Fiscal & Governance Reform – Page 8 – Public Policy Institute of California

Proposed Budget Prioritizes College Students in Need

Governor Newsom’s January budget proposal includes $1 billion in new funding for higher education. Much has been made of his plan to cover two years of tuition for first-time, full-time community college students. But that is just one aspect of an overall approach that provides extensive support to a wide variety of students.

Newsom’s proposal increases by nearly 15% the number of “competitive” Cal Grants—a distinct type of support available to students who do not qualify for entitlement grants. Recipients of competitive Cal Grants are often older, non-traditional students. Further, all Cal Grant recipients who have dependent children would receive an additional $6,000 to help with non-tuition related costs. In addition, Newsom’s budget allocates nearly $50 million to programs that address housing and student hunger—and those that provide legal services for undocumented students, staff, and faculty.

The governor’s focus on affordability aligns with Californians’ concerns regarding higher education. According to the latest PPIC survey on Californians and higher education, 58% of all adults noted that affordability was a big problem for California’s public higher education systems; just 14% said that it was not much of a problem. Most Californians also said that higher education should be a high priority for the new governor. This budget proposal suggests that Governor Newsom is listening.

Colorado Drought Deal Close, But Not Done

Last week Arizona and California missed a deadline to submit final plans for how they will manage water shortages in the Colorado River Basin over the coming decades to prevent Lake Mead levels from dropping so low that water cannot be released from the dam. The other five states that share the river’s waters have already submitted their drought contingency plans. We talked to John Fleck—director of the University of New Mexico’s Water Resources Program and a member of the PPIC Water Policy Center research network—about the situation.

PPIC: What is the drought contingency plan intended to do?

John Fleck: The key problem on the Colorado is that the basin’s water is over-allocated. It was really wet in 1920 when the allocation rules for the river were developed. So the rules allocated extremely large water shares to the “lower basin states”—California, Arizona, and Nevada—that hydrologic reality can’t support. We’ve been struggling ever since to come to terms with that reality.

The drought contingency plan is a voluntary program involving the lower basin states to decrease their use of the river’s water in an attempt to reduce the over-allocation problem. There’s an overall agreement describing the conditions that would require each state to use less water. Then each state has to have its own separate internal set of agreements on how to share those cuts.

There are a couple of different ways you can approach this over-allocation problem. The federal government can just reduce everyone’s allocation. Or you can have the water users themselves acknowledge the problem and agree to a voluntary, collaborative approach. The latter approach is far more likely to succeed, so I definitely think this was the better way to go.

Even though the lower basin states are close to having final plans, federal officials have said that “close isn’t done.” The states now have until March 4 to submit their final plans. No one wants to have an imposed federal solution—and I don’t think we’ll end up there—but it’d be better than doing nothing. The threat alone might push people to finish up.

PPIC: What are some important steps the states have agreed to?

JF: The agreements reduce water use in the lower basin by 1.5 million acre-feet per year; it’s a very big deal. Arizona has now agreed to a plan that could eventually reduce the Central Arizona Project’s flow of Colorado River water into the valleys of Tucson and Phoenix by nearly half of current levels. They did this voluntarily, without any litigation. That’s real progress. And Imperial Irrigation District (IID)—the biggest agricultural user of California’s allocation of Colorado River water—has already given up 500,000 acre-feet a year, which is a huge amount of water.

One of the complications of reductions in Colorado River water is the drying of the Salton Sea, which relies principally on runoff from farms in IID. California promised to mitigate the public health and environmental problems associated with the shrinking of the sea, particularly the air quality impact on poor communities. Solving this problem is a work in progress made more challenging by reductions in Colorado River water.

PPIC: Do you think the states’ plans go far enough, given the warming climate?

JF: We can’t be sure, because we don’t know how much impact climate change will have, on what time scales. Since we don’t really know where the bottom is for the Colorado River, hydrologically speaking, we don’t how far we’re going to have to go with water cutbacks in the long run. Drought planning is a really important step to prepare for a climate-challenged future—it creates a framework for deeper cuts.

It’s important to see the drought contingency planning as the latest development in the evolution of long-term management of the river’s waters. There are a bunch of unresolved problems—both hydrologic and institutional―and a lot of work remains to be done, but we can’t solve all these problems at once. Though drought planning is an incredibly important step, it’s certainly not the last one.

Fleck is a co-author (with Eric Kuhn) of the upcoming book Science Be Dammed: How Ignoring Inconvenient Science Drained the Colorado River, to be published this fall by the University of Arizona Press.

Video: A Conversation with California’s Legislative Leadership

When Toni Atkins, President Pro Tem of the California State Senate, sat down to talk with PPIC president Mark Baldassare last week, she brought along a list of pressing issues. Asked to name the top two issues facing the state, she led off with housing: “The growing crisis around the lack of housing supply for all levels of Californians is one of our most critical issues.” Next came climate change and its effects across California. And then she added a third issue: water sustainability. In reality, she said, “there is always a list of issues and challenges that we are working on in California.”

Despite this long list, Atkins was optimistic about the legislature’s chances of working productively with Governor Newsom. “It’s early, but I would say that what I appreciate and enjoy about Governor Newsom is he really is a policy wonk at heart.” She added that while Jerry Brown and Gavin Newsom share many priorities, the two have very different styles. “Jerry Brown proposed a budget and he only wanted a few things,” while Governor Newsom “has thrown everything out there.”

After noting that it will be interesting to see how the legislature approaches this year’s budget process, Atkins highlighted the governor’s focus on homelessness and mental health issues and his commitment to early childhood education—which, she added, has been “a huge driving issue for the legislative women’s caucus.” She expressed particular interest in the governor’s proposal to “take juvenile justice offenders out of CDCR—the California Department of Corrections and Rehabilitation—and into more of a health/social services arena.”

Shifting from the state budget process to the ongoing drama over the budget—and border wall—at the federal level, Baldassare asked Atkins about the state government’s response to what is happening in Washington, DC. “You know, I’m so glad to be in California,” she replied. Citing the state’s diversity and the policies that foster it, she said that “to have that attacked in many ways at the federal level means all of a sudden you’ve got California really promoting state’s rights, to protect our policies, our values, and things that we hold dear.”

Atkins tended to be optimistic about even the thorniest issues—such as forestry management, building more housing, and water sustainability. Speaking about the cluster of issues related to climate change, she said, “Maybe the result of these catastrophic fires, and floods, and mudslides—maybe that is the way we’re now able to have a conversation we couldn’t have five years ago, before it was a crisis.” But she added that in order to move an agenda forward, “you’ve got to still have all the stakeholders at the table.”

More generally, Atkins stressed the importance of representing all Californians, regardless of party: “I think we have work to do together.”

Will the Governor’s Budget Reduce the Heat on School Districts?

Last week Los Angeles district leaders reached a deal with public school teachers to end the city’s first teachers’ strike in 30 years, agreeing to higher teacher salaries, smaller class sizes, and more support staff. The strike was the culmination of long-brewing tensions over the amount and allocation of funds in California’s largest school district. Many other districts in the state are facing similar challenges, as the demand for resources grows faster than the available dollars.

Earlier this month, the governor’s first budget proposal acknowledged some of these broader difficulties. The 2019–20 spending plan proposes $3 billion in one-time payment to CalSTRS, the main teachers’ retirement system, on behalf of schools (separate from the General Fund K–12 spending determined by Proposition 98). The proposal also includes $1.1 billion to pay down a portion of the state’s share of the estimated CalSTRS liability.

The proposed $3 billion CalSTRS payment could take some financial pressure off school districts. Funding for schools is determined by two main formulas. First, total statewide funding is determined by applying a formula (Proposition 98) to the expected revenue from state and local property taxes. Then, another formula (the Local Control Funding Formula) is used to determine the bulk of the dollars available to individual school districts.

Distributing resources in this manner means local school districts, even one as large as Los Angeles, have limited control over the total amount of dollars they have to work with. But the demand for those dollars is constantly going up as districts find themselves paying more—overall and in particular areas such as special education services, health care premiums, and pensions. Pensions are especially challenging, as legislation passed in 2014 mandated that school districts’ share of teacher pension contributions would rise from 8% (2013) of their teacher payrolls to 19% by 2020. This increase will drive annual pension contributions to more than $1,000 per student in most local school districts.

How much relief might the governor’s proposed payment provide? The answer is some, but not much. The governor’s budget document states that the payment “will reduce the out-year contribution rate by half a percentage point.” Given that number, the expected relief amounts to an annual savings of around $25 per student. In large districts such as Los Angeles, this adds up to tens of millions of dollars annually, but districts with lower enrollment numbers will see more modest financial gains.

The CalSTRS payment proposal is a departure from prior state budgets. First, it represents an acknowledgment that, despite recent increases in total education spending, school districts still face fiscal challenges. Second, it proposes to direct non–Proposition 98 funds, making it a de facto increase in total K–12 resources. School district administrators are likely to appreciate both. However, the proposal still needs the legislature’s approval, and it’s not clear whether it would significantly relieve fiscal pressures on districts.

Whether the one-time CalSTRS payment represents a shift in future policy remains to be seen. If it is in fact only a one-time payment, the impact on the resources available to schools will be welcome but modest. It may, however, signal a different approach to education funding in the long run—something that would be worth watching.

Governor’s Budget Targets Safe Drinking Water, Wildfires, Healthy Soils

Governor Newsom’s first proposed state budget, released earlier this month, addresses several critical water and natural resource management challenges. Here are highlights from his plans to mitigate problems with safe drinking water, improve forest health and reduce the risk of wildfires, and encourage healthy soils to reduce greenhouse gas emissions and increase drought resilience.

Safe and affordable drinking water: The governor’s budget proposal revives last year’s failed legislative proposal to tap urban water customers, agricultural fertilizer users, and dairies to pay for safe drinking water projects in small, disadvantaged communities with water quality challenges.

The proposed budget also includes a one-time capital investment of $168.5 million (compared to $93 million enacted in the previous budget) to fund safe drinking water and wastewater infrastructure projects in disadvantaged communities. The funds will come from Proposition 68—a $4 billion bond approved by voters in June 2018 for investments in water, parks, the environment, and flood protection. The proposed spending represents the remaining two-thirds of the $250 million in Proposition 68 funds for safe drinking water projects.

In addition, the governor proposes allocating $10 million from the General Fund for a State Water Board program that provides technical, operational, and managerial assistance to water systems serving disadvantaged communities. This funding will be used to implement the Board’s relatively new authority to hire third-party administrators to help water systems comply with safe drinking water standards—including tasks such as project planning and grant procurement. This authority was granted by SB 552 in 2016.

The budget also allocates $10 million from the General Fund for water supply emergencies in disadvantaged communities. During the latest drought, more than 2,500 domestic wells ran dry and nearly 150 small water systems requested emergency support. Many rural, disadvantaged communities still do not have reliable supplies, and these funds could provide emergency drinking water, extend water service lines, and repair groundwater wells.

Forests and wildfires: The budget calls for $415 million for programs to improve the health of forests and fight wildfires. Of this sum, $200 million will be sourced from the Greenhouse Gas Reduction Fund (GGRF). This is consistent with a legislative requirement from last year to spend $1 billion from the GGRF over five years for forest health, fire prevention, and fuel reduction activities. These funds will largely be allocated to Cal Fire’s grant programs for forest management projects on private and federal forest lands. The remaining half of the $415 million in proposed spending will go toward upgrading firefighting equipment and increasing firefighting capacity.

Healthy soils: The budget allocates $18 million to the California Department of Food and Agriculture to expand the Healthy Soils Initiative—a $3 million increase from its 2018 budget. Funded by the state’s cap-and-trade revenues, the program incentivizes farmers to adopt sustainable practices and increase their soils’ capacity to sequester more carbon. Activities might include installing riparian forest buffer, composting, and planting cover crops and wind barriers. Such practices can also improve crop yields, drought and flood tolerance, and air and water quality. The funding is projected to enable the sequestration of 5.3 million tons of CO₂ on 500,000 acres by 2030, which is equivalent to nearly 2% of California’s annual emissions in 2016.

The proposed budget will be revised by May—and ultimately finalized and passed by the legislature in June.

One Step Closer to a Statewide Educational Data System

Governor Newsom’s recently proposed budget includes $10 million in one-time funding for the planning, creation, and implementation of a statewide longitudinal data system—including early childhood education, K–12, higher education, the workforce, and health and human services. As we wrote in a recent PPIC report, this idea holds a lot of promise. An integrated data system could allow for improved feedback for educational institutions, more efficient use of public funds, and better evaluation and coordination for the state. The idea also has support in the state senate, where Senators Glazer and Allen proposed a similar system (SB 2) last December.

Each public education system—K–12, the community colleges, California State University, and the University of California—already recognizes the importance of data. They all collect, store, and analyze data on students within their respective systems to improve instruction and outcomes. However, few connections are ever made between educational sectors. Even though a high school senior may graduate from a K–12 school, attend a community college, and then transfer to a UC, data isn’t shared across those systems in any systematic way. So each system has no idea if students are successful in the next stage of their academic career. California is one of the few states that does not follow students across sectors.

The governor’s budget summary also suggests that the data system could be used to improve K–12 measures of career and college readiness. Current measures are based on high school test scores and high school course-taking. But connecting K–12 data to higher education and employment data could lead to more meaningful measures of whether students are able to take and succeed in college-level courses, or whether they work in a job with a living wage.

With the Newsom administration’s support, California may be closer than ever to establishing a data system that can answer key questions about how students move along the educational pipeline. Creation and implementation will involve security, privacy, and governance challenges, but California has 42 other states that can serve as models. This is a much-needed first step in helping the state develop effective policy solutions that will improve students’ progress through school and into the workforce.

Californians’ Priorities for Their New Leaders

California enters 2019 with Democratic super-majorities in both chambers of the state legislature and a Democratic governor replacing another for the first time in more than a century. What do Californians want state leaders to prioritize? Although the state is projected to have a budget surplus of $21 billion, many are pessimistic about the state’s short- and long-term economic prospects. These economic concerns are possibly linked to Californians’ policy and spending preferences, and they are likely to inform their attitudes toward the governor’s recently released budget proposal for the next fiscal year.

According to the December 2018 PPIC Statewide Survey, fewer than half of Californians (46%) say the state will have good times financially in the next 12 months. The share of adults holding this view hasn’t been this low since October 2014 (45%).

About one in three (32%) also say California will be a worse place to live in 2025, and 50 percent think children growing up in the state today will be worse off financially than their parents.

When asked what the state government’s most important priority should be in planning for California’s future, 39% of residents say it should be improving jobs and the economy. In the shorter term, what issues should state leaders prioritize in the coming year? Findings from the December survey offer some possible answers.

When asked what they would prefer to do with a projected budget surplus, a majority of Californians (57%) say they’d like to increase state funding for education and health and human services. When asked about several potential policies—most of which Governor Newsom highlighted during his campaign—majorities of adults say universal health coverage (60%) and tuition-free community college (53%) should be top priorities for new state funding. Fewer than half (48%) say the same about universal preschool, and one in four (25%) want to prioritize high-speed rail.

These findings underscore Californians’ preferences for programs that can help reduce economic uncertainty. They also indicate that Californians’ priorities are aligned with Governor Newsom’s budget proposal for the next fiscal year. The governor’s budget includes funding for an expansion of Medi-Cal coverage to young adults regardless of immigration status, a second tuition-free year at community college, and steps toward universal preschool for income-eligible four-year old children.

Over the next five months, as the governor and state lawmakers work toward a final budget, Californians will have the opportunity to voice their opinions. Stay tuned to the PPIC Statewide Survey as we track Californians’ attitudes toward new leaders and key policy issues.

2020 Census: Counting Imperial County

The decennial census plays an essential role in American democracy. Our series of blog posts examines what’s at stake for California and the challenges facing the 2020 Census, including communities that are at risk of being undercounted.

PPIC’s interactive census maps are an important tool for Californians working to ensure an accurate census count. Using estimates from the Census Bureau and the Federal Communications Commission, they highlight hard-to-count communities across the state and pinpoint reasons why certain areas may be hard to reach.

Home to nearly 200,000 people, Imperial County will likely be one of the hardest-to-count counties in California. According to Census Bureau estimates that draw on demographic characteristics (e.g., race/ethnicity, age, citizenship, and housing conditions) and historical trends, 43% of census tracts in the county will be very hard to count—the highest percentage of any county in the state. Households in these very hard-to-count areas—which are concentrated in the western half of the county, around the Salton Sea and El Centro—are the least likely to respond initially to census forms and are therefore at risk of being undercounted.

Some highlights:

Legislative districts representing Imperial County are among the hardest to count in California. Between 33% and 52% of census tracts are considered very hard to count in Congressional District 51 (Vargas), State Senate District 40 (Hueso), and State Assembly District 56 (Garcia). Undercounting residents of these districts could result in political representation shifting away from Imperial County and toward areas with higher population counts, since district lines will be redrawn based on the results of the 2020 Census.
Almost all residents belong to demographic groups that have been historically undercounted. In the past, the census has disproportionately undercounted African Americans, Latinos, and Native Americans, as well as young children. The large majority of Imperial County’s population is Latino—with higher shares of Latinos in the western half of the county—and the Fort Yuma Indian Reservation is located in the southeast. Altogether, 86% of county residents are African American, Latino, or Native American (compared to 45% statewide). Noncitizens—who may be less likely to respond in 2020 due to the planned addition of a citizenship question and concerns about deportation and privacy—make up 17% of residents in this border county (compared to 14% statewide).
Imperial County has a high share of young children, particularly in its cities and towns. Children under five years old make up 8% of Imperial County residents, compared with 6.5% statewide. Most young children live in the Imperial Valley, along the corridor from the Salton Sea to Calexico, or outside Yuma, Arizona. In the more rural areas to the east and west, less than 3% of county residents are children under five.
Housing conditions could make it difficult to accurately count residents. Compared to the rest of the state, Imperial County has relatively high shares of renters (44%), overcrowded rental units (15%), and mobile homes (8%), all of which can make residents harder to count. Reaching residents at home will require strategies that vary by geography and reflect local understanding of how families make ends meet. In the eastern part of the county, for example, almost 60% of housing units are mobile homes, and about 20% are rentals, while in and around El Centro and Calexico less than 20% of units are mobile homes but more than 60% are rentals.
Much of the county lacks high-speed residential internet access. The Census Bureau plans to collect the majority of responses online in 2020—a change from previous practice. Imperial County has one of the lowest rates of internet access in the state: with the exception of only one neighborhood in El Centro, fewer than 800 households per thousand in the county have high-speed internet connections. In places with limited residential internet access, census participation may rely more heavily on paper forms, in-person census takers, or internet provided by local institutions.

We hope these maps serve as a starting point to help local, regional, and state leaders think about which activities, resources, and partnerships—including language assistance, awareness raising, and community outreach—might be most effective for accurately counting different parts of California. While this concludes our regional series on hard-to-count communities throughout the state, stay tuned for future posts on the decennial census as we near 2020.

2020 Census: Counting Orange and San Diego Counties

More than 6.5 million Californians live in Orange and San Diego Counties. In Orange County, the hardest-to-reach neighborhoods are found in Anaheim, Buena Park, Santa Ana, and Tustin. In San Diego County, the hardest-to-count areas include parts of Oceanside and Escondido in the northwest and, in the southwest, pockets of the cities of San Diego and Chula Vista. Altogether, San Diego County has a higher share of these very hard-to-count areas (18% of census tracts) than Orange County (11%), according to Census Bureau estimates that draw on demographic characteristics (e.g., race/ethnicity, age, citizenship, and housing conditions) and historical trends. Both counties have higher shares of these areas than 60% of counties, statewide. Households in these very hard-to-count areas are the least likely to respond initially to census forms and are therefore at risk of being undercounted.

Some highlights:

Undercounting hard-to-reach areas could affect political representation in the region. Since the 2020 Census will be used to redraw legislative district lines, political representation could shift away from certain neighborhoods if they are undercounted relative to other areas. For example, in Assembly District 80 (Gonzalez Fletcher), which covers southern parts of the cities of San Diego and Chula Vista, as well as a stretch of the southern border with Mexico, 52% of households are predicted to not respond initially to the census—compared to 19% in the surrounding districts.
Knowledge of local population trends can help guide effective outreach. Some neighborhoods in the region have higher concentrations of African Americans, Latinos, or Native Americans—populations that have historically been undercounted in the census. Latinos make up the large majority of residents around Anaheim and Santa Ana in Orange County, as well as in parts of the cities of San Diego and Chula Vista in San Diego County. In some of these same neighborhoods, more than a quarter of residents are noncitizens, who may be less likely to respond in 2020 due to the planned addition of a citizenship question. Moreover, in central and eastern parts of San Diego County, working with tribal governments to reach Native Americans will be necessary to count all residents.
Housing conditions may present challenges to an accurate count, particularly in urban areas. Renters and people living in overcrowded conditions or mobile homes can be harder to count accurately. Hard-to-count housing in the region is concentrated in urban parts of Orange County and in urban and eastern San Diego County. For example, in several neighborhoods in Anaheim, Stanton, and Santa Ana in Orange County, more a quarter of rentals are overcrowded. The same is true for many neighborhoods in the southwest corner of San Diego County, which also often have high shares of mobile homes. San Diego County has hard-to-count housing in inland areas as well, including in Bostonia, El Cajon, and several tribal lands.
The region has small pockets of relatively low internet access. The Census Bureau plans to collect most responses online in 2020—a change from previous practice. Though urban areas generally have better internet access than rural areas do, a number of neighborhoods in the cities of San Diego and Chula Vista actually have fewer high-speed residential internet connections than the surrounding suburbs. Central and eastern San Diego County also have relatively low internet connectivity. In these places, it may be harder to collect responses online, and participation will rely more heavily on paper forms, in-person census takers, or internet provided by local institutions.

We hope these maps serve as a starting point to help local, regional, and state leaders think about which activities, resources, and partnerships—including language assistance, awareness raising, and community outreach—might be most effective for accurately counting different parts of California. Stay tuned for future posts that examine hard-to-count communities in other regions of the state.

Video: Californians and Their Government

As Governor-Elect Gavin Newsom prepares for his first term, half of Californians think he should take a different policy direction than Governor Brown. Four in ten approve of Newsom’s plans and priorities—while three in ten don’t yet know enough to have an opinion. These and other key findings of the latest PPIC Statewide Survey were outlined by Dean Bonner at a Sacramento briefing last week.

The survey asked Californians about four major policy areas that were highlighted in the governor’s campaign. Most see universal health coverage and free community college as top priorities, while fewer see universal preschool as a high or very high priority and only one in four prioritize high-speed rail.

The survey also asked how the state should use the projected surplus in the next budget year. A majority of Californians say they would prefer to use the surplus to increase funding for education and health and human services. Far fewer prefer to use it to pay down debt and build up a reserve or to spend on one-time funding for transportation, water, and infrastructure.

When asked to identify the state government’s highest priority in planning for the future, 39% name improving jobs and the economy, 20% say protecting the environment, and 15% say updating water and transportation infrastructure. Improving jobs and the economy is the highest priority across all parties and demographic groups.

Other survey highlights:

Two-thirds of Californians say the state is divided into two economic groups: the “haves” and the “have nots.” Four in ten characterize themselves as haves and 45% say they are have nots.
While more than half of Californians think the state is generally headed in the right direction, only about a third are satisfied with the way things are going in the nation. Half have no confidence that President Trump will make the right decisions for the country’s future.
Only two in ten likely voters approve of Congress; more than half see the shift in control of the US House from the Republicans to the Democrats as a good thing.
Two-thirds of state residents continue to see immigrants as a benefit, and there is still bipartisan support for allowing undocumented immigrants to stay in the US legally if certain requirements are met.