservation Board.

Appendix Figure 8

Possible Remaining One‑Time and Temporary Spending:
Transportation

(In Millions)

Department/
Program Area		 Description 2023‑24 2024‑25 2025‑26
Caltrans Clean California $146 — —
CalSTA Transit and rail funding (Transportation Infrastructure) — $739 $1,000
Totals $146 $739 $1,000
Note: This table includes allocations from the 2021 and 2022 budget packages that remain after accounting for Governor’s budget proposals and known disbursements and encumbrances, as of February 2024. In some cases our office does not have full information on disbursements from the administration, which means these estimates reflect our best understanding at this time.

Note: Amounts reflect one‑time and temporary spending adopted in the 2021 and 2022 budget packages.
Caltrans = California Department of Transportation and CalSTA = California State Transportation Agency.

 

Valentine’s Day marchers call on UC Regents, Chancellors to “Break Up with Blackstone”

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Marches at two of seven UC campuses on Valentine’s Day. Source: AFSCME 3299 Facebook page

Hundreds of students, workers, tenants participate at 7 UC campuses; claim UC is major shareholder in $3.5B controversial private equity investment trust that’s been linked to state’s housing affordability Crisis

On Valentine’s Day, Wednesday, Feb. 14, 2024, students, the University of California’s (UC) union of low-wage frontline service and patient care workers – members of AFSCME Local 3299 – alongside Blackstone tenants and community members with the Alliance of Californians for Community Empowerment (ACCE) called on UC Chancellors to “Break up with Blackstone” and invest in affordable housing. The global Wall Street private equity firm Blackstone has become the largest landlord in America and has been accused of worsening high housing costs and evictions.

Actions were held across the state in seven locations on the campuses of UC Berkeley, UC Davis, UC Santa Cruz, UCLA, UC Riverside, UC Santa Barbara and UC San Diego. The renewed call to divest from Blackstone follows the announcement of its $3.5 billion acquisition of Tricon Residential Inc. UC invested $4.5 billion in Blackstone’s BREIT in 2023 to boost investor confidence amid a wave of shareholder redemptions.

Blackstone went on an aggressive buying spree in 2021 and 2022, expanding its residential real estate empire, and adding over 200,000 housing units to its portfolio, including 5,600 naturally occurring affordable housing units in the San Diego area. ACCE released a report earlier this year with the Private Equity Stakeholder Project showing that Blackstone had raised rents in some units in San Diego between 43% – 64% in two years. Even before its announced acquisition of Tricon Residential, Blackstone owned more than 300,000 housing units, including a majority stake in the nation’s largest provider of student housing. As California becomes increasingly unaffordable, throwing more families into homelessness, Blackstone’s aggressiveness as one of the largest landlords in the state in hiking up rents for its thousands of units only adds to the problem.

UC acknowledged last year that its staff vacancy rate had tripled under the weight of California’s housing affordability crisis since the start of the COVID Pandemic, but has thus far failed to act on calls from students and workers to divest from Blackstone and invest in more affordable housing.  The University currently houses just 38% of its students in places that cost 30% more, on average than comparable campus communities nationwide. Recent news reports have chronicled the struggles of UC’s low-wage service and patient care workers being forced to commute several hours or sleep in their cars to maintain their employment.

AFSCME Local 3299 represents more than 33,000 Service and Patient Care Technical workers at UC’s 10 campuses, 5 medical centers, numerous clinics, research laboratories, and UC Law, SF.

The Alliance of Californians for Community Empowerment (ACCE) Action is a grassroots, member-led, statewide community organization working with more than 16,000 members across California. ACCE is dedicated to raising the voices of everyday Californians, neighborhood by neighborhood, to fight for the policies and programs we need to improve our communities and create a brighter future.

Delta Levees Investment Strategy becomes California state law

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Delta levee work. Photo: Delta Stewardship Council

New flood-related regulations prioritize levee investments in the Delta and Suisun Marsh

By Delta Stewardship Council

SACRAMENTO – The new year has brought new flood protections for the Sacramento-San Joaquin Delta. The Delta Stewardship Council has successfully amended the Delta Levees Investment Strategy (DLIS), a tool the state uses to prioritize investments in Delta levee operations, maintenance and improvements, thus reducing the likelihood and consequences of levee failures.

Executive Officer Jessica R. Pearson at a Delta Stewardship Council meeting. Photo: DSC

The amendment assigns very high, high, or other priority to islands or tracts within the Delta and Suisun Marsh and directs the California Department of Water Resources (DWR) to fund levee improvement projects by order of priority. Additionally, it requires the DWR to submit an annual report to the Council describing Delta levee investments relative to the established priorities. The amended regulation took effect on January 1, 2024.

“Delta flood risk is one of the most urgent threats to California and will continue to worsen in the future with changes in sea levels and storm patterns,” says the Council’s Executive Officer Jessica R. Pearson. “Limited funding to address that risk demands clear priorities. The product of nearly a decade of public input and collaboration, the strategy represents one of the Council’s greatest milestone achievements.”

 

The amendment assigns very high, high, or other priority to islands or tracts within the Delta and Suisun Marsh and directs the California Department of Water Resources (DWR) to fund levee improvement projects by order of priority. Additionally, it requires the DWR to submit an annual report to the Council describing Delta levee investments relative to the established priorities.

The Dutch Slough Tidal Marsh Restoration Project site, located in the Sacramento-San Joaquin Delta near Oakley, California.
The restoration project implemented by the California Department of Water Resources will restore 1,187 acres into a tidal marsh to provide habitat for salmon and other native fish and wildlife. Photo taken May 18, 2023, by Florence Low / California Department of Water Resources,

“Flood protection is a key piece of DWR’s work to increase water resilience as California moves toward a hotter, drier future,” says DWR Director Karla Nemeth. “DWR stands in partnership with the Delta Stewardship Council across multiple initiatives, including the Delta Levees Investment Strategy. These efforts will provide needed protections to the diverse communities that call the Delta home.”

The Delta’s 1,100 miles of levees provide protection for residences, agricultural lands, and infrastructure, which need deliberate and sustainable maintenance and funding. Many of the levees date back to when the Delta was reclaimed for agricultural purposes in the late 1800s.

The updated strategy prioritizes the protection of people, property, and state interests and advances statewide water supply reliability and Delta ecosystem resilience in a manner that protects and enhances the Delta as a place where people live, work, and recreate.

Source: DSC

On September 21, 2023, the Office of Administrative Law approved the Council’s Administrative Procedure Act process to amend the California Code of Regulations, title 23, sections 5001 and 5012, to implement the Council’s Delta Levees Investment Strategy. The amended regulation took effect on January 1, 2024, and is available at on the Delta Levees Investment Strategy web page at deltacouncil.ca.gov/DLIS.

ABOUT THE COUNCIL

The Delta Stewardship Council was created by the California Legislature in 2009 to advance California’s water supply reliability and the Delta’s ecosystem resiliency in a manner that protects and enhances the region’s unique characteristics. It is composed of seven members, advised by an independent 10-member science board, and supported by a dedicated staff. For more information, visit the Council’s website at deltacouncil.ca.gov.

Opinion: Will California’s budget woes impact tax reform?

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By Jon Coupal, President, Howard Jarvis Taxpayers Association

The Taxpayer Protection and Government Accountability Act (TPA) is a proposed constitutional amendment which has already qualified for the November 2024 ballot. It is sponsored by taxpayer and business organizations to restore key provisions of Proposition 13 and other pro-taxpayer laws that give voters more control over when and how new tax revenue is raised.

Although TPA, unlike previous tax reform measures, doesn’t reduce or eliminate any state or local tax, it does impose both enhanced voter approval requirements for fee and tax increases as well as robust accountability and transparency provisions.

For obvious reasons, tax-and-spend interests hate TPA and have launched a multi-front assault hoping to either defeat it or keep it off the ballot entirely.

The motivation for these schemes is that politicians and their enablers are fully aware that TPA is highly likely to pass if it stays on the ballot. Californians are sick and tired of having the nation’s highest tax rates jammed down their throats, especially when these heavy tax burdens are not accompanied by higher levels of public services; in fact, the opposite is true, as evidenced by California’s high cost of living, crime, homelessness, hostile business climate, and other ills.

But now, there may be another reason why anti-taxpayer interests are waging this war on TPA. A recent report by the California Legislative Analyst’s office threw a bucket of cold water on progressives’ plans to continue to increase taxes with virtually no restraint. The LAO now estimates “2022-23 revenues to be $26 billion below Budget Act projections. Historical experience suggests this weakness is likely to carry into this fiscal year and next. Overall, our updated revenue outlook anticipates collections to come in $58 billion below Budget Act projections across 2022-23 to 2024-25.” (Note that in less than a week after this news, the LAO upped the shortfall from $58 billion to $68 billion).

If there is any saving grace to the current financial situation it is that California still has substantial budget reserves. That, plus some creative accounting, can probably blunt the negative impacts of a severe drop in revenues – at least for a while.

Nonetheless, if California’s tax revenue spigot is curtailed any significant amount, will the enemies of the Taxpayer Protection Act argue that this provides another justification for removing all restraints on raising taxes?

Economic growth in Texas and Florida is outpacing that in California, due in part to a top marginal income tax rate of zero. What is happening in other smaller states is less well known. The smart move would be to follow the lead of other states which are aggressively pursuing pro-growth strategies which in turn lead to more tax revenue.

Take Iowa for example. Defying critics who claimed that tax reductions would crush the state budget, Iowa’s Governor Kim Reynolds slashed top marginal tax rates, previously some of the highest in the nation. Not only did revenues not crash, but they shot up by huge percentage points. According to a report in Center Square, “Iowa led the ‘tax-cutting wave’ in 2022, with the most comprehensive and aggressive tax reform in the United States. This will gradually replace the nine-bracket, progressive income tax with a flat tax, bringing the top rate, which was close to 9 percent, down to a flat 3.9 percent by 2026.”

Other states have provided California with a roadmap for economic growth and healthy budgets by cutting taxes and pursuing other pro-freedom policies. However, the political realities in this one-party state – governed by hardcore progressives – render the odds of politicians even looking at the roadmap extremely slight.

That being said, if the Governor and the Legislature won’t do what’s necessary to prevent a budget disaster, the least they can do is get out of the way of those who have offered the Taxpayer Protection Act to the voters so that ordinary citizens can do what politicians won’t: impose fiscal discipline on a fiscally reckless state.

This column originally appeared in the Orange County Register. Republished with permission.

CA State Controller responds to Legislative Analyst’s projected $68 billion budget deficit

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Says state can borrow over $91 billion

By Allen D. Payton

The California Legislative Analyst’s Office issued a report on Dec. 7, 2023, that the state faces a $68 billion budget deficit for the 2024-25 Fiscal Year. Entitled, “The 2024-25 Budget: California’s Fiscal Outlook”, the report’s Executive Summary read as follows:

“California Faces a $68 Billion Deficit.

Largely as a result of a severe revenue decline in 2022-23, the state faces a serious budget deficit. Specifically, under the state’s current law and policy, we estimate the Legislature will need to solve a budget problem of $68 billion in the upcoming budget process.

Unprecedented Prior-Year Revenue Shortfall Creates Unique Challenges.

Typically, the budget process does not involve large changes in revenue in the prior year (in this case, 2022-23). This is because prior-year taxes usually have been filed and associated revenues collected. Due to the state conforming to federal tax filing extensions, however, the Legislature is gaining a complete picture of 2022-23 tax collections after the fiscal year has already ended. Specifically, we estimate that 2022-23 revenue will be $26 billion below budget act estimates. This creates unique and difficult challenges—including limiting the Legislature’s options for addressing the budget problem.

Legislature Has Multiple Tools Available to Address Budget Problem.

While addressing a deficit of this scope will be challenging, the Legislature has a number of options available to do so. In particular, the state has nearly $24 billion in reserves to address the budget problem. In addition, there are options to reduce spending on schools and community colleges that could address nearly $17 billion of the budget problem. Further adjustments to other areas of the budget, such as reductions to one-time spending, could address at least an additional $10 billion or so. These options and some others, like cost shifts, would allow the Legislature to solve most of the deficit largely without impacting the state’s core ongoing service level.

Legislature Will Have Fewer Options to Address Multiyear Deficits in the Coming Years.

Given the state faces a serious budget problem, using general purpose reserves this year is merited. That said, we suggest the Legislature exercise some caution when deploying tools like reserves and cost shifts. The state’s reserves are unlikely to be sufficient to cover the state’s multiyear deficits—which average $30 billion per year under our estimates. These deficits likely necessitate ongoing spending reductions, revenue increases, or both. As a result, preserving a substantial portion—potentially up to half—of reserves would provide a helpful cushion in light of the anticipated shortfalls that lie ahead.”

Controller Cohen Calls for Calm

In a press release issued today, Tuesday, Dec. 19, State Controller Malia M. Cohen calls for calm in the wake of recent budget deficit announcements and issued the following statement after releasing the recent Cash Report on December 8:

“Despite reports from various sources indicating a budgetary deficit of approximately $68 billion, the state’s cash position remains strong, and, absent any unforeseen circumstances, the state has sufficient cash to pay its bills and meet its financial obligations through the end of the fiscal year.”

“As chief fiscal officer, one of my duties is to track and report on the state’s actual cash balance,” she continued. “In that regard, the state currently has more than $91.4 billion in available borrowable resources, due in large part to the Governor’s and Legislature’s foresight in building prudent rainy-day reserves in the Budget Stabilization Account. While legislators will have difficult choices to make in the new year, I am confident they will be deliberate in addressing the budget challenges before them, and I urge them to protect, to the extent possible, the health and social service programs designed to benefit those who are displaced, without shelter, or otherwise economically disadvantaged.”

About Controller Cohen

As the chief fiscal officer of California, Controller Cohen is responsible for accountability and disbursement of the state’s financial resources. The Controller has independent auditing authority over government agencies that spend state funds. She is a member of numerous financing authorities, and fiscal and financial oversight entities including the Franchise Tax Board. She also serves on the boards for the nation’s two largest public pension funds. Follow the Controller on X at @CAController and on Facebook at California State Controller’s Office.

About the Legislative Analyst’s Office

The Legislative Analyst’s Office (LAO) has provided fiscal and policy advice to the Legislature for 75 years. It is known for its fiscal and programmatic expertise and nonpartisan analyses of the state budget. The office serves as the “eyes and ears” for the Legislature to ensure that the executive branch is implementing legislative policy in a cost efficient and effective manner.

The office is overseen by the Joint Legislative Budget Committee (JLBC), a 16-member bipartisan committee. Currently, the office has a staff of 43 analysts and approximately 13 support staff. The analytical staff cover several budget and policy areas: Criminal Justice, State Finance, Education (including K-12 and Higher Education), Health and Human Services, Natural Resources and Environment, General Government (including Local Government), Transportation, and Capital Outlay and Infrastructure.

 

State Public Utilities Commission approves 12.8% PG&E rate increase

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Claims typical residential customer will pay $32.62 more for combined monthly electric and natural gas bill beginning January 1, 2024.

By CPUC

The California Public Utilities Commission (CPUC) on Thursday, Nov. 16, 2023, resolved Pacific Gas and Electric Company’s (PG&E) General Rate Case (GRC), which covers its operational and infrastructure revenue requirement for 2023-2026. The decision marks a crucial step in fortifying the future of California’s electric grid while prioritizing customer affordability.

Based on the evidence presented, the CPUC today unanimously approved the Alternate Proposed Decision of Commissioner John Reynolds. This decision approves investments in the safety and reliability of PG&E’s energy services. Inflation and a significant investment in undergrounding electric lines ranked among the top drivers in PG&E’s request. Over the past year and a half, numerous parties reviewed PG&E’s GRC request and provided input on each cost category and related proposed expenditures.

“I am proud of today’s decision because it represents the CPUC’s commitment to finding a reasonable balance in the face of incredibly challenging circumstances and competing objectives,” said Commissioner John Reynolds, who is assigned to the proceeding. “This decision ultimately represents both an historic investment in PG&E’s electric and natural gas systems as well as an expectation that PG&E must continue to be safer and more efficient. I am grateful to the many parties, and the scores of CPUC staffers, for their help as we grappled with this decision.”

Today’s decision propels PG&E’s energy infrastructure and operations into the future, addressing critical objectives such as mitigating wildfire risk, enhancing safety and reliability, and anticipating evolving electric grid demands. This comprehensive approach not only ensures PG&E’s capacity to maintain a safe and reliable energy system with a dedicated workforce, but also positions California for a more resilient energy future in the face of climate change. Moreover, the decision reflects rigorous oversight over hundreds of programs, and reduces PG&E’s request to more accurately reflect forecasts for prudent use of ratepayer funds.

Among the key initiatives covered in the decision:

  • Wildfire System Enhancement and Undergrounding
    • Approves 1,230 miles of electric line undergrounding, as well as 778 miles of covered conductor, totaling 2,008 hardened miles. This represents an historic opportunity for PG&E to invest in safer, reliable improvements for its customers while also achieving economies of scale to drive down costs; the revised undergrounding total also provides PG&E with a bridge to a future phase of undergrounding planning, through the Senate Bill 884 program.
  • Vegetation Management
    • Approves PG&E investing approximately $1.3 billion in vegetation management to reduce wildfire ignition risk and improve reliability on PG&E’s electrical system.
  • Capacity Upgrades
    • Approves PG&E investing more than $2.5 billion in upgrading the electric distribution system from 2023-2026, which will help prepare the grid to support initiatives for enhanced building electrification and new interconnections for electric vehicle charging stations and new housing and businesses.

“Today’s decision balances a myriad of competing interests—affordability, feasibility, safety, and reliability,” said CPUC President Alice Reynolds. “And in the face of increasingly turbulent climate-driven weather events, it gives PG&E the opportunity to prove it can underground electric lines at scale.  This will allow PG&E to achieve economies of scale, drive down costs, and reduce wildfire risk.”

Setting the pathway for critical investments in PG&E’s system

For PG&E customers, this approval by the CPUC translates to a continued commitment to safe, reliable, and affordable energy services. The GRC ensures that every dollar invested contributes to more resilient energy infrastructure, offering customers lasting benefits. Moreover, stringent accountability measures are embedded within the decision, assuring customers that their investment yields tangible and accountable improvements in PG&E’s operations and services.

PG&E requested $15.4 billion for 2023; Thursday’s decision cut that amount substantially, by $1.8 billion. Today’s decision sets the 2023 revenue requirement at $13.5 billion, reflecting an 11 percent increase from the authorized 2022 revenue requirement. For the typical residential customer, their combined monthly electric and natural gas bill will increase by $32.62 or 12.8 percent, compared to PG&E’s request of $38.73 or 17.9 percent increase.

PG&E’s 2022 Authorized Revenue Requirement Proposed 2023
Revenue Requirement		 Percent Increase Dollar Increase
$12.2 billion PG&E Request $15.4 billion 26% $3.2 billion
Decision $13.5 billion 11% $1.3 billion

Customers can expect any changes to their bill to go into effect on January 1, 2024.

For further information on the proceeding, including today’s decision and a fact sheet, please visit the CPUC’s website.

About the California Public Utilities Commission

The CPUC regulates services and utilities, protects consumers, safeguards the environment, and assures Californians access to safe and reliable utility infrastructure and services. Visit www.cpuc.ca.gov for more information.