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"content": "\u003cp>\u003cstrong>Updated at 6:00 p.m. ET Friday\u003c/strong>\u003c/p>\n\u003cp>The ride-hailing company Uber made its stock market debut on Friday, and promptly saw share prices dip.\u003c/p>\n\u003cp>[aside postID='news_11745857' label='More Coverage of Rail-Hailing Companies']\u003c/p>\n\u003cp>Uber priced its shares at $45, the lower end of the possible range, aiming for a total diluted market value of about $82 billion. After a delay of two and a half hours, trading started with the stock at $42, down more than 6% over that initial price.\u003c/p>\n\u003cp>Throughout the day, share prices never reached $45. And at the closing bell, stocks were even lower than their morning value: Uber ended the day at $41.57 per share.\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\n\u003cp>The company's pricing reflected a relatively conservative approach for this initial public offering. A few months ago, analysts were expecting Uber's IPO to be far bigger than this. A $100 billion valuation was seen as reasonable — some even floated $120 billion.\u003c/p>\n\u003cp>But it's a rough week for the stock market, which is watching President Trump's rhetoric on trade with concern. And Uber's smaller ride-hailing rival Lyft saw its stock values plummet after an ambitiously priced IPO last month. \u003c/p>\n\u003cp>Still, this is the largest U.S. initial public offering since Alibaba's record-setting IPO in 2014.\u003c/p>\n\u003cp>Uber, which has never turned a profit, raised $8.1 billion in the IPO.\u003c/p>\n\u003cp>Uber has expanded dramatically since its founding a decade ago — in user base, in geographic scope and in ambition. Once focused on helping wealthy users hail private limos as an alternative to taxis, Uber embraced a peer-to-peer model where almost anyone could become a driver. Like Lyft, it began offering carpooling options where you share a ride with a stranger.\u003c/p>\n\u003cp>As Lyft focused on ride-hailing in the U.S., Uber took another path — expanding its global footprint and diversifying its services, offering food delivery, freight shipping and electric bike rentals.\u003c/p>\n\u003cp>But all that growth was expensive. Uber, like Lyft, has never made a profit. Instead, the company has burned through prodigious quantities of venture capital as it slashes prices to compete with rivals and invests any earnings into expansion. \u003c/p>\n\u003cp>Plenty of investors see big profits in Uber's future — in the long term. These profits depend on Uber outlasting rivals, raising rates and cutting costs. Investors point to the company's massive size, and the tremendous potential markets for its many services: ordering takeout, receiving packages, even getting groceries delivered.\u003c/p>\n\u003cp>\"They want to be able to touch consumers across all aspects of how they utilize transportation,\" says Ygal Arounian, an equity analyst at Wedbush Securities.\u003c/p>\n\u003cp>And autonomous vehicles, if they begin to replace drivers, could let Uber keep a bigger chunk of what users pay.\u003c/p>\n\u003cp>All the money raised through this IPO will help Uber chase that vision. But there are major obstacles.\u003c/p>\n\u003cp>While the technology behind autonomous or self-driving cars has come a long way, the cars are nowhere near ready for widespread, human-free deployment. And after a self-driving Uber hit and killed a pedestrian last year, Uber's own tests have slowed down.\u003c/p>\n\u003cp>Meanwhile, with autos that aren't autonomous ruling the roads, Uber relies on its community of drivers for its business model to work. And many drivers aren't happy: On Wednesday, groups held strikes and protests in cities in the United States, United Kingdom and Australia to push for higher pay and better working conditions. \u003c/p>\n\u003cfigure id=\"attachment_11746384\" class=\"wp-caption aligncenter\" style=\"max-width: 800px\">\u003cimg src=\"https://ww2.kqed.org/news/wp-content/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85-800x504.jpg\" alt=\"A small group of independent drivers and supporters protest against Uber and other app-based ride-hailing companies near the Wall Street Charging Bull on May 8 in New York City. Drivers called for higher wages and better rights as Uber prepared to go public.\" width=\"800\" height=\"504\" class=\"size-medium wp-image-11746384\" srcset=\"https://ww2.kqed.org/app/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85-800x504.jpg 800w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85-160x101.jpg 160w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85-1020x642.jpg 1020w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85-1200x755.jpg 1200w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85.jpg 1600w\" sizes=\"(max-width: 800px) 100vw, 800px\">\u003cfigcaption class=\"wp-caption-text\">A small group of independent drivers and supporters protest against Uber and other app-based ride-hailing companies near the Wall Street Charging Bull on May 8 in New York City. Drivers called for higher wages and better rights as Uber prepared to go public. \u003ccite>(Drew Angerer/Getty Images)\u003c/cite>\u003c/figcaption>\u003c/figure>\n\u003cp>Nabilia Nusrat, who drives for Uber in New York, \u003ca href=\"https://www.npr.org/2019/05/08/721333408/uber-and-lyft-drivers-are-striking-and-call-on-passengers-to-boycott\" rel=\"noopener\" target=\"_blank\">told NPR\u003c/a> she was striking to protest the meager amount of money that drivers make from the overall fares. \"Kinda like the big fish making all the money,\" she said. \"I'm at the bottom of the chain so I'm getting pressed.\"\u003c/p>\n\u003cp>In Los Angeles, James Hicks said that both Uber and Lyft have been reducing drivers' take-home pay. Uber recently cut per-mile rates in Los Angeles by 25%.\u003c/p>\n\u003cp>\"Uber and Lyft have been stealing from their drivers almost since the beginning of introducing their respective businesses,\" Hicks said Wednesday.\u003c/p>\n\u003cp>Drivers' protests have seen some gains. New York City \u003ca href=\"https://www.wnyc.org/story/new-york-city-passes-new-pay-standards-app-based-drivers/\" rel=\"noopener\" target=\"_blank\">passed a minimum pay requirement\u003c/a> for drivers who work on ride-hailing platforms. A California court ruling found that drivers, currently treated as independent contractors, might be employees entitled to benefits. \u003c/p>\n\u003cp>At a protest outside Uber's company headquarters in San Francisco on Wednesday, Mostafa Maklad said he feels emboldened by those successes. He has been driving for Uber for four years, but this is his first protest for a living wage.\u003c/p>\n\u003cp>\"There have been several attempts before, but every time when people organize against Uber, Uber has always been managing to shut it down or kill it,\" he said. Now? \"If they're not going to reach out to us, the law will force them to.\"\u003c/p>\n\u003cp>Uber's brand has been dinged by more than driver complaints. The company continues to cope with the fallout of years of bad behavior and a toxic corporate culture — everything from illegal business practices to reports of sexual harassment.\u003c/p>\n\u003cp>Then there's the question of regulation and how a rising tide of populism might affect Uber's agenda. The company aspires to become a monopoly in transportation, using Wall Street money to overcome rivals.\u003c/p>\n\u003cp>At the same time, several progressive Democratic candidates running in the 2020 election are either calling for or considering moves to break up big tech giants. New legislation in that direction could threaten Uber's growth goals.\u003c/p>\n\u003cp>But many analysts who are optimistic about Uber's future take comfort in the example set by another tech giant, Facebook. Its practices have violated user privacy and raised alarms over monopoly power. But after CEO Mark Zuckerberg said he \u003ca href=\"https://www.npr.org/2019/04/24/716886822/facebook-could-face-up-to-5-billion-fine-for-privacy-violations\" rel=\"noopener\" target=\"_blank\">expected to pay a multi-billion-dollar fine to regulators\u003c/a>, Facebook's stock jumped more than 7% — indicating that investors believe the fine is not a real threat to Facebook's future.\u003c/p>\n\u003cp>Uber's history, too, suggests the company won't see its path blocked any time soon. The company grew as big as it did by openly ignoring municipal laws for taxicabs. Such rule-breaking has been essential to Uber's business model, said Matt Stoller, a fellow at the Open Markets Institute.\u003c/p>\n\u003cp>\"They go into cities. They get a bunch of customers. And then they get those customers to lobby their city council to change the law. \"\u003c/p>\n\u003cp>[ad floatright]\u003c/p>\n\u003cp>In the next phase, Stoller predicts, Uber could try to bypass antitrust laws. \u003c/p>\n\n",
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"excerpt": "Uber had a rocky debut on the stock market. Despite taking a relatively conservative approach to its share price, the company saw its stock go down immediately as trading began. ",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003cp>\u003cstrong>Updated at 6:00 p.m. ET Friday\u003c/strong>\u003c/p>\n\u003cp>The ride-hailing company Uber made its stock market debut on Friday, and promptly saw share prices dip.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>Uber priced its shares at $45, the lower end of the possible range, aiming for a total diluted market value of about $82 billion. After a delay of two and a half hours, trading started with the stock at $42, down more than 6% over that initial price.\u003c/p>\n\u003cp>Throughout the day, share prices never reached $45. And at the closing bell, stocks were even lower than their morning value: Uber ended the day at $41.57 per share.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>The company's pricing reflected a relatively conservative approach for this initial public offering. A few months ago, analysts were expecting Uber's IPO to be far bigger than this. A $100 billion valuation was seen as reasonable — some even floated $120 billion.\u003c/p>\n\u003cp>But it's a rough week for the stock market, which is watching President Trump's rhetoric on trade with concern. And Uber's smaller ride-hailing rival Lyft saw its stock values plummet after an ambitiously priced IPO last month. \u003c/p>\n\u003cp>Still, this is the largest U.S. initial public offering since Alibaba's record-setting IPO in 2014.\u003c/p>\n\u003cp>Uber, which has never turned a profit, raised $8.1 billion in the IPO.\u003c/p>\n\u003cp>Uber has expanded dramatically since its founding a decade ago — in user base, in geographic scope and in ambition. Once focused on helping wealthy users hail private limos as an alternative to taxis, Uber embraced a peer-to-peer model where almost anyone could become a driver. Like Lyft, it began offering carpooling options where you share a ride with a stranger.\u003c/p>\n\u003cp>As Lyft focused on ride-hailing in the U.S., Uber took another path — expanding its global footprint and diversifying its services, offering food delivery, freight shipping and electric bike rentals.\u003c/p>\n\u003cp>But all that growth was expensive. Uber, like Lyft, has never made a profit. Instead, the company has burned through prodigious quantities of venture capital as it slashes prices to compete with rivals and invests any earnings into expansion. \u003c/p>\n\u003cp>Plenty of investors see big profits in Uber's future — in the long term. These profits depend on Uber outlasting rivals, raising rates and cutting costs. Investors point to the company's massive size, and the tremendous potential markets for its many services: ordering takeout, receiving packages, even getting groceries delivered.\u003c/p>\n\u003cp>\"They want to be able to touch consumers across all aspects of how they utilize transportation,\" says Ygal Arounian, an equity analyst at Wedbush Securities.\u003c/p>\n\u003cp>And autonomous vehicles, if they begin to replace drivers, could let Uber keep a bigger chunk of what users pay.\u003c/p>\n\u003cp>All the money raised through this IPO will help Uber chase that vision. But there are major obstacles.\u003c/p>\n\u003cp>While the technology behind autonomous or self-driving cars has come a long way, the cars are nowhere near ready for widespread, human-free deployment. And after a self-driving Uber hit and killed a pedestrian last year, Uber's own tests have slowed down.\u003c/p>\n\u003cp>Meanwhile, with autos that aren't autonomous ruling the roads, Uber relies on its community of drivers for its business model to work. And many drivers aren't happy: On Wednesday, groups held strikes and protests in cities in the United States, United Kingdom and Australia to push for higher pay and better working conditions. \u003c/p>\n\u003cfigure id=\"attachment_11746384\" class=\"wp-caption aligncenter\" style=\"max-width: 800px\">\u003cimg src=\"https://ww2.kqed.org/news/wp-content/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85-800x504.jpg\" alt=\"A small group of independent drivers and supporters protest against Uber and other app-based ride-hailing companies near the Wall Street Charging Bull on May 8 in New York City. Drivers called for higher wages and better rights as Uber prepared to go public.\" width=\"800\" height=\"504\" class=\"size-medium wp-image-11746384\" srcset=\"https://ww2.kqed.org/app/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85-800x504.jpg 800w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85-160x101.jpg 160w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85-1020x642.jpg 1020w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85-1200x755.jpg 1200w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/gettyimages-1142194552_custom-12954595a641e6f033bdc9a7a8e61e0d430a3ca0-s1600-c85.jpg 1600w\" sizes=\"(max-width: 800px) 100vw, 800px\">\u003cfigcaption class=\"wp-caption-text\">A small group of independent drivers and supporters protest against Uber and other app-based ride-hailing companies near the Wall Street Charging Bull on May 8 in New York City. Drivers called for higher wages and better rights as Uber prepared to go public. \u003ccite>(Drew Angerer/Getty Images)\u003c/cite>\u003c/figcaption>\u003c/figure>\n\u003cp>Nabilia Nusrat, who drives for Uber in New York, \u003ca href=\"https://www.npr.org/2019/05/08/721333408/uber-and-lyft-drivers-are-striking-and-call-on-passengers-to-boycott\" rel=\"noopener\" target=\"_blank\">told NPR\u003c/a> she was striking to protest the meager amount of money that drivers make from the overall fares. \"Kinda like the big fish making all the money,\" she said. \"I'm at the bottom of the chain so I'm getting pressed.\"\u003c/p>\n\u003cp>In Los Angeles, James Hicks said that both Uber and Lyft have been reducing drivers' take-home pay. Uber recently cut per-mile rates in Los Angeles by 25%.\u003c/p>\n\u003cp>\"Uber and Lyft have been stealing from their drivers almost since the beginning of introducing their respective businesses,\" Hicks said Wednesday.\u003c/p>\n\u003cp>Drivers' protests have seen some gains. New York City \u003ca href=\"https://www.wnyc.org/story/new-york-city-passes-new-pay-standards-app-based-drivers/\" rel=\"noopener\" target=\"_blank\">passed a minimum pay requirement\u003c/a> for drivers who work on ride-hailing platforms. A California court ruling found that drivers, currently treated as independent contractors, might be employees entitled to benefits. \u003c/p>\n\u003cp>At a protest outside Uber's company headquarters in San Francisco on Wednesday, Mostafa Maklad said he feels emboldened by those successes. He has been driving for Uber for four years, but this is his first protest for a living wage.\u003c/p>\n\u003cp>\"There have been several attempts before, but every time when people organize against Uber, Uber has always been managing to shut it down or kill it,\" he said. Now? \"If they're not going to reach out to us, the law will force them to.\"\u003c/p>\n\u003cp>Uber's brand has been dinged by more than driver complaints. The company continues to cope with the fallout of years of bad behavior and a toxic corporate culture — everything from illegal business practices to reports of sexual harassment.\u003c/p>\n\u003cp>Then there's the question of regulation and how a rising tide of populism might affect Uber's agenda. The company aspires to become a monopoly in transportation, using Wall Street money to overcome rivals.\u003c/p>\n\u003cp>At the same time, several progressive Democratic candidates running in the 2020 election are either calling for or considering moves to break up big tech giants. New legislation in that direction could threaten Uber's growth goals.\u003c/p>\n\u003cp>But many analysts who are optimistic about Uber's future take comfort in the example set by another tech giant, Facebook. Its practices have violated user privacy and raised alarms over monopoly power. But after CEO Mark Zuckerberg said he \u003ca href=\"https://www.npr.org/2019/04/24/716886822/facebook-could-face-up-to-5-billion-fine-for-privacy-violations\" rel=\"noopener\" target=\"_blank\">expected to pay a multi-billion-dollar fine to regulators\u003c/a>, Facebook's stock jumped more than 7% — indicating that investors believe the fine is not a real threat to Facebook's future.\u003c/p>\n\u003cp>Uber's history, too, suggests the company won't see its path blocked any time soon. The company grew as big as it did by openly ignoring municipal laws for taxicabs. Such rule-breaking has been essential to Uber's business model, said Matt Stoller, a fellow at the Open Markets Institute.\u003c/p>\n\u003cp>\"They go into cities. They get a bunch of customers. And then they get those customers to lobby their city council to change the law. \"\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>In the next phase, Stoller predicts, Uber could try to bypass antitrust laws. \u003c/p>\n\n\u003c/div>\u003c/p>",
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"disqusTitle": "Uber's Eye-Popping IPO Approaches. Is it Really Worth $90 Billion?",
"title": "Uber's Eye-Popping IPO Approaches. Is it Really Worth $90 Billion?",
"headTitle": "The California Report | KQED News",
"content": "\u003cp>Uber will go public on Friday in a highly anticipated initial public offering that will be the largest since 2014 — and one of the biggest in U.S. history.\u003c/p>\n\u003cp>After speculation that the ride-hailing company could be valued at as high as $120 billion, Uber is now targeting a valuation of $80 billion to $90 billion. At the same time, it has never made a profit — and has instead been burning through cash at a prodigious rate.\u003c/p>\n\u003cp>[aside label=\"More Uber IPO coverage\" tag=\"ipo\"]\u003c/p>\n\u003cp>Uber has grown massively in the decade since its founding and has footprints around the world. Its wild success has made Uber a household name — not just synonymous with ride-hailing but shorthand for any app that offers a service on demand: \"Uber, but for laundry,\" \"Uber, but for dog-walking.\"\u003c/p>\n\u003cp>And these days, Uber itself is the Uber for a lot more than ride-hailing. Uber Eats is Uber, but for \u003ca href=\"https://www.npr.org/sections/thesalt/2018/10/23/658436657/ubers-online-only-restaurants-the-future-or-the-end-of-dining-out\">takeout\u003c/a>. Uber Freight is Uber, but for shipping. Jump is Uber, but for electric bikes and scooters.\u003c/p>\n\u003cp>\"This is a company that's fighting a lot of battles on a lot of fronts,\" says Tom White, an analyst at D.A. Davidson.\u003c/p>\n\u003cp>It has been expensive for Uber to expand into all those new markets. And the company has burned through money while keeping rates low to compete with its numerous rivals.\u003c/p>\n\u003cp>Uber has mastered the art of rapid growth. But how can it pivot to become a profitable company?\u003c/p>\n\u003cp>\"That's the $100 billion question,\" says Ygal Arounian, an equity analyst at Wedbush Securities.\u003c/p>\n\u003cp>\"Uber is losing money, and you have to have a little bit of a vision to see them taking that revenue and start turning it into profit,\" he says.\u003c/p>\n\u003cp>Both Arounian and White are optimistic about Uber's chances — eventually.\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\n\u003cp>Uber has sheer scale on its side, giving it a balance sheet that will let it wait out competitors. And once rivals have dropped out or consolidated, Uber can stop spending so much on discounts and coupons (thus effectively raising prices for users) and start bringing in more money.\u003c/p>\n\u003cp>Arounian also notes that there's an advantage to being the Uber for everything. If drivers work for multiple Uber platforms — for example, for ride-hailing and for Uber Eats — they can fill a day more efficiently.\u003c/p>\n\u003cp>\"During peak driving times, that driver is picking people up and dropping them off,\" Arounian says. \"Lunchtime kicks in — they're dropping off food. Switch back on during the evening rush hour to drop people off, and then they could do dinner.\"\u003c/p>\n\u003cp>That gives Uber an edge over companies that offer just one service. Cut some expenses, find a way to spend less on insurance, eventually roll out self-driving cars, and you may have a recipe for profits, Arounian says.\u003c/p>\n\u003cp>There's reason to be skeptical. To make this recipe work, Uber has to crush a small army of competitors. And when it comes to self-driving cars, there are huge obstacles, including not just technical challenges but also a maze of regulatory hurdles.\u003c/p>\n\u003cp>Analysts who believe in Uber's future profits emphasize that they're talking about the long term.\u003c/p>\n\u003cp>In the meantime, aside from the minor detail that it burns billions of dollars each year, Uber has other challenges.\u003c/p>\n\u003cp>Drivers have complained about their pay. On Wednesday, drivers \u003ca href=\"https://www.npr.org/2019/05/08/721333408/uber-and-lyft-drivers-are-striking-and-call-on-passengers-to-boycott\">went on strike \u003c/a>and protested in cities across the United States.\u003c/p>\n\u003cp>James Hicks was on strike in Los Angeles. He noted that Uber recently cut driver per-mile pay by 25% in that city.\u003c/p>\n\u003cp>\"My main concern is making sure that each and every individual driver makes enough money to put food on the table, to pay the bills,\" Hicks said, standing at the protest at Los Angeles International Airport.\u003c/p>\n\u003cp>And some drivers have called to be treated like employees, \u003ca href=\"https://www.npr.org/sections/thetwo-way/2015/06/17/415262801/california-labor-commission-rules-uber-driver-is-an-employee-not-a-contractor\">not contractors\u003c/a>, which would hurt Uber financially.\u003c/p>\n\u003cp>Then there is Uber's dented brand. The company was long famous for openly flouting laws. Its corporate culture was toxic. Women who worked at Uber have reported rampant \u003ca href=\"https://www.npr.org/sections/thetwo-way/2017/06/06/531806891/uber-fires-20-employees-after-sexual-harassment-claim-investigation\">sexual harassment\u003c/a>.\u003c/p>\n\u003cp>Uber \u003ca href=\"https://www.npr.org/sections/alltechconsidered/2017/06/21/533791446/after-ceo-resignation-is-uber-kalanick-less-or-kalanick-free\">ousted co-founder Travis Kalanick\u003c/a> as CEO and replaced him with \u003ca href=\"https://www.npr.org/sections/thetwo-way/2017/08/27/546621735/uber-picks-new-ceo-expedias-dara-khosrowshahi\">Dara Khosrowshahi\u003c/a>, who has been tasked with cleaning up shop — and, with some of Uber's reputation restored, taking the company public.\u003c/p>\n\u003cp>As the IPO approaches, Uber has tempered expectations slightly. Lyft's IPO in March is a bit of a cautionary tale.\u003c/p>\n\u003cp>Uber's smaller ride-sharing rival set an ambitious price for its shares. After an initial pop, Lyft's stock slid dramatically. It has dropped nearly 30% from its IPO price.\u003c/p>\n\u003cp>As Uber prepares to follow Lyft into the stock market, it's \u003cem>not\u003c/em> aiming for a $120 billion valuation, like some analysts had previously floated.\u003c/p>\n\u003cp>Still, with a total value of $80 billion to $90 billion, this will be the largest IPO in five years.\u003c/p>\n\u003cdiv class=\"fullattribution\">Copyright 2019 NPR. To see more, visit https://www.npr.org.\u003cimg src=\"https://www.google-analytics.com/__utm.gif?utmac=UA-5828686-4&utmdt=Uber%27s+Eye-Popping+IPO+Approaches.+Is+It+Really+Worth+%2490+Billion%3F&utme=8(APIKey)9(MDAxOTAwOTE4MDEyMTkxMDAzNjczZDljZA004)\">\u003c/div>\n\u003cp>\u003c/p>\n",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003cp>Uber will go public on Friday in a highly anticipated initial public offering that will be the largest since 2014 — and one of the biggest in U.S. history.\u003c/p>\n\u003cp>After speculation that the ride-hailing company could be valued at as high as $120 billion, Uber is now targeting a valuation of $80 billion to $90 billion. At the same time, it has never made a profit — and has instead been burning through cash at a prodigious rate.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>Uber has grown massively in the decade since its founding and has footprints around the world. Its wild success has made Uber a household name — not just synonymous with ride-hailing but shorthand for any app that offers a service on demand: \"Uber, but for laundry,\" \"Uber, but for dog-walking.\"\u003c/p>\n\u003cp>And these days, Uber itself is the Uber for a lot more than ride-hailing. Uber Eats is Uber, but for \u003ca href=\"https://www.npr.org/sections/thesalt/2018/10/23/658436657/ubers-online-only-restaurants-the-future-or-the-end-of-dining-out\">takeout\u003c/a>. Uber Freight is Uber, but for shipping. Jump is Uber, but for electric bikes and scooters.\u003c/p>\n\u003cp>\"This is a company that's fighting a lot of battles on a lot of fronts,\" says Tom White, an analyst at D.A. Davidson.\u003c/p>\n\u003cp>It has been expensive for Uber to expand into all those new markets. And the company has burned through money while keeping rates low to compete with its numerous rivals.\u003c/p>\n\u003cp>Uber has mastered the art of rapid growth. But how can it pivot to become a profitable company?\u003c/p>\n\u003cp>\"That's the $100 billion question,\" says Ygal Arounian, an equity analyst at Wedbush Securities.\u003c/p>\n\u003cp>\"Uber is losing money, and you have to have a little bit of a vision to see them taking that revenue and start turning it into profit,\" he says.\u003c/p>\n\u003cp>Both Arounian and White are optimistic about Uber's chances — eventually.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>Uber has sheer scale on its side, giving it a balance sheet that will let it wait out competitors. And once rivals have dropped out or consolidated, Uber can stop spending so much on discounts and coupons (thus effectively raising prices for users) and start bringing in more money.\u003c/p>\n\u003cp>Arounian also notes that there's an advantage to being the Uber for everything. If drivers work for multiple Uber platforms — for example, for ride-hailing and for Uber Eats — they can fill a day more efficiently.\u003c/p>\n\u003cp>\"During peak driving times, that driver is picking people up and dropping them off,\" Arounian says. \"Lunchtime kicks in — they're dropping off food. Switch back on during the evening rush hour to drop people off, and then they could do dinner.\"\u003c/p>\n\u003cp>That gives Uber an edge over companies that offer just one service. Cut some expenses, find a way to spend less on insurance, eventually roll out self-driving cars, and you may have a recipe for profits, Arounian says.\u003c/p>\n\u003cp>There's reason to be skeptical. To make this recipe work, Uber has to crush a small army of competitors. And when it comes to self-driving cars, there are huge obstacles, including not just technical challenges but also a maze of regulatory hurdles.\u003c/p>\n\u003cp>Analysts who believe in Uber's future profits emphasize that they're talking about the long term.\u003c/p>\n\u003cp>In the meantime, aside from the minor detail that it burns billions of dollars each year, Uber has other challenges.\u003c/p>\n\u003cp>Drivers have complained about their pay. On Wednesday, drivers \u003ca href=\"https://www.npr.org/2019/05/08/721333408/uber-and-lyft-drivers-are-striking-and-call-on-passengers-to-boycott\">went on strike \u003c/a>and protested in cities across the United States.\u003c/p>\n\u003cp>James Hicks was on strike in Los Angeles. He noted that Uber recently cut driver per-mile pay by 25% in that city.\u003c/p>\n\u003cp>\"My main concern is making sure that each and every individual driver makes enough money to put food on the table, to pay the bills,\" Hicks said, standing at the protest at Los Angeles International Airport.\u003c/p>\n\u003cp>And some drivers have called to be treated like employees, \u003ca href=\"https://www.npr.org/sections/thetwo-way/2015/06/17/415262801/california-labor-commission-rules-uber-driver-is-an-employee-not-a-contractor\">not contractors\u003c/a>, which would hurt Uber financially.\u003c/p>\n\u003cp>Then there is Uber's dented brand. The company was long famous for openly flouting laws. Its corporate culture was toxic. Women who worked at Uber have reported rampant \u003ca href=\"https://www.npr.org/sections/thetwo-way/2017/06/06/531806891/uber-fires-20-employees-after-sexual-harassment-claim-investigation\">sexual harassment\u003c/a>.\u003c/p>\n\u003cp>Uber \u003ca href=\"https://www.npr.org/sections/alltechconsidered/2017/06/21/533791446/after-ceo-resignation-is-uber-kalanick-less-or-kalanick-free\">ousted co-founder Travis Kalanick\u003c/a> as CEO and replaced him with \u003ca href=\"https://www.npr.org/sections/thetwo-way/2017/08/27/546621735/uber-picks-new-ceo-expedias-dara-khosrowshahi\">Dara Khosrowshahi\u003c/a>, who has been tasked with cleaning up shop — and, with some of Uber's reputation restored, taking the company public.\u003c/p>\n\u003cp>As the IPO approaches, Uber has tempered expectations slightly. Lyft's IPO in March is a bit of a cautionary tale.\u003c/p>\n\u003cp>Uber's smaller ride-sharing rival set an ambitious price for its shares. After an initial pop, Lyft's stock slid dramatically. It has dropped nearly 30% from its IPO price.\u003c/p>\n\u003cp>As Uber prepares to follow Lyft into the stock market, it's \u003cem>not\u003c/em> aiming for a $120 billion valuation, like some analysts had previously floated.\u003c/p>\n\u003cp>Still, with a total value of $80 billion to $90 billion, this will be the largest IPO in five years.\u003c/p>\n\u003cdiv class=\"fullattribution\">Copyright 2019 NPR. To see more, visit https://www.npr.org.\u003cimg src=\"https://www.google-analytics.com/__utm.gif?utmac=UA-5828686-4&utmdt=Uber%27s+Eye-Popping+IPO+Approaches.+Is+It+Really+Worth+%2490+Billion%3F&utme=8(APIKey)9(MDAxOTAwOTE4MDEyMTkxMDAzNjczZDljZA004)\">\u003c/div>\n\u003cp>\u003c/p>\n\u003c/div>\u003c/p>",
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"content": "\u003cp>Happy \u003ca href=\"http://bit.ly/fioredodgetheubers\" target=\"_blank\" rel=\"noopener\">#BikeToWorkDay\u003c/a>, remember to #DodgeTheUbers during your commute!\u003c/p>\n\u003cp>After\u003ca href=\"https://www.kqed.org/news/11745857/uber-and-lyft-drivers-are-striking-calling-on-passengers-to-boycott\" target=\"_blank\" rel=\"noopener\"> Wednesday’s ride-service strike\u003c/a>, Uber and Lyft cars are out in full force again.\u003c/p>\n\u003cp>As a regular bike commuter myself, I didn’t need \u003ca href=\"https://www.kqed.org/news/11699063/city-analysis-uber-lyft-are-biggest-contributors-to-slowdown-in-s-f-traffic\" target=\"_blank\" rel=\"noopener\">a study\u003c/a> to tell me there has been an explosion of new ride “share” cars on our clogged roads. (Although it’s great to have the data to back up my suspicions.)\u003c/p>\n\u003cp>For some, those added cars translate into \u003ca href=\"https://www.kqed.org/news/11745274/ipos-bring-tax-jackpot-for-california-can-lawmakers-resist\" target=\"_blank\" rel=\"noopener\">billions of dollars.\u003c/a>\u003c/p>\n\u003cp>Sure the money would be nice, but all things being equal, I’ll \u003ca href=\"https://www.kqed.org/news/11746183/san-francisco-to-get-20-new-miles-of-protected-bike-lanes-mayor-says-on-bike-to-work-day\" target=\"_blank\" rel=\"noopener\">take a bike\u003c/a> over a car any day.\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\u003cp>\u003c/p>\n",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003cp>Happy \u003ca href=\"http://bit.ly/fioredodgetheubers\" target=\"_blank\" rel=\"noopener\">#BikeToWorkDay\u003c/a>, remember to #DodgeTheUbers during your commute!\u003c/p>\n\u003cp>After\u003ca href=\"https://www.kqed.org/news/11745857/uber-and-lyft-drivers-are-striking-calling-on-passengers-to-boycott\" target=\"_blank\" rel=\"noopener\"> Wednesday’s ride-service strike\u003c/a>, Uber and Lyft cars are out in full force again.\u003c/p>\n\u003cp>As a regular bike commuter myself, I didn’t need \u003ca href=\"https://www.kqed.org/news/11699063/city-analysis-uber-lyft-are-biggest-contributors-to-slowdown-in-s-f-traffic\" target=\"_blank\" rel=\"noopener\">a study\u003c/a> to tell me there has been an explosion of new ride “share” cars on our clogged roads. (Although it’s great to have the data to back up my suspicions.)\u003c/p>\n\u003cp>For some, those added cars translate into \u003ca href=\"https://www.kqed.org/news/11745274/ipos-bring-tax-jackpot-for-california-can-lawmakers-resist\" target=\"_blank\" rel=\"noopener\">billions of dollars.\u003c/a>\u003c/p>\n\u003cp>Sure the money would be nice, but all things being equal, I’ll \u003ca href=\"https://www.kqed.org/news/11746183/san-francisco-to-get-20-new-miles-of-protected-bike-lanes-mayor-says-on-bike-to-work-day\" target=\"_blank\" rel=\"noopener\">take a bike\u003c/a> over a car any day.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"headTitle": "The California Report | KQED News",
"content": "\u003cp>California Gov. Gavin Newsom unveiled his updated state budget proposal Thursday, a record $213.5 billion total spending plan that includes about $4 billion in additional revenue above his original January budget.\u003c/p>\n\u003cp>The governor's budget reflects his expansive vision of both investing in programs aimed at closing the state's inequality gap while trying to hew to the fiscally cautious path of his predecessor by paying down debt and building up the state's rainy day fund.\u003c/p>\n\u003cp>It allocates $15 billion to build reserves and help pay down the state's unfunded liabilities, an increase of $1.4 billion from January.\u003c/p>\n\u003cp>“The California Dream must be built on a strong fiscal foundation,” Newsom said. “This budget fortifies California’s fiscal position while making long-sighted investments to increase affordability for California families.\"\u003c/p>\n\u003cp>The so-called May revise is the constitutionally required revision of his \u003ca href=\"https://www.kqed.org/news/11717355/gavin-newsom-looks-to-spend-and-save-in-first-budget-proposal\" target=\"_blank\" rel=\"noopener noreferrer\">January budget proposal that reflects tax revenue paid to the state by April 15 for the 2019-2020 year that begins July 1\u003c/a>. Lawmakers now have until June 15 to debate, amend and pass a budget.\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\n\u003cp>State Senate President Pro Tem Toni Atkins, D-San Diego, praised Newsom's priorities and pledged that lawmakers will \"deliver a final budget that will make a real difference for Californians, while maintaining the safeguards we need to protect the state’s economic health.”\u003c/p>\n\u003cp>But Republican lawmakers — who represent a small minority in the Democratically-controlled Legislature — criticized the governor for proposing any new taxes while the state has a surplus.\u003c/p>\n\u003cp>State Sen. Patricia Bates, R-Laguna Niguel, singled out the governor's proposed tax on water bills to help pay to clean up polluted drinking water in disadvantaged communities. The tax would cost most Californians about 95 cents a month; large agricultural customers would pay $10 a month.\u003c/p>\n\u003cp>“The governor’s desire for new taxes despite an estimated $21.5 billion budget surplus is unfortunate, unhelpful and unnecessary,\" Bates said. But she praised his plans to help low-income families, build the state’s rainy day fund and modernize schools.\u003c/p>\n\u003cp>On K-12 funding, the governor noted that 45% of this budget is going into education, above the level required by Proposition 98, a 1980s ballot measure that mandates a baseline on school spending.\u003c/p>\n\u003cp>\u003c!-- iframe plugin v.4.3 wordpress.org/plugins/iframe/ -->\u003cbr>\n\u003ciframe src=\"https://e.infogram.com/8302e5fa-deff-40df-9146-39bbfe326c26?src=embed\" title=\"State budget\" width=\"800\" height=\"650\" scrolling=\"no\" frameborder=\"0\" style=\"border:none;\" allowfullscreen=\"allowfullscreen\" class=\"iframe-class\">\u003c/iframe>\u003c/p>\n\u003cp>\"Prop. 98 is often a ceiling, but this budget is $4.4 billion above the Prop. 98 requirement,\" Newsom said, noting that the plan includes a reserve fund for education specifically.\u003c/p>\n\u003cp>After hearing from mayors and other local officials, Newsom is also proposing an additional $150 million for local governments to combat homelessness, raising the total to $650 million. That's part of a \u003cem>total\u003c/em> of $1 billion in spending to fight homelessness.\u003c/p>\n\u003cp>The governor called homelessness \"a stain on the state of California,\" adding that residents are \"outraged and disgusted by it\" and wondering what Sacramento is going about it.\u003c/p>\n\u003cp>He also acknowledged that his original goal for new housing construction is meeting resistance, adding that \"we can't step back from our resolve and commitment\" to building more housing. Despite pushback from both Republicans and Democrats in the Legislature, Newsom is not backing away from a plan to tie road funding for local governments to their willingness to meet state housing goals.\u003c/p>\n\u003cp>Newsom's ambitious spending plan is the result of a booming California economy.\u003c/p>\n\u003cp>But the governor, channeling his predecessor, Gov. Jerry Brown, also warned of a coming recession.\u003c/p>\n\u003cp>\u003ca href=\"https://ww2.kqed.org/news/wp-content/uploads/sites/10/2019/05/deficits.jpg\">\u003cimg class=\"alignnone size-full wp-image-11746158\" src=\"https://ww2.kqed.org/news/wp-content/uploads/sites/10/2019/05/deficits.jpg\" alt=\"\" width=\"2048\" height=\"1223\" srcset=\"https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits.jpg 2048w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits-160x96.jpg 160w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits-800x478.jpg 800w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits-1020x609.jpg 1020w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits-1200x716.jpg 1200w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits-1920x1146.jpg 1920w\" sizes=\"(max-width: 2048px) 100vw, 2048px\">\u003c/a>\u003c/p>\n\u003cp>Newsom projected any downturn would be \"more modest than (the one in) 2007 but a little more intense than the 2001 recession,\" with a downward impact of $70 billion on state revenues over three years. He said he hopes to see another year of growth so the state can grow its reserves even more, saying that another big infusion of cash into the state's savings accounts would leave California in a much better place to weather a future recession.\u003c/p>\n\u003cp>In the meantime, one of Newsom's top priorities is making California more affordable for everyone, particularly working families. On Tuesday, ahead of the review, he announced plans to end the sales taxes on diapers and feminine hygiene products — a long-held goal of the Legislative Women's Caucus — and add two weeks to California's paid family leave policy.\u003c/p>\n\u003cp>The sales tax exemptions would sunset after two years, but Newsom said he hopes the state will be able to keep the exemptions in place long term.\u003c/p>\n\u003cp>In 2016, Gov. Brown vetoed legislation to eliminate taxes on diapers and tampons, saying in his veto message that \"tax breaks are the same as new spending\" and should be handled in the regular budget process, as Newsom is now proposing.\u003c/p>\n\u003cp>But the new governor's embrace of this tax cut and other ideas to help struggling families further highlights not just his differing priorities, but the fact that unlike Brown, Newsom has children — including two who still use diapers.\u003c/p>\n\u003cp>Assemblywoman Lorena Gonzalez, D-San Diego, who has long championed tax relief on diapers, said the move was overdue.\u003c/p>\n\u003cp>\"This tax relief will go a long way in helping those young families who we know are at their most economically vulnerable,\" she said. \"In California, more than 50 percent of the children born are on Medi-Cal. We know that young parents struggle. We know that diapers are a necessity not only for the health of the child, they're also required in order to drop your child off at child care. If you want a job, you have to have diapers.\"\u003c/p>\n\u003cp>The changes Newsom is proposing, he noted, will help both low- and middle-income families. But he's also suggesting investments in programs aimed at the working poor, such as two extra weeks of paid parental leave.\u003c/p>\n\u003cp>\u003cem>Read the 2019-20 May Budget Revision below.\u003c/em>\u003c/p>\n\u003cp>\u003c/p>\n\u003cp>[documentcloud url=\"https://www.documentcloud.org/documents/5995257-California-May-Budget-Revision-2019-2020\" notes=\"true\" text=\"true\" search=\"true\" sidebar=\"true\" pdf=\"true\" responsive=\"true\" page=\"1\"]\u003c/p>\n\n",
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"excerpt": "The governor's budget reflects Newsom's expansive vision of both investing in programs aimed at closing the state's inequality gap while trying to hew to the fiscally cautious path of his predecessor by paying down debt and building up the state's rainy day fund.",
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"title": "Gov. Gavin Newsom Balances Saving, Spending in Budget Aimed at Tackling Inequality | KQED",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003cp>California Gov. Gavin Newsom unveiled his updated state budget proposal Thursday, a record $213.5 billion total spending plan that includes about $4 billion in additional revenue above his original January budget.\u003c/p>\n\u003cp>The governor's budget reflects his expansive vision of both investing in programs aimed at closing the state's inequality gap while trying to hew to the fiscally cautious path of his predecessor by paying down debt and building up the state's rainy day fund.\u003c/p>\n\u003cp>It allocates $15 billion to build reserves and help pay down the state's unfunded liabilities, an increase of $1.4 billion from January.\u003c/p>\n\u003cp>“The California Dream must be built on a strong fiscal foundation,” Newsom said. “This budget fortifies California’s fiscal position while making long-sighted investments to increase affordability for California families.\"\u003c/p>\n\u003cp>The so-called May revise is the constitutionally required revision of his \u003ca href=\"https://www.kqed.org/news/11717355/gavin-newsom-looks-to-spend-and-save-in-first-budget-proposal\" target=\"_blank\" rel=\"noopener noreferrer\">January budget proposal that reflects tax revenue paid to the state by April 15 for the 2019-2020 year that begins July 1\u003c/a>. Lawmakers now have until June 15 to debate, amend and pass a budget.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>State Senate President Pro Tem Toni Atkins, D-San Diego, praised Newsom's priorities and pledged that lawmakers will \"deliver a final budget that will make a real difference for Californians, while maintaining the safeguards we need to protect the state’s economic health.”\u003c/p>\n\u003cp>But Republican lawmakers — who represent a small minority in the Democratically-controlled Legislature — criticized the governor for proposing any new taxes while the state has a surplus.\u003c/p>\n\u003cp>State Sen. Patricia Bates, R-Laguna Niguel, singled out the governor's proposed tax on water bills to help pay to clean up polluted drinking water in disadvantaged communities. The tax would cost most Californians about 95 cents a month; large agricultural customers would pay $10 a month.\u003c/p>\n\u003cp>“The governor’s desire for new taxes despite an estimated $21.5 billion budget surplus is unfortunate, unhelpful and unnecessary,\" Bates said. But she praised his plans to help low-income families, build the state’s rainy day fund and modernize schools.\u003c/p>\n\u003cp>On K-12 funding, the governor noted that 45% of this budget is going into education, above the level required by Proposition 98, a 1980s ballot measure that mandates a baseline on school spending.\u003c/p>\n\u003cp>\u003c!-- iframe plugin v.4.3 wordpress.org/plugins/iframe/ -->\u003cbr>\n\u003ciframe src=\"https://e.infogram.com/8302e5fa-deff-40df-9146-39bbfe326c26?src=embed\" title=\"State budget\" width=\"800\" height=\"650\" scrolling=\"no\" frameborder=\"0\" style=\"border:none;\" allowfullscreen=\"allowfullscreen\" class=\"iframe-class\">\u003c/iframe>\u003c/p>\n\u003cp>\"Prop. 98 is often a ceiling, but this budget is $4.4 billion above the Prop. 98 requirement,\" Newsom said, noting that the plan includes a reserve fund for education specifically.\u003c/p>\n\u003cp>After hearing from mayors and other local officials, Newsom is also proposing an additional $150 million for local governments to combat homelessness, raising the total to $650 million. That's part of a \u003cem>total\u003c/em> of $1 billion in spending to fight homelessness.\u003c/p>\n\u003cp>The governor called homelessness \"a stain on the state of California,\" adding that residents are \"outraged and disgusted by it\" and wondering what Sacramento is going about it.\u003c/p>\n\u003cp>He also acknowledged that his original goal for new housing construction is meeting resistance, adding that \"we can't step back from our resolve and commitment\" to building more housing. Despite pushback from both Republicans and Democrats in the Legislature, Newsom is not backing away from a plan to tie road funding for local governments to their willingness to meet state housing goals.\u003c/p>\n\u003cp>Newsom's ambitious spending plan is the result of a booming California economy.\u003c/p>\n\u003cp>But the governor, channeling his predecessor, Gov. Jerry Brown, also warned of a coming recession.\u003c/p>\n\u003cp>\u003ca href=\"https://ww2.kqed.org/news/wp-content/uploads/sites/10/2019/05/deficits.jpg\">\u003cimg class=\"alignnone size-full wp-image-11746158\" src=\"https://ww2.kqed.org/news/wp-content/uploads/sites/10/2019/05/deficits.jpg\" alt=\"\" width=\"2048\" height=\"1223\" srcset=\"https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits.jpg 2048w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits-160x96.jpg 160w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits-800x478.jpg 800w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits-1020x609.jpg 1020w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits-1200x716.jpg 1200w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/deficits-1920x1146.jpg 1920w\" sizes=\"(max-width: 2048px) 100vw, 2048px\">\u003c/a>\u003c/p>\n\u003cp>Newsom projected any downturn would be \"more modest than (the one in) 2007 but a little more intense than the 2001 recession,\" with a downward impact of $70 billion on state revenues over three years. He said he hopes to see another year of growth so the state can grow its reserves even more, saying that another big infusion of cash into the state's savings accounts would leave California in a much better place to weather a future recession.\u003c/p>\n\u003cp>In the meantime, one of Newsom's top priorities is making California more affordable for everyone, particularly working families. On Tuesday, ahead of the review, he announced plans to end the sales taxes on diapers and feminine hygiene products — a long-held goal of the Legislative Women's Caucus — and add two weeks to California's paid family leave policy.\u003c/p>\n\u003cp>The sales tax exemptions would sunset after two years, but Newsom said he hopes the state will be able to keep the exemptions in place long term.\u003c/p>\n\u003cp>In 2016, Gov. Brown vetoed legislation to eliminate taxes on diapers and tampons, saying in his veto message that \"tax breaks are the same as new spending\" and should be handled in the regular budget process, as Newsom is now proposing.\u003c/p>\n\u003cp>But the new governor's embrace of this tax cut and other ideas to help struggling families further highlights not just his differing priorities, but the fact that unlike Brown, Newsom has children — including two who still use diapers.\u003c/p>\n\u003cp>Assemblywoman Lorena Gonzalez, D-San Diego, who has long championed tax relief on diapers, said the move was overdue.\u003c/p>\n\u003cp>\"This tax relief will go a long way in helping those young families who we know are at their most economically vulnerable,\" she said. \"In California, more than 50 percent of the children born are on Medi-Cal. We know that young parents struggle. We know that diapers are a necessity not only for the health of the child, they're also required in order to drop your child off at child care. If you want a job, you have to have diapers.\"\u003c/p>\n\u003cp>The changes Newsom is proposing, he noted, will help both low- and middle-income families. But he's also suggesting investments in programs aimed at the working poor, such as two extra weeks of paid parental leave.\u003c/p>\n\u003cp>\u003cem>Read the 2019-20 May Budget Revision below.\u003c/em>\u003c/p>\n\u003cp>\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"disqusTitle": "Uber and Lyft Drivers Are Striking, Calling on Passengers to Boycott",
"title": "Uber and Lyft Drivers Are Striking, Calling on Passengers to Boycott",
"headTitle": "The California Report | KQED News",
"content": "\u003cp>\u003cem>Updated 2 p.m.\u003c/em>\u003c/p>\n\u003cp>Ahead of Uber's initial public offering, drivers for Uber, Lyft and other ride-service companies plan to strike, turning off the apps as they flex their collective muscles to say: What about us?\u003c/p>\n\u003cp>Drivers in 10 cities across the country are taking action on Wednesday to draw attention to what they say are decreasing wages for drivers and a distressing lack of job security — and some are calling on passengers to temporarily boycott the ride-hailing services, too.\u003c/p>\n\u003cp>About 200 drivers and supporters protested outside Uber headquarters in San Francisco, carrying signs and chanting, “Drivers united will never be defeated.” Passing drivers honked their horns in support before protesters spilled onto Market Street, blocking traffic.\u003c/p>\n\u003cp>The Bay Area-based group Gig Workers Rising, which describes itself as \"a community of app and platform workers coming together to improve our work and livelihoods,\" called for a 12-hour \"app shut-off\" for drivers and a strike in San Francisco starting at noon.\u003c/p>\n\u003cp>Oakland resident Stephen Phillips, who has driven for Uber and Lyft for four years, turned his app off and held a sign in front of Uber headquarters that said, “Our actual earnings are half what they were 4 years ago.”\u003c/p>\n\u003cp>He said drivers are flocking to San Francisco for work.\u003c/p>\n\u003cp>“Drivers are coming from all over the state, from Modesto, Sacramento, L.A., San Diego,\" Phillips said. \"And they’re driving here and they’re sleeping in their cars because they can make so much more money here than they can where they come from. Many, many, many of them are very aware the companies have been treating us unfairly. There’s a very big awareness of that.”\u003c/p>\n\u003cp>https://twitter.com/Steph_Lister_7/status/1126200496039940097\u003c/p>\n\u003cp>Uber driver Gabriel Ets-Hokin said the real danger with the company is that it built its business by fragmenting workers and slashing their pay below livable rates.\u003c/p>\n\u003cp>“What will society look like when this model is exported to other industries?” he asked.\u003c/p>\n\u003cp>Erica Mighetto said she drives to San Francisco from Sacramento to try to make money driving for Lyft. She took the job because her dad has diabetes and she‘s the primary caregiver. But she said she now has to drive 60 hours a week to pay the bills.\u003c/p>\n\u003cp>https://twitter.com/SamWHarnett/status/1126213122228809728\u003c/p>\n\u003cp>Among the \u003ca href=\"https://drivers-united.org/strike\">drivers' demands in Los Angeles \u003c/a>are a 10% cap on commissions taken by Uber and Lyft, hourly minimum pay and fare breakdowns on passenger receipts that show the companies' take. New York drivers \u003ca href=\"http://www.nytwa.org/home/2019/5/7/nyc-is-strike-ready-tomorrow-uber-lyft-juno-via-apps-off-7am-9am\">are demanding\u003c/a> an end to sudden account deactivations and the right to appeal through the courts.\u003c/p>\n\u003cp>The strike was spearheaded by \u003ca href=\"https://drivers-united.org/\">Rideshare Drivers United\u003c/a>, a Los Angeles-based association of drivers. And the group is asking for the support of would-be passengers.\u003c/p>\n\u003cp>\"We ask that the public support drivers in their struggle for fair wages and our Drivers bill of rights,\" spokesman Brian Dolber said in an email to NPR. \"We are calling for community standards that will ensure that Uber and Lyft do not create needless traffic and pollution. By boycotting Uber/Lyft for 24 hours, passengers can show that they stand with RDU in our fight for a rideshare industry that truly serves Angelenos.\"\u003c/p>\n\u003cp>When companies go public, it usually means big money for executives and sometimes nice payouts for employees. San Francisco's housing market has been bracing for the \u003ca href=\"https://www.nytimes.com/2019/03/07/style/uber-ipo-san-francisco-rich.html\">thousands\u003c/a> of newly minted millionaires spawned by four major IPOs this spring.\u003c/p>\n\u003cp>Uber's valuation could be as high as \u003ca href=\"https://www.nytimes.com/2019/04/26/technology/uber-ipo-valuation-price-range.html?module=inline\">$91 billion\u003c/a> when trading begins, which would place it among the top three most valuable firms to ever debut on a U.S. exchange. Co-founder and former CEO Travis Kalanick's stake may be worth \u003ca href=\"https://www.nytimes.com/2019/05/05/business/dealbook/uber-ipo.html\">as much as\u003c/a> $5.9 billion.\u003c/p>\n\u003cp>https://twitter.com/SamWHarnett/status/1126209288081293312\u003c/p>\n\u003cp>But the IPO won't be life-changing for most drivers, who Uber insists are independent contractors, not employees. Some drivers will receive \u003ca href=\"https://www.sec.gov/Archives/edgar/data/1543151/000119312519120759/d647752ds1a.htm#toc647752_1\">one-time bonuses\u003c/a> according to their loyalty: Those who completed more than 2,500 trips before April 7 and at least one this year are eligible for a bonus, ranging from $100 for those drivers with 2,500 completed trips to $40,000 for 40,000 completed trips. U.S. drivers can use that bonus to buy \u003ca href=\"https://www.cbsnews.com/news/uber-ipo-will-uber-drivers-profit-from-tech-companys-initial-public-offering/\">up to $10,000 in stock\u003c/a> in the company at the IPO price.\u003c/p>\n\u003cp>That may not end up being a great deal if Lyft's IPO is any indication: Its shares are down about 20% since the initial offering. Some drivers also \u003ca href=\"https://www.npr.org/2019/03/29/707908980/uber-and-lyft-drivers-strike-in-california\">went on strike\u003c/a> before Lyft went public in March.\u003c/p>\n\u003cp>Strikes or rallies are also planned in Chicago, Washington, Boston, Atlanta, Philadelphia, San Diego and Stamford, Connecticut. On Twitter, organizers are using the hashtags #StrikeUberLyft and #AppsOffMay8 to build momentum.\u003c/p>\n\u003cp>This strike is taking different forms in different cities, but in the L.A. metro area, the strike will last for \u003ca href=\"https://drivers-united.org/strike\">24 hours\u003c/a>, with a picket line at Los Angeles International Airport and a noon rally. The New York Taxi Workers Alliance called for \u003ca href=\"http://www.nytwa.org/home/2019/5/7/nyc-is-strike-ready-tomorrow-uber-lyft-juno-via-apps-off-7am-9am\">a rush-hour strike\u003c/a>, during which drivers will turn off the Uber, Lyft, Juno and Via apps from 7 to 9 a.m., and then rally outside Uber and Lyft headquarters in Long Island City.\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\n\u003cp>\"Uber/Lyft going public on the stock market will make billionaires of Uber and Lyft bosses while drivers struggle in poverty and the companies destroy the livelihoods of drivers in every sector,\" the New York drivers' organization says in its call to action.\u003c/p>\n\u003cp>For those who often use ride-hailing apps and want to support the strike, today may mean a commute by public transit, a cab or bicycle. At D.C.-area airports, officials arranged for extra cabs and said they always encourage passengers to consider taking the Metro rail system or the bus, The Washington Post \u003ca href=\"https://www.washingtonpost.com/transportation/2019/05/07/strike-by-uber-lyft-drivers-wednesday-has-potential-disrupt-travel-thousands/?utm_term=.f1d44fa418bf\">reported\u003c/a>.\u003c/p>\n\u003cp>In a statement to Post, Uber said drivers \"are at the heart of our service — we can't succeed without them — and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road. Whether it's more consistent earnings, stronger insurance protections or fully-funded four-year degrees for drivers or their families, we'll continue working to improve the experience for and with drivers.\"\u003c/p>\n\u003cp>\u003cem>KQED's Sam Harnett and Stephanie Lister contributed to this post.\u003c/em>\u003c/p>\n\u003cp>Copyright 2019 NPR. To see more, visit https://www.npr.org.\u003c/p>\n\u003cp>[ad floatright]\u003c/p>\n",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003cp>\u003cem>Updated 2 p.m.\u003c/em>\u003c/p>\n\u003cp>Ahead of Uber's initial public offering, drivers for Uber, Lyft and other ride-service companies plan to strike, turning off the apps as they flex their collective muscles to say: What about us?\u003c/p>\n\u003cp>Drivers in 10 cities across the country are taking action on Wednesday to draw attention to what they say are decreasing wages for drivers and a distressing lack of job security — and some are calling on passengers to temporarily boycott the ride-hailing services, too.\u003c/p>\n\u003cp>About 200 drivers and supporters protested outside Uber headquarters in San Francisco, carrying signs and chanting, “Drivers united will never be defeated.” Passing drivers honked their horns in support before protesters spilled onto Market Street, blocking traffic.\u003c/p>\n\u003cp>The Bay Area-based group Gig Workers Rising, which describes itself as \"a community of app and platform workers coming together to improve our work and livelihoods,\" called for a 12-hour \"app shut-off\" for drivers and a strike in San Francisco starting at noon.\u003c/p>\n\u003cp>Oakland resident Stephen Phillips, who has driven for Uber and Lyft for four years, turned his app off and held a sign in front of Uber headquarters that said, “Our actual earnings are half what they were 4 years ago.”\u003c/p>\n\u003cp>He said drivers are flocking to San Francisco for work.\u003c/p>\n\u003cp>“Drivers are coming from all over the state, from Modesto, Sacramento, L.A., San Diego,\" Phillips said. \"And they’re driving here and they’re sleeping in their cars because they can make so much more money here than they can where they come from. Many, many, many of them are very aware the companies have been treating us unfairly. There’s a very big awareness of that.”\u003c/p>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\n\u003cp>Uber driver Gabriel Ets-Hokin said the real danger with the company is that it built its business by fragmenting workers and slashing their pay below livable rates.\u003c/p>\n\u003cp>“What will society look like when this model is exported to other industries?” he asked.\u003c/p>\n\u003cp>Erica Mighetto said she drives to San Francisco from Sacramento to try to make money driving for Lyft. She took the job because her dad has diabetes and she‘s the primary caregiver. But she said she now has to drive 60 hours a week to pay the bills.\u003c/p>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\n\u003cp>Among the \u003ca href=\"https://drivers-united.org/strike\">drivers' demands in Los Angeles \u003c/a>are a 10% cap on commissions taken by Uber and Lyft, hourly minimum pay and fare breakdowns on passenger receipts that show the companies' take. New York drivers \u003ca href=\"http://www.nytwa.org/home/2019/5/7/nyc-is-strike-ready-tomorrow-uber-lyft-juno-via-apps-off-7am-9am\">are demanding\u003c/a> an end to sudden account deactivations and the right to appeal through the courts.\u003c/p>\n\u003cp>The strike was spearheaded by \u003ca href=\"https://drivers-united.org/\">Rideshare Drivers United\u003c/a>, a Los Angeles-based association of drivers. And the group is asking for the support of would-be passengers.\u003c/p>\n\u003cp>\"We ask that the public support drivers in their struggle for fair wages and our Drivers bill of rights,\" spokesman Brian Dolber said in an email to NPR. \"We are calling for community standards that will ensure that Uber and Lyft do not create needless traffic and pollution. By boycotting Uber/Lyft for 24 hours, passengers can show that they stand with RDU in our fight for a rideshare industry that truly serves Angelenos.\"\u003c/p>\n\u003cp>When companies go public, it usually means big money for executives and sometimes nice payouts for employees. San Francisco's housing market has been bracing for the \u003ca href=\"https://www.nytimes.com/2019/03/07/style/uber-ipo-san-francisco-rich.html\">thousands\u003c/a> of newly minted millionaires spawned by four major IPOs this spring.\u003c/p>\n\u003cp>Uber's valuation could be as high as \u003ca href=\"https://www.nytimes.com/2019/04/26/technology/uber-ipo-valuation-price-range.html?module=inline\">$91 billion\u003c/a> when trading begins, which would place it among the top three most valuable firms to ever debut on a U.S. exchange. Co-founder and former CEO Travis Kalanick's stake may be worth \u003ca href=\"https://www.nytimes.com/2019/05/05/business/dealbook/uber-ipo.html\">as much as\u003c/a> $5.9 billion.\u003c/p>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\n\u003cp>But the IPO won't be life-changing for most drivers, who Uber insists are independent contractors, not employees. Some drivers will receive \u003ca href=\"https://www.sec.gov/Archives/edgar/data/1543151/000119312519120759/d647752ds1a.htm#toc647752_1\">one-time bonuses\u003c/a> according to their loyalty: Those who completed more than 2,500 trips before April 7 and at least one this year are eligible for a bonus, ranging from $100 for those drivers with 2,500 completed trips to $40,000 for 40,000 completed trips. U.S. drivers can use that bonus to buy \u003ca href=\"https://www.cbsnews.com/news/uber-ipo-will-uber-drivers-profit-from-tech-companys-initial-public-offering/\">up to $10,000 in stock\u003c/a> in the company at the IPO price.\u003c/p>\n\u003cp>That may not end up being a great deal if Lyft's IPO is any indication: Its shares are down about 20% since the initial offering. Some drivers also \u003ca href=\"https://www.npr.org/2019/03/29/707908980/uber-and-lyft-drivers-strike-in-california\">went on strike\u003c/a> before Lyft went public in March.\u003c/p>\n\u003cp>Strikes or rallies are also planned in Chicago, Washington, Boston, Atlanta, Philadelphia, San Diego and Stamford, Connecticut. On Twitter, organizers are using the hashtags #StrikeUberLyft and #AppsOffMay8 to build momentum.\u003c/p>\n\u003cp>This strike is taking different forms in different cities, but in the L.A. metro area, the strike will last for \u003ca href=\"https://drivers-united.org/strike\">24 hours\u003c/a>, with a picket line at Los Angeles International Airport and a noon rally. The New York Taxi Workers Alliance called for \u003ca href=\"http://www.nytwa.org/home/2019/5/7/nyc-is-strike-ready-tomorrow-uber-lyft-juno-via-apps-off-7am-9am\">a rush-hour strike\u003c/a>, during which drivers will turn off the Uber, Lyft, Juno and Via apps from 7 to 9 a.m., and then rally outside Uber and Lyft headquarters in Long Island City.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>\"Uber/Lyft going public on the stock market will make billionaires of Uber and Lyft bosses while drivers struggle in poverty and the companies destroy the livelihoods of drivers in every sector,\" the New York drivers' organization says in its call to action.\u003c/p>\n\u003cp>For those who often use ride-hailing apps and want to support the strike, today may mean a commute by public transit, a cab or bicycle. At D.C.-area airports, officials arranged for extra cabs and said they always encourage passengers to consider taking the Metro rail system or the bus, The Washington Post \u003ca href=\"https://www.washingtonpost.com/transportation/2019/05/07/strike-by-uber-lyft-drivers-wednesday-has-potential-disrupt-travel-thousands/?utm_term=.f1d44fa418bf\">reported\u003c/a>.\u003c/p>\n\u003cp>In a statement to Post, Uber said drivers \"are at the heart of our service — we can't succeed without them — and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road. Whether it's more consistent earnings, stronger insurance protections or fully-funded four-year degrees for drivers or their families, we'll continue working to improve the experience for and with drivers.\"\u003c/p>\n\u003cp>\u003cem>KQED's Sam Harnett and Stephanie Lister contributed to this post.\u003c/em>\u003c/p>\n\u003cp>Copyright 2019 NPR. To see more, visit https://www.npr.org.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"disqusTitle": "Newsom Proposes Scrapping State Taxes on Tampons, Diapers",
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"content": "\u003cp>Women in the state Legislature have been trying for years to eliminate California's sales taxes on diapers, tampons and other hygiene products, but were thwarted by former Gov. Jerry Brown, who twice vetoed such proposals, citing budgetary concerns.\u003c/p>\n\u003cp>[aside label=\"related\" tag=\"tampon-tax\"]\u003c/p>\n\u003cp>But there's a new captain at the helm — and he's throwing his full weight behind the idea.\u003c/p>\n\u003cp>At a meeting with the Legislative Women's Caucus, Gov. Gavin Newsom on Tuesday announced plans to include the parent-friendly sales tax exemptions in his budget proposal for the coming fiscal year. The move would cost the state upward of $56 million a year in lost tax revenue, according to previous estimates.\u003c/p>\n\u003cp>But the governor's office argued that giving working families financial breathing room, particularly on items they have little choice but to purchase, is worth it. Newsom has four young kids of his own, and often mentions the influence of personal experience in his policymaking decisions.\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\n\u003cp>\"As anyone who takes care of kids can tell you — these costs add up,\" Newsom said in a written statement in advance of his announcement. \"From diapers to childcare, raising kids is expensive wherever you live. But when you factor in the cost of living here in California, it is close to impossible.\"\u003c/p>\n\u003cp>Unlike most food and medicine, tampons and diapers are \u003ca href=\"https://www.kqed.org/news/11737907/beyond-the-tampon-tax-how-far-will-california-go-to-end-menstrual-inequity\" target=\"_blank\" rel=\"noopener\">not exempt\u003c/a> from California sales tax because they are technically considered luxuries, not necessities.\u003c/p>\n\u003cp>To date, 10 other states, including New York, Florida, Connecticut and, most recently, Nevada, have banned sales taxes on period products. Across the globe, Canada, India and Australia have long since eliminated the tax, and a battle is currently underway to end it in the United Kingdom.\u003c/p>\n\u003cp>Newsom's office said the tax exemptions were part of his \"parents agenda\" aimed at making things easier for families in the Golden State. Other proposals he unveiled Tuesday include increasing a tax credit for low-income families, expanding the number of families that qualify for it and increasing funding for \u003ca href=\"https://www.cdss.ca.gov/CalWORKS\" target=\"_blank\" rel=\"noopener\">CalWORKS\u003c/a>, which provides child care assistance for parents participating in California's welfare-to-work program.\u003c/p>\n\u003cp>\u003c/p>\n\u003cp>The new proposals will be included in Newsom's updated 2019-20 budget proposal that he plans to unveil Thursday. They are in addition to a series of family-friendly policies Newsom already unveiled in his first budget proposal in January, such as increasing paid family leave by two weeks and expanding state-subsidized child care facilities.\u003c/p>\n\n",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>But there's a new captain at the helm — and he's throwing his full weight behind the idea.\u003c/p>\n\u003cp>At a meeting with the Legislative Women's Caucus, Gov. Gavin Newsom on Tuesday announced plans to include the parent-friendly sales tax exemptions in his budget proposal for the coming fiscal year. The move would cost the state upward of $56 million a year in lost tax revenue, according to previous estimates.\u003c/p>\n\u003cp>But the governor's office argued that giving working families financial breathing room, particularly on items they have little choice but to purchase, is worth it. Newsom has four young kids of his own, and often mentions the influence of personal experience in his policymaking decisions.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>\"As anyone who takes care of kids can tell you — these costs add up,\" Newsom said in a written statement in advance of his announcement. \"From diapers to childcare, raising kids is expensive wherever you live. But when you factor in the cost of living here in California, it is close to impossible.\"\u003c/p>\n\u003cp>Unlike most food and medicine, tampons and diapers are \u003ca href=\"https://www.kqed.org/news/11737907/beyond-the-tampon-tax-how-far-will-california-go-to-end-menstrual-inequity\" target=\"_blank\" rel=\"noopener\">not exempt\u003c/a> from California sales tax because they are technically considered luxuries, not necessities.\u003c/p>\n\u003cp>To date, 10 other states, including New York, Florida, Connecticut and, most recently, Nevada, have banned sales taxes on period products. Across the globe, Canada, India and Australia have long since eliminated the tax, and a battle is currently underway to end it in the United Kingdom.\u003c/p>\n\u003cp>Newsom's office said the tax exemptions were part of his \"parents agenda\" aimed at making things easier for families in the Golden State. Other proposals he unveiled Tuesday include increasing a tax credit for low-income families, expanding the number of families that qualify for it and increasing funding for \u003ca href=\"https://www.cdss.ca.gov/CalWORKS\" target=\"_blank\" rel=\"noopener\">CalWORKS\u003c/a>, which provides child care assistance for parents participating in California's welfare-to-work program.\u003c/p>\n\u003cp>\u003c/p>\n\u003cp>The new proposals will be included in Newsom's updated 2019-20 budget proposal that he plans to unveil Thursday. They are in addition to a series of family-friendly policies Newsom already unveiled in his first budget proposal in January, such as increasing paid family leave by two weeks and expanding state-subsidized child care facilities.\u003c/p>\n\n\u003c/div>\u003c/p>",
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"content": "\u003cp>Millionaires and billionaires, anyone?\u003c/p>\n\u003cp>Bay Area \u003ca href=\"https://www.nytimes.com/2019/03/07/style/uber-ipo-san-francisco-rich.html\" target=\"_blank\" rel=\"noopener\">housing\u003c/a> and state tax revenues may be \u003ca href=\"http://bit.ly/fioreipotaxes\" target=\"_blank\" rel=\"noopener\">in for a wild ride\u003c/a> as at least six companies valued at over $1 billion are set to go public.\u003c/p>\n\u003cp>The number-crunchers estimate Uber will be valued at around $91 billion, making it one of the most gigantic initial public offerings in technology.\u003c/p>\n\u003cp>Meanwhile, state officials say they are about to rake in the largest haul of capital gains taxes the state has ever seen, even before any IPO windfalls are figured in.\u003c/p>\n\u003cp>Even though what goes up can \u003cem>definitely\u003c/em> come down, it seems a little different from the days of \u003ca href=\"https://www.marketwatch.com/story/sock-puppet-kills-petscom\" target=\"_blank\" rel=\"noopener\">sock puppet IPOs\u003c/a>.\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\u003cp>\u003c/p>\n",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003cp>Millionaires and billionaires, anyone?\u003c/p>\n\u003cp>Bay Area \u003ca href=\"https://www.nytimes.com/2019/03/07/style/uber-ipo-san-francisco-rich.html\" target=\"_blank\" rel=\"noopener\">housing\u003c/a> and state tax revenues may be \u003ca href=\"http://bit.ly/fioreipotaxes\" target=\"_blank\" rel=\"noopener\">in for a wild ride\u003c/a> as at least six companies valued at over $1 billion are set to go public.\u003c/p>\n\u003cp>The number-crunchers estimate Uber will be valued at around $91 billion, making it one of the most gigantic initial public offerings in technology.\u003c/p>\n\u003cp>Meanwhile, state officials say they are about to rake in the largest haul of capital gains taxes the state has ever seen, even before any IPO windfalls are figured in.\u003c/p>\n\u003cp>Even though what goes up can \u003cem>definitely\u003c/em> come down, it seems a little different from the days of \u003ca href=\"https://www.marketwatch.com/story/sock-puppet-kills-petscom\" target=\"_blank\" rel=\"noopener\">sock puppet IPOs\u003c/a>.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"disqusTitle": "IPOs to Bring Tax Jackpot for California. Can Lawmakers Resist?",
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"content": "\u003cp>Uber and Airbnb are among at least six California-based companies valued at more than $1 billion expected to go public this year, creating a new class of millionaires and billionaires and a welcome quandary for the state's budget writers.\u003c/p>\n\u003cp>Though it's tough to gauge the total tax revenue all those profits will produce, it's not a stretch to estimate California will add $1 billion or more after the initial public offerings, or IPOs, are made.\u003c/p>\n\u003cp>\"I've never experienced anything like this,\" said Daniel Morgan, senior portfolio manager for the investment firm Synovus Trust. \"It's definitely going to be a big lottery for everyone. Not only tech owners, but I think the state of California.\"\u003c/p>\n\u003cp>It's an enticing opportunity for lawmakers to fund chosen causes — a temptation legislative leaders are trying to resist. Lawmakers can't count on the money being there every year, and Assembly Budget Chairman Phil Ting said they are intent on learning from their past mistakes.\u003c/p>\n\u003cp>\"My sense of it is we will have to be very careful,\" said Ting, a Democrat from San Francisco. \"Our overall budget is $200 billion. So even if there was a $1 billion or $2 billion windfall, let's say, it doesn't make or break the budget — unless we spend it in the wrong way.\"\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\n\u003cp>In the late 1990s and early 2000s, that's what happened. Lawmakers were quick to expand state spending amid a booming tech economy and the corporate IPOs that went with it, only to see those gains vanish when the bubble burst and ushered in a recession and a $14 billion budget gap.\u003c/p>\n\u003cp>\"From a state budget perspective, major IPOs are a bit like rainbows. They are lovely to watch but they don't last for very long,\" said H.D. Palmer, deputy director for external affairs at the California Department of Finance, which manages Gov. Gavin Newsom's budget plans.\u003c/p>\n\u003cp>It could be difficult for lawmakers to keep their hands off any extra money because, this year, California has so much of it.\u003c/p>\n\u003cp>The state has a projected $21 billion surplus in the first year of Newsom's administration, and that's without factoring in money from the IPO wave. Former Gov. Jerry Brown began his administration with a deficit, and he frequently clashed with fellow Democrats who wanted to spend more while he wanted to save it.\u003c/p>\n\u003cp>As he left office, with the California economy humming, Brown warned that Newsom might have a tough time convincing the Legislature not to drastically increase spending.\u003c/p>\n\u003cp>Newsom did propose new recurring spending, including proposals to improve drinking water in rural areas and to bolster the state's 911 emergency call system. But he proposed new taxes to pay for them instead of relying on the state surplus.\u003c/p>\n\u003cp>Newsom's budget proposal will be revised next month based on revenue collections. Ting said it likely will not include revenue from the IPOs.\u003c/p>\n\u003cp>David Wolfe is skeptical. The legislative director of the Howard Jarvis Taxpayers Association noted California has historically had trouble saving money during the good years.\u003c/p>\n\u003cp>\"You see these surpluses out there and it's deja vu all over again,\" said Wolfe, whose organization favors limited taxation. \"Are we going to spend this money on one-time programs? Given California's history, I think the likelihood of that is doubtful.\"\u003c/p>\n\u003cp>IPO windfalls are unusual in the world of state budgets, but they have become common in California, a state with nearly 40 million people that boasts the fifth-largest economy in the world. The state budget relies heavily on the wealthiest earners; in 2017, the top 1% were responsible for more than 47% of the state's income tax collections.\u003c/p>\n\u003cp>Most of that comes in capital gains, which in California are taxed the same as income and are heavily dependent on the stock market. California got nearly $11 billion from capital gains taxes in 2007, only to see it drop to $4.6 billion in 2008 and $2.3 billion in 2009 during the Great Recession.\u003c/p>\n\u003cp>This budget year, state officials expect to get $15.2 billion from capital gains taxes, the largest amount ever. And that's without adding in the expected jackpot from the major IPOs.\u003c/p>\n\u003cp>Companies, including ride-service startup Lyft and social media website Pinterest, already have gone public, but it could be months before the state starts seeing the tax revenue from them. Uber, corporate chat room provider Slack, home rental site Airbnb and data software company Palantir are poised to go public later this year.\u003c/p>\n\u003cp>Of those, Uber is the behemoth. Experts predict the company could be valued as much as $91 billion, a decline from initial estimates but still near Facebook's $100 billion initial public offering in 2012 that netted California $1.3 billion in tax revenue.\u003c/p>\n\u003cp>Predicting how much money California will get from these IPOs is difficult. Facebook's 2012 IPO was unusual in that most of the state's tax gains came from one person: CEO and founder Mark Zuckerberg, whose wealth state officials could easily guess based on the company's regulatory filings.\u003c/p>\n\u003cp>\u003c/p>\n\u003cp>This year, more companies going public involving more investors makes it harder to forecast.\u003c/p>\n\n",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003cp>Uber and Airbnb are among at least six California-based companies valued at more than $1 billion expected to go public this year, creating a new class of millionaires and billionaires and a welcome quandary for the state's budget writers.\u003c/p>\n\u003cp>Though it's tough to gauge the total tax revenue all those profits will produce, it's not a stretch to estimate California will add $1 billion or more after the initial public offerings, or IPOs, are made.\u003c/p>\n\u003cp>\"I've never experienced anything like this,\" said Daniel Morgan, senior portfolio manager for the investment firm Synovus Trust. \"It's definitely going to be a big lottery for everyone. Not only tech owners, but I think the state of California.\"\u003c/p>\n\u003cp>It's an enticing opportunity for lawmakers to fund chosen causes — a temptation legislative leaders are trying to resist. Lawmakers can't count on the money being there every year, and Assembly Budget Chairman Phil Ting said they are intent on learning from their past mistakes.\u003c/p>\n\u003cp>\"My sense of it is we will have to be very careful,\" said Ting, a Democrat from San Francisco. \"Our overall budget is $200 billion. So even if there was a $1 billion or $2 billion windfall, let's say, it doesn't make or break the budget — unless we spend it in the wrong way.\"\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>In the late 1990s and early 2000s, that's what happened. Lawmakers were quick to expand state spending amid a booming tech economy and the corporate IPOs that went with it, only to see those gains vanish when the bubble burst and ushered in a recession and a $14 billion budget gap.\u003c/p>\n\u003cp>\"From a state budget perspective, major IPOs are a bit like rainbows. They are lovely to watch but they don't last for very long,\" said H.D. Palmer, deputy director for external affairs at the California Department of Finance, which manages Gov. Gavin Newsom's budget plans.\u003c/p>\n\u003cp>It could be difficult for lawmakers to keep their hands off any extra money because, this year, California has so much of it.\u003c/p>\n\u003cp>The state has a projected $21 billion surplus in the first year of Newsom's administration, and that's without factoring in money from the IPO wave. Former Gov. Jerry Brown began his administration with a deficit, and he frequently clashed with fellow Democrats who wanted to spend more while he wanted to save it.\u003c/p>\n\u003cp>As he left office, with the California economy humming, Brown warned that Newsom might have a tough time convincing the Legislature not to drastically increase spending.\u003c/p>\n\u003cp>Newsom did propose new recurring spending, including proposals to improve drinking water in rural areas and to bolster the state's 911 emergency call system. But he proposed new taxes to pay for them instead of relying on the state surplus.\u003c/p>\n\u003cp>Newsom's budget proposal will be revised next month based on revenue collections. Ting said it likely will not include revenue from the IPOs.\u003c/p>\n\u003cp>David Wolfe is skeptical. The legislative director of the Howard Jarvis Taxpayers Association noted California has historically had trouble saving money during the good years.\u003c/p>\n\u003cp>\"You see these surpluses out there and it's deja vu all over again,\" said Wolfe, whose organization favors limited taxation. \"Are we going to spend this money on one-time programs? Given California's history, I think the likelihood of that is doubtful.\"\u003c/p>\n\u003cp>IPO windfalls are unusual in the world of state budgets, but they have become common in California, a state with nearly 40 million people that boasts the fifth-largest economy in the world. The state budget relies heavily on the wealthiest earners; in 2017, the top 1% were responsible for more than 47% of the state's income tax collections.\u003c/p>\n\u003cp>Most of that comes in capital gains, which in California are taxed the same as income and are heavily dependent on the stock market. California got nearly $11 billion from capital gains taxes in 2007, only to see it drop to $4.6 billion in 2008 and $2.3 billion in 2009 during the Great Recession.\u003c/p>\n\u003cp>This budget year, state officials expect to get $15.2 billion from capital gains taxes, the largest amount ever. And that's without adding in the expected jackpot from the major IPOs.\u003c/p>\n\u003cp>Companies, including ride-service startup Lyft and social media website Pinterest, already have gone public, but it could be months before the state starts seeing the tax revenue from them. Uber, corporate chat room provider Slack, home rental site Airbnb and data software company Palantir are poised to go public later this year.\u003c/p>\n\u003cp>Of those, Uber is the behemoth. Experts predict the company could be valued as much as $91 billion, a decline from initial estimates but still near Facebook's $100 billion initial public offering in 2012 that netted California $1.3 billion in tax revenue.\u003c/p>\n\u003cp>Predicting how much money California will get from these IPOs is difficult. Facebook's 2012 IPO was unusual in that most of the state's tax gains came from one person: CEO and founder Mark Zuckerberg, whose wealth state officials could easily guess based on the company's regulatory filings.\u003c/p>\n\u003cp>\u003c/p>\n\u003cp>This year, more companies going public involving more investors makes it harder to forecast.\u003c/p>\n\n\u003c/div>\u003c/p>",
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"disqusTitle": "Free Immigration Applications May Become Harder to Get Under Federal Proposal",
"title": "Free Immigration Applications May Become Harder to Get Under Federal Proposal",
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"content": "\u003cp>A plan in the works from the Trump administration could make it harder for immigrants to request an exemption from fees when they seek to become citizens or legal permanent residents of the United States.\u003c/p>\n\u003cp>Monday is the deadline for public comments on a proposal that would eliminate proof of means-tested benefits, such as Medi-Cal or CalFresh food stamps, as a way to qualify for fee waivers in immigration applications. The agency would still offer to waive fees for applicants who can show through other documents they are very low income or have a financial hardship.\u003c/p>\n\u003cp>In California, the move could exclude more than 200,000 potential applicants for citizenship from obtaining fee waivers, and is likely to discourage others from applying, according to researchers.\u003c/p>\n\u003cp>An application for citizenship costs a total of $725, while a request for a green card is $1,225.\u003c/p>\n\u003cp>Opponents argue that the proposal from U.S. Citizenship and Immigration Services would lengthen and complicate the process of requesting a free application by dropping the most straightforward way for people to prove that their income is low.\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\n\u003cp>“This proposal has the potential to affect our clients really seriously, and limit their ability to file their applications,” said Alyssa Simpson, supervising attorney with Catholic Charities of the East Bay. The nonprofit helps about 1,600 low-income immigrants per year to apply for citizenship and humanitarian relief and other visas.\u003c/p>\n\u003cp>[aside tag='immigration-policy' label='More on Immigration Policy']\u003c/p>\n\u003cp>“It’s going to be a longer and dragged-out process,” Simpson added. “It's the sort of thing that's going to make people have to seek out lawyers or community agencies when, in the past, they might have been able to file on their own.”\u003c/p>\n\u003cp>Currently, USCIS will waive the application fees of immigrants who are enrolled in means-tested programs administered by states, or who can prove through other documents that they are very low income or have a financial hardship.\u003c/p>\n\u003cp>The agency argues that the “means-tested benefit receipt” is unfair and should be eliminated, because different states use different income levels to grant food stamps and other federally funded programs.\u003c/p>\n\u003cp>“Consequently, a fee waiver may be granted for one person who has a certain level of income in one state, but denied for a person with that same income who lives in another state,” according to the USCIS \u003ca href=\"https://www.federalregister.gov/documents/2019/04/05/2019-06657/agency-information-collection-activities-revision-of-a-currently-approved-collection-request-for-fee\" target=\"_blank\" rel=\"noopener\">notice\u003c/a> in the Federal Register.\u003c/p>\n\u003cp>USCIS did not return requests for comment.\u003c/p>\n\u003cfigure id=\"attachment_11745015\" class=\"wp-caption aligncenter\" style=\"max-width: 1920px\">\u003cimg class=\"size-full wp-image-11745015\" src=\"https://ww2.kqed.org/news/wp-content/uploads/sites/10/2019/05/RS36944_Photo-2-qut.jpg\" alt=\"\" width=\"1920\" height=\"1280\" srcset=\"https://ww2.kqed.org/app/uploads/sites/10/2019/05/RS36944_Photo-2-qut.jpg 1920w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/RS36944_Photo-2-qut-160x107.jpg 160w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/RS36944_Photo-2-qut-800x533.jpg 800w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/RS36944_Photo-2-qut-1020x680.jpg 1020w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/RS36944_Photo-2-qut-1200x800.jpg 1200w\" sizes=\"(max-width: 1920px) 100vw, 1920px\">\u003cfigcaption class=\"wp-caption-text\">A student reviews a civics lesson for the citizenship exam on March 22, 2018, at a community center in Redwood City, California. \u003ccite>(Farida Jhabvala Romero/KQED)\u003c/cite>\u003c/figcaption>\u003c/figure>\n\u003cp>About 220,000 people in California who are eligible for citizenship and also enrolled in means-tested programs would no longer qualify for a free application if the new policy takes effect, said Michael Hotard, a researcher with the Immigration Policy Lab at Stanford University.\u003c/p>\n\u003cp>He said the changes could deter eligible green card holders from becoming U.S. citizens.\u003c/p>\n\u003cp>“Making it harder to use the fee waiver will certainly discourage some potential citizens from actually applying,” said Hotard, the lead author in a recent \u003ca href=\"https://immigrationlab.org/project/how-a-simple-nudge-could-boost-citizenship-rates/\" target=\"_blank\" rel=\"noopener\">study\u003c/a> that found that just telling low-income immigrants that they might qualify for a fee waiver boosted citizenship application rates.\u003c/p>\n\u003cp>[pullquote size='small' align='right' citation='Melissa Rodgers, director of programs for New Americans Campaign']'I think it's an extremely cynical proposal from an agency that right now is proposing to make it harder for poor people to access immigration benefits for which they qualify by attacking the fee waiver pathway'[/pullquote]\u003c/p>\n\u003cp>In California, roughly 2.4 million people are eligible to become naturalized citizens, and about half of them are eligible to have their application fee waived, a higher proportion than for the rest of the country, according to Hotard.\u003c/p>\n\u003cp>The proposed change to fee waivers comes as the Department of Homeland Security, which oversees USCIS, put forward a \u003ca href=\"http://src.bna.com/wmv\" target=\"_blank\" rel=\"noopener\">budget plan\u003c/a> earlier this year to move nearly $208 million in revenue from USCIS application fees to support agents working on immigration enforcement. Congress declined the request, citing concerns about USCIS’s backlog of more than 750,000 pending immigration applications.\u003c/p>\n\u003cp>Melissa Rodgers, who directs the New Americans Campaign, a national coalition of nonprofits, decried that plan to divert money from processing immigration applications to Immigration and Customs Enforcement.\u003c/p>\n\u003cp>“I think it's an extremely cynical proposal from an agency that right now is proposing to make it harder for poor people to access immigration benefits for which they qualify by attacking the fee waiver pathway,” said Rodgers.\u003c/p>\n\u003cp>[aside tag='green-card' label='Naturalization in the U.S.']\u003c/p>\n\u003cp>Unlike most other federal agencies, which are funded by appropriations from Congress, USCIS depends on the fees it collects from immigrants to cover the majority of its operating costs. The agency periodically reviews its fees, and implemented its latest fee increase in 2016.\u003c/p>\n\u003cp>USCIS waived an estimated $344 million in fees in fiscal year 2016, up from $223 million in 2013, according to a U.S. Department of Homeland Security \u003ca href=\"https://www.dhs.gov/sites/default/files/publications/USCIS%20-%20Fee%20Waiver%20Policies%20and%20Data.pdf\" target=\"_blank\" rel=\"noopener\">report\u003c/a> to Congress.\u003c/p>\n\u003cp>Becoming naturalized U.S. citizens gives people born abroad the right to vote and protects them from deportation. Research also suggests that immigrants who become citizens are able to earn higher wages, which can benefit their families and larger communities.\u003c/p>\n\u003cp>\u003c/p>\n\u003cp>“We live in areas where immigrants are living and working, and they're our friends our neighbors, and so I think it affects all of us,” said Simpson, the attorney.\u003c/p>\n\n",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003cp>A plan in the works from the Trump administration could make it harder for immigrants to request an exemption from fees when they seek to become citizens or legal permanent residents of the United States.\u003c/p>\n\u003cp>Monday is the deadline for public comments on a proposal that would eliminate proof of means-tested benefits, such as Medi-Cal or CalFresh food stamps, as a way to qualify for fee waivers in immigration applications. The agency would still offer to waive fees for applicants who can show through other documents they are very low income or have a financial hardship.\u003c/p>\n\u003cp>In California, the move could exclude more than 200,000 potential applicants for citizenship from obtaining fee waivers, and is likely to discourage others from applying, according to researchers.\u003c/p>\n\u003cp>An application for citizenship costs a total of $725, while a request for a green card is $1,225.\u003c/p>\n\u003cp>Opponents argue that the proposal from U.S. Citizenship and Immigration Services would lengthen and complicate the process of requesting a free application by dropping the most straightforward way for people to prove that their income is low.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>“This proposal has the potential to affect our clients really seriously, and limit their ability to file their applications,” said Alyssa Simpson, supervising attorney with Catholic Charities of the East Bay. The nonprofit helps about 1,600 low-income immigrants per year to apply for citizenship and humanitarian relief and other visas.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>“It’s going to be a longer and dragged-out process,” Simpson added. “It's the sort of thing that's going to make people have to seek out lawyers or community agencies when, in the past, they might have been able to file on their own.”\u003c/p>\n\u003cp>Currently, USCIS will waive the application fees of immigrants who are enrolled in means-tested programs administered by states, or who can prove through other documents that they are very low income or have a financial hardship.\u003c/p>\n\u003cp>The agency argues that the “means-tested benefit receipt” is unfair and should be eliminated, because different states use different income levels to grant food stamps and other federally funded programs.\u003c/p>\n\u003cp>“Consequently, a fee waiver may be granted for one person who has a certain level of income in one state, but denied for a person with that same income who lives in another state,” according to the USCIS \u003ca href=\"https://www.federalregister.gov/documents/2019/04/05/2019-06657/agency-information-collection-activities-revision-of-a-currently-approved-collection-request-for-fee\" target=\"_blank\" rel=\"noopener\">notice\u003c/a> in the Federal Register.\u003c/p>\n\u003cp>USCIS did not return requests for comment.\u003c/p>\n\u003cfigure id=\"attachment_11745015\" class=\"wp-caption aligncenter\" style=\"max-width: 1920px\">\u003cimg class=\"size-full wp-image-11745015\" src=\"https://ww2.kqed.org/news/wp-content/uploads/sites/10/2019/05/RS36944_Photo-2-qut.jpg\" alt=\"\" width=\"1920\" height=\"1280\" srcset=\"https://ww2.kqed.org/app/uploads/sites/10/2019/05/RS36944_Photo-2-qut.jpg 1920w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/RS36944_Photo-2-qut-160x107.jpg 160w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/RS36944_Photo-2-qut-800x533.jpg 800w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/RS36944_Photo-2-qut-1020x680.jpg 1020w, https://ww2.kqed.org/app/uploads/sites/10/2019/05/RS36944_Photo-2-qut-1200x800.jpg 1200w\" sizes=\"(max-width: 1920px) 100vw, 1920px\">\u003cfigcaption class=\"wp-caption-text\">A student reviews a civics lesson for the citizenship exam on March 22, 2018, at a community center in Redwood City, California. \u003ccite>(Farida Jhabvala Romero/KQED)\u003c/cite>\u003c/figcaption>\u003c/figure>\n\u003cp>About 220,000 people in California who are eligible for citizenship and also enrolled in means-tested programs would no longer qualify for a free application if the new policy takes effect, said Michael Hotard, a researcher with the Immigration Policy Lab at Stanford University.\u003c/p>\n\u003cp>He said the changes could deter eligible green card holders from becoming U.S. citizens.\u003c/p>\n\u003cp>“Making it harder to use the fee waiver will certainly discourage some potential citizens from actually applying,” said Hotard, the lead author in a recent \u003ca href=\"https://immigrationlab.org/project/how-a-simple-nudge-could-boost-citizenship-rates/\" target=\"_blank\" rel=\"noopener\">study\u003c/a> that found that just telling low-income immigrants that they might qualify for a fee waiver boosted citizenship application rates.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>In California, roughly 2.4 million people are eligible to become naturalized citizens, and about half of them are eligible to have their application fee waived, a higher proportion than for the rest of the country, according to Hotard.\u003c/p>\n\u003cp>The proposed change to fee waivers comes as the Department of Homeland Security, which oversees USCIS, put forward a \u003ca href=\"http://src.bna.com/wmv\" target=\"_blank\" rel=\"noopener\">budget plan\u003c/a> earlier this year to move nearly $208 million in revenue from USCIS application fees to support agents working on immigration enforcement. Congress declined the request, citing concerns about USCIS’s backlog of more than 750,000 pending immigration applications.\u003c/p>\n\u003cp>Melissa Rodgers, who directs the New Americans Campaign, a national coalition of nonprofits, decried that plan to divert money from processing immigration applications to Immigration and Customs Enforcement.\u003c/p>\n\u003cp>“I think it's an extremely cynical proposal from an agency that right now is proposing to make it harder for poor people to access immigration benefits for which they qualify by attacking the fee waiver pathway,” said Rodgers.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>Unlike most other federal agencies, which are funded by appropriations from Congress, USCIS depends on the fees it collects from immigrants to cover the majority of its operating costs. The agency periodically reviews its fees, and implemented its latest fee increase in 2016.\u003c/p>\n\u003cp>USCIS waived an estimated $344 million in fees in fiscal year 2016, up from $223 million in 2013, according to a U.S. Department of Homeland Security \u003ca href=\"https://www.dhs.gov/sites/default/files/publications/USCIS%20-%20Fee%20Waiver%20Policies%20and%20Data.pdf\" target=\"_blank\" rel=\"noopener\">report\u003c/a> to Congress.\u003c/p>\n\u003cp>Becoming naturalized U.S. citizens gives people born abroad the right to vote and protects them from deportation. Research also suggests that immigrants who become citizens are able to earn higher wages, which can benefit their families and larger communities.\u003c/p>\n\u003cp>\u003c/p>\n\u003cp>“We live in areas where immigrants are living and working, and they're our friends our neighbors, and so I think it affects all of us,” said Simpson, the attorney.\u003c/p>\n\n\u003c/div>\u003c/p>",
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"disqusTitle": "When the Next Recession Hits, Will California Be Able to Count on Washington?",
"title": "When the Next Recession Hits, Will California Be Able to Count on Washington?",
"headTitle": "CALmatters | KQED News",
"content": "\u003cp>They don’t call it the Golden State for nothing, at least not lately. California’s fiscal health is in extraordinary shape.\u003c/p>\n\u003cp>Income tax receipts \u003ca href=\"https://sco.ca.gov/2019_personal_income_tax_tracker.html\" target=\"_blank\" rel=\"noopener\">surpassed\u003c/a> expectations for the pivotal month of April. Projections of a $21 billion-plus surplus are not out of the question. Nearly \u003ca href=\"https://www.labormarketinfo.edd.ca.gov/data/Top-Statistics.html#EMP\" target=\"_blank\" rel=\"noopener\">3 million\u003c/a> jobs have been added since the depths of the Great Recession, yielding record low unemployment. And having already \u003ca href=\"http://www.ebudget.ca.gov/2019-20/pdf/BudgetSummary/Introduction.pdf#page=5\" target=\"_blank\" rel=\"noopener\">met\u003c/a> a 10% rainy day fund requirement, the state is socking away billions in additional reserves to buffer against the next downturn. Impending Silicon Valley \u003ca href=\"https://finance.yahoo.com/news/lyft-uber-slack-airbnb-ipo-millionaires-123523288.html\" target=\"_blank\" rel=\"noopener\">IPOs\u003c/a> could provide an even bigger windfall.\u003c/p>\n\u003cp>Yet California isn’t as prepared as it may seem for the next recession — and, economists say, there will be a next one. Because voters have willingly taxed the rich, California’s $209 billion budget is \u003ca href=\"https://calmatters.org/articles/the-open-secret-about-california-taxes/#Theres-instability-\" target=\"_blank\" rel=\"noopener\">more volatile\u003c/a> than ever, overly reliant on top earners whose fortunes are tied to Wall Street.\u003c/p>\n\u003cp>And what’s different this time — and perhaps more worrisome — is that when the next pullback hits, California may have to fight off red ink without a historically crucial ally: Washington, D.C.\u003c/p>\n\u003cp>\u003c!-- iframe plugin v.4.3 wordpress.org/plugins/iframe/ -->\u003cbr>\n\u003ciframe src=\"https://e.infogram.com/b8a5afbc-d178-40d5-8e1d-490dd349cb4c?src=embed\" title=\"Capital gains\" width=\"550\" height=\"758\" scrolling=\"no\" frameborder=\"0\" style=\"border:none;\" allowfullscreen=\"allowfullscreen\" class=\"iframe-class\">\u003c/iframe>\u003c/p>\n\u003cp>It’s not just that there’s no love lost between President Trump and California leaders, or that Congress is gridlocked in its political divisions. Fiscal choices that have been made in the past couple of years may make it tough for the federal government to help states much in the next recession, even if Congress and the Trump administration want to.\u003c/p>\n\u003cp>Fiscal analysts warn, for example, that the federal deficit is soaring just as historically low interest rates are limiting the Federal Reserve’s monetary firepower.\u003c/p>\n\u003cp>[ad fullwidth]\u003c/p>\n\u003cp>“Whether it’s because of a worsening fiscal picture at the federal level or just the politics, I wouldn’t be counting on them coming to some agreement about helping out states,” said Gabriel Petek, the Legislature’s nonpartisan budget analyst.\u003c/p>\n\u003cp>“If you go from that premise, then the state has to be thinking about contingency planning for the next recession and getting through it on its own.”\u003c/p>\n\u003ch2>The Macro View\u003c/h2>\n\u003cp>During the economic downturn that followed the Sept. 11, 2001, terrorist attack and the financial crisis that struck in late 2008, the federal government poured billions of dollars into state coffers by enhancing support for anti-poverty programs, health care and infrastructure.\u003c/p>\n\u003cp>But Petek and other analysts warn that with U.S. government coffers drawn down by Trump’s tax cuts — and without an extraordinary and unifying cause like a terrorist attack or near-Depression — California and other states may not be able to count on the federal government again to backfill fiscally.\u003c/p>\n\u003cp>Given political priorities, casualties could easily include services that impact millions of Californians: anti-poverty programs such as CalWORKS for working parents, in-home supportive services for low-income seniors or the state’s Medicaid program known as Medi-Cal, which serves one in three residents.\u003c/p>\n\u003cp>\u003c!-- iframe plugin v.4.3 wordpress.org/plugins/iframe/ -->\u003cbr>\n\u003ciframe src=\"https://e.infogram.com/6adf6b59-9f26-41db-8969-5b79bc5ebf8f?src=embed\" title=\"Rainy day fund rank by states\" width=\"550\" height=\"826\" scrolling=\"no\" frameborder=\"0\" style=\"border:none;\" allowfullscreen=\"allowfullscreen\" class=\"iframe-class\">\u003c/iframe>\u003c/p>\n\u003cp>“Gabe is not alone in having those thoughts,” said John Hicks, executive director of the National Association of State Budget Officers in Washington, D.C. “States did get assistance in the Great Recession and a smaller version of that in the early 2000s. That prevented them from having to make more significant cuts in education or other priority areas or have to raise revenues more.”\u003c/p>\n\u003cp>Petek, who was appointed in February after two decades at S&P Global Ratings, estimated the state will need \u003ca href=\"https://lao.ca.gov/Publications/Report/4003\" target=\"_blank\" rel=\"noopener\">$25 billion\u003c/a> just to weather a moderate recession. That would wipe out everything the state has been able to save.\u003c/p>\n\u003cp>According to the Department of Finance, for instance, the state’s general fund spending on Medi-Cal alone is $22 billion, and trimming that line item in a recession would threaten the $100 billion a year in matching federal money that underpins health care for the poor in California.\u003c/p>\n\u003cp>“It’s a huge part of how we fund our health care system,” said Gov. Gavin Newsom’s finance director, Keely Bosler. And that’s just one need among many that would soon be competing for the state’s surplus should the economy turn.\u003c/p>\n\u003cp>In addition to the unpredictable economy, Bosler worries about the federal support that hinges on the fate of the Affordable Care Act, which is facing a legal challenge, and the next \u003ca href=\"https://calmatters.org/articles/census-california-hard-to-count-immigrants-2020-stakes/\" target=\"_blank\" rel=\"noopener\">census\u003c/a>, which would be dramatically impacted if California residents are spooked by a proposed citizenship question.\u003c/p>\n\u003ch2>Recalling the Recession\u003c/h2>\n\u003cp>So as California strides toward the longest economic expansion in state history this July, Newsom and his fiscal advisers are keenly aware of what could happen. Many of them, longtime government staffers, were tasked with making cuts during the last recession and are steering the governor to limit his commitment to ongoing spending.\u003c/p>\n\u003cp>Bosler, who was a staff consultant in the Senate in 2010, recalls emotional daylong committee hearings a decade ago when developmentally disabled children, working mothers and destitute patients suffering from chronic illnesses lined up, pleading with state lawmakers to spare them from cuts.\u003c/p>\n\u003cp>“I remember it so clearly because it was really, really hard,” said Bosler, who later joined former Gov. Jerry Brown’s finance team.\u003c/p>\n\u003cp>[pullquote size='medium' align='right' citation='Keely Bosler, director of the California Department of Finance']'No program was spared. Significant damage was done to core state services.'[/pullquote]he said\u003c/p>\n\u003cp>On the brink of becoming a failed state, California drastically reduced spending on the poor then — with particularly long-lasting impacts on \u003ca href=\"https://calbudgetcenter.org/wp-content/uploads/120201_Falling_Behind.pdf\" target=\"_blank\" rel=\"noopener\">women\u003c/a>. From cutting programs that provide child care assistance to preschool subsidies for mothers holding low-income jobs, the pullback made the dream of self-sufficiency that much harder. For older women and women with disabilities, the state reduced safety-net programs intended to help them stay in their own homes by paying someone to help with housework, shopping and cooking.\u003c/p>\n\u003cp>In health, California slashed payments to doctors, dentists and clinics seeing patients covered by Medi-Cal, a move that discouraged providers from seeing them. The developmentally disabled were told to take generic drugs and were prevented from participating in experimental treatments. And podiatry and optometry were no longer covered because they were deemed optional.\u003c/p>\n\u003cp>Those cuts have lasting impacts. “No program was spared,” recalled Bosler. “Significant damage was done to core state services.” Welfare advocates are still \u003ca href=\"https://calmatters.org/articles/california-eyeglasses-medi-cal-restoring-benefitsr/\" target=\"_blank\" rel=\"noopener\">fighting\u003c/a> today to restore medical benefits slashed during the recession.\u003c/p>\n\u003cp>So the Democratic governor and the Democratic-controlled Legislature are making a conscious choice to build reserves now.\u003c/p>\n\u003ch2>Building Resiliency\u003c/h2>\n\u003cp>When Newsom updates his spending plan in mid-May, he is expected to maintain his three-pronged \u003ca href=\"https://calmatters.org/articles/blog/newsom-california-spend-budget-surplus/\" target=\"_blank\" rel=\"noopener\">approach\u003c/a> for savings, paying down debt and making targeted investments in affordable housing and early education.\u003c/p>\n\u003cp>One bucket of about $3 billion would be used to expand ongoing services for the poor, particularly in-home supportive services programs and CalWORKs. A portion would be used to boost higher education to stave off a tuition hike in the University of California and California State University systems, as well as fund a second year of free community college.\u003c/p>\n\u003cp>The second bucket would be targeted for affordable housing and to confront California’s homeless epidemic, lay the groundwork for extending full-day kindergarten to all Californians and provide an extra $3 billion toward districts’ teacher pension payments.\u003c/p>\n\u003cp>The last and largest bucket would be used to help the state weather a potential economic downturn for what Newsom has termed “budget resiliency.” He would finish paying off the state’s Wall of Debt that had accumulated from years of internal borrowing and undo a 9-year-old accounting trick that pushed the June state payroll into July so it looked like the state was spending less.\u003c/p>\n\u003ch2>A Safety Net Reserve\u003c/h2>\n\u003cp>Last year, the state put $200 million toward seeding a new account intended to protect anti-poverty programs in a downturn. Newsom has embraced the safety net reserve by proposing to increase the fund to $900 million.\u003c/p>\n\u003cp>Senate President Pro Tem Toni Atkins, a Democrat from San Diego, told a crowd of policy advocates in Sacramento in March that even though Newsom’s style is much different from his predecessor's, their underlying strategy is similar.\u003c/p>\n\u003cp>https://youtu.be/f9EsgXuLxYg\u003c/p>\n\u003cp>“If you look at what Gov. Newsom has done in terms of the rainy day fund, paying down debt, and those kinds of issues, and if you extrapolate that, then what you see is a fairly conservative approach to resources to make sure that we are trying to keep a sustainable, resilient foundation of a budget going forward,” Atkins \u003ca href=\"https://www.youtube.com/watch?v=f9EsgXuLxYg&feature=youtu.be&t=5889\" target=\"_blank\" rel=\"noopener\">said\u003c/a>.\u003c/p>\n\u003cp>Atkins credits that extra safety net reserve to the Senate’s budget committee chair, Sen. Holly Mitchell. Both lawmakers indicated they would like to go beyond $900 million, because the money would protect just a fraction of those in need.\u003c/p>\n\u003cp>If the state were to set aside $900 million, it would protect roughly 435,000 Medi-Cal recipients or 132,000 CalWORKS families for a year, based on the state’s average spending on those programs. Currently, about 13 million people are on Medi-Cal and nearly 400,000 families rely on CalWORKS with demand growing when people fall on hard times.\u003c/p>\n\u003cp>Lawmakers haven’t said how much they will try to set aside. “It’s a technical term: A whole lot of money,” Atkins quipped.\u003c/p>\n\u003ch2>The Course Ahead\u003c/h2>\n\u003cp>Petek, the Legislature’s budget analyst, suggests lawmakers could do even more. He notes, for example, that while paying off California’s so-called Wall of Debt sounds nice, lawmakers may not want to undo that payroll accounting trick because it’s administratively burdensome to do it again if the state needs to free up cash.\u003c/p>\n\u003cp>All this prevention is ironic, said Jeffrey Michael, director of the Center for Business and Policy Research at the University of the Pacific in Stockton. If the state is overly reactive to economic cycles, Californians have no one to blame but themselves.\u003c/p>\n\u003cp>It’s voters, he notes, who have decided again and again to tax the rich, a choice that has made the system more reliant on the investment income of high earners and therefore more volatile.\u003c/p>\n\u003cp>And for the record, he doubts that California will have any more or less to worry about than any state should a recession hit during the Trump administration.\u003c/p>\n\u003cp>“While California is acting to oppose or counteract the president’s policies in many areas, I don’t believe the federal fiscal response to a downturn is an area where California needs to take special precautions against the actions of Congress or the president,” he said.\u003c/p>\n\u003cp>[pullquote size='medium' align='right' citation='Charles McLaughlin, Ventura County Taxpayers Association Board']'If they're not going to give it back in a refund, then they should save it for a rainy day.'[/pullquote]\u003c/p>\n\u003cp>But polls show the state is generally in sync with Newsom’s mix of priorities for the current surplus. A recent survey by the \u003ca href=\"https://www.ppic.org/wp-content/uploads/ppic-statewide-survey-californians-and-their-government-march-2019.pdf\" target=\"_blank\" rel=\"noopener\">Public Policy Institute of California\u003c/a> found majorities support additional funding for working-poor tax credits, wildfire preparedness and developing more housing. Only 47 percent approved of one-time spending to pay down unfunded pension liabilities.\u003c/p>\n\u003cp>And, like the governor, a lot of taxpayers remember the last two recessions, and remain cautious.\u003c/p>\n\u003cp>“If they’re not going to give [the surplus] back in a refund,” said Charles McLaughlin, a board member of the Ventura County Taxpayers Association, “then they should save it for a rainy day.”\u003c/p>\n\u003cp>[ad floatright]\u003c/p>\n",
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"excerpt": "California isn’t as prepared as it may seem for the next recession. And when the next pullback hits, the state may have to fight off red ink without a historically crucial ally: Washington, D.C.",
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"description": "California isn’t as prepared as it may seem for the next recession. And when the next pullback hits, the state may have to fight off red ink without a historically crucial ally: Washington, D.C.",
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"nprByline": "\u003cstrong>\u003ca href=\"https://calmatters.org/articles/author/judy-lin/\">Judy Lin\u003c/a>\u003cbr />\u003ca href=\"https://calmatters.org/\">CALmatters\u003c/a>\u003c/strong>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003cp>They don’t call it the Golden State for nothing, at least not lately. California’s fiscal health is in extraordinary shape.\u003c/p>\n\u003cp>Income tax receipts \u003ca href=\"https://sco.ca.gov/2019_personal_income_tax_tracker.html\" target=\"_blank\" rel=\"noopener\">surpassed\u003c/a> expectations for the pivotal month of April. Projections of a $21 billion-plus surplus are not out of the question. Nearly \u003ca href=\"https://www.labormarketinfo.edd.ca.gov/data/Top-Statistics.html#EMP\" target=\"_blank\" rel=\"noopener\">3 million\u003c/a> jobs have been added since the depths of the Great Recession, yielding record low unemployment. And having already \u003ca href=\"http://www.ebudget.ca.gov/2019-20/pdf/BudgetSummary/Introduction.pdf#page=5\" target=\"_blank\" rel=\"noopener\">met\u003c/a> a 10% rainy day fund requirement, the state is socking away billions in additional reserves to buffer against the next downturn. Impending Silicon Valley \u003ca href=\"https://finance.yahoo.com/news/lyft-uber-slack-airbnb-ipo-millionaires-123523288.html\" target=\"_blank\" rel=\"noopener\">IPOs\u003c/a> could provide an even bigger windfall.\u003c/p>\n\u003cp>Yet California isn’t as prepared as it may seem for the next recession — and, economists say, there will be a next one. Because voters have willingly taxed the rich, California’s $209 billion budget is \u003ca href=\"https://calmatters.org/articles/the-open-secret-about-california-taxes/#Theres-instability-\" target=\"_blank\" rel=\"noopener\">more volatile\u003c/a> than ever, overly reliant on top earners whose fortunes are tied to Wall Street.\u003c/p>\n\u003cp>And what’s different this time — and perhaps more worrisome — is that when the next pullback hits, California may have to fight off red ink without a historically crucial ally: Washington, D.C.\u003c/p>\n\u003cp>\u003c!-- iframe plugin v.4.3 wordpress.org/plugins/iframe/ -->\u003cbr>\n\u003ciframe src=\"https://e.infogram.com/b8a5afbc-d178-40d5-8e1d-490dd349cb4c?src=embed\" title=\"Capital gains\" width=\"550\" height=\"758\" scrolling=\"no\" frameborder=\"0\" style=\"border:none;\" allowfullscreen=\"allowfullscreen\" class=\"iframe-class\">\u003c/iframe>\u003c/p>\n\u003cp>It’s not just that there’s no love lost between President Trump and California leaders, or that Congress is gridlocked in its political divisions. Fiscal choices that have been made in the past couple of years may make it tough for the federal government to help states much in the next recession, even if Congress and the Trump administration want to.\u003c/p>\n\u003cp>Fiscal analysts warn, for example, that the federal deficit is soaring just as historically low interest rates are limiting the Federal Reserve’s monetary firepower.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>“Whether it’s because of a worsening fiscal picture at the federal level or just the politics, I wouldn’t be counting on them coming to some agreement about helping out states,” said Gabriel Petek, the Legislature’s nonpartisan budget analyst.\u003c/p>\n\u003cp>“If you go from that premise, then the state has to be thinking about contingency planning for the next recession and getting through it on its own.”\u003c/p>\n\u003ch2>The Macro View\u003c/h2>\n\u003cp>During the economic downturn that followed the Sept. 11, 2001, terrorist attack and the financial crisis that struck in late 2008, the federal government poured billions of dollars into state coffers by enhancing support for anti-poverty programs, health care and infrastructure.\u003c/p>\n\u003cp>But Petek and other analysts warn that with U.S. government coffers drawn down by Trump’s tax cuts — and without an extraordinary and unifying cause like a terrorist attack or near-Depression — California and other states may not be able to count on the federal government again to backfill fiscally.\u003c/p>\n\u003cp>Given political priorities, casualties could easily include services that impact millions of Californians: anti-poverty programs such as CalWORKS for working parents, in-home supportive services for low-income seniors or the state’s Medicaid program known as Medi-Cal, which serves one in three residents.\u003c/p>\n\u003cp>\u003c!-- iframe plugin v.4.3 wordpress.org/plugins/iframe/ -->\u003cbr>\n\u003ciframe src=\"https://e.infogram.com/6adf6b59-9f26-41db-8969-5b79bc5ebf8f?src=embed\" title=\"Rainy day fund rank by states\" width=\"550\" height=\"826\" scrolling=\"no\" frameborder=\"0\" style=\"border:none;\" allowfullscreen=\"allowfullscreen\" class=\"iframe-class\">\u003c/iframe>\u003c/p>\n\u003cp>“Gabe is not alone in having those thoughts,” said John Hicks, executive director of the National Association of State Budget Officers in Washington, D.C. “States did get assistance in the Great Recession and a smaller version of that in the early 2000s. That prevented them from having to make more significant cuts in education or other priority areas or have to raise revenues more.”\u003c/p>\n\u003cp>Petek, who was appointed in February after two decades at S&P Global Ratings, estimated the state will need \u003ca href=\"https://lao.ca.gov/Publications/Report/4003\" target=\"_blank\" rel=\"noopener\">$25 billion\u003c/a> just to weather a moderate recession. That would wipe out everything the state has been able to save.\u003c/p>\n\u003cp>According to the Department of Finance, for instance, the state’s general fund spending on Medi-Cal alone is $22 billion, and trimming that line item in a recession would threaten the $100 billion a year in matching federal money that underpins health care for the poor in California.\u003c/p>\n\u003cp>“It’s a huge part of how we fund our health care system,” said Gov. Gavin Newsom’s finance director, Keely Bosler. And that’s just one need among many that would soon be competing for the state’s surplus should the economy turn.\u003c/p>\n\u003cp>In addition to the unpredictable economy, Bosler worries about the federal support that hinges on the fate of the Affordable Care Act, which is facing a legal challenge, and the next \u003ca href=\"https://calmatters.org/articles/census-california-hard-to-count-immigrants-2020-stakes/\" target=\"_blank\" rel=\"noopener\">census\u003c/a>, which would be dramatically impacted if California residents are spooked by a proposed citizenship question.\u003c/p>\n\u003ch2>Recalling the Recession\u003c/h2>\n\u003cp>So as California strides toward the longest economic expansion in state history this July, Newsom and his fiscal advisers are keenly aware of what could happen. Many of them, longtime government staffers, were tasked with making cuts during the last recession and are steering the governor to limit his commitment to ongoing spending.\u003c/p>\n\u003cp>Bosler, who was a staff consultant in the Senate in 2010, recalls emotional daylong committee hearings a decade ago when developmentally disabled children, working mothers and destitute patients suffering from chronic illnesses lined up, pleading with state lawmakers to spare them from cuts.\u003c/p>\n\u003cp>“I remember it so clearly because it was really, really hard,” said Bosler, who later joined former Gov. Jerry Brown’s finance team.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>he said\u003c/p>\n\u003cp>On the brink of becoming a failed state, California drastically reduced spending on the poor then — with particularly long-lasting impacts on \u003ca href=\"https://calbudgetcenter.org/wp-content/uploads/120201_Falling_Behind.pdf\" target=\"_blank\" rel=\"noopener\">women\u003c/a>. From cutting programs that provide child care assistance to preschool subsidies for mothers holding low-income jobs, the pullback made the dream of self-sufficiency that much harder. For older women and women with disabilities, the state reduced safety-net programs intended to help them stay in their own homes by paying someone to help with housework, shopping and cooking.\u003c/p>\n\u003cp>In health, California slashed payments to doctors, dentists and clinics seeing patients covered by Medi-Cal, a move that discouraged providers from seeing them. The developmentally disabled were told to take generic drugs and were prevented from participating in experimental treatments. And podiatry and optometry were no longer covered because they were deemed optional.\u003c/p>\n\u003cp>Those cuts have lasting impacts. “No program was spared,” recalled Bosler. “Significant damage was done to core state services.” Welfare advocates are still \u003ca href=\"https://calmatters.org/articles/california-eyeglasses-medi-cal-restoring-benefitsr/\" target=\"_blank\" rel=\"noopener\">fighting\u003c/a> today to restore medical benefits slashed during the recession.\u003c/p>\n\u003cp>So the Democratic governor and the Democratic-controlled Legislature are making a conscious choice to build reserves now.\u003c/p>\n\u003ch2>Building Resiliency\u003c/h2>\n\u003cp>When Newsom updates his spending plan in mid-May, he is expected to maintain his three-pronged \u003ca href=\"https://calmatters.org/articles/blog/newsom-california-spend-budget-surplus/\" target=\"_blank\" rel=\"noopener\">approach\u003c/a> for savings, paying down debt and making targeted investments in affordable housing and early education.\u003c/p>\n\u003cp>One bucket of about $3 billion would be used to expand ongoing services for the poor, particularly in-home supportive services programs and CalWORKs. A portion would be used to boost higher education to stave off a tuition hike in the University of California and California State University systems, as well as fund a second year of free community college.\u003c/p>\n\u003cp>The second bucket would be targeted for affordable housing and to confront California’s homeless epidemic, lay the groundwork for extending full-day kindergarten to all Californians and provide an extra $3 billion toward districts’ teacher pension payments.\u003c/p>\n\u003cp>The last and largest bucket would be used to help the state weather a potential economic downturn for what Newsom has termed “budget resiliency.” He would finish paying off the state’s Wall of Debt that had accumulated from years of internal borrowing and undo a 9-year-old accounting trick that pushed the June state payroll into July so it looked like the state was spending less.\u003c/p>\n\u003ch2>A Safety Net Reserve\u003c/h2>\n\u003cp>Last year, the state put $200 million toward seeding a new account intended to protect anti-poverty programs in a downturn. Newsom has embraced the safety net reserve by proposing to increase the fund to $900 million.\u003c/p>\n\u003cp>Senate President Pro Tem Toni Atkins, a Democrat from San Diego, told a crowd of policy advocates in Sacramento in March that even though Newsom’s style is much different from his predecessor's, their underlying strategy is similar.\u003c/p>\u003c/p>\u003cp>\u003cspan class='utils-parseShortcode-shortcodes-__youtubeShortcode__embedYoutube'>\n \u003cspan class='utils-parseShortcode-shortcodes-__youtubeShortcode__embedYoutubeInside'>\n \u003ciframe\n loading='lazy'\n class='utils-parseShortcode-shortcodes-__youtubeShortcode__youtubePlayer'\n type='text/html'\n src='//www.youtube.com/embed/f9EsgXuLxYg'\n title='//www.youtube.com/embed/f9EsgXuLxYg'\n allowfullscreen='true'\n style='border:0;'>\u003c/iframe>\n \u003c/span>\n \u003c/span>\u003c/p>\u003cp>\u003cp>“If you look at what Gov. Newsom has done in terms of the rainy day fund, paying down debt, and those kinds of issues, and if you extrapolate that, then what you see is a fairly conservative approach to resources to make sure that we are trying to keep a sustainable, resilient foundation of a budget going forward,” Atkins \u003ca href=\"https://www.youtube.com/watch?v=f9EsgXuLxYg&feature=youtu.be&t=5889\" target=\"_blank\" rel=\"noopener\">said\u003c/a>.\u003c/p>\n\u003cp>Atkins credits that extra safety net reserve to the Senate’s budget committee chair, Sen. Holly Mitchell. Both lawmakers indicated they would like to go beyond $900 million, because the money would protect just a fraction of those in need.\u003c/p>\n\u003cp>If the state were to set aside $900 million, it would protect roughly 435,000 Medi-Cal recipients or 132,000 CalWORKS families for a year, based on the state’s average spending on those programs. Currently, about 13 million people are on Medi-Cal and nearly 400,000 families rely on CalWORKS with demand growing when people fall on hard times.\u003c/p>\n\u003cp>Lawmakers haven’t said how much they will try to set aside. “It’s a technical term: A whole lot of money,” Atkins quipped.\u003c/p>\n\u003ch2>The Course Ahead\u003c/h2>\n\u003cp>Petek, the Legislature’s budget analyst, suggests lawmakers could do even more. He notes, for example, that while paying off California’s so-called Wall of Debt sounds nice, lawmakers may not want to undo that payroll accounting trick because it’s administratively burdensome to do it again if the state needs to free up cash.\u003c/p>\n\u003cp>All this prevention is ironic, said Jeffrey Michael, director of the Center for Business and Policy Research at the University of the Pacific in Stockton. If the state is overly reactive to economic cycles, Californians have no one to blame but themselves.\u003c/p>\n\u003cp>It’s voters, he notes, who have decided again and again to tax the rich, a choice that has made the system more reliant on the investment income of high earners and therefore more volatile.\u003c/p>\n\u003cp>And for the record, he doubts that California will have any more or less to worry about than any state should a recession hit during the Trump administration.\u003c/p>\n\u003cp>“While California is acting to oppose or counteract the president’s policies in many areas, I don’t believe the federal fiscal response to a downturn is an area where California needs to take special precautions against the actions of Congress or the president,” he said.\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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"content": "\u003cdiv class=\"post-body\">\u003cp>\u003c/p>\n\u003cp>But polls show the state is generally in sync with Newsom’s mix of priorities for the current surplus. A recent survey by the \u003ca href=\"https://www.ppic.org/wp-content/uploads/ppic-statewide-survey-californians-and-their-government-march-2019.pdf\" target=\"_blank\" rel=\"noopener\">Public Policy Institute of California\u003c/a> found majorities support additional funding for working-poor tax credits, wildfire preparedness and developing more housing. Only 47 percent approved of one-time spending to pay down unfunded pension liabilities.\u003c/p>\n\u003cp>And, like the governor, a lot of taxpayers remember the last two recessions, and remain cautious.\u003c/p>\n\u003cp>“If they’re not going to give [the surplus] back in a refund,” said Charles McLaughlin, a board member of the Ventura County Taxpayers Association, “then they should save it for a rainy day.”\u003c/p>\n\u003cp>\u003c/p>\u003c/div>",
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