By that definition, California is one of the nation’s most liberal states. Annually, its governors and legislators enact hundreds of measures that purport to generate more prosperity and equity for its nearly 39 million residents.

Whether those efforts have had an overall positive effect – which is debatable – they unquestionably have a darker side. Each tax, each appropriation and each regulatory action has a financial impact, thus motivating those affected to seek favorable treatment.

A classic example is the California Coastal Commission, created by voters more than a half-century ago with the stated goal of maintaining public access to beaches and other coastal property by regulating development. The commission holds immense authority within a 1.6 million-acre “coastal zone” that runs from Oregon to Mexico, superseding the land use powers of local governments.

From the onset, the commission has been besieged by lobbyists for and against specific projects, and its actions have often been tinged by scandal. Three decades ago commission member Mark Nathanson, a Beverly Hills real estate broker, pleaded guilty to soliciting almost $1 million from Hollywood entertainment barons seeking building permits.

During the early years of its existence, meanwhile, the Legislature saw numerous attempts to revise the coastal zone’s dimensions because land outside its borders became more valuable. One state senator even carried a bill removing his own family’s business from the zone.

Another hoary example is California’s “tied house law” that supposedly battles monopolies in the liquor business by making it illegal for someone in the production, distribution or retail levels to engage in more than one.

The law has long outlived whatever rationale it once had and should have been repealed, but it remains on the books and thus generates a brisk trade in legislation to carve out exemptions for particular businesses.

Still another: If a Californian buys some off-the-shelf computer software – such as the TurboTax, for example – sales tax is added. But three-plus decades ago, the Legislature bowed to pressure from Silicon Valley and exempted custom software, which can cost millions of dollars, from taxation.

One more: Every year, the state allocates millions of dollars to the Southern California film industry for production inside the state. Why should California taxpayers subsidize them and not other businesses? Film executives, actors and their unions bedazzle politicians.

The California Environmental Quality Act is blatantly misused to block much-needed housing development and cries out for reform. The Legislature has taken some baby steps but routinely helps big projects such as sports arenas minimize CEQA’s effect.

A few years ago, the Legislature passed Assembly Bill 5, which requires millions of Californians who do contract work to be converted into payroll employees, but only after exempting certain categories chosen by legislative leaders.

Something of that nature happened again this week when Gov. Gavin Newsom signed Assembly Bill 610, which exempts certain restaurant employees from the state’s new $20 minimum wage for fast food workers. They include workers in hotels, theme parks, concessions on public property and gambling casinos.

Earlier, there had been a flap over an exemption for workers in restaurants that bake and sell bread. It appeared to benefit Panera Bread, one of whose franchise holders had been a major political contributor to Newsom. The controversy died down when Panera agreed to abide by the law.

AB 610 arbitrarily improves the bottom line for some restaurants while others will soon see their labor costs escalate. Politicians once again choose winners and losers.

Dan Walters can be reached at dan@calmatters.org.

California’s average price for regular grade gas has again topped $5 a gallon, according to the most recent American Automobile Association report. It’s more than $6 in some areas. The average is up about 20 cents from a year ago and is about $1.50 higher than the national figure.

I can attest to the differential, having spent part of March driving some 3,000 miles through four western states, mostly to visit national parks, and buying about 200 gallons of fuel along the way. All of my fill-ups were under $3.50 a gallon, with the lowest price being $2.99 in Wyoming.

The difference between California prices and those in other states raises, for the umpteenth time, is the question of why it exists.

A couple of years ago, Gov. Gavin Newsom spent months vilifying oil companies as price-gouging enemies of the people and demanded that the Legislature punish them with taxes on excess profits. He couldn’t win approval the tax proposal, switched to seeking civil penalties, and ultimately had to settle for relatively toothless legislation directing the state Energy Commission to gather data, establish a reasonable profit level and assess penalties for exceeding it.

“Finally, we’re in a position to look our constituents in the eye and say we now have a better understanding of why you’re being taken advantage of,” Newsom said a year ago as he signed the bill. “There’s a new sheriff in town in California, where we brought Big Oil to their knees. And I’m proud of this state.”

We have heard virtually nothing from officialdom about gas prices since, and Newsom apparently didn’t bring Big Oil to its knees.

The vast majority of the differential in gas prices between California and other states can be attributed to differing policies.

Severin Borenstein, a UC Berkeley economist regarded as the state’s leading expert on the issue, parsed the differential in a 2023 paper, pointing out that California’s direct and indirect taxes on fuel amount to nearly $1 per gallon – 70 cents higher than the national average in such taxes – and the state’s unique fuel blend to battle smog adds another dime.

That left what he calls the “mystery gasoline surcharge,” or MGS, of about 43 cents a gallon that cannot be directly attributed to oil prices or California’s taxes and other official factors. It may be a mystery, but at least some of it can be logically attributed to the relatively high costs of doing any kind of business in California – rents, electricity and other utilities, wages and regulatory overhead, for example.

Even if the MGS could be eliminated from the equation, California’s gas prices would still be at least $1 higher than those in other states.

This month’s sojourn through other western states underscored another aspect of the gas-price conundrum. Despite paying direct and indirect taxes on fuel that are three times the national average, California’s motorists are driving on highways that are subpar vis-à-vis those in other states.

Driving back into California from other states can be a jarring experience, and data from the federal Bureau of Transportation Statistics back up that observation. As of 2020, California had the fourth-worst roadway conditions of any state with just 67% of its 26,406 miles of pavement in “acceptable” condition.

The national average was 81%, and all four states I visited had much higher scores than California: Wyoming 94.3%, Nevada 85.7%, Utah 80% and Colorado 78.1%.

We are paying the most in gas taxes and getting almost the least in roadway quality.

You can reach Dan Walters at dan@calmatters.org.

They are utterly dependent on how much money the state budget allocates each year under Proposition 98, a formula adopted by voters in 1988 that only a few wonks in and around the Capitol profess to understand – and even they often disagree.

Prop. 98 computations are also subject to political horse-trading during each budget cycle. Whatever number emerges is then distributed to school districts, primarily based on “average daily attendance.”

California is one of only a few states that use attendance to distribute state aid and a perpetual debate over whether it should continue is becoming more intense because two major factors in school attendance – enrollment and student absences – have been regressing.

California experienced rapid population growth over the last two decades of the 20th century, due to a wave of migration from other states and a baby boom. That translated into a 50% increase in K-12 school enrollment, eventually topping out at 6.3 million kids.

After reaching a plateau, however, enrollment started declining as the state began losing population, thanks largely to movements to other states, and as the state’s birthrate dropped dramatically.

“Demographic projections suggest enrollment will continue to decline across the state over the coming decade,” according to a recent report by the Public Policy Institute of California. “The California Department of Finance (DOF) projects that declines will persist at roughly 40,000 to 60,000 students per year, resulting in enrollment levels below 5.2 million by 2032.”

The inexorable decline in enrollment is exacerbated by a startling large number of students who may be enrolled but are chronically absent – what once was known as playing hooky.

During the early months of the COVID-19 pandemic almost all of California’s schools were closed, but even with online classes, attendance took a nosedive. After schools were reopened, however, chronic absenteeism – students missing from the classroom 10% or more of the time – continued to be a problem. Prior to the pandemic 12% of the state’s students were chronically absent, but in the first year after schools reopened the rate was 30% and since then has declined marginally to 25%, according to a new PPIC study.

PPIC researchers learned that the most absence-prone children these days are in kindergarten or the early primary grades while, prior to the pandemic, high schoolers were most likely to be missing classes.

“High levels of absenteeism among the youngest students is particularly concerning since absenteeism tends to have a snowball effect: a student is more likely to be chronically absent in later grades if they are chronically absent in earlier ones,” PPIC’s report noted.

During the pandemic, school finances were bolstered by billions of dollars in federal relief funds and a temporary respite from attendance-based state aid, but both of those programs have expired, so districts are beginning to feel the full impact of enrollment declines and absenteeism.

As the gaps between income and outgo widen, school officials throughout the state are contemplating school closures – which almost always generate neighborhood opposition – while pressing the state to change the attendance-based system.

“Between 2012 and 2021, nearly 700 schools across the state were closed, resulting in roughly 167,000 students being displaced,” Policy Analysis for California Education, a multi-university research project, reported recently, adding that “Black students were more likely to experience school closure than any other racial subgroup. Black students represent nearly 14 percent of the student body in schools that were closed.”

Demography is destiny and California’s school conundrum of declining enrollment, high absenteeism and unstable attendance will become more intense. It warrants urgent attention by the state’s political figures, from the governor downward.

Dan Walters has been a journalist for more than 60 years. He can be reached at dan@calmatters.org.

Primary elections also would host preliminary contests for nonpartisan local offices and decide any initiative ballot measures that had qualified.

Usually there was enough on the ballot to draw substantial numbers of voters to the polls. A half-dozen well-known Republicans vied for the party’s U.S. Senate nomination in 1982, for instance, and Proposition 13, the iconic property tax cut measure, won voter approval in the 1978 primary.

However, politicians eventually started messing with it, particularly after Democrats became California’s dominant party. Democratic politicos felt left out when presidential nominees were chosen via earlier primaries in other states. They also didn’t like having conservative ballot measures, such as Prop. 13, decided in June because a primary election’s lower voter turnout would help those measures win.

Democratic majorities in the Legislature fiddled around with having primaries earlier in election years. After several inconclusive experiments, they finally decided that beginning in 2020 primaries in presidential election years would be held in March, rather than June. They also decreed that no initiative ballot measures would be placed on primary ballots.

Meanwhile, moderate Republicans, via a parliamentary power play, pushed another big change through the Legislature and won voter support. It changed California’s primary election from a closed system – voters participating within their parties – to an open top-two system in which all candidates appear on the same ballot and the top two finishers qualify for the November ballot regardless of party.

Sponsors hoped that it would tend to produce more centrist legislators in both parties and initially seemed to have that effect after debuting in 2010. But its impact was quickly overshadowed after Democrats captured immense margins in both legislative houses. Instead, clever campaign strategists game the top-two system by trying to get the weakest would-be opponents on the November ballot.

This year, for example, the leading Democratic candidate for U.S. Senate, Adam Schiff, spent heavily on ads that promote Republican Steve Garvey, in hopes that he, rather than one of the other two Democratic candidates, will finish in second place.

Overall, these systemic changes have not had the positive effects their advocates promised.

California is no more relevant in the selection of presidential nominees than it ever was. Legislative and congressional candidates must begin raising money and campaigning nearly a year before the final election.

Finally, banning initiative ballot measures from primary elections depresses voter interest while concentrating them in November contributes to voter confusion.

March primaries are mostly boring, which translates into low voter turnout even though the Legislature has made voting increasingly easy by making voter registration more or less automatic, making mail-in voting the default mechanism and sending ballots to all of the state’s 22 million registered voters.

A recent Public Policy Institute of California poll revealed that fewer than 40% of registered voters are either “extremely” or “very” enthusiastic about the presidential election and enthusiasm dropped to 28% about congressional races.

Paul Mitchell, California’s go-to expert on voting patterns, notes that a week before the March 5 primary, only 1.7 million ballots had been received by county election offices and projected that this year’s primary would set an all-time record for low turnout, 29%.

In effect, while Democrats say they want to maximize voter participation, their changes in the primary system are effectively minimizing turnout.

It’s time to go back to the drawing board.

You can email Dan Walters at dan@calmatters.org.

The last official count found more than 181,000 Californians without homes, nearly a third of the nation’s homeless population. When new data are released later this year, the number will probably approach 200,000.

The numbers have continued to grow despite many billions of dollars in federal, state and local funds having been spent – $20 or so billion by the state alone over the last five years. As the problem worsens, it consistently ranks as one of Californians’ most pressing public policy issues, polling has found.

How is it, one might ask, that so much money could be spent with so little, if any, progress?

One factor, certainly, is that the underlying causes of homelessness, such as sky-high housing costs, family breakups, mental illness and drug addiction have not abated.

Another, probably, is that here is no consensus on what programs would be most successful and officialdom has taken a scattergun approach, providing money to a bewildering array of often overlapping programs and services in hopes of finding approaches that work.

Gov. Gavin Newsom, who pledged 20 years ago to end homelessness in San Francisco when serving as the city’s mayor, is touting a measure on the March 5 ballot that would authorize bonds to build facilities for treating the mentally ill and redirect some funds from a two-decade-old special mental health tax into new programs. He’s also won legislative approval of “CARE courts” that could compel some mentally ill Californians into receiving treatment.

The multiplicity of programs to deal with homelessness cries out for some kind of independent appraisal of what’s been spent and how effective the spending has been.

We may get such an overview soon because the Legislature has approved a request from Republicans for the state auditor to delve into what’s been spent.

“Homelessness is the most urgent issue facing California,” said state Sen. Roger Niello of Roseville, one of those making the request. “Given the crisis has only worsened, we need to know what the money has accomplished and what programs have been effective in moving people to permanent housing.”

One area the state auditor should examine is what could be termed “bang-for-the-buck” – the startlingly expensive costs of providing even the most basic services to homeless Californians.

Sacramento, like other large California cities, has a large and growing homeless population and a new report from the city auditor is indicative of that aspect of the homeless crisis.

Auditor Farishta Ahrary said the city, which faces a $66 million budget deficit, spent $57 million on homelessness during the 2022-23 fiscal year, $34 million of it on maintaining about 1,300 beds of temporary shelter, or enough to house about a third of the city’s homeless people. Overall that’s about $26,000 per bed or $2,000-plus per month, which would equal the rent on a mid-range apartment.

Three contracts for shelters between the city and the Sacramento Housing and Redevelopment Agency amounting to more than $10 million stand out. Two 100-bed facilities cost the city almost $7 million – well over $100 per bed per day – while the third, $3.3 million for a 24-bed shelter for young people, cost the city $373 per day for each bed.

Sacramento is not alone in paying a lot of money for rudimentary shelters, and costs of that magnitude indicate that California would have to spend much more than the current levels to put roofs over the heads of its homeless people.

Meanwhile, Newsom is proposing to pare back homelessness spending because the state faces a multibillion-dollar budget deficit.

Dan Walters has been a journalist for more than 60 years. He can be reached at dan@calmatters.org.

One, the Housing Accountability Act, or HAA, aims to remove barriers to construction, while the older California Environmental Quality Act has been employed to delay or block specific projects.

One tactic used by local authorities to overcome the accountability law’s pro-housing provisions has been indefinitely delaying decisions on whether projects are eligible for CEQA clearance by demanding ever-more data from developers.

Last year, the Legislature, which has been strengthening HAA provisions in recent years, cracked down on CEQA delays by passing Assembly Bill 1633, carried by Assemblyman Phil Ting, a Democrat from San Francisco, where the tactic has often been employed. It decreed that excessive CEQA delays in high-density urban projects violate state law and subject officials to lawsuits.

While AB 1633 gives pro-housing advocates a new legal weapon, its applicability to only specific kinds of projects falls short of a wider overhaul of CEQA that some political figures have supported.

For instance, former Gov. Jerry Brown once described CEQA reform as “the Lord’s work,” but was unwilling to take on the heavy political burden such changes would require. If politicians are unwilling to take on CEQA reform – which would draw opposition from environmental groups, and labor unions which invoke the law to demand agreements with developers – California’s courts may do the job.

This month, a state appellate court delivered a ruling that, if not overturned by the state Supreme Court, would make it much more difficult to use CEQA to stop projects that conform to local zoning laws.

The case involved a corporation, Hilltop Group Inc., that wanted to construct a facility to recycle construction debris on a site adjacent to Interstate 15 in northern San Diego County that had been designated for industrial uses in the county’s general plan.

The county’s staff declared that the North County Environmental Resources Project was entitled to a CEQA exemption because it met the criteria of the general plan, which had been certified as compatible with CEQA. However, when residents of the area and the city of Escondido opposed the facility, citing noise, traffic and aesthetic impacts, the San Diego County Board of Supervisors declared that it needed more environmental mitigation under CEQA.

Hilltop sued and the county prevailed in the trial court, but a three-judge panel on the 4th District Court of Appeal unanimously declared that the county could not impose additional conditions because the project was compatible with the industrial zone the county created in its general plan.

Chris Elmendorf, a UC Davis law professor who is the state’s foremost authority on development laws, says the appellate court ruling is a major blow to the tactic of using CEQA to delay projects of any kind – not just housing – that conform to the standards of pre-existing general plans.

It could be a “judicial transformation of CEQA (that) won’t be rendered ineffectual by project-labor, community-benefit or other everything bagel conditions,” Elmendorf remarked on X, formerly known as Twitter.

Elmendorf likens the appellate court decision to the Washington Legislature’s sweeping overhaul of its environmental quality act last year, also meant to minimize delays in housing development. It exempts zoning-compliant housing from further environmental review.

If the decision has the effect Elmendorf anticipates, one wonders whether those who have for years invoked CEQA on specific projects, particularly environmentalists and labor unions, will accept a changed legal climate or try to overturn the ruling through the Legislature.

Dan Walters has been a journalist for more than 60 years. He can be reached at dan@calmatters.org.

Last week, his Department of Finance indirectly acknowledged the budget’s problems, reporting that through January revenues were running $5.9 billion behind the new budget’s assumption for the current fiscal year.

On Tuesday, the Legislative Analyst’s Office, which advises the Legislature, increased its estimate of the budget’s deficit, which Newsom had originally pegged at $38 billion, to an eye-popping $73 billion after toting up Newsom’s proposals and decreasing its revenue estimate.

If the downward revenue trend continues, the 2023-24 budget could wind up in a deep hole and there will be much less money available for the 2024-25 fiscal year that begins on July 1.

The shortfall was particularly acute in January, a key month on the fiscal calendar because quarterly payments for personal income taxes were due. The month’s income tax payments were $5 billion below the $20.4 billion the administration expected to collect.

When he unveiled his 2024-25 budget in January, Newsom proposed a series of fiscal maneuvers to close the gap, very few of which were actual spending reductions.

He tapped the state’s emergency reserve and dug deeply into the bag of tools that the state has historically used to paper over deficits, including spending deferrals, loans from special funds and accounting tricks, such as a maneuver involving school aid.

The Legislature’s budget analyst, Gabe Petek, had originally estimated the deficit at $68 billion, largely due to revenue projections about $15 billion lower than the governor’s over the three-year “budget window,” from 2022-23 through 2024-25. He later declared that Newsom’s action could offset a $58 billion shortfall. On Tuesday, however, Petek’s staff added $15 billion to the estimated deficit, bringing it to $73 billion.

The new revenue numbers and projections imply that Petek’s scenario is much closer to reality than Newsom’s. They also imply that, if Newsom is trying to skate through the final three years of his governorship without making some basic fiscal adjustments, he’ll leave a big mess for his successor.

The deficit, whatever its true dimensions, appears to be detached from California’s underlying economy, and is rather what fiscal mavens call a “structural deficit” – one in which baseline revenues and baseline spending are fundamentally imbalanced. And in fact both Newsom’s budget and Petek’s analysis agree that the state faces deficits of roughly $30 billion a year at least for the remainder of his governorship.

The state’s economy may not be booming, but it is generally positive, with low unemployment. Nevertheless, Newsom wants to tap the “rainy day” reserves that are meant to offset a serious economic downturn.

Using reserves now and employing other short-term actions would merely postpone the day of reckoning and worsen its impact.

That danger is illustrated by the aforementioned school aid maneuver, which would, Petek’s office says, “allow schools to keep $8 billion in cash disbursement above the minimum requirement without recognizing the budgetary impact of those payments.”

“This proposed maneuver is bad fiscal policy,” the analysis continues, saying it “creates a binding obligation that will worsen out‑year deficits and require more difficult decisions in the future.”

If revenues continue to fall behind the Newsom budget’s relatively rosy projections, avoiding hard decisions to cut spending and/or raise taxes would require even more elaborate budgetary tricks like the school finance sleight-of-hand that would make future budgets even more imbalanced.

Petek wants his bosses in the Legislature to get real with true cuts in spending, particularly money for items that had been budgeted but not yet spent. But doing so means they would have to reduce spending that their allies, such as public employee unions and advocates for educational, health care or social services, want to preserve, or raise taxes that are already among the nation’s highest.

That’s why they will be tempted to adopt a bag of tricks, regardless of future impact.

Dan Walters has been a journalist for more than 60 years. He can be reached at dan@calmatters.org.

The stark differences between estimates and reality, if continued, will affect the state budget’s solvency for at least the remaining years of Newsom’s governorship.

Newsom’s latest budget acknowledges that income taxes, which are mostly paid by those in upper income brackets, are $44 billion less than previously projected for the three-year “budget window” from 2022-23 through 2024-25. But the shortfall is actually billions of dollars more.

When Newsom and the Legislature enacted a 2022-23 budget in June 2022, it assumed that income taxes would bring in $129 billion. Later, that projection dropped to $122.8 billion and Newsom’s latest budget set it even lower at $101.8 billion, as state officials close the books on that fiscal year.

The 2023-24 budget adopted last year projected $118.2 billion in income tax revenues, but it’s since been revised to $113.8 billion. And Newsom’s newest budget assumes that income taxes will bring in $114.7 billion for the fiscal year 2024-25, a $4 billion drop from last year’s assumption.

Over the three-year period, Newsom pegs the revenue shortfall at $44 billion, but it’s more likely $51 billion if one begins with the original numbers from 2022-23 – when Newsom famously bragged about the state’s having a $98 billion surplus.

“No other state in American history has ever experienced a surplus as large as this,” Newsom said as he unveiled a $300-plus billion budget that the Legislature eagerly adopted with a few tweaks.

Newsom’s budget for 2024-25 assumes that the freefall in income tax receipts will end and revenues will actually pick up a bit next year. However, the Legislature’s budget analyst, Gabe Petek sees continued revenue weakness and pegs the three-year shortfall at $58 billion. Their differing projections are the main reason their estimates of the overall budget deficit are $30 billion apart.

Although Newsom’s budget was unveiled just two weeks ago, income taxes – the largest single source of state revenue – are already falling behind. So far in January they are running $3 billion behind the new budget’s assumption.

This is no small matter. Newsom will revise his budget in May, and he and the Legislature will enact a budget in June that will be based on a revenue figure of some kind. Legislators will be tempted to adopt a rosy figure from Newsom rather than Petek’s lower number to minimize how much spending must be reduced to close the gap. It will particularly affect state support for K-12 schools, the state’s largest single budget obligation, which is largely determined by a revenue-based formula.

However, if the Legislature does go for a higher revenue number, as it has it years past, and it proves to be as off the mark as other recent estimates have been, the effect will be traumatic for programs that depend on state financing.

Newsom blames the seven-month delay in the deadline for filing 2022 income tax returns, from April 2023 to November, for masking the sharp drop in revenue, and that contributed to the huge disparity. However, he and the Legislature could – and should – have been much more conservative in their guesswork.

The record of errors implies that either the administration’s methodology for projecting revenues is faulty or it has been consciously adopting rosy numbers to make the state’s fiscal situation seem better than it really is. Newsom’s much-trumpeted but bogus surplus proclamation in 2022 invites skepticism about what he is telling Californians now.

Dan Walters has been a journalist for more than 60 years, spending all but a few of those years working for California newspapers. You can reach him at dan@calmatters.org.

Six weeks out from the March 5 primary election – and only a couple of weeks until mail ballots can be cast – Adam Schiff, a Democratic congressman from Burbank, is the clear leader and very likely will finish first for a spot on the November election.

The real battle is for second place and thus the other position on the ballot eight months hence under California’s top-two system.

Katie Porter, a Democratic congresswoman from Irvine, seemed destined for a second-place primary finish until Republican Steve Garvey, a former star baseball player, jumped into the contest. Polls indicate that Porter and Garvey are in a dead heat for second place with Barbara Lee, a Democratic member of Congress from Oakland, trailing the field.

Schiff would be quite pleased if Garvey finished second, a distinct possibility with Democrats divvying their party’s vote. Having Garvey as a November rival would make Schiff a prohibitive favorite to win the seat, given the Democrats’ very lopsided voter advantage.

Were Porter or Lee to finish second in the primary, the November runoff would be far more competitive, mirroring the complex struggle for dominance between their party’s progressive left and its professional political class. Schiff enjoys support from the party regulars, such as former House Speaker Nancy Pelosi, while Porter has portrays herself as a progressive advocate of curbing corporate influence in Washington.

The war between Israel and Hamas in Gaza, which touched off when the militant group staged a deadly raid on Israel in October, is one of the flashpoints between the two wings of the Democratic Party, and was very evident on Monday.

Lee, who is best known for her many votes against wars, was an early proponent of a ceasefire in Gaza, while Porter later endorsed that view. On the other hand, Schiff, who is Jewish, has been a steadfast supporter of Israel, said that Hamas cannot be allowed to control Gaza.

Schiff and Garvey were in sync on that divisive issue, with the latter saying, “I stand with Israel today and tomorrow.”

Notwithstanding the sharp division on Gaza among Democrats, other policy issues raised by the panel of questioners, such as abortion, homelessness and immigration, did not produce many differences. Mostly, they took turns ragging on Garvey about his previous support for ex-President Donald Trump and demanding that he declare whether he would vote for Trump again this year.

Garvey refused to take a position on Trump’s bid to return to the presidency, saying he would decide later.

“I’m my own man,” Garvey insisted. “I make my own decisions.”

“Once a Dodger, always a dodger,” Porter snapped at Garvey in one of several allusions to his former career as a baseball player.

Porter, hoping to claim a spot on the November ballot, did take a few potshots at frontrunner Schiff, saying he took “dirty money” from corporate interests while she refused it. Schiff retorted that he had spent some of that money getting Porter re-elected to Congress.

It’s doubtful that the debate itself, which was broadcast locally and online, would have a major influence on the March outcome, but its issues will be amplified in post-debate media drives.

The question still to be answered is whether Garvey will consolidate support among Republican voters, who are numerous enough to give him a second-place finish if the three Democrats’ shares of their party’s voters are more or less equal. If Garvey does finish second, the contest is, for all intents, decided.

You can reach Dan Walters at dan@calmatters.org.

Simultaneously, the agency botched countless legitimate claims for unemployment insurance benefits while handing out billions of dollars to fraudsters, a disaster that CalMatters reporter Lauren Hepler detailed last year, to wit:

“A year-long CalMatters investigation found that the EDD was primed for disaster by years of failing to heed red flags, stalling reforms and abruptly abandoning a pre-pandemic effort to get ahead of exploding online fraud – issues that rose to the top of political agendas and budgets around recessions, but were never really fixed as governors, legislators and federal regulations changed,” Hepler wrote. “Once it all boiled over in the spring of 2020, California got the worst of both worlds: tens of billions of dollars lost to fraud, and workers who lost their financial stability, their homes or, in extreme cases, their lives.”

There is, however, a third element to the EDD catastrophe that still haunts the state and is likely to mushroom again if the state’s economy turns sour: an immense debt to the federal government.

The Unemployment Insurance Fund, or UIF, supported by payroll taxes on employers, is the source of payments to jobless workers under ordinary circumstances.

However, the fund cannot fully absorb claims for benefits even in relatively prosperous times. The problem stems from a two-decade-long political stalemate that began in 2001 when former Gov. Gray Davis and the Legislature sharply increased benefits, absorbing most of the unemployment fund’s $6.5 billion reserve.

When the Great Recession struck a half-decade later, the UIF quickly ran out of money and EDD borrowed about $10 billion from the federal government to cover the increased outflow. The state did not repay the loans, so the feds raised payroll taxes on employers to retire the debt.

The Great Recession debt was paid off in 2018, but two years later COVID-19 layoffs hammered the nearly depleted unemployment fund. Once again, the state borrowed money – nearly $18 billion – to keep benefits flowing.

In 2022, federal officials again raised payroll taxes on employers to offset the fund’s deficit and retire the debt – about $21 per worker, per year. A new EDD report says the unemployment fund’s debt had increased to $20 billion by the end of last year and is expected to reach $21 billion by 2025.

There is a widespread misconception that the debt stems from the explosion of unemployment insurance fraud. The fraud almost entirely involved federally financed extended benefits for workers who did not qualify for state benefits, and has no direct relationship to the state’s debt.

Today, the UIF still struggles to pay benefits even though unemployment is, in historic terms, relatively low. EDD says it’s paying out about $6.7 billion in benefits each year, but state payroll taxes are generating barely $5 billion a year.

Thus, the fund is growing steadily weaker and would be completely incapable of dealing with even a mild economic downturn, forcing the state to borrow even more money from the federal government.

This should be a massive embarrassment for a state whose governor boasts of its global economic standing. But there are no indications that the decades-long stalemate is softening.

Unions want taxes to be increased, either by expanding the taxable wage base of $7,000 a year or raising the tax rate, currently just over 3%, to make the UIF healthier. Employers, meanwhile, say they are already paying more to retire the debt and want reforms in benefits.

You can reach Dan Walters at dan@calmatters.org.