California health care workers banking on a state-ordered minimum wage increase later this year might have to wait a little longer.

Because of the state’s $38 billion projected budget deficit, Gov. Gavin Newsom on Wednesday said he is seeking changes to a law he signed just three months ago that set the health care industry on a path to a $25 minimum wage.

The first pay increases were expected to take effect in June. It’s unclear how long the proposed changes could push back that schedule. Newsom wants the wage increases to take place when the state’s fiscal outlook is healthy.

He said he signed the law, Senate Bill 525, in October because he “had a commitment on that trigger” from proponents of the law, meaning that the bill’s backers had agreed to tie the wage increase to the state’s budget outlook. His administration did not disclose that agreement when he signed the law.

Erin Mellon, a spokesperson for the governor’s office, said the administration publicly discussed the possibility of clean-up legislation soon after Newsom signed the law. She pointed to a Los Angeles Times article that published three weeks after Newsom signed the law in which another spokesperson said the administration was working on “accompanying legislation to account for state budget conditions and revenues.”

Newsom included his request for a delay in the state budget proposal he released Wednesday. He said he is working with legislators and the law’s proponents to craft changes that will be presented in the form of a new bill later this month. His budget proposal said he also wants the Legislature to clarify whether state health workers are exempt from the law.

California minimum wage increases

The law was one of two bills Newsom signed last fall raising the minimum wage for certain workers in specific industries. A separate law that raises the minimum wage for fast-food workers to $20 an hour starting in April is moving forward. The California minimum wage for other workers is $16 this year.

Close to 500,000 California health care workers are expected to see pay increases under the minimum wage law for their industry once it goes into effect.

The bill came together late in the legislative year after SEIU, the law sponsor, and a group of health care employers, including the California Hospital Association, brokered a deal under which both sides supported the wage increase. Newsom signed it without a clear cost estimate.

Newsom’s Department of Finance released a price estimate in November, projecting it would cost the state approximately $4 billion in 2024-25, with $2 billion coming out of the state general fund.

SEIU declined an interview after Newsom’s budget remarks. It released a statement that said it would continue working with the administration and the Legislature.

Lawmakers anticipated budget deficit

Newsom’s signature on the bill surprised some lawmakers because they anticipated a steep deficit.

“While we didn’t know what the deficit was at the time, I, at least, was assuming that the news was going to be not good and I couldn’t understand why we would be so deliberately adding to our own overhead,” said Sen. Roger Niello, a Fair Oaks Republican who sits as vice chair of the Senate budget and fiscal review committee

The health worker pay law aims to create more sustainable incomes as a way to retain and attract workers in a field that for years now has been dealing with serious staff shortages. The law would cost the state because it applies to workers at state-owned facilities and because the state would likely have to raise Medi-Cal rates paid to providers to offset some of their increased costs associated with the wage hikes.

Before securing a statewide boost in pay, SEIU California and its affiliate chapters pushed to increase wages for health workers at the local level through city ordinances and ballot measures. In 2022, the union secured its first local win in the city of Inglewood, where health workers at private health facilities qualified for a new floor wage of $25 that went into effect on Jan. 1, 2023.

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Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Three years ago, Gov. Gavin Newsom sensed an opportunity as California emerged from the pandemic with record budget surpluses after a series of calamitous wildfires and drought years.

The governor set aside a bigger chunk of the surplus billions for two consecutive years to combat climate change — an issue close to the heart of many Democratic voters — and then, facing deficits, had to cut it back last year, to $52.3 billion.

But Newsom has proposed scaling climate funding back by 7% compared to last year’s budget, to $48.3 billion, while spreading that money out over seven years, up from six last year. The cuts unveiled in the first draft of his new budget follow last year’s 3% cut to climate programs, and triggered criticism from environmental groups.

California programs to tackle and adapt to the changing climate include a vast array of programs, including subsidies for electric cars, funds for making the coast more resilient, programs to prepare for wildfires and secure water supplies, and efforts to build solar and wind projects.

Newsom’s proposal offers a look at how viable the state’s commitments to tackling climate change will be as the state’s historic surpluses turn to deficits. Newsom, in a budget presentation in Sacramento, detailed a preliminary budget meant to fill what his administration said was a huge, $37.9 billion projected statewide budget hole.

“We can’t backslide or slow down while the climate crisis speeds up. We need our state leadership to do more, not less.”
— Mary Creasman, California Environmental Voters

Newsom said some of the climate cuts would be buttressed by more than $10 billion in federal money from the Biden administration. He said his budget still included “unprecedented commitments on climate that actually will grow because of the support of the federal government.”

The governor’s proposal delayed $600 million in spending on zero emission cars and trucks by three years, including to the electric car rebate program, the Clean Cars 4 All program aimed at getting more lower-income Californians to purchase zero emissions cars. Also delayed by three years is money to build charging stations. An ambitious transition to electric cars is considered critical to meeting the state’s zero-carbon mandate to slash climate-warming greenhouse gases.

“These delays suggest a bumpy road ahead for an equitable ZEV transition amid a deficit,” Jamie Pew, climate policy advisor with the nonprofit group NextGen, wrote in an email to CalMatters.

The governor’s proposal is the first step in a months-long negotiation with the Legislature that will include his revised plan in May and a June 15 legislative deadline.

Climate groups criticized Newsom’s proposal, saying cutting back on state spending now would cost the state more down the line.

“We can’t backslide or slow down while the climate crisis speeds up. We need our state leadership to do more, not less,” said Mary Creasman, chief executive of California Environmental Voters in a statement.“We look forward to working with the governor and Legislature to make 2024 a year of innovative and courageous climate leadership.”

Newsom’s proposal included $2.9 billion in climate program cuts, $1.9 billion in spending delays and $1.8 billion shifts in funding from spending general fund dollars to other sources of revenue.

Most of the shift will be made to the state’s Greenhouse Gas Reduction Fund, which is paid for by the controversial cap-and-trade carbon market, in which oil refineries, power plants and manufacturers pay for their excess carbon dioxide emissions. Last quarter’s auction brought in $1.4 billion.

The plan pauses spending on staff costs to implement two climate laws signed last year that required large corporations to disclose greenhouse gas emissions and financial risks from climate change. Newsom, when he signed the bills last year, said he might seek delays in their implementation.

Out of a $10 billion package to encourage adoption of zero emission cars and trucks, the governor proposed $38.1 million in cuts and replaced $475.3 million in general fund dollars with money from the greenhouse gas fund.

Last year, Newsom left funds for the transition to electric vehicles largely in place, though he made $910 million meant for zero emissions transit available to support public transit agencies.

This year’s proposal also would make some cuts and delays in clean energy, as well as drought, wildfire and forest resilience, water recycling and other programs. The 2021 and 2022 budgets included $2.8 billion for forest and wildfire resilience; the new proposal maintains $2.7 billion that over five years.

The state also secured another source of funding last year. The Legislature extended registration and other fees on state drivers last year to fund the state’s Clean Transportation Program, which is expected to provide about $1.2 billion for zero-emission infrastructure through 2035, including a controversial set aside for building fueling stations for hydrogen fuel cell vehicles.

Rachel Ehlers, a deputy legislative analyst covering environment and transportation, said one critical question will be how quickly programs are using the money they have received.

“How are we doing on getting that money out the door? On getting it in the hands of consumers looking to buy vehicles? To entities who are building the charging infrastructure?” she said. “And how quickly are we spending that money? … That’s going to be a key question.”

Many activists were bracing for what Newsom’s announcement might mean for the state’s ability to finance California’s clean energy transition.

“We’re disappointed in the proposed cuts to the state’s clean car, truck and bus programs and to rooftop solar power and storage incentives, especially as rooftop solar installations stall,” Environment California State Director Laura Deehan said in a statement. “Clean energy and climate programs are investments we make for our kids and grandkids. If we cut now, they pay more later in health, and in their environment as well as money.

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CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Enjoying all this rain, Humboldt? Good, because you can expect a lot more of it.

The local sky watchers at the National Weather Service tell us to expect even more precipitation to close out the week. “Another storm system will impact the area late Friday into Saturday,” NWS says. “Compared to previous systems, this system will bring significantly more rain with 3 to 6 inches most likely along the North Coast.”

Inland residents can expect continued frigid conditions. “Snow levels will be mostly above 3000 feet though heavy snow remains possible especially in Trinity County.”

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One of Hollywood’s most esteemed auteurs is coming to town, and he’s bringing Leo.

Paul Thomas Anderson, the Oscar-nominated writer and director of Boogie Nights, Magnolia and There Will be Blood, has been identified as the man behind the Warner Bros. movie production preparing to shoot here in Humboldt County very soon.

Leonardo DiCaprio, Sean Penn and Regina Hall have been confirmed as stars of the production, which is filming under the name “BC Project.”

Jordan Raup, editor of the industry website The Film Stage, tweeted this morning:

Asked by Outpost Editor Hank Sims how he knows the movie will be filmed in Eureka, Raup responded, “It’s the location mentioned in extras casting notices for the project.”

The Humboldt-Del Norte Film Commission recently issued a casting call for extras in “BC,” and in a recent call for vehicles from the 1980s and ‘90s the commission wrote, “The film is currently scheduled to shoot the entirety of the project in the area and will depend on many local resources to make it happen.” 

[CORRECTION: The casting call for old cars was actually from the production of An Evening With Beverly Luff Linn, which filmed here in 2016. For “BC,” the commission issued a call for a green Suzuki Geo Tracker or Suzuki Samurai and a white pickup truck. The Outpost regrets the error.]

Deadline reports, “While DiCaprio, Penn and Hall are the leads, the new film will have a big ensemble cast that is still falling into place.”

Rumors have circulated online that Anderson has been working on an adaptation of Vineland, a 1990 postmodern novel set in a fictional version of Humboldt County by author Thomas Pynchon, whose book Inherent Vice was adapted to film by Anderson in 2014. However, recent reporting casts doubt on that. 

From Film Stage:

Scripted by PTA, not much is known about the project, only that it will be set in the present-day (ruling out those Vineland adaptation rumors) and it will be “the most commercial one that PTA has attempted, with commensurate budget.” Variety specifically reports the budget could be as high as $100 million. Expect more casting announcements soon as it will be a large ensemble cast.

Filming is scheduled to begin in the coming weeks. 

California is in a budget hole, its depth measured not in feet, but in dollars.

How deep? A projected $38 billion deficit, according to Gov. Gavin Newsom, who declared a fiscal emergency today and unveiled his initial plan to dig the state out of a fiscal chasm for the second year in a row.

But Newsom painted it as a return to a more normal budget, after recent spikes in revenue. He called it “a story of correction, a story of normalization after a period of tremendous amount of distortion.”

His deficit projection is far less dire than last month’s outlook from the nonpartisan legislative analysts, who projected that the state is eyeing a $68 billion deficit for the 2024-25 fiscal year, which starts July 1.

Newsom’s plan to close the deficit includes:

• Withdrawing $13.1 billion from the budget stabilization and safety net reserve accounts;
• Cutting $8.5 billion from existing programs and services, including climate, housing and education;
• Delaying $5.1 billion worth of spending, including on transit;
• And deferring another $2.1 billion to 2025-26, including about $500 million in additional funding for University of California and California State University;
• $5.7 billion in internal borrowing from special funds to support the tax on health care providers.

But he said he wants to protect investments in addressing homelessness, mental health reform, and public safety.

All told, Newsom is proposing a total state budget of $291.5 billion — about $19 billion less than what he and lawmakers approved last June for 2023-24. But January plans are often revised considerably. Last year, Newsom proposed spending $297 billion; the final total in June was upped to $310 billion.About 70% of California’s total state spending would go toward public schools, colleges and health and social services — a trend that’s held steady since the 1970s, according to a CalMatters review of state budget data.Unlike the federal government, most state governments, including California, must approve balanced budgets — running a deficit isn’t an option. And California isn’t alone facing a shortfall — about half of Americans live in states now grappling with budget gaps, ongoing deficits, or both, according to an analysis by The Pew Charitable Trusts.

But many of the proposals outlined today will undoubtedly change in the months ahead. Following the usual process, lawmakers will hold dozens of hearings to evaluate the governor’s ideas and recommend their own before their June 15 deadline to pass a budget. The Legislative Analyst’s Office will produce independent revenue projections and policy suggestions as more data pours in. The state’s read on the budget starting July 1 will gain greater certainty in May when the governor will release updated revenue projections based on the personal income taxes Californians will have paid by April — and present revised spending proposals.

And while the deficit projected by the governor’s office is about 20% higher than what California faced last year ($32 billion, after two years of record surpluses credited to a healthy stock market and federal funds), experts say we’re not at crisis level just yet: The state is in a better position now to deal with the downturn compared to past deficits during the Great Recession after it put billions in reserves. Even after Newsom’s plan to pull from the state’s reserves, he says the state would have $18.4 billion remaining.

Revenue misfire

In recent years, about 60% of the state’s general fund, the core source of government spending, was paid for by personal income taxes. And the top 1%, whose incomes swing wildly according to the vagaries of the stock market, have historically paid close to half of all income tax revenue for the state.

A main cause of the deficit is a $11.8 billion in revenues compared to what the governor and lawmakers expected when they finalized the current budget last June. The misfire is the result of both state and federal tax collectors giving nearly all Californians more time to file their income taxes due to last winter’s deadly storms.That decision meant lawmakers and the governor lacked the usual data when they solidified the budget last year. As a result, they committed money they didn’t have to spending programs underway now.

Newsom had already signaled that California’s government needed more belt-tightening: On Dec. 12, his finance department directed state agencies to freeze spending, including new services contracts, IT equipment and vehicles. And last fall, he repeatedly cited the budget crunch in vetoing bills that he said would have added $19 billion in unaccounted costs.

The state budget is actually a multi-year math problem — with very real human consequences — that projects revenues for the year ahead and factors in surpluses or deficits in the current year and year before. One way to find savings is to delay, or outright cut, so-called one-time spending programs. These are typically trial runs of new social programs, construction projects, or experimental programs that last a few years. Last year’s budget projected that the 2024-25 fiscal year would include $12 billion in one-time spending; the Legislative Analyst’s Office said the figure is closer to $9 billion. The analyst’s office said those one-time projects, including $2.2 billion in transportation and $1.8 billion in education, could be on the chopping block.Building the proposed budget is largely a closed-door exercise until the governor publishes his plan in January. Scott Graves, a budget expert with the California Budget & Policy Center, said that the governor’s office starts developing the January budget around May or June of the previous year.

“So advocates who want to influence what’s going to appear in the governor’s proposed budget will use whatever contacts they have within the administration to make their case for particular expenditures or policy changes that they would like to see included in the governor’s proposal in January,” Graves said in an interview.That doesn’t mean the governor’s team will listen, but once a budget idea appears in the January draft, it has a strong chance of becoming law six months later when the Legislature and the governor finalize the state’s new spending plan.If the first six months of the budget process is largely out of public view, the period between now and June is the public’s chance to weigh in,especially as the Legislature begins its numerous budget and subcommittee hearings starting in February.

In anticipation of today’s budget release, some groups started their asks early: The League of California Cities — one of the highest spenders on lobbying the Legislature — asked the governor in a letter last week for a $3 billion funding stream to increase affordable housing and reduce homelessness. For three years in a row, Newsom has granted $1 billion for local homelessness programs.

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CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Press release from the Humboldt County Sheriff’s Office:

Eligible Humboldt County homeowners can once again apply for grants of up to $3,000 to safeguard their homes against future earthquake damage.

The registration period for the Earthquake Brace + Bolt (EBB) program is limited and runs Wednesday, Jan. 10 through Wednesday, Feb. 21.

This program is administered by the California Residential Mitigation Program (CRMP) which is a joint powers agreement between the California Earthquake Authority (CEA) and the California Governor’s Office of Emergency Services (Cal OES).

These funds cannot be used to pay for repairs to homes damaged in the Dec. 20, 2022 earthquake but can be used to protect eligible residences against similar damages resulting from future earthquakes. An EBB retrofit includes bracing the cripple walls of older houses, when present, and bolting houses to their foundation, making them less vulnerable to earthquake damage. Your house may qualify for an EBB grant if it is:

•  Built before 1980
• Owner-occupied
• On a raised foundation
• In an EBB ZIP code

Income-eligible homeowners may also qualify for supplemental grants. These grants are available for households with an income at or below $87,360 and may be able to provide up to 100% of the funds needed to cover a seismic retrofit as funding permits.

Humboldt County homeowners can apply for retrofit funding at EarthquakeBraceBolt.com. At this website, homeowners can check if their house is in an EBB eligible ZIP code, review detailed program information and begin searching for a FEMA-trained, California-licensed general contractor. For customer service assistance, please call 877-232-4300.

Once registration closes, participating homeowners will be selected through a random drawing and notified via email if they have been chosen or if they have been placed on the waitlist. 

According to the CEA, more than 1.2 million houses in high-hazard ZIP codes are particularly vulnerable to earthquakes because of the way they were constructed. These homes are typically built before 1980, are wood framed with a raised foundation and may have a cripple wall in the crawl space under the house.

To date, EBB grants have helped more than 23,000 homeowners strengthen their homes against earthquake damage.

About Earthquake Brace + Bolt (EBB)

Established by the California Residential Mitigation Program, EBB offers grants to help California homeowners retrofit their houses to reduce potential damage from earthquakes. For more information, please visit EarthquakeBraceBolt.com.

About the California Residential Mitigation Program (CRMP)

CRMP was established in 2011 to help Californians strengthen their homes against damage from earthquakes. CRMP is a joint powers authority created by the California Earthquake Authority and the California Governor’s Office of Emergency Services. For more information, please visit https://www.californiaresidentialmitigationprogram.com/About-CRMP.

To learn more about available resources regarding earthquake recovery, visit humboldtgov.org/earthquake.

Previously: What Went Down Jan. 9, 2024

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Press release from the Arcata Fire District:

ARCATA, CA - On January 9, 2024, just before 6:00 P.M., Arcata Fire District units were dispatched to the South I Street Arcata Marsh area for the report of a water rescue. The Fortuna Cal Fire ECC requested Humboldt Bay Fire respond with their rescue swimmer. Upon arrival, Arcata Fire personnel contacted Arcata Police Officers who were in verbal communication with a 15-year-old male who was stranded on an island in the marsh. Due to low tide and steep muddy embankments, the juvenile was unable to make his way to the shore.

Arcata Fire and Arcata Police units established visual contact with the juvenile who was approximately 200 yards from shore. Weather conditions were deteriorating, and personnel determined through verbal assessment that the juvenile was becoming hypothermic. As fire personnel attempted to find possible access paths across the sloughs and marsh areas to the juvenile, a U.S. Coast Guard helicopter was requested to the scene.

The USCG helicopter was in the area and arrived within minutes of the request. The helicopter crew hoisted the juvenile and transported him to nearby Arcata Fire personnel on shore who assessed the patient and transferred him to an awaiting ambulance.

Arcata Fire District would like to recognize the team effort of the Arcata Police Department, Arcata Fire District, Arcata-Mad River Ambulance, Cal Fire Emergency Communications Center, Humboldt Bay Fire and the United States Coast Guard.

This incident may have had a much different outcome if it wasn’t for the coordination of multiple agencies and the availability of a U.S. Coast Guard helicopter in this area.