The California Endowment Sponsors Special Election Townhall Tomorrow

April 29, 2009

If you happen to be in Los Angeles tomorrow, don’t miss out on a forum being sponsored by The California Endowment featuring the CBP’s executive director, Jean Ross. Entitled Breaking Down the Ballot: The May 19 Special Election and California’s Health, the forum will be held on Thursday at 6 p.m. at The California Endowment’s Center for Healthy Communities. Jean will join a panel of experts who will talk about the health-related implications of the ballot propositions that will go before voters next month. Audience members will have a chance to ask questions. You can find out more information and RSVP here.

– Lisa Gardiner

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Posted by cbporg

SSI/SSP Cuts on the Horizon

April 28, 2009

Some of California’s poorest residents will be among the first to feel the impact of the cuts included in the February budget agreement. Starting Friday, May 1, California will reduce Supplemental Security Income/State Supplementary Payment (SSI/SSP) grants – which help more than 1.1 million low-income seniors and people with disabilities meet basic needs – to their December 1, 2008 level. For an individual recipient, this means the maximum grant will drop from $907 per month to $870 per month, a 4.1 percent reduction. This cut is estimated to save the state $80 million in 2008-09 and $487 million in 2009-10. SSI/SSP recipients are also bracing for an additional 2.3 percent cut scheduled to take effect on July 1, 2009, which will further reduce the maximum grant for individuals to $850 per month, saving another $268 million in 2009-10. Finally, the February budget agreement suspended the state cost-of-living adjustment for SSI/SSP grants that was supposed to be provided in June 2010 for one-month savings of $27 million in 2009-10 and annual savings of more than $300 million beginning in 2010-11.

The combined impact of these cuts means that individual SSI/SSP recipients will lose more than $770 between May 2009 and June 2010. This reduction is more than three times the $250 payment that SSI/SSP recipients will receive this year under the American Recovery and Reinvestment Act, thereby undercutting the intended economic stimulus of the one-time federal payment. In addition, the SSI/SSP cuts included in the February budget agreement are only the latest in a long series of state cuts to the program – cuts that have reduced the purchasing power of SSI/SSP grants by approximately one-quarter since 1990.

– Scott Graves

2 Comments | Human Services & Child Care | Permalink
Posted by cbporg

The Plural of Anecdote Is Not Data

April 27, 2009

It’s curious that anyone concerned about the state’s economy would look for answers in Nevada – a state that has been hit even harder by the recession than California. But on Friday, a group of the state’s legislators did just that; they convened a forum in Reno to learn from former California business owners why they relocated out of state. But businesses hopping across state lines are not the source of California’s job market troubles. In fact, the most recent employment data show that our neighboring states have fared worse during the downturn than we have. The total number of nonfarm jobs dropped by 7.0 percent in Arizona and by 5.4 percent in both Nevada and Oregon between March 2008 and March 2009, compared to a 4.2 percent drop in California.

The premise of Friday’s forum – to uncover why businesses “flee” California – calls to mind one of the CBP’s favorite aphorisms: The plural of anecdote is not data. Sure, some business owners have moved across state lines; but that doesn’t mean that businesses are leaving California in droves, as often is claimed. In fact, when researchers at the Public Policy Institute of California examined a database of essentially all business establishments that employed California workers, they found that business relocation out of California accounted for a negligible share of the state’s job loss between 1992 and 2004. Based on this finding, PPIC researchers concluded that “it is important to be wary of anecdotal evidence of businesses fleeing the state to support arguments that California has an economic climate hostile to business.”

– Alissa Anderson

3 Comments | Work, Wages, & Incomes | Tagged: , , | Permalink
Posted by cbporg

This Ought To Be a No Brainer…

April 24, 2009

The declining “yield” of the state’s sales tax is one cause of California’s ongoing budget deficits. Since 1960, the revenue raised by each one percent state sales tax rate has fallen by about one-third. The reasons for the decline are two-fold. First, consumers now spend a larger share of their incomes on services, which are largely untaxed, rather than goods, which are subject to the state’s sales tax. The second reason is the rise of internet sales, including purchases from out-of-state retailers, that don’t collect the tax on sales made to California consumers. Estimates suggest that California loses $2 billion to $5 billion per year from untaxed internet sales – enough to make a significant and lasting dent in the state’s chronic budget woes.

In light of this fact, one might think that a bill that attempts to narrow a loophole that provides preferential treatment for businesses located entirely outside of California would be a “no brainer.” Unfortunately, this appears not to be the case. Assemblymember Nancy Skinner’s AB 178 is similar to a recently enacted New York law, would require businesses such as Amazon.com that enter into “affiliate” relationships with California-based entities to collect California sales tax.

At a time when California faces significant budget shortfalls and California retailers face declining sales, you’d think a bill that makes it possible for the state to actually collect taxes that are legally owed and that limits an incentive for Californians to buy from businesses that don’t employ a single Californian would be greeted with open arms. Unfortunately, opposition from tech industry lobbyists has left the measure’s future in question.

The Skinner measure, which is scheduled for hearing in the Assembly’s Revenue and Taxation Committee on Monday, April 27, won’t erase the entire $2 billion to $5 billion gap attributable to untaxed internet sales – that would require Congressional action overturning the 1992 US Supreme Court decision in Quill Corporation v. North Dakota – but it would raise about $100 million, that could be used to support state services – enough to restore the suspended cost-of-living increase for CalWORKs families or the recently-enacted reduction to In-Home Supportive Service workers’ wages – and give nearly $50 million to cash-strapped local governments. And that’s better than a poke in the eye, as my mother used to say.

–Jean Ross

Comments Off | State Taxes | Permalink
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Is This a “Man-cession”?

April 23, 2009

The word “man-cession” has recently popped up in the blogosphere. Some bloggers have dubbed the recession a “man-cession“  because men have experienced a steeper rise in unemployment than women. In California, the unemployment rate for men hit 8.8 percent in March 2009, up by 3.1 percentage points from the same month of the prior year, while women’s unemployment rate rose by 2.2 percentage points, reaching 7.7 percent in March 2009. These figures represent the average unemployment rate for men and women during the 12 months ending in March 2009 and therefore are considerably lower than the overall unemployment rate reported last week, which reflects only the month of March.

Underemployment is also on the rise, and national data show that men are more likely than women to be underemployed (comparable data for California are not available). More than a third of US men working less than 35 hours per week (36.0 percent) were so-called “involuntary part-time workers” in March, meaning either that they usually work full-time, but had their hours cut, or that they wanted to work full-time, but couldn’t find full-time jobs. In contrast, one out of five US women (20.2 percent) were working part-time involuntarily in March.

Men have been disproportionately affected by the downturn largely because they tend to work in sectors of the economy hardest hit by the recession. The male-dominated construction sector in California lost more than 150,000 jobs between March 2008 and March 2009 – an 18.4 percent decline and the largest percentage decline of the major sectors. California’s manufacturing sector, which also employs a larger share of men, experienced the second-largest decline in jobs during this period – 7.0 percent (100,600 jobs). Women, on the other hand, are more likely to work in educational and health services – the one major sector that has continued to add jobs during the downturn.

Although unemployment has increased more for men during the past year, men are still much more likely than women to be working. Approximately two out of three of California’s working-age men (67.7 percent) were employed in March 2009, compared to just more than half of working-age women (53.4 percent).

– Alissa Anderson

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