Newsom Vetoes Controversial Gender-Identity Bill in California

September 24, 2023 By David Zimmerman 5 Comments

Deviating from his past legislative support of transgender youth in California, Democratic governor Gavin Newsom vetoed a bill that would have required parents to demonstrate affirmation of their child’s gender identity in custody court battles.

Under California Bill AB957, judges would have been legally obligated to specifically consider whether parents have affirmed their child’s gender identity or gender expression in determining “the health, safety, and welfare of the child.” The California State Assembly passed the bill along strictly party lines earlier this month, hoping to advance transgender rights in the state.

Newsom said in a statement late Friday night he appreciates “the passion and values” of Democratic assembly member Lori Wilson for authoring the bill but disclosed he couldn’t sign it.

“I share a deep commitment to advancing the rights of transgender Californians, an effort that has guided my decisions through many decades in public office,” Newsom wrote.

“That said, I urge caution when the Executive and Legislative branches of state government attempt to dictate – in prescriptive terms that single out one characteristic – legal standards for the Judicial branch to apply,” he added. “Other-minded elected officials, in California and other states, could very well use this strategy to diminish the civil rights of vulnerable communities.”

Nonetheless, the California governor noted judges are still “required to consider a child’s health, safety, and welfare” in the context of their gender identity when hearing out parents in child custody cases, even if the bill wasn’t signed.

“Moreover, a court, under existing law, is required to consider a child’s health,
safety, and welfare when determining the best interests of a child in these
proceedings, including the parent’s affirmation of the child’s gender identity,” he concluded.

Following the governor’s veto, Wilson expressed her disappointment with the decision.

“I am extremely disappointed. I know the Governor’s record. He’s been a champion for the LGBTQ+ community for years and even before it was popular to do so,” Wilson said in a statement. “However, on this point, the Governor and I disagree on the best way to protect [Transgender, Gender-Diverse and Intersex] kids.”

She added her bill was intended “to give [the trans community] a voice, particularly in the family court system where a non-affirming parent could have a detrimental impact on the mental health and well-being of a child.”

Democratic state senator Scott Wiener, who co-authored the bill, also called out Newsom for rejecting it.

“This veto is a tragedy for trans kids here & around the country,” Wiener posted on X, formerly known as Twitter. “These kids are living in fear, with right wing politicians working to out them, deny them health care, ban them from sports & restrooms & erase their humanity. CA needs to unequivocally stand with these kids.”

“Governor Newsom has been such a staunch ally to the LGBTQ community. A true champion. Respectfully, however, this veto is a mistake,” he continued.

Click here to read the full article in the National Review

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Federal Judge Again Strikes Down California law Banning Gun Magazines of More Than 10 rounds

September 24, 2023 By Adam Beam Leave a Comment

SACRAMENTO, Calif. (AP) — California cannot ban gun owners from having detachable magazines that hold more than 10 rounds, a federal judge ruled Friday.

The decision from U.S. District Judge Roger Benitez won’t take effect immediately. California Attorney General Rob Bonta, a Democrat, has already filed a notice to appeal the ruling. The ban is likely to remain in effect while the case is still pending.

This is the second time Benitez has struck down California’s law banning certain types of magazines. The first time he struck it down — way back in 2017 — an appeals court ended up reversing his decision.

But last year, the U.S. Supreme Court set a new standard for how to interpret the nation’s gun laws. The new standard relies more on the historical tradition of gun regulation rather than public interests, including safety.

The Supreme Court ordered the case to be heard again in light of the new standards. It’s one of three high-profile challenges to California gun laws that are getting new hearings in court. The other two cases challenge California laws banning assault-style weapons and limiting purchases of ammunition.

Benitez ruled that “there is no American tradition of limiting ammunition capacity.” He said detachable magazines “solved a problem with historic firearms: running out of ammunition and having to slowly reload a gun.”

“There have been, and there will be, times where many more than 10 rounds are needed to stop attackers,” Benitez wrote. “Yet, under this statute, the State says ‘too bad.’”

Bonta said larger capacity magazines are also important to mass shooters, allowing them to fire quickly into crowds of people without reloading. He said the U.S. Supreme Court made it clear the new standard for reviewing gun laws “did not create a regulatory straitjacket for states.”

“We believe that the district court got this wrong,” Bonta said. “We will move quickly to correct this incredibly dangerous mistake.”

Chuck Michel, president of the California Rifle and Pistol Association, praised Benitez for a “thoughtful and in-depth approach.”

“Sure, the state will appeal, but the clock is ticking on laws that violate the Constitution,” Michel said.

California has been at the forefront of gun restrictions in the United States. Last week, California became the first state to call for an amendment to the U.S. Constitution that would ban assault weapons and gun sales to people under 21, among other changes.

Gov. Gavin Newsom called Benitez’s ruling “a radical decision.”

Click here to read the full article in AP News

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Wildfire-prone California to consider new rules for property insurance pricing

September 23, 2023 By Adam Beam 7 Comments

California will let insurance companies consider climate change when setting their prices, the state’s chief regulator announced Thursday, a move aimed at preventing insurers from fleeing the state over fears of massive losses from wildfires and other natural disasters.

Unlike other states, California does not let insurance companies consider current or future risks when deciding how much to charge for an insurance policy. Instead, they can only consider what’s happened on a property in the past to set the price.

At a time when climate change is making wildfires, floods and windstorms more common, insurers say that restriction makes it difficult to truly price the risk on properties. It’s one reason why, in the past year, seven of the top 12 insurance companies doing business in California have either paused or restricted new business in the state.

On Thursday, California Insurance Commissioner Ricardo Lara said the state will write new rules to let insurers look to the future when setting their rates. But companies will only get to do this if they agree to write more policies for homeowners who live in areas with the most risk — including communities threatened by wildfires.

“Modernizing our insurance market is not going to be easy or happen overnight. We are in really unchartered territory and we must make difficult choices when the world is changing rapidly,” Lara said at a news conference.

The rule change could mean higher rates for homeowners who are already seeing dramatic increases. Eight insurance companies doing business in California have requested rate increases of at least 20% or higher this year, according to the California Department of Insurance.

Harvey Rosenfield, founder of the advocacy group Consumer Watchdog and author of a 1988 ballot proposition that regulates insurance rates, said Lara’s announcement “will dramatically increase homeowner and renter insurance bills by hundreds or even thousands of dollars.”

But Lara said looking to the future to set rates doesn’t have to always be pessimistic. Insurers can also consider the billions of dollars the state has spent to better manage forests and the improvements homeowners have made to their homes to make them resistant to wildfires — all things insurers aren’t allowed to consider when setting rates under the current rules.

“Insurers have advanced a very powerful argument that the past is not as good a predictor of the future as it used to be,” said Amy Bach, executive director of United Policyholders, a national insurance consumer organization. “I think the (Insurance) department did what it needed to do to try to restore a viable market. We don’t have a viable market right now in this state in a lot of areas.”

California isn’t the only state that’s struggled to keep home insurance companies amid natural disasters. Officials in Florida and Louisiana, which deal with hurricanes and flooding, have fought to keep companies writing policies. A recent report from First Street Foundation said about one-quarter of all homes in the nation are underpriced for climate risk in insurance. Florida allows insurers to consider climate risk with restrictions. States with less regulated insurance markets have insurers who build current and future events into their models.

Wildfires have always been part of life in California, where it only rains for a few months out of the year. But as the climate has gotten hotter and dryer, it has made those fires much larger and more intense. Of the top 20 most destructive wildfires in state history, 14 have occurred since 2015, according to the California Department of Forestry and Fire Protection.

Insurance companies have responded by not renewing coverage for many homeowners who live in areas threatened by wildfires. When that happens, homeowners who need insurance must purchase it from the California Fair Access to Insurance Requirements (FAIR) Plan. All insurance companies doing business in California must pay into a fund to provide coverage from the FAIR plan.

People with mortgages often have to buy home insurance because their lender requires it. The number of people on California’s FAIR plan nearly doubled in the five years leading up to 2021, and that number has almost certainly increased even more in the past two years.

Lara said his plan is to require insurance companies to write policies for no less than 85% of their statewide market share in areas at risk for wildfires. That means if a company writes policies for 20 homes, it must write 17 new policies for homeowners in wildfire-distressed areas — moving those people off of the FAIR Plan.

“This is a historic agreement between the department and insurance companies,” Lara said.

The American Property Casualty Insurance Association, which represents insurers, called Lara’s actions “the first steps of many needed to address the deterioration” of the market.

“California’s 35-year-old regulatory system is outdated, cumbersome and fails to reflect the increasing catastrophic losses consumers and businesses are facing from inflation, climate change, extreme weather and more residents living in wildfire prone areas,” Denni Ritter, vice president for state government relations, said in a statement.

Jeremy Porter, a co-author of the First Street Foundation report on climate risk, said allowing insurers to consider climate change in their pricing might lead to more competition in the state’s insurance market.

“If this is implemented correctly, this would definitely allow insurers to come back into the market in California,” he said.

Some consumer groups, including Consumer Watchdog, say they are not opposed to insurance companies using a model to look to the future to set their rates. But they want to see what is in that model. It’s not clear if California’s new rules will allow that. State regulators will spend much of the next year deciding what the rule will be.

Click here to read the full article in AP News

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Legal Fights Over California’s Homeless Camps Expand to Supreme Court

September 23, 2023 By CalMatters 1 Comment

The California State Association of Counties and League of California Cities told justices that a string of federal court rulings over the last five years have made addressing health and safety concerns “unworkable.”

Fed up with homeless encampments, California local officials are seeking guidance from the nation’s most powerful judges.

In a legal brief filed Tuesday with the U.S. Supreme Court, the California State Association of Counties and League of California Cities told the justices that a string of federal court rulings over the last five years that restrict cities’ abilities to sweep camps and order residents off the streets have made addressing health and safety concerns “unworkable.”

“The State of California and its cities and counties are engaged in unprecedented efforts to address homelessness through the creation of significant new policy initiatives and funding investments,” the league and association wrote. “However, camping ordinances can be a useful tool in appropriate circumstances in addressing the complex conditions that exist in our homeless populations.”

California cities made a similar appeal in 2019, but the court declined to hear that case.

It all stems from a landmark 2018 decision by the 9th U.S. Circuit Court of Appeals in an Idaho case that was binding on California local governments. Judges then decided that it’s unconstitutional to criminally penalize people camping in public when they lack “access to adequate temporary shelter.”

On Wednesday, more California officials weighed in. The state’s sheriff’s association and police chiefs association, as well as a group of Orange County cities, filed their own brief arguing the Idaho ruling “may have expanded the rights of those suffering from homelessness [while] the rights of business owners, taxpayers, children and other housed citizens to clean, safe, drug-free streets and public areas have been completely ignored.”

Sacramento County District Attorney Thien Ho filed his own brief, too. And San Diego, which recently began enforcing a sweeping new camping ban, will sign on to a brief being circulated by the city of Seattle, a spokesperson for Mayor Todd Gloria said.

Will Knight, decriminalization director at the National Homelessness Law Center, previously told CalMatters he doesn’t think the Supreme Court will take up the case, given that the question has not come up prominently in federal courts in other parts of the country. Knight criticized cities for trying to get around the technical boundaries of the Idaho ruling and said they should focus instead on expanding individualized housing options for residents.

Meanwhile, political pressure is mounting on cities to more strictly enforce their camping ban. Democratic big-city mayors and Gov. Gavin Newsom have blasted federal judges for rulings that halt encampment sweets.

On Tuesday, Ho sued the city of Sacramento, accusing it of inadequately enforcing a number of recent camping bans such as those near schools and of ignoring residents’ requests to safety issues at camps.

Click here to read the full article in OC Register

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Sacramento Prosecutor Sues California’s Capital City Over Failure to Clean Up Homeless Encampments

September 21, 2023 By Tran Nguyễn 2 Comments

SACRAMENTO, Calif. (AP) — Sacramento’s top prosecutor is suing the city’s leaders over failure to cleanup homeless encampments, escalating a monthslong dispute with leaders in California’s capital city.

County District Attorney Thien Ho announced the lawsuit Tuesday during a news conference in Sacramento, saying the city is seeing a “collapse into chaos” that he said reflects the “erosion of everyday life.” A group of residents and business owners also filed a companion lawsuit against the city.

Ho said his office had asked the city to enforce local laws around sidewalk obstruction and to create additional professionally operated camping sites, but that the city did not.

The lawsuit includes accounts from dozens of city residents living around 14 encampments. Some homeowners recounted being threatened with firearms at their front door and having their properties broken into and vandalized — which has driven some from their homes. Local business owners said they have spent thousands of dollars to upgrade their security systems after their workers were assaulted by homeless people, while calls to city officials seeking help have gone unanswered, the lawsuit said.

“This is a model for the people to stand up and hold their government accountable,” Ho said in an interview Tuesday. “All I’m asking is the city do its job.”

Sacramento County had nearly 9,300 homeless people in 2022, based on data from the annual Point in Time count. That was up 67% from 2019. Roughly three-quarters of the county’s homeless population is unsheltered, and the majority of that group are living on Sacramento streets.

Sacramento Mayor Darrell Steinberg said Ho was politicizing the issue. The city has added 1,200 emergency shelter beds, passed ordinances to protect sidewalks and schools and has created more affordable housing, Steinberg said in a statement.

The city is trying to avoid “the futile trap of just moving people endlessly from one block to the next,” Steinberg said. People’s frustrations are “absolutely justified” but Ho’s actions are a “performative distraction,” he said.

“The city needs real partnership from the region’s leaders, not politics and lawsuits,” he said.

Homeless tent encampments have grown visibly in cities across the U.S. but especially in California, which is home to nearly one-third of unhoused people in the country.

Ho had threatened in August to file charges against city officials if they didn’t implement changes within 30 days. In a letter to the city, Ho demanded that Sacramento implement a daytime camping ban where homeless people have to put their belongings in storage between 6 a.m. and 9 p.m., among other rules.

City Attorney Susana Alcala Wood’s office has also repeatedly urged Ho to work with the city to address the issue, she said.

“It sadly appears the DA would rather point fingers and cast blame than partner to achieve meaningful solutions for our community,” Alcala Wood said in a statement.

Ho, elected in 2022 after vowing on the campaign trail to address the city’s homelessness crisis, said he’s asked the city to share real-time data about available shelter beds with law enforcement. He anticipates the lawsuit will go to trial and hopes a jury will agree with what he has proposed.

“This is a rare opportunity — a rare opportunity — for us to effectuate meaningful, efficient means of getting the critically, chronically unhoused off the streets,” Ho said.

Ho said he supports a variety of solutions including enforcing laws and establishing new programs to provide services to people facing addiction or mental health issues. He said he supports a statewide bond measure that would go toward building more treatment facilities. Voters will weigh in on that measure next year. He also backs the proposed changes in the state’s conservatorship system that would make it easier for authorities to mandate treatment for those with alcohol and drug use disorders.

The dispute between the district attorney and the city was further complicated by a lawsuit filed by a homeless advocacy group earlier this year that resulted in an order from a federal judge temporarily banning the city from clearing homeless encampments during extreme heat. That order is now lifted but the group wants to see it extended.

The attorney for the homeless coalition also filed a complaint with the state bar this month, saying Ho abused his power by pushing the city to clear encampments when the order was in place.

Ho’s news conference included testimony from residents who say the city is not providing resources to deal with homelessness. Emily Webb said people living an encampment near her home have trespassed on her property, blocked her driveway and threatened her family, but city officials have done little to clear the camp.

“We’re losing sleep and exhausted from this stress,” she said Tuesday. “We are beyond frustrated and no longer feel comfortable or safe in our home.”

Click here to read the full article in AP News

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California Gov. Gavin Newsom says he will sign climate-focused transparency laws for big business

September 19, 2023 By Staff Report 6 Comments

NEW YORK (AP) — California Gov. Gavin Newsom said Sunday that he plans to sign into law a pair of climate-focused bills intended to force major corporations to be more transparent about greenhouse gas emissions and the financial risks stemming from global warming.

Newsom’s announcement came during an out-of-state trip to New York’s Climate Week, where world leaders in business, politics and the arts are gathered to seek solutions for climate change.

California lawmakers last week passed legislation requiring large businesses from oil and gas companies to retail giants to disclose their direct greenhouse gas emissions as well as those that come from activities like employee business travel.

Such disclosures are a “simple but intensely powerful driver of decarbonization,” said the bill’s author, state Sen. Scott Wiener, a Democrat.

“This legislation will support those companies doing their part to tackle the climate crisis and create accountability for those that aren’t,” Wiener said in a statement Sunday applauding Newsom’s decision.

Under the law, thousands of public and private businesses that operate in California and make more than $1 billion annually will have to make the emissions disclosures. The goal is to increase transparency and nudge companies to evaluate how they can cut their carbon emissions.

The second bill approved last week by the state Assembly requires companies making more than $500 million annually to disclose what financial risks climate change poses to their businesses and how they plan to address those risks.

State Sen. Henry Stern, a Democrat from Los Angeles who introduced the legislation, said the information would be useful for individuals and lawmakers when making public and private investment decisions. The bill was changed recently to require companies to begin reporting the information in 2026, instead of 2024, and mandate that they report every other year, instead of annually.

Newsom, a Democrat, said he wants California to lead the nation in addressing the climate crisis. “We need to exercise not just our formal authority, but we need to share our moral authority more abundantly,” he said.

Newsom’s office announced Saturday that California has filed a lawsuit against some of the world’s largest oil and gas companies, claiming they deceived the public about the risks of fossil fuels now faulted for climate change-related storms and wildfires that caused billions of dollars in damage.

Click here to read the full article in AP News

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New Initiative Strikes at Root of Housing Ills

September 19, 2023 By Editorial Board Leave a Comment

California’s housing crisis is a long time in the making, caused by regulations, land-use restrictions and developer fees that depress supply and drive up the cost of building.

With statewide median home prices hovering around $750,000 and costs in sought-after coastal areas soaring above $1 million, the situation destroys homeownership opportunities for the non-wealthy, sends young families to other states and exacerbates homelessness.

It’s gotten so bad that the state Legislature —  the same body that passed many of the growth controls, urban boundaries and environmental rules at the root of the problem — has passed a succession of laws that make it easier to build (at least within the urban footprint).

Those laws are welcome, but they haven’t yet made a dent because they don’t address the biggest obstacles.

A group called Californians for Home Ownership (californians4homeownership.com) is gathering signatures for a statewide initiative campaign that deals directly with two major cost drivers — the California Environmental Quality Act (CEQA) and developer fees that localities impose on new projects.

Virtually anyone can file a lawsuit that halts or delays construction for years. And CEQA never was intended to be used for housing proposals, so the group would require any lawsuit alleging CEQA noncompliance to be filed by district attorneys or the attorney general.

That would stop labor unions from using the threat of CEQA challenges to secure wage demands from developers and NIMBY activists from stopping the construction of housing near their homes.

None of that is how CEQA was intended to be used, yet it is routinely how CEQA is abused. This is why, for many years, you can find elected officials from both the Democratic and Republican parties acknowledging the problems of CEQA. As this editorial board frequently recalls, Gov. Jerry Brown called CEQA reform “the Lord’s work.”

If Sacramento politicians can’t find the courage to stand up to special interests and change CEQA, this measure might have to do.

The initiative also would “would end the extortionate tax on new homes by capping impact fees at a proportion of construction costs, thereby creating the incentive to build truly affordable homes,” as one of the group’s founders, Steve Hilton, explained in these pages.

One of the reason that builders focus on luxury homes is because outsized fees make it cost-prohibitive to build more affordable places.

Fundamentally, the housing crisis in California is a matter of simple economics. When you make it harder and costlier to build more housing, you get less of it.

If you want more housing to be built in California, you must make it easier to do so. Part of that has been done by the California Legislature through implemented and ongoing zoning and land-use reforms. But the threat of frivolous CEQA lawsuits remains, and costly impact fees remain.

Most initiative proposals fail to raise the money needed to qualify for the ballot and successfully secure support at the polls.

Nevertheless, this idea offers a model for reform.

If lawmakers are serious about the housing crisis, they ought to lend their support to it.

Click here to read the full article at the OC Register

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Southern California Gas Prices Climb at Their Fastest Rate This Year

September 18, 2023 By Carly Olson 4 Comments

Gas prices in Southern California shot up at their fastest rate of the year last week, according to data released by AAA.

A gallon of regular self-serve gasoline cost an average of $5.62 in the Los Angeles-Long Beach metro area as of Thursday. That is up 18 cents from last week and 38 cents from last month.

The national average price is nearly $2 less — $3.86 — up 6 cents from a week ago.

AAA officials blamed both regional and global factors for high prices, including the floods in Libya.

“Our pump prices have been skyrocketing as a result of regional refinery outages, as well as from increasing crude oil prices following deadly flooding in Libya, which will temporarily disrupt oil exports from that OPEC nation,” Doug Shupe, a spokesperson for the Automobile Club of Southern California, said in a statement.

Other parts of Southern California have seen similar eye-popping price increases.

In the San Diego metro area, the average price for a gallon of gas is $5.60, and in Riverside, $5.50. Both of those figures are up 17 cents from last week and 39 cents from last month.

On the Central Coast, a gallon will cost drivers an average of $5.53, 14 cents higher than a week ago and 38 cents more than last month.

It remains unclear when drivers might feel relief, but AAA officials said last month that California has increased oil stockpiles and imports, which may drive down wholesale prices soon.

Click here to read the full article in the LA Times

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Gov. Gavin Newsom May Regret Pledges to Black Californians

September 13, 2023 By Dan Walters 3 Comments

William Congreve, an English playwright, coined the adage “Married in haste, we may repent at leisure,” in his 1693 comedy “The Old Batchelour,” but it quickly evolved into sage advice for other human behaviors.

California Gov. Gavin Newsom could regret hasty political promises to California’s Black population — to appoint a Black woman to the U.S. Senate if a seat becomes vacant, and provide meaningful reparations for the state’s woeful history of racial discrimination — that he probably cannot honor.

Newsom made the Senate pledge in early 2021 after appointing Alex Padilla to the Senate, replacing Kamala Harris once she became vice president. The appointment drew criticism from Black political leaders and women’s groups because he was replacing a woman with Black and South Asian ethnic heritage with a Latino man.

Weeks later, Newsom was asked by MSNBC host Joy Reid whether he would appoint another Black woman to the Senate should Sen. Dianne Feinstein, suffering from physical and apparently neurological ailments, resign.

“I have multiple names in mind. We have multiple names in mind – and the answer is yes,” Newsom replied, obviously trying to dampen the criticism.

As Feinstein’s situation continued to deteriorate, she announced earlier this year that she would not seek re-election in 2024. That touched off a contest among three Democratic members of Congress – Katie Porter, Adam Schiff and Barbara Lee with the latter, a Black woman, badly trailing the other two.

Newsom’s pledge to appoint a Black woman became a political trap of his own making. If Feinstein resigned, he would be pressed by Black leaders to appoint Lee, but if he did, he would be interfering with the election, causing no end of political grief.

Over the weekend, while pressed again by Chuck Todd of Meet the Press, Newsom said he would name a Black woman to fill a vacant Senate seat — but only as a caretaker to fill out Feinstein’s term, meaning it would not be Lee.

If Newsom thought he had resolved the matter, he was mistaken because Lee denounced it, saying, “The idea a Black woman should be appointed only as a caretaker to simply check a box is insulting to countless Black women across this country who have carried the Democratic Party to victory election after election.”

When he signed 2020 legislation to create a commission to recommend reparations for Black Californians, Newsom declared, “Our painful history of slavery has evolved into structural racism and bias built into and permeating throughout our democratic and economic institutions” and promised, “we won’t turn away from this moment to make right the discrimination and disadvantages that Black Californians and people of color still face.”

However, as the commission completed its work this year and declared that some very hefty financial payments to descendants of slaves would be justified, Newsom became noncommittal.

While praising the commission’s work as “a milestone in our bipartisan effort to advance justice and promote healing,” he said, “Dealing with that legacy is about much more than cash payments.”

Newsom’s cool response is where matters lie. Members of the commission still expect reparations to include some hard cash but with the state experiencing multi-billion-dollar budget deficits that are likely to persist, anything more than token payments are unlikely.

Meanwhile, a new poll by UC-Berkeley’s Institute of Governmental Studies has found scant support among Californians for cash reparations, even as they recognize the lingering impacts of slavery. Such payments are opposed by 59% of the registered voters surveyed, with Republicans and independents overwhelmingly opposed and Democrats evenly divided.

Click here to read the full article in CalMatters

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Does the EDD Owe the Feds Another $18 Billion Dollars?

September 4, 2023 By Thomas Buckley 1 Comment

Seems That Way…

Buried in a state Controller’s Office financial report, there is a rather odd entry:  a $17.9 billion dollar “current liability” owed to “other governments.”

The Controller’s Office said the $17.9 billion line item refers to “amounts due to the Federal Government, primarily associated with federal grant expenditures for which the State was not able to verify eligibility of claimants under federal program guidelines.”

This does not refer to the $18.5 billion dollars the Employment Development Department owes the federal government for its fraud-filled disastrous pandemic unemployment benefit system response.

It’s in addition to that figure, meaning the total unemployment-related federal debt could be more than $36 billion dollars.

While neither the Controller’s Office nor the EDD would explicitly confirm it, the debt is almost certainly related to the state not being able to prove that that $17.9 billion dollars was sent to actual eligible unemployment claimants.

The language used by the Controller specifically parallels federal unemployment benefit program reporting guidelines.

Whether or not that is part of the $32-to-$40-billion-dollar overall fraud loss the EDD was fleeced for during the pandemic is not clear.

Either way, again – the unemployment-related debt to the feds appears to actually be more than $36 billion dollars (it is theoretically possible the debt is related to another program but that doesn’t remove the debt itself.)

It is unknown if that debt can be added to the existing unemployment trust fund debt or has to be treated – and paid back – separately. If it can be lumped together, that could extend out the surcharge every business is already paying per employee. The rate increases each year – this year it’s $21 and it will increase by $21 per year (plus additional increases starting in a few years) until it hits $420 per year per employee, which the surcharge is already expected to do. Originally, the EDD had estimated it would take only seven years to pay the debt; if the other debt is added it could be more than 25.

The “trust fund” part of the debt is growing because the EDD cannot cover its day-to-day bills now and is borrowing another $18 million a day, or $214 a second, or $25 bucks literally in the blink of an eye.  Whether or not the “eligibility” debt is growing is unknown.

The EDD did not respond to multiple requests for comment/explanation; the Controller’s Office did provide requested information but did not directly comment further.

Indirectly, though, the Controller’s Office – like the Legislative Analyst’s Office and the State Auditor blasted the EDD’s gross incompetence.  In the report  – the Annual Comprehensive Financial Report for fiscal year ending June, 2021 (the latest available) – the office stated it was unable to perform a proper audit of the EDD because it has “inadequate internal control over its financial reporting for unemployment benefits.”

Click here to read the full article in the California Globe

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