Programming note: The newsletter will take a break on Monday, Jan. 16 for the Martin Luther King, Jr. holiday. We’ll be back in your inbox Tuesday, Jan. 17.
California’s projected $22.5 billion deficit means budget cuts are almost inevitable — much to the chagrin of climate activists, public health advocates and others who’ve criticized Gov. Gavin Newsom’s proposal since its unveiling this week.
We also can expect to see pushback from the Legislature on Newsom’s proposals to chop money for public transit.
State Sen. Scott Wiener, a San Francisco Democrat, let or not it’s known Thursday that he’s analyzing the impacts on transit — and potentially forming a “big coalition” to fight the proposal. That will include transit agencies, advocates and others within the Legislature.
- Wiener: “There are plenty of people typically, and quite a lot of people within the Legislature, who’re deeply concerned with the long run of transportation given the fiscal cliff that agencies are going to experience in the subsequent one to 2 years as federal emergency funds run out, but ridership has not fully rebounded yet. It may lead to significant service cuts, which is a downward death spiral for a few of these agencies.”
What Wiener is raising alarms about is on page 51 of Newsom’s proposed budget, as a part of the climate change section, since transit is vital to reducing greenhouse gas emissions:
- A $2 billion cut (in intercity projects) from the $7.7 billion put aside for transit capital infrastructure;
- A $200 million cut to bicycle and pedestrian programs;
- Delaying $350 million in funding to enhance rail crossing safety from 2023-24 to 2025-26.
Sen. Nancy Skinner, the Oakland Democrat who leads the Senate Budget Committee, said she agrees with the governor’s approach to shifting or delaying funding apart from core programs akin to health care and childcare.
But is transit funding appropriate to delay? “The Legislature could have plenty of discussion about that,” she told CalMatters. “I feel everyone within the Legislature wouldn’t need to have any funding shift, for instance, for a public service like transit.”
Transit agencies were hit hard throughout the COVID pandemic — especially within the Bay Area, which each Wiener and Skinner represent.
- Michael Pimentel, executive director of the California Transit Association: “We’re going to be working with the Legislature throughout this budget process to discover a path forward to restoring the proposed cuts — but additionally to handle this operational funding shortfall that agencies across the state are facing.”
If the revenue picture improves, it’s possible that the cuts will probably be restored and delays canceled.
Transit can also be on the mind of state Sen. Lena Gonzalez, a Democrat from Long Beach and chairperson of the Senate Transportation Committee, who said she plans to introduce a bill to make sure the state moves forward on its Clean Transportation Program with “sustainable funding to cut back transportation-related emissions and improve air quality for a healthier future for our families, especially those historically overburdened by pollution.”
And Sen. Maria Elena Durazo, a Los Angeles Democrat and chairperson of the budget subcommittee on transportation, said last 12 months’s investments in transit reflect the state’s give attention to regional equity, completion of major projects, and leveraging federal funds.
- Durazo: “If we’re serious about climate mitigation and improving mobility and quality of life for all Californians, we must follow through on these investments.”
But transit advocates are also indignant at Newsom for vetoing a bill last 12 months that will have created more reduced fare pilot programs, including for college kids. Advocacy group MoveLA rallied on the state Capitol on Tuesday to lobby again for free student passes.
- More budget news: The nonpartisan Legislative Analyst’s Office today will release an initial review of the governor’s proposed budget, with more detailed reports in coming weeks. In November, the analyst estimated the projected deficit at $24 billion, barely higher than Newsom’s Finance Department. The LAO also noted it expected higher inflation to persist — and which may require further spending reductions to balance the budget.
The coronavirus bottom line: As of Tuesday, California had 10,972,516 confirmed cases and 98,393 total deaths, based on state data now updated only once every week on Thursdays. CalMatters can also be tracking coronavirus hospitalizations by county.
California has administered 87,315,550 total vaccine doses, and 72.5% of eligible Californians have received their primary vaccine series.
Other Stories You Should Know
1
Bonta goes after insulin makers
From CalMatters health reporter Kristen Hwang: California is suing the six largest insulin manufacturers and pharmacy profit managers within the country over unfair business practices, Attorney General Rob Bonta announced Thursday, as a part of the state’s broader technique to bring down the associated fee of pharmaceuticals.
The criticism alleges that drug manufacturers Eli Lilly, Novo Nordisk and Sanofi — together with profit managers CVS Caremark, Express Scripts and OptumRX — have illegally conspired to artificially raise the worth of insulin by 600% over the past twenty years. The civil suit seeks to ban the complex system of price setting and rebates firms engage in that drive out-of-pocket costs, to secure damage payments for diabetic Californians and to levy monetary penalties against each company.
Greater than 3.2 million Californians are diagnosed with diabetes, and plenty of depend on the blood-sugar regulating hormone to survive. The fee of a vial of insulin ranges from $170 to $400, depending on the brand, and plenty of patients require a couple of vial per thirty days. Compared, patients paid as little as $21 in 1999 for a similar prescriptions.
- Bonta: “The rise in price is just not based on cost. It’s not based on research and development. It’s artificially being increased. And so we ask ourselves, Is that this fair? No. Is that this illegal? Yes, it’s.”
In a press release to CalMatters, Eli Lilly characterised the criticism as “false accusations” and noted that the corporate lowered the worth of its generic insulin last 12 months to 2008 levels.
While insulin is a “poster child for inflated prices,” the state’s lawsuit could have far-reaching impacts on the associated fee of other prescribed drugs, said Anthony Wright, executive director of Health Access California, a consumer rights advocacy group. The negotiation tactics targeted within the lawsuit are used to set prices for many pharmaceuticals.
- Wright: “It’s a system that advantages each the manufacturer and the profit manager to the detriment of the patients…Californians feel these high prices of prescribed drugs of their premiums and of their monthly visit to the pharmacy, especially in the event that they’re paying out of pocket in the event that they’re uninsured or underinsured.”
In a press release, considered one of the targeted profit managers rejected the lawsuit’s claims.
- CVS Caremark: “Pharmaceutical firms alone set the list price for his or her products. Nothing in our agreements prevents drug manufacturers from lowering the costs of their insulin products and we might welcome such motion.”
The lawsuit comes at the identical time that state lawmakers are poised to announce which company will partner with the federal government to fabricate generic insulin.
2
The prices of not filing taxes
If you happen to don’t owe taxes, why trouble filing? Because — as stimulus payments and gas rebates throughout the last two years have shown – not filing can result in losing money, CalMatters’ Grace Gedye reports.
One in every of the necessities for getting those payments was to have filed taxes for the 12 months 2020. But it surely’s not only the one-time payments. There are also annual money back tax credits that provide hundreds of dollars to lower income people.
Nationally, about one fifth of the individuals who qualify for the federal earned income tax credit don’t receive it, based on the U.S. Department of Health and Human Services. And, researchers found, of the California households who receive food assistance and are eligible for CalEITC, about 400,000 households that qualified for credit didn’t receive it, largely resulting from low-income families not filing taxes.
- Anna Hasselblad, policy director at United Ways of California: “We prefer to say, ‘It’s your money, go get it. And going and getting it means also: Ask for help in the event you need it.”
One caution: Paid tax preparation can cancel out the advantages of a few of those payments. But there are quite a lot of free resources to get tax help or to file online yourself.
CalMatters Commentary
Offshore wind development isn’t clean unless California tribes are involved: Officials from California’s largest tribe are concerned in regards to the lack of engagement to date by offshore wind firms, says Frankie Myers, vice chairman of the Yurok Tribe.
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R.J. Reynolds pivots to latest cigarette pitches as flavor ban takes effect // The Recent York Times
Rep. Ro Khanna says he’s taking a look at the Senate. His allies are talking in regards to the White House. // POLITICO
An about-face on elementary school closures: Oakland school board reverses decision // CBS San Francisco
SF paid $25 million to revoked, suspended and delinquent nonprofits // San Francisco Standard
Former Sacramento officer sues city alleging ‘anti-Black culture’ // Sacramento Bee
California agency wants money for pet-friendly cannabis standards // Sacramento Bee