Economic warning signs are mounting in California — foreshadowing potentially tough budget decisions for the state officials and policymakers who emerge victorious from the Nov. 8 election.
One particularly eye-popping statistic: Just nine corporations headquartered within the Golden State went public in the primary three quarters of 2022, in comparison with 81 throughout the same period last 12 months, based on a Bloomberg News evaluation.
- As of Sept. 30, initial public offerings in California had raised just $177 million, in comparison with a mean of $16 billion throughout the same period over the past five years.
- The $177 million figure represents just 2% of funds generated by U.S. corporations that went public through the top of September. Last 12 months right now, California accounted for 39% of funds nationally.
- If this trend continues, it could spell an end to the streak California has maintained since 2003 of generating more IPOs than another state.
“We’re already seeing a right away effect,” Brian Uhler, deputy legislative analyst for the state Legislative Analyst’s Office, told Bloomberg. “And it does look like significant,” contributing to a 5% decline in California employers’ income tax withholding payments in September in comparison with last 12 months.
Indeed, California collected about $2.8 billion less in taxes in September than it thought it could, marking the third straight month of revenues coming in below projections, based on a report released this week by Gov. Gavin Newsom’s Department of Finance.
The issue can be pronounced on the local level. In San Francisco, for instance, revenues from a latest business tax have plunged as corporations struggle to emerge from the pandemic, resulting in a shortfall of tens of thousands and thousands of dollars for homelessness, mental health and substance abuse programs, the San Francisco Chronicle reports.
In a Monday interview with Bloomberg, San Francisco Mayor London Breed said town must turn into less reliant on tech corporations — a few of which have downsized or left the realm altogether as many employees proceed to make money working from home — so as to stabilize the economy and avoid losing further tax revenue.
Breed said she desires to lure more biotechnology and life sciences corporations into empty office buildings downtown, noting that Salesforce — town’s largest private employer — continues to permit distant work.
- Breed: Salesforce CEO Marc Benioff is “very supportive of town, continues to contribute that support to colleges and to other great causes, however the constructing is empty, and that’s an actual problem.”
- A Salesforce spokesperson declined to comment to Bloomberg.
Meanwhile, five of San Francisco’s 11 supervisors are calling for changes to a neighborhood ordinance banning city employees from traveling to or contracting with corporations based in 30 states which have enacted anti-LGBTQ, anti-abortion or anti-voting-rights laws, based on the San Francisco Chronicle.
- The supervisors: “By prohibiting town from doing business with half the nation, this policy has resulted in significant administrative costs and potentially way more significant contracting costs by limiting bidder competition.”
- The state of California has the same law that got here under renewed scrutiny after Newsom took a family vacation to Montana, a state on the travel ban list.
One last financial factoid for the road: Democratic Assemblymember Matt Haney of San Francisco announced Wednesday that he had secured $1.7 million in state funds to construct a neighborhood public bathroom — though it probably won’t be accomplished until 2025. “Why is a public bathroom so insanely expensive, and why does it take so long to construct?” San Francisco Chronicle columnist Heather Knight asked in exasperation.
Some things never change: I attempted to reply that exact same query in a 2019 article for the San Francisco Business Times, headlined: “Constructing a toilet cost San Francisco $2 million. Why does a restroom cost as much as a luxury condo to construct?”
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1
Will community colleges get more $$ for remedial class reforms?
From CalMatters higher-education reporter Mikhail Zinshteyn: A latest California law taking effect in January says community colleges must enroll most students in math and English courses which might be required to transfer into the University of California or the California State University systems.
- Many viewed the bill’s passage as an equity win, citing data that show placing students in remedial classes prevents them from reaching their academic goals.
- But faculty groups opposed the bill. Amongst their biggest gripes: It didn’t include any extra ongoing funding for tutoring. The groups say the brand new law puts pressure on instructors by requiring them to show students who would otherwise have been placed in remedial classes alongside their more academically prepared peers.
During a Tuesday ceremony at Moorpark College, the bill’s creator told Mikhail she’s probably not in a rush to push for that ongoing funding. “Now we have a really uncertain budget outlook” next 12 months, said Assemblymember Jacqui Irwin, a Camarillo Democrat. Even on this 12 months’s bonanza of a budget, 95% of the excess paid for things on a one-time basis, like construction or pilot programs.
Irwin added that a 2017 law she authored to scale back remedial classes at community colleges didn’t include extra funding for tutoring, and most campuses switched to enrolling students into transferable math and English anyway.
- Irwin: The law “was very successfully implemented at a really large number of colleges with resources that they’d.”
Predictably, as tens of 1000’s more students began taking these transferable courses, a rather higher percentage have been failing them. But overall almost twice as many students are passing transferable math courses due to the reforms Irwin’s 2017 bill initiated.
This 12 months’s budget deal still included $64 million in one-time spending for things like tutoring and college training to raised implement these transfer-course reforms. The community college system is looking for to make that cash everlasting and grow it to $70 million in next 12 months’s budget.
- Irwin: “Now we have to see how successfully the ($64 million) this 12 months is used.”
2
Why Los Angeles is at center of housing crisis
In the case of the housing crisis, Los Angeles tends to hog the highlight — and for good reason. It’s each the capital of single-family-home suburban sprawl and probably the most crowded place to live, as highlighted by a latest investigation by the Los Angeles Times. The series found that more individuals are squeezing into fewer rooms in Los Angeles County than in another place in the USA, with deadly consequences for its poorest residents. For more, try the newest episode of Gimme Shelter: The California Housing Crisis podcast. And whilst you’re at it, give a hearken to one other recent podcast episode on how California’s latest parking law could lower housing costs.
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See also
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S.F. DA Brooke Jenkins removes certainly one of California’s most veteran judges from latest juvenile cases. // San Francisco Chronicle
Latest conflict after Boudin recall: Jenkins accuses fired prosecutor of removing confidential files. // San Francisco Chronicle
San Jose gun owners to be fined as much as $1,000 for breaking latest firearm law. // Mercury News
Tesla wants latest trial over ‘Jim Crow-era racism’ at Fremont factory. // Mercury News
The gig law causing chaos in California strip clubs. // WIRED
Students, legal scholars push California universities to rent undocumented students. // Latest York Times
L.A. Unified enrollment continues to fall, but drop is cushioned by influx of 4-year-olds. // Los Angeles Times
Sacramento highschool student tests positive for energetic tuberculosis. // Sacramento Bee
Repairs could halt California rail service into December. // Associated Press
Marin County moving to require latest construction be all-electric. // Marin Independent Journal
‘Builder’s treatment’ law could pressure cities resistant to additional housing. // San Diego Union-Tribune
California is trying to deal with the homeless through a medical insurance program. It worked for this man. // Los Angeles Times
