Latest news with #Californians'
Miami Herald
21-05-2025
- Business
- Miami Herald
State Farm seeks to boost California home insurance rate hike to 30%
A week after winning emergency approval to raise Californians' home insurance premiums, State Farm is seeking to boost that rate hike even higher to 30%. On May 13, the state's largest insurance company got the OK from regulators to increase rates by an average of 17% starting next month. State Farm secured the expedited rate hike after asserting it was in financial distress and expected $7.6 billion in claims arising from the deadly Los Angeles wildfires in January. The "interim" rate increase, however, was only part of a 30% hike the company asked for in June 2024. To reach the full amount, State Farm filed a request Monday for an 11% increase starting next year, on top of the already approved 17% increase. Since the hikes would happen sequentially, they would have the effect of raising rates by 30%. State Farm is also requesting to raise rates by 36% for condos and 52% for renters. The California Department of Insurance said it will hold a public hearing in October to continue gathering information from company officials as they seek to justify the requests. "State Farm wanting a rate increase doesn't change the law," the agency said in a statement. "All rates must be justified so consumers don't pay more than is required." It's unclear exactly how much premiums could go up in the Bay Area or which parts of the region would see the largest rate hikes. Statewide, the insurer covers roughly 15% of homes, totaling more than 1 million customers. When State Farm made its initial 30% request last June, the company asked the insurance department to grant a "variance" to raise premiums higher than usual due to its financial outlook. State Farm General, the company's California-only subsidiary, had issued multiple warnings about its solvency. S&P Global Ratings recently threatened to downgrade the insurer's credit rating, signaling concerns about its financial strength. With the June request still pending, the insurer asked regulators to approve the emergency hike after the devastating fires in Los Angeles County. At the recommendation of an administrative judge, Insurance Commissioner Ricardo Lara last week authorized the 17% hike, slightly less than the 22% the company had requested. In a statement, State Farm said it was "pleased" with Lara's decision but made clear it would continue pursuing the full 30% increase. Consumer advocates, however, said regulators should not have agreed to approve the expedited rate hike - the first time an insurer won such approval in California. They called on the insurance department to closely scrutinize the data that State Farm is now providing to justify another increase. "We've already heard from consumers who are outraged that they just got 17% and now they're asking for more," said Carmen Balber, executive director of Los Angeles-based Consumer Watchdog. State Farm's latest request is the most recent chapter in California's insurance crisis, as providers have ended coverage for hundreds of thousands of policyholders across the state in recent years amid unprecedented wildfire losses. California's insurance rates are closely regulated and, as a result, lower than in many other parts of the country. The insurance industry argues that has left insurers in an untenable situation, even as companies have won approval for repeated rate hikes in recent years. In an attempt to stabilize the faltering home insurance market, state regulators earlier this year finalized a plan that includes allowing insurers to raise rates based on the growing threat of climate change - long an industry demand - in exchange for expanding coverage in parts of the state with the greatest wildfire risk. Consumer advocates, however, contend the plan will lead to huge rate increases and lacks the teeth to force insurers to add homeowners. In the greater Bay Area, insurers who opt into the plan will be expected to write more policies in Marin, Napa and Santa Cruz counties, as well as parts of San Mateo and Sonoma counties and a sliver of Santa Clara County. Insurers would also have to offer new policies for fire-risk homes in suburban areas such as the East Bay Hills and Los Gatos. Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
Yahoo
17-05-2025
- Business
- Yahoo
California approves State Farm's request for double-digit insurance rate hike
The state of California approved State Farm's request for a double-digit increase in home insurance premiums to help the insurer deal with financial challenges following the wildfires that devastated communities near Los Angeles in January. California Insurance Commissioner Ricardo Lara on Tuesday adopted a proposed court order that will allow State Farm to move ahead with a 17% interim homeowners insurance rate increase in the state. That's less than the insurer's initial request of a 21.8% premium hike. Under the terms of the order, which will take effect on June 1, State Farm's California-based subsidiary will receive a $400 million infusion from its parent company to ensure its solvency, and will participate in a full rate hearing at a later date. The insurer is also barred from implementing block non-renewal programs through the end of this year. "I am balancing all the facts. Protecting all State Farm customers and the integrity of our insurance market is an urgent matter," Lara said. Wildfire Victims Not Receiving Help From Fair Plan: 'I'll Have To Fight With Them For The Next Three Years' "Let me be clear: We are in a statewide insurance crisis, affecting millions of Californians. Taking this on requires tough decisions. This is not a game. This is not a media-driven moment for some to exploit — this impacts people I am committed to protecting," he added. Read On The Fox Business App State Farm General (SFG) said in a statement that the commissioner's interim rate approval is a "critical first step" for the company's ability to continue serving customers in California, adding that it "still must continue building sufficient capital for the future." State Farm Executive Fired Over Comments On Premium Hikes After California Wildfires "With this interim rate approval, SFG will obtain from its parent company, State Farm Mutual (SFM), an advance of $400 million under a surplus note to be issued by SFG, subject to regulatory approval. SFG would be obligated to repay the surplus note balance plus interest over time, subject to certain conditions, because customers outside California should not be expected to pay for risks in California," the company said. It added that it's pausing group non-renewals for the rest of 2025 for non-tenant homeowners, renters and condominium unit owners, as well as rental dwelling properties. State Farm Requests Emergency Rate Hike That Could Raise Californians' Premiums By 38% "We remain focused on helping our customers recover from the wildfires. As of May 12, we have already paid more than $3.51 billion and are handling more than 12,692 claims," State Farm added. S&P Global Ratings downgraded State Farm General's credit rating from "AA" to "A+" due to what it called a "significant deterioration of its capital position and regulatory solvency ratios." The rating change doesn't affect other State Farm group article source: California approves State Farm's request for double-digit insurance rate hike
Politico
14-05-2025
- Business
- Politico
Not-so-happy deficit day, everyone
DRIVING THE DAY — Gov. Gavin Newsom will propose capping undocumented Californians' enrollment in Medi-Cal as the programs' costs outrace projections, Rachel Bluth reports this a.m. Newsom will also ask lawmakers to fast-track the Delta tunnel project, Camille von Kaenel reports. The project to reroute more water around the Sacramento-San Joaquin River Delta to farmers and cities is part of the governor's revised budget blueprint. THE BUZZ: MAYDAY — Don't get too sentimental. But this morning, Newsom will release his second-to-last May Revision — typically the governor's final public budget proposal before negotiations with legislative leadership. It's bound to be a doozy. The Newsom administration projected in a memo that President Donald Trump's tariffs will cost the state $16 billion in revenue through next fiscal year alone, as we reported yesterday. The result is expected to be a shortfall of at least $10 billion. And that's not counting fiscal years beyond 2026. The state in January had seemingly balanced its ledger heading into the upcoming fiscal year, before tariffs, federal spending cuts and soaring health care costs left budget wonks feeling some type of way about the state's finances. Now, cuts and perhaps accounting gimmicks will have to come into play for the third-straight year as California grapples with another deficit. Newsom will release the plan at around 10:30 a.m., and our reporters will be rifling through its pages, alongside lobbyists and lawmakers checking in on the fate of their budget babies. Ahead of the release, we asked a few members of our bureau where their eyes will be darting first. Here's what they're watching: Drug costs: Newsom just this morning answered looming questions about whether he'd make cuts to the Medi-Cal program for undocumented patients in response to a multibillion-dollar shortfall. But I'm also following the pharmacy part of the Medi-Cal budget. The administration has been signaling all year that it wants to find a way to rein in pharmacy costs, and Newsom made some early budget news by introducing pharmacy benefit regulations. In Washington, congressional Republicans are floating ideas to bring down Medicaid costs by imposing cost-sharing requirements like co-payments. I'm curious if we could see something like that proposed here to bring Medi-Cal costs down, such as pharmacy co-pays. Even a $5 co-pay could be a barrier for people, especially if they have multiple prescriptions. — Rachel Bluth, health care reporter Eyes on the prize: The revised budget proposal is shaping up to be a reality check on how deep the damage from tariffs runs for Newsom's prized tech sector. The state fiscal outlook, previously buoyed by surprise tax hauls from Silicon Valley giants, is closely tied to the day-to-day swings of major tech stocks like Nvidia. The budget could also decide the fate of a $25 million plan for a Silicon Valley chip center. It's a project California fought hard to win, but officials are warning they may lose it if lawmakers pull funding, compelling Trump to reopen the contest. One top Silicon Valley business group tells us it will be scanning the budget to see if Newsom follows through on his push to integrate AI into various government functions. — Christine Mui, Silicon Valley reporter Lifeline for BART: One of the biggest budget requests from lawmakers — $2 billion over the next two years to prop up struggling public transit systems — will now be an even longer shot, given the projected deficit. The proposal, spearheaded by state Sen. Jesse Arreguín, a Berkeley Democrat, and Democratic Assemblymember Mark Gonzalez of Los Angeles, comes as agencies like Bay Area Rapid Transit and the Los Angeles County Metropolitan Transportation Authority warn they could be forced to slash services amid ridership declines, undermining the state's goals of moving away from fossil fuels. — Alex Nieves, transportation reporter No cap? Newsom and legislative leadership (with an assist from Trump) have set the table for a reauthorization of the state's cap-and-trade system, which generates billions of dollars for state coffers. Sacramento observers had expected Newsom to come out with his plan as soon as Monday, but they're still holding out hope for Wednesday. (Read more on what the climate team is expecting in last night's California Climate.) — Camille von Kaenel, environment reporter Higher ed cuts: Newsom dealt a blow to the University of California and California State University systems in January when he proposed an 8 percent budget cut on top of a deferral of over $200 million for both institutions. More than 60 state lawmakers signed a letter in March asking legislative leaders to reject the proposed cuts amid heavy lobbying by both the UCs and CSUs. We'll see if Newsom gives in as the institutions continue to face funding threats from the Trump administration's purging of diversity initiatives in schools. — Eric He, education and budget reporter Homelessness fight: Local governments have limited space to request funding with all the state's red ink. Still, California's major cities and counties face severe problems with homelessness which, they argue, they can't solve themselves. Newsom's January draft budget included no new money for the state's Homeless Housing Assistance and Prevention program, which provides grants for localities to get people into shelter. Newsom argues his administration has already provided ample funding — more than $27 billion in recent years — to help local governments address the twin homelessness and housing crises. Will Newsom hold firm and push local governments to clear encampments using money allocated in prior state budgets? If he does, expect tension between the governor and local officials to amplify in the coming weeks. — Dustin Gardiner, Playbook co-author La La Land: I'll be looking for the fate of two major Los Angeles priorities — the expansion of the state film tax credit and if there will be any help for the city's budget woes. Newsom has made it clear that the former is one of his top priorities, and if he continues to seek $750 million for the incentives (as he first proposed last fall), that would be a major show of support for the industry even as resources are tightening elsewhere in his spending plan. Meanwhile, Los Angeles Mayor Karen Bass has made several trips to Sacramento to lobby for her cash-strapped city. We'll see just how effective that charm offensive was if there's more money for LA in the May Revise — or if the Los Angeles delegation will have to flex its muscle during budget negotiations with the Legislature. — Melanie Mason, senior politics reporter The long game: Even in January, the governor's team anticipated budget shortfalls beyond the upcoming 2026 fiscal year, hinting at cuts to come. As the governor nears the end of his term, will he make the kinds of structural changes needed to avoid saddling his successor with deficits? Or will he balance the budget only through the 2027 fiscal year, risking negative headlines about California's financial situation closer to the presidential primary? — Blake Jones, Playbook co-author GOOD MORNING. Happy Wednesday. Thanks for waking up with Playbook. You can text us at 916-562-0685 — save it as 'CA Playbook' in your contacts. Or drop us a line at dgardiner@ and bjones@ or on X — @DustinGardiner and @jonesblakej. WHERE'S GAVIN? Delivering his budget plan in Sacramento. CAMPAIGN YEAR(S) FIRST IN PLAYBOOK: THE DOCTOR IS IN — It's a day that ends in 'y' so that means GOP Rep. David Valadao is facing pressure not to vote for Medi-Cal cuts. But this particular new ad campaign from SEIU could also be read as a potential preview of a marquee showdown in the Central Valley House seat next year. The ad features Democratic Assemblymember Jasmeet Bains, a family doctor, making a direct appeal to Valadao to vote against cuts to the program. 'I'm trying to see as many patients as I can, because Congress is trying to cut their Medi-Cal,' she says over footage of Bains seeing patients. Her day job as a legislator in Sacramento goes unmentioned. House Republicans have proposed slashing hundreds of billions of dollars from the program, even though they have eschewed some of the more drastic cuts sought by hardliners. Valadao, whose district has the highest percentage of Medi-Cal enrollees in the state, has been a key voice among moderate Republicans warning against steep cuts to the program. The Republican is a political unicorn, managing to win cycle after cycle despite Democrats holding a double-digit registration advantage in his district. The one exception to his win streak: 2018, a wave election during Trump's first term where health care caused major headaches for GOP incumbents. Democrats see a similar dynamic brewing for the 2026 cycle, and Bains, a three-term legislator who still practices medicine, has been floated as a possible challenger who could cause Valadao some real headaches. Bains has not declared any plans to run for Congress. When asked about the SEIU ad, her spokesperson pointed to a recent statement decrying Medicaid cuts. Already Valadao has fielded one Democratic challenger: progressive local school board trustee Randy Villegas, who is running on an unabashedly economic populist platform. Still, the ads, which will run on broadcast for several weeks, by a major player such as SEIU is a notable boost to Bains' profile. The six-figure buy is financed by SEIU California, as well as smattering of its health care and homecare local affiliates. 'Dr. Jasmeet Bains is showing the Valley what strong leadership looks like: standing up for the health care a half million people in CD-22 — 200,000 of them children — rely on to live healthy lives,' said Riko Mendez, chief elected officer of SEIU Local 521. 'While David Valadao sides with extremists rushing through a plan to terminate health care for children, seniors, and veterans in the Valley, Dr. Bains is actively working to save their lives.' — Melanie Mason BACK TO BRASSTRACKS — Katie Porter apparently raised the eyebrows of the State Building and Construction Trades Council when she sounded a critical note on California's high-speed rail project, telling KTLA, 'if it can't get done, then stop' construction. Trades President Chris Hannan, who represents workers building the project, subtly bit back during a California Labor Federation panel Monday. While asking candidates for governor about high-speed rail, he said it could take an electric vehicle 15-plus hours to travel from Orange County (Porter's home) to Sacramento (the site of the event). Porter sided with every other Democratic candidate there by giving a green light to the project in response to a binary question about her support for it. And she told our colleague Jeremy B. White that 'we have to figure out how to build it' in an interview afterward. Beyond a simple yes-no, where do the other leading Democrats think of a project that remains popular with voters but is well behind schedule? Here's what they told Playbook: Toni Atkins is all in: 'High-speed rail is more than clean transit — it's an investment in the communities, small businesses and workers so often left behind. I fought to keep this project on track as a leader in the legislature and will do the same as Governor. I will never walk away from my commitment to creating good jobs, growing our economy, connecting our communities, and building for the future.' Xavier Becerra says he gets people's disappointment: 'I understand the frustration — costs have grown, timelines have slipped, and trust in government has taken a hit. But completing high-speed rail is a test of whether we're serious about building the future, delivering world-class infrastructure, and ensuring California remains a competitive force in the global economy — and I'm committed to seeing it through in a way that works for Californians.' Eleni Kounalakis is all aboard: 'High speed rail is an investment in the future of California. I am committed to getting it done. As Governor, I will work with all stakeholders to push costs down and speed up the timeline.' Tony Thurmond loved the AVE: 'The delays have been beyond disappointing but I still believe this project can work. We need to prove California can build big projects and do hard things — not give into the idea that we can't just because the state has failed to so far. … I have traveled by high speed rail on a trip to Spain and I believe that we can create a version in California that does great things from the standpoint of job creation and supporting tourism and our economy. I believe if things can't be turned around we should be willing to walk away from it, but I believe we can and should turn it around.' Antonio Villaraigosa is looking at the money: 'I don't think candidates should play politics with high speed rail. We need to safeguard local jobs, protect taxpayers, and avoid haphazard decisions that could trigger requirements forcing the state to repay billions in federal funding that we can't afford. As Governor, I'll make sure this project is transparent, meets deadlines, and sticks to a budget.' Betty Yee is focused on the sunk costs: 'I support California staying focused on completing the Merced to Bakersfield segment that is the backbone of the statewide high-speed rail system. To abandon this segment now would not only strand assets under construction but also forgo the potential for economic transformation in the Central Valley with respect to new business and housing opportunities.' TECH TALK A BIT LEAKY — California's utility regulator may have accidentally exposed 'sensitive,' 'confidential,' or 'personal' data of applicants seeking federal funds for internet expansion projects, according to correspondence shared with our colleague Tyler Katzenberger this week. In a message sent to applicants, dated May 8, the California Public Utilities Commission said it may have exposed personal information about some applicants, like emails and phone numbers, as well as other details about their project awards. The telecom companies that applied were vying for the same pot of federal cash. POLITICO Pro subscribers can read more in today's California Decoded. TOP TALKERS PLAY TO PAY — San Jose Mayor Matt Mahan is pushing forward with his proposal to tie part of city councilmembers' pay to their performance, modifying it to now withhold five percent of salaries and pay it back based on how well they meet specific goals, The Mercury News reports. 'I'm very hopeful that San Jose will be the city — as the capital of Silicon Valley — that leads the way in demonstrating what public sector focus, transparency, clear goal-setting, (and) performance management accountability looks like,' he said. RIYADH READER — Dr. Patrick Soon-Shiong, billionaire owner of the Los Angeles Times and biotech entrepreneur, was spotted on Tuesday with Trump during his visit to Saudi Arabia, POLITICO's Will McCarthy writes. The doctor says he and Saudi Crown Prince Mohammed bin Salman have a 'common goal to cure cancer.' AROUND THE STATE — A judge reduced the Menendez brothers' murder sentences, making them eligible for parole. (AP) — Attorney General Rob Bonta is investigating two San Diego County juvenile detention halls, alleging civil rights abuses. (The San Diego Union-Tribune) — California state workers used an AI-generated image of Newsom in a billboard off Interstate 80, saying Newsom's back-to-work order is going to cause more traffic. (The Sacramento Bee) Compiled by Nicole Norman PLAYBOOKERS IN MEMORIAM — Jennifer Barraza Mendoza, former chief of staff to LA Councilmember Kevin de León, died Tuesday morning after a prolonged battle with cancer. She was 37. Among the many roles she held in her career, Barraza Mendoza was organizing director for SEIU Local 99, deputy director for the state Senate Democratic Caucus, a top adviser on De León's 2018 campaign for the U.S. Senate, a principal at Hilltop Public Solutions and served on the campaigns team at the National Education Association. 'Jennifer lived with purpose, led with courage, and never backed down from a fight worth having,' De León said in a statement. 'In a world often marked by conflict and uncertainty, she was a beautiful soul, anchored by conviction, guided by compassion.' PEOPLE MOVES — Josh Escovedo has been named co-managing shareholder of Buchalter's Sacramento office. He was previously a shareholder. — Lathrop GPM has expanded with a new office in downtown Sacramento, marking another milestone in its West Coast growth following the 2024 combination with Silicon Valley firm Hopkins Carley. BIRTHDAYS — Stephanie Estrada of Cruz Strategies … Mark Zuckerberg … former Reps. Mimi Walters and Jackie Speier … Sam Newton … Erwin Chemerinsky WANT A SHOUT-OUT FEATURED? — Send us a birthday, career move or another special occasion to include in POLITICO's California Playbook. You can now submit a shout-out using this Google form.
Yahoo
12-05-2025
- Climate
- Yahoo
California dust storms will get worse, new report says. It doesn't just harm your health
A team of researchers is urging more attention to the harmful effects of dust on Californians' lives in a new report that warns it's expected to worsen due to climate change. Researchers from several University of California schools collaborated to create the report, 'Beyond the Haze: A UC Dust Report on the Causes, Impacts, and Future of Dust Storms in California.' The report aims to be a resource for policymakers on dust storms in the state. It presents strategies to mitigate the negative impacts of dust, which threatens California's health, the agricultural sector, snowpack, and more. The report, synthesizing various work, said climate change is expected to increase dust storms in California because rainfall, soil moisture, and surface winds, all of which can drive dust emissions, are projected to change with the warming planet. For example, higher surface temperatures due to greenhouse gases can 'greatly amplify seasonal dryness and moisture loss in the atmosphere and soil, resulting in increased severity of drought conditions' among other impacts. Future drought conditions could affect soil, such as by reducing its moisture, and 'potentially' lead to changes in dust emissions in the state's arid and semi-arid regions. Climate change can also have more indirect effects on dust emissions in the future, with the report citing research about how global warming is driving a long-term decline in Colorado River levels by drying the basin's snowpack regions. This in turn could lead to agricultural practices, such as reducing irrigation, that 'tend to increase dust emission.' Additionally, the effect of climate change on wildfires in the state also impacts dust emissions. Wildfires alter the landscape and its soil and reduce vegetation, leading to wind-driven dust emission. The implication is that there will be an increase in dust emission as climate change continues to increase fire risk, according to the research the report cited. 2025 report: Visalia ranks among worst in US for harmful pollutants Among the harms the report explores are those to our health and calls for California studies to 'clarify the relevant health impacts of dust and identify the highest risk communities.' One 'key worry' is that dust in the state often carries chemicals that can lead to health problems or elevated health risks. 'As dust emissions in California have increased in the past and likely will continue to grow in the future, developing effective adaptation and mitigation strategies to minimize dust impacts needs to be prioritized,' the report read. 'Furthermore, the locations in the state with some of the highest concentrations of dust in the air are also home to some of the most vulnerable and underserved populations here.' According to the report, where dust storms mainly occur in California are the Mono Lake area through Owens Valley, the Mojave Desert and the northwestern corner of the Sonoran Desert, the Salton Trough (which includes Coachella and Imperial valleys), and the San Joaquin Valley. Nearly five million people live in this large swath of impacted areas, the report said. The report also examines how dust can impact crop yields and how dust storms can injure and kill livestock. Another concern relates to California's snowpack: "dust deposition can accelerate snowmelt.' This impacts regions reliant on snowmelt, whether for agriculture or its water supplies, but also for ecosystems, the report explained. Paris Barraza is a trending reporter covering California news at The Desert Sun. Reach her at pbarraza@ This article originally appeared on Palm Springs Desert Sun: California dust storms worsening due to climate change, report warns
Yahoo
08-05-2025
- Business
- Yahoo
Despite political promises, Californians are stressed about their finances
After voters in November sent a clear message that the rising cost of living remained a top concern, California lawmakers came to the Capitol vowing to take decisive action. "Our task this session is urgent and clear," Assembly Speaker Robert Rivas (D-Hollister) told lawmakers at the start of the 2024-2025 legislative session in early December. "We must chart a new path forward. And it begins by focusing on affordability." Despite proposed legislation to help make California a more affordable place to live, however, voters in the state are growing increasingly pessimistic about their financial future, according to a new poll from the UC Berkeley Institute of Governmental Studies, co-sponsored by The Times. Nearly half of California voters feel worse off than they were last year, and 54% felt less hopeful about their economic well-being. When asked to name the most important issues for state leaders to be addressing this year, the cost of living, housing affordability and homelessness topped the list — far above concerns about crime and public safety, taxes and immigration, the poll found. "The number one issue is an economic issue. It's the cost of living," Mark DiCamillo, director of the IGS poll, said. "Both Democrats are and Republicans are in agreement on that one." Californians' fears about their future, and their current financial well-being, dramatically increased after President Trump moved back into the White House in January, DiCamillo said. Within months, Trump announced sweeping new tariffs on goods imported from countries worldwide, sending turbulence through the global economy, and his administration began slashing federal agencies and programs. The shift among voters was driven largely by partisan allegiance, and in California Democratic voters outnumber Republicans by a nearly two-to-one margin. In August, before Trump's election, 46% of Democratic voters in the state were upbeat about their financial well-being. In April, just 9% of them felt that way, according to the poll. Optimism also dropped among voters declared as "no party preference," but to a much lesser degree. Among Republicans, just 9% were hopeful before Trump's election, and that leaped to 57% in April. "I've never seen this before," DiCamillo said. "I've been polling for over 40 years in California and the last five years or so, everything seems to turn on party. If you ask people, 'Is it sunny outside?' the Democrats will say one thing, the Republicans will say [another]. It's just unbelievable." In Sacramento, the Democratic-led Legislature and Gov. Gavin Newsom know that addressing California's high cost of living is imperative, and that not doing enough to address voter concerns may have consequences. But any hopes of quick financial relief have been lost to the slow, deliberative political process of lawmaking in the Capitol. Democrats have introduced a raft of new bills to save Californians billions in utility costs, limit extra fees for renters and cut red tape for building permits, among other measures, to target the growing financial burdens plaguing residents. But the pending bills are not expected to make a dramatic shift in California's longstanding economic problems that voters care most about, such as the housing affordability crisis, homelessness and the general cost of living. Assembly Republican leader James Gallagher of Yuba City said the financial struggles of many Californians is the result of years of misguided, liberal leadership, and dismisses the Democrats' latest push in Sacramento to repair that damage as too little, too late. "My read of most of those bills is they don't do a whole lot," Gallagher told The Times. Most of them tackle fringe issues, he said, instead of getting at the meat of the problem. "In order to actually do something about affordability, [the Democrats] have to go back on their previous ideas." Trump's victory in November was credited, in part, to his campaign promises to address the high prices and economic uncertainties confronting many Americans. The economic upheaval over the past five years is a major reason for the pessimism many feel today. Fiscal policy meant to keep household budgets afloat during COVID-19 lockdowns caused higher inflation and drove up prices faster than usual, said Jerry Nickelsburg, faculty director at the UCLA Anderson Forecast. Since 2020, inflation rates have fallen, but voters notice the steep increase in everyday expenses, like gas and groceries. Growth in worker pay during that time has not kept pace. Food, beverage and energy prices increased by 28% compared to before the COVID-19 pandemic, said Sarah Bohn, vice president of the Public Policy Institute of California (PPIC). "We feel these at the pump, in utility bills, and at the grocery store," Bohn said before an Assembly committee in late March. Inflation cut a 26% rise in wages down to net 2.9% since January 2020, she said. "To me, those are all the facts we need to understand why Californians are frustrated financially. Earning 26% higher wages but feeling like you're treading water at the end of the day? That is very frustrating," Bohn said. California is one of the most expensive states in the U.S. to buy or rent a home — the crisis has worsened in the last decade with rising housing costs and rent increases, and some policies like the California Environmental Quality Act, or CEQA, have been used to stifle new development since the 1970s. Read more: Despite noble intentions, California's environmental law is hurting Latinos Rent in California is 50% higher than the national median, according to U.S. Census data. One in six middle-class renters in California are now spending over half their income on housing, according to the PPIC, a nonprofit research center. For years, Democrats have tried to carve out loopholes in existing laws and promote new developments to address the housing shortage. High prices have contributed to homelessness and the growing trend of Californians leaving for cheaper, not greener, pastures in neighboring states, according to recent PPIC analysis. "California has really strangled itself by making it so hard over the years to build enough housing," Sen. Scott Wiener (D-San Francisco) told The Times. This session, Wiener introduced Senate Bill 677 — which failed in the Senate Housing Committee earlier this month — which could have expanded SB 9, a "duplex bill" from 2021 that allowed people to split their single family lot into two lots, and build up to three additional units on the property. The committee did advance another of Wiener's bills, SB 79, which proposes allowing homes between four and seven stories to be built near major transit stops. SB 681, part of the Senate Democratic Caucus' affordability package and introduced by Sen. Aisha Wahab (D-Hayward), proposes several measures that address the housing crisis: quadrupling the renter's tax credit for the first time in decades, cutting out additional fees renters pay for owning pets and other junk fees not listed in a rental agreement, addressing zombie mortgages — home loans appearing years, sometimes decades later after the debtor believes the loan has been forgiven — capping homeowner association fines at $100 and making the Permit Streamlining Act and Housing Crisis Act permanent. Other legislation backed by the Democratic leadership would streamline applications for new housing developments, ban extra fees on rental payments and expand affordable housing for farmworkers. SB 254 from Sen. Josh Becker (D-Menlo Park), chair of the Senate Committee on Energy, Utilities and Communications, is "the Legislature's most ambitious effort yet to rein in rising energy costs and put ratepayers first," he told members of the committee last week. The bill, in part, forces the California Public Utilities Commission to provide a public statement justifying any approved rate hike, and also require investor-owned utilities to finance $15 billion for wildfire mitigation and connecting customers to the grid. The legislation is opposed by San Diego Gas and Electric, among others, who said it doesn't address the underlying issues causing rates to go up and could be unconstitutional. California Republicans offered their own solutions to affordability issues, including a bill from Gallagher that would have forced the Public Utilities Commission to cut electricity rates by 30% and AB 1443 sponsored by Assemblymember Leticia Castillo (R-Home Gardens) that would make earned tips tax-exempt. California Republicans also had a bill that expanded upon the renter's tax credit, similar to the measure in Wahab's SB 681. Gallagher criticized the new Assembly committees created to focus on housing, child care, food assistance for those in need and reviewing the state's push for low-carbon and renewable alternatives, arguing that discussing the issues rather than taking quick action was tone-deaf. "Californians don't need more government committees, they need real action that cuts their costs. Legislative Democrats have spent decades making our state unaffordable," Gallagher said. "The faces change, but the party and the broken ideas stay the same — blocking housing, raising taxes, and driving up costs for working families." Times staff writer Phil Willon contributed to this report. Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week. This story originally appeared in Los Angeles Times.
