In a letter to county and district superintendents and charter school administrators, Newsom, State Superintendent Tony Thurmond and Attorney General Rob Bonta cautioned against instituting any book bans.

Should a school still choose to remove certain instructional materials, the trio warns that it could be asked to explain its decision-making process to Bonta’s office.

“As state leaders elected to represent the values of all Californians, we offer our response in one shared voice: Access to books – including books that reflect the diverse experiences and perspectives of Californians, and especially, those that may challenge us to grapple with uncomfortable truths – is a profound freedom we all must protect and cultivate,” the letter read.

The free speech organization Pen America has found instances of book bans rising rapidly across the nation. During the first half of the 2022-23 school year, there were 1,477 cases of books being removed from schools, up from 1,149 in the previous six months, according to a recent PEN report.

The American Library Association recorded 87 challenged book titles in 2022 in California, and almost all of the top 10 books targeted for removal revolved around LBGTQ issues. The two most challenged were “Gender Queer: A Memoir” by Maia Kobabe and “Beyond Magenta” by Susan Kuklin, according to the Library Association.

Book bans are frequently invoked by Newsom as a prime example of repressive policies in red states such as Texas and Florida, and a stark contrast to California.

The letter distributed to California schools on Thursday highlighted constitutional precedent and case law that officials say restrict the removal of books and mandate that school administrators preserve freedom of speech and academic freedom.

Newsom, Bonta and Thurmond said it was meant to assist school leaders with “fielding requests within your community while you continue to support your students and their educational rights.”

During budget committee meetings last week, lawmakers grew noticeably frustrated over the limited information provided by the Newsom administration and corrections officials regarding their plan to reimagine California’s oldest correctional facility.

“I try not to consider it insulting, but it’s close,” Assemblyman Tom Lackey, R-Palmdale, said at a recent budget committee hearing. “I find it to be very disturbing that we’re following a pathway where we’re being asked to fund first and answers will come later.”

Meanwhile, the agency tasked with advising lawmakers on fiscal and policy matters is imploring the Legislature to reject the governor’s funding requests and demand accountability.

A newly released report from the Legislative Analyst’s Office blasted Newsom’s office for failing to set any clear objectives and for putting forward a $380 million funding proposal that lacks crucial information, such as the project’s full scope and projected operating costs.

The report called the governor’s plan to complete the transformation in less than three years “unnecessary and problematic.” It also found that the initiative could cost upwards of $20 billion to scale across California’s correctional system, as the governor expressed was his intent.

“While the administration has articulated some broad approaches to pursuing the goals of the California Model, such as ‘becoming a trauma-informed organization,’ it has not identified any clear changes to policy, practice, or prison environments it deems necessary to achieve the goals,” the LAO report reads.

Izzy Gardon, a spokesperson for Newsom, deferred questions to the California Department of Corrections and Rehabilitation.

CDCR spokesperson Terri Hardy called the criticisms “premature” and said that a newly-appointed advisory council — led by Sacramento Mayor Darrell Steinberg — was “actively working to develop recommendations to transform the prison by the end of the year.”

Gavin Newsom to build new training center at San Quentin

Newsom announced in mid-March that the 171-year-old penitentiary, which houses about 3,900 inmates and was home to the nation’s largest death row, would overhaul its approach to rehabilitating inmates to emphasize services and support over punishment.

Dubbed the California Model, Newsom said the plan that incorporates methods used in Norway and other Scandinavian nations would launch by the end of 2025.

Since then, the Newsom administration has requested $20 million for operations and $360.6 million in revenue bond authority to construct a new educational and vocational center.

The bond money would be used to knock down an existing building, which had its roof replaced less than two years ago at a cost of nearly $5 million, to make room for the new center on the Marin County property.

After factoring in annual debt costs, the project’s price tag is likely to reach $680 million, according to the LAO.

San Quentin is already known as a prison that offers considerable programming, including education, arts and other rehabilitative services. Activists have questioned whether a new capital project at San Quentin is the best use of state dollars.

“There are a lot of other prisons that could use some help in this regard and they’re much worse off than San Quentin,” said Don Specter, executive director of the Prison Law Office.

Funding first, details later for California prison reform

Full details of the project will not be determined until after the 2023-24 budget is passed by the legislature in June.

That means the governor is asking lawmakers to approve funding for his plan without knowing how the money would be spent or whether it’s the best option for rehabilitating inmates and curbing recidivism rates on the scale of California’s correctional system.

“You’re being asked to provide full funding — from design all the way through construction — for proposals without essentially any details,” Caitlin O’Neil, an LAO analyst who specialized in state corrections, told lawmakers. “… This means that the legislature risks approving funding for projects that it may ultimately disagree with.”

During budget hearings, Assemblywoman Mia Bonta, D-Alameda, read out a long list of concerns, including the ability to scale the California Model, the programming changes that would be implemented and potential environmental impacts. The latter is because the new educational center at San Quentin would bypass historic preservation requirements and review under the California Environmental Quality Act.

“I just want to be clear that I don’t think that the role of the Legislature is to green-light a proposal without any ability to be able to weigh in,” Bonta said.

Sen. Kelly Seyarto, R-Murrieta, called the administration’s timeline for completion by the end of 2025 “unrealistic,” adding that he felt the project was being rushed.

Incarcerated people absent from California corrections reform

Specter, who played an integral role in bringing Norway’s correctional model back to the U.S., said Newsom’s plan for San Quentin was a “far cry” from the overhaul achieved in Norway.

Although he agrees with the governor’s vision, Specter said he “didn’t think it was the right way to go about it.”

“They didn’t start by renovating a building,” he said about Norway. “They started by developing a white paper — an analysis of where they were and where they wanted to be, with clear goals and objectives.”

The makeup of the advisory council, which will be deciding what direction the initiative takes, also has caused some alarm. The council does not include any currently incarcerated people, front-line prison staff or someone representing family members of inmates.

Shortly after the governor’s March visit to San Quentin, a group of inmates called The People in Blue penned a letter, asking for a seat at the table. Some changes they said they wanted to see include better hygiene kits, fresh fruits and vegetables, an indoor gym to use during inclement weather and programs about money management and credit building.

“The dynamics of rehabilitation in action, and how to foster a rehabilitative environment, can only come from the stakeholders who have never been consulted on the issue; the incarcerated people doing the work,” their letter read.

Under the current plan, the advisory council will need to provide recommendations by the fall of this year to inform the design of the educational and vocational center. The LAO’s report said that the compressed timeline “severely limits the council’s time to develop well-informed recommendations” and also undermines legislative oversight and public input on the project.

Sen. María Elena Durazo, D-San Diego, recently said she was eager to see this new California Model in action but lamented that she was not getting “any sense of what that means.”

“I want to believe,” she said, “but you’re not giving me much here to work with as far as what we’re gonna get ourselves into.”

More than a dozen mayors from California’s largest cities came to Sacramento Wednesday with their answer. They told Gov. Gavin Newsom it will take $2 billion in annual, ongoing funding to ease homelessness on their streets.

The ask is $1 billion less than the lobbying group League of California Cities called for last week. It is double the $1 billion in one-time funding currently proposed by the governor.

All of the numbers come as the state faces a budget deficit projected to top $31.5 billion in the fiscal year that begins July 1.

The mayors acknowledged the difficult fiscal position but argued that California’s “biggest humanitarian crisis” deserves an immediate influx of consistent funding.

“Homelessness is solvable but we need the resources to scale the projects and programs,” said San Diego Mayor Todd Gloria.

“… We acknowledge that it’s hard for many Californians to see the results and that’s because we’re simply not keeping pace with the number of people who are becoming newly homeless,” he continued.

Gavin Newsom opposes ongoing homeless funding

Daniel Lopez, a spokesperson for the governor, said Newsom met with California’s Big City Mayors coalition on Wednesday to discuss local initiatives to address the crisis and the governor’s plan to dramatically expand the number of mental health treatment beds for those living on the streets.

Lopez would not say whether the governor planned to agree to their request for more funding. Newsom in the past has been outspoken about his opposition to ongoing homeless funding.

The governor, who has taken much heat for the growing homeless population, has publicly questioned whether the state has seen an adequate return on its investment. He has demanded ambitious plans from local officials to tackle the problem.

Since 2019, California’s Homeless Housing, Assistance and Prevention Program (HHAP) has awarded local governments with nearly $3 billion to run shelters, build affordable housing and provide services to unhoused residents. Newsom, whose proposed 2023-24 budget allotted another $1 billion, said that he was “not backing away” from the issue.

In an effort to hold local officials accountable for results, Newsom in 2022 required them to submit action plans as a condition of receiving funding through the program. Those who meet their targets will be rewarded with additional money.

California mayors push for more money despite budget deficit

During Wednesday’s press conference, the mayors commended the governor for launching the program and shared stories about people in their communities who have benefited. They also agreed that the state should continue measuring their success and hold them accountable for reducing their homeless populations.

But in order to get more people off the streets than the number entering homelessness each day, the mayors argued, more resources were required.

“We need to all take it to the next level and we cannot do it alone,” said Sacramento Mayor Darrell Steinberg.

As part of their request, the mayors are also asking the state to guarantee approval and funding for 2,300 units proposed under the Homekey program, which provides funding for agencies to convert hotels, motels and other residential and commercial properties into permanent or interim housing for unhoused residents.

Senate Minority Leader Brian W. Jones, R-San Diego, criticized the ask, saying that “throwing more money at the problem” would not fix it.

“Under the leadership of the current San Diego and Sacramento mayors, homelessness has skyrocketed while spending to tackle the crisis has also shot up simultaneously,” Jones said in a statement. “Homelessness has spiraled out of control under their watch and they simply don’t have credibility to be the spokesmen of ‘solving’ homelessness.”

“The job growth in California already has slowed considerably in 2023 from the previous two years, and it will continue to slow throughout 2023,” said Michael Bernick, a former California Employment Development Department director and now an employment attorney at Duane Morris LLP.

Later this week, Gov. Gavin Newsom plans to introduce a revised budget for fiscal 2024, which begins July 1. A gloomier employment outlook could have an impact on deficits and spending.

“Our view going into this budget process is to be mindful that we have made a stronger recovery out of the COVID recession, but there are real risks out here,” said H.D. Palmer, spokesperson for the Department of Finance.

Unemployment is one of the bigger risks.

“The state’s economy is heavily dependent on real estate, technology, agriculture and international trade. Unfortunately, all these sectors are suffering downturns,” said Sung Won Sohn, president of SS Economics, a Los Angeles-based consulting firm.

The path of both the state and national economy has been unusually unpredictable. The Federal Reserve’s series of increases in key interest rates over the last 14 months was designed to cool the economy and cut the rate of inflation.

While prices have stopped rising at last summer’s sizzling pace, the economy continues to perform fairly well. The national unemployment rate last month hit 3.4%, its lowest level in 54 years.

California’s latest reported rate was 4.4% in March, the same rate as in February. In March 2022 the rate was also 4.4%, but dropped slightly below 4% over the summer before climbing slowly again.

Bernick’s data show California averaged gains last year of over 51,000 jobs per month. While some unusual factors pushed January’s job growth to 96,700, it collapsed in February to about 21,800 and then 8,700 in March.

Bernick predicted a gain of about 25,000 jobs in April, but said “the slowing growth will continue, as the high interest rates, high inflation, business caution and declining consumer savings take effect.”

California employment has struggled to regain its pre-pandemic levels in the leisure and hospitality industry, which provides about 2 million jobs. March employment was slightly below levels in February 2020, the month before the pandemic hit the sector hard.

The sluggish growth has been concentrated largely in the Bay area and Los Angeles, said the UCLA Anderson School economic forecast in March.

It attributed the problem in part to the increase in remote work, which has kept demand for restaurants and bars down. Fewer foreign tourists are visiting, particularly from China.

The bigger risk to the state’s employment picture involves the broader economy.

The state’s independent Legislative Analyst’s Office cited a “presently heightened risk of recession” in its January report on the budget.

That warning came a week after Newsom proposed a $297 billion spending plan for fiscal 2024 that included a $22.5 billion deficit. With the economy and employment slowing, that deficit projection is expected to grow when Newsom releases his revised budget Friday.

Fewer California jobs?

Since the economy depends heavily on technology, trade and agriculture, as the economy slows analysts predict an impact on jobs.

“Technology was the backbone of the state’s economy, but layoffs are mounting and demand for their products softening,” said Sohn.

Drought and floods have affected agriculture and related industries, he said, and while California is a gateway for trade with Asian countries, “both political and economic problems (related to Covid) with China have slowed the Asian trade.”

But Somjita Mitra, California’s chief economist, said that a higher unemployment rate is “not necessarily a bad thing.”

She said it could indicate people returning to the labor force and looking for work. The state also has a more fluid economy in which workers switch jobs more frequently.

After an unprecedented pace of job recovery coming out of the pandemic, California’s unemployment has returned to a more “predictable level,” said Mitra.

While tech companies such as Meta, Lyft and Salesforce have laid off tens of thousands of employees in recent months, a relatively small number of the total cuts have targeted Californians, Mitra said. Those who do live here are expected to bounce back relatively quickly

“The workers themselves tend to be highly skilled, highly qualified and highly compensated, so as a result, they tend to be highly desirable workers,” Mitra said.

She added that “We’re monitoring very closely and if we start seeing some long-term unemployment, then we will start worrying about the health of the tech industry itself.”

Mitra cited other uncertainties, notably the fate of the federal debt limit and the rate of inflation. President Joe Biden and congressional leaders are deadlocked over how to raise the debt limit. The U.S. Treasury estimates that around June 1, it could lack the funds to pay all the government’s bills.

Options on the table could include more delayed funding or outright cuts to programs, borrowing money internally or closing prisons. Some lawmakers are also pushing a plan to raise corporate taxes — a prospect that Newsom has already said he won’t support.

“I think one of the most important things to understand is there is no silver budget,” said Scott Graves, director of research at the California Budget & Policy Center. “There are lots of ways of solving a shortfall. It doesn’t have to be cuts.”

Newsom in January released his $297 billion spending plan for 2023-24 and projected the state would face a $22.5 billion deficit.

But state revenue collected since then has lagged behind projections. And financial issues at the national level, including an unresolved standoff over the federal debt limit, rising interest rates and banking instability, stand to grow the state’s shortfall.

The Legislature must approve a new budget by mid-June.

How will Gavin Newsom fix California’s budget problem?

Newsom’s original 2023-24 budget proposal called for cuts in transportation and climate initiatives, deferred spending on capital improvements and a series of “trigger reductions” that could be restored if economic conditions improve. The governor refrained from tapping into state reserves in case a recession hit and the state’s fiscal position worsened.

Consistent with his January proposal, Newsom is unlikely in his May revision to propose any drastic cuts to social services or some of the state’s largest priorities, including health care, education and homelessness.

Democrats in the state Senate last week released their own detailed proposal for addressing the deficit. The 38-page plan, titled Protect our Progress, included a bold proposition to cut taxes on small businesses and raise the state tax rate on major corporations, such as Coca Cola and Walmart.

Senate Budget Chair Nancy Skinner, D-Berkeley, said during an April budget press call the tax increase would affect only the biggest corporations, or 2,500 total companies.

She framed the corporate tax hike as a partial reversal of federal cuts former President Donald Trump signed into law in 2017. Skinner said the increases represented a chance for California to take the lead on rolling back those tax breaks, as national leaders refuse to do so.

“Back in D.C., we’ve got House Speaker Kevin McCarthy blocking President Biden’s efforts to partially reverse those Trump tax cuts,” Skinner said. “And, meanwhile, McCarthy and others are holding the nation and world economies hostage demanding economy-killing cuts to recently-enacted climate, safety net and infrastructure investments.”

The Senate Democrats’ plan, which would raise billions of dollars annually for the state, sets the stage for a robust debate over the next month over the merits of using taxes as an avenue for helping to fix the state’s budget problems.

The Newsom administration has already rejected the idea.

Anthony York, a spokesperson for the governor, said Newsom would not support any new tax increases or “massive ongoing spending.”

“It would be irresponsible to jeopardize the progress we’ve all made together over the last decade to protect the most vulnerable while putting our state on sound fiscal footing,” York said in a statement.

Democrats divided over tax hikes

Publicly, the Assembly Democratic caucus has remained silent on the matter, refraining from comment on the Senate’s proposal. The caucus has not offered its own plan, aside from a budget blueprint members put forward in December.

Privately, however, moderate and progressive Democrats are split over the corporate tax cuts. The Sacramento Bee obtained letters moderate Assemblywoman Jacqui Irwin, D-Thousand Oaks, and progressive Assemblyman Alex Lee, D-San Jose, sent to Assembly Budget Chair Phil Ting, D-San Francisco, outlining both sides of the debate.

Lee’s letter suggests the Assembly “mirror or adopt a similar approach to the Senate Budget Proposal,” including corporate tax hikes, tax breaks for small businesses and “working class Californians” and restored funding for “critical investments.”

Irwin’s letter criticized the Senate’s plan to raise taxes, saying it would “jeopardize our state’s long-term economic stability.”

“We aren’t currently in a recession, but we certainly could be headed into one,” Irwin said in an interview. “And I think we have to be really insistent in living within our means.”

“If we expect businesses to invest in California, we need to provide more stability, not less,” she added.

A battle to reverse proposed climate and transportation cuts

To fill the projected $22.5 billion deficit anticipated in January, Newsom proposed significant cuts to climate initiatives and transportation projects. That included a $1.1 billion reduction in funding for zero-emission vehicle programs over five years and paring back $2 billion for future transit construction projects.

Asked then why he targeted these two sectors, the governor cited the magnitude of the budgets, calling them “unprecedented.”

Transit and climate advocates have spent the past four months lobbying legislators and the Newsom administration to reallocate funds so that transit agencies, struggling with declining ridership since the pandemic, can operate.

“Ending subsidies for the oil and gas industry is consistent with the state’s climate goals and could provide an important alternate source of revenue to continue to ensure California leads the way in staving off the worst impacts of climate change,” leaders from more than two dozen environmental groups wrote in a letter to the governor on Tuesday.

The Senate Democrat’s budget plan adopted several of the advocates’ recommendations. It included rejection of proposed cuts and delays in funding for the climate and transportation sectors and allowing transit agencies to use funds for operations as a bridge until a permanent fix is identified.

Michael Pimentel, executive director of the California Transit Association, a nonprofit trade organization representing California’s transit industry, called the Senate’s support “the clearest sign of progress.”

Although Pimentel doesn’t know what the governor’s revised budget will entail, the administration is hosting two listening sessions with transit agencies this week to explore proposals for addressing their near-term problems. While it’s unlikely those proposals would be reflected in this week’s proposed budget plan, the conversations could shape the final budget that must be passed next month.

State revenue as of March was $4.7 billion below the governor’s January forecast, according to the latest data from the California Department of Finance. In addition to lagging revenue, a handful of issues at the national level pose elevated risks that could further widen the state’s budget gap.

Those include an unresolved standoff over the federal debt limit, a significantly delayed tax filing deadline and rising interest rates. Any of which could tip the direction of the U.S. economy, implicating credit card debt, car and home loans and the purchasing power of consumers.

This means that the governor and legislature will need to identify new fixes. These could involve additional delays in funding or outright cuts to programs. The state could also shift cash between accounts, close prisons, or raise taxes.

“While we’re still finalizing the numbers, it’s clear that the problem the governor and the legislature will need to solve is larger than the January estimate,” said H.D. Palmer, spokesperson for the California Department of Finance.

Rising interest rates and a delayed tax deadline create uncertainty

Newsom in January released a $297 billion spending plan for 2023-24 that projected a $22.5 billion deficit, a sharp swing away from last year’s $100 billion surplus. A week later, the Legislative Analyst’s Office warned of “a good chance” that California revenues would come in lower than the governor forecast and that additional cuts would be needed to fill the gap.

Since then, the Federal Reserve hiked interest rates and moved up the expected date that the U.S. will reach its debt limit. The Federal Reserve on Wednesday raised its key interest rate to the highest level in 16 years.

California also extended its tax filing deadline to Oct. 16 to align with the Biden Administration and ease burdens on Californians hit by major winter storms.

Those factors all make it more difficult for California’s budget officials to accurately predict the state’s fiscal future.

In a typical tax year, the governor and legislature rely on the traditional April tax deadline to get a solid sense of state income tax revenue and develop a state budget around that in June. But this year, the state won’t have a full picture of its revenue until mid-October, making projections cloudier than normal.

If the budget passed in June overestimates state revenue, the governor and legislature will have to make mid-year adjustments, meaning additional cuts or deferred spending to put finances back in balance.

“The governor is continuing to finalize his decisions in the coming days,” Palmer said. “But given those realities, we need to give that a clear-eyed recognition that these are risks to the budget and economy that we do not have control over.”

The U.S. federal debt crisis

Some experts warn that failure to raise the debt ceiling would trigger a global economic collapse.

“There will be seismic repercussions if the federal government isn’t able to meet their obligations and pay its bills,” Palmer said, pointing to a new analysis from White House economists that said an extended breach of the nation’s borrowing limit could eliminate 8 million jobs and cause “severe damage” to the U.S. economy.

The U.S. government has never defaulted, and predictions vary widely about what could happen.

“Because the debt ceiling has never not been extended and the U.S. government has never been in default, we really know what would happen to the country, let alone a single state,” said Mark Schniepp, director of the California Economic Forecast in Santa Barbara.

Gokce Soydemir, professor of business economics at California State University, Stanislaus, was more pessimistic.

“Investors do not like uncertainty, when there is uncertainty present, investors will not invest,” he said. He foresaw higher unemployment and a deep recession.

President Joe Biden and congressional leaders plan to meet Tuesday to discuss the debt limit crisis. Treasury Secretary Janet Yellen said this week that the government is expected to reach the $31.38 trillion ceiling by June 1.

House Republicans approved a plan last week to reduce federal spending, which they say in turn would help California and the rest of the country. A less expensive government would help keep taxes down, and ease inflation, the GOP maintains.

The plan is a “necessary course correction,” said Rep. Kevin Kiley, R-Rocklin, saving trillions of dollars “by restraining Washington’s spending habits, spurring economic growth, and setting our nation on a sustainable fiscal path.”

Democrats, though, contend the GOP plan would be disastrous. “All across California, these reckless cuts would raise costs for hardworking families, set back economic growth, and hurt children, families, seniors, veterans, students, and more,” a White House statement says.

The administration estimates California would stand to lose about $494 million in funding for transit and highway infrastructure projects all across the state, including more than $99 million for projects in Los Angeles, Long Beach and Anaheim, $34 million for projects in Fresno, and $10 million for Sacramento.

It also says the plan would mean that as many as 17,000 families across California who are homeless or at risk, or are domestic violence victims, would have a difficult time getting help with emergency housing.

A new report released Wednesday by the UC Berkeley Labor Center provides a compelling case study to validate their concerns.

The report, which draws on a survey of 140 workers who were laid off when Marathon’s Martinez oil refinery shut down in 2020, exposes the range of challenges fossil fuel workers face as the state transitions away from oil and gas to an economy built on clean energy. It also offers an array of recommendations to address the issues, including financial support, job search assistance and a certification process to help refinery workers validate their skills.

“We know that the clean transition is coming and we need to be prepared,” said Virginia Parks, report co-author and a UC Irvine professor. “It’s too late for many of these workers who were at Marathon — and that’s devastating. But we need to start readying others for the transition before their jobs disappear.”

Experts agree that drastically reducing reliance on fossil fuels will help improve California’s shot of meeting its ambitious climate goals and significantly curb greenhouse gas emissions. But they also acknowledge there will inevitably be trade-offs — from loss of jobs to a decrease in taxes to slumped economic activity in communities that rely on the oil industry.

State leaders so far have not developed a comprehensive plan on how to limit such fallout.

A California refinery closure causes hundreds of layoffs

In the fall of 2020, Marathon laid off 345 permanent workers at its Martinez refinery, as well as about as many contract and management employees. Most of them lost high-paying, union jobs that they thought they would hold until retirement.

Tracy Scott, president of United Steelworkers Local 5, which represented 345 of the approximately 700 workers laid off at the facility, called it a “gut punch.”

“As a local union rep, we were faced with needing resources that we didn’t have the capacity to provide for our members, and there were a lot of gaps in our ability to help them,” Scott said, pointing to workers’ needs around filing unemployment insurance claims and transitioning health care plans.

The facility is now in the process of converting into a renewable diesel processing plant, but the company shuttered its oil refining operation while it awaited permits and other approvals.

A year after the layoffs, three out of four of those former Marathon workers found new work, according to the UC Berkeley report, but not without a cost.

Many workers said they had trouble finding jobs that matched their skills, citing the lack of a certification process and employers’ lack of knowledge about refinery work.

Few have been able to secure jobs at the same wages they were paid in their unionized roles at the refinery. On average, the workers are earning 24% less in their new jobs, according to the report.

One-third of the workers surveyed said they were “falling behind financially” a year post-layoff, compared to just 3% prior to losing their jobs. Nearly a third of the workers took early withdrawals from their retirement accounts to make ends meet after the layoff, the report said.

Scott said he hopes state leaders will take into account the report’s finding and make sure more workers aren’t left behind as it continues to move away from fossil fuels.

“When a state or a nation changes its outlook on policy and or the future of an energy source, I think they should do so in a way that it’s not on the backs of the people who have committed their whole lives to this,” he said. “We can do better.”

Finding assistance for oil and gas workers

Oil industry advocates and policy researchers in recent years have increasingly called for financial assistance and training programs for oil and gas workers transitioning to careers in other sectors. It’s a policy referred to as a “just transition.”

California’s 2022-23 budget established a $40 million oil and gas workforce displacement fund, as well as a $20 million pilot program for training displaced oil and gas workers in Kern and Los Angeles counties to help cap abandoned wells. The state can allocate the program funding through the 2024-25 fiscal year, when the program is set to expire.

Gov. Gavin Newsom has not made any indication up to this point that he has plans to expand that program. Daniel Villasenor, a spokesperson for the governor, previously told this news organization that it was a possibility but the governor first wanted to “make sure the money is being used effectively.”

Although the two programs mark a starting point for a ‘just transition,’ the industry and researchers say that more is needed.

A 2022 analysis from the nonpartisan think tank Gender Equity Policy Institute estimated that providing income subsidies and relocation support for oil and gas workers who needed assistance would cost the state of California up to $68.9 million annually. Comparatively, a 2021 study from the Department of Economics and Political Economy Research Institute at the University of Massachusetts-Amherst estimated that assistance programs for California’s fossil fuel workers would cost the state up to $830 million per year.

The Newsom administration recently put $1 billion toward creating more clean energy jobs and economic opportunities.

But there are not currently enough clean energy jobs to absorb the magnitude of the state’s at-risk fossil fuel workers.

Those jobs are also likely to pay less than those in the oil and gas industry. Fossil fuel jobs pay an average of $130,000 while solar industry workers earn an average salary of $97,000, according to a 2021 labor-funded just transition report.

“In the aggregate, there are going to be many jobs created in the clean energy economy and supply chain,” said Jessie Hammerling, a researcher with the UC Berkeley Labor Center. “But the real critical challenge to get right is to make sure that they are good union jobs that pay comparable wages with similar benefits and job quality to the fossil fuel jobs that are at risk here.”

Kounalakis, who was first elected lieutenant governor in 2018, kicked off her gubernatorial campaign to become the first woman to lead the state.

“My family & I owe everything to our state,” Kounalakis wrote in a Twitter post. “I will fight fiercely to make sure every Californian has the chance to walk the path of the CA dream just like I have.”

She told Politico she planned to campaign on addressing statewide problems including homelessness, fentanyl deaths and California’s high cost of living.

“The challenges that California has require leaders who are decisive, who have experience and who have a track record of getting things done,” Kounalakis said.

She’s the first major female candidate to run for the office since Republican Meg Whitman, who led eBay and Hewlett Packard, faced off in 2010 against former Gov. Jerry Brown, who won a third term.

If elected in 42 months, Kounalakis would become the state’s first female governor.

Kounalakis’ career, Sacramento roots

Voters re-elected Kounalakis for a second term as lieutenant governor last November. Prior to running for office in California, Kounalakis served as ambassador to Hungary from 2010 to 2013 under former President Barack Obama.

Former Gov. Jerry Brown in 2014 appointed her to serve as chair of the California Advisory Council for International Trade and Investment.

Kounalakis comes from a well-known Sacramento family. Her father, Angelo Tsakopoulos, is a Greek immigrant and real estate developer. She served as president of AKT Development, her family’s business, before running for public office.

Tsakopoulos has donated millions of dollars to Democratic and Greek American candidates, including his daughter. During her 2018 lieutenant governor race, Kounalakis and Tsakopoulos together contributed at least $9 million to her campaign.

Kounalakis came under fire during her 2022 campaign for lieutenant governor when an independent expenditure committee supporting her received a large check from a pharmaceutical group, despite her vowing not to accept money from the industry.

Her campaign spokesperson at that time said she denounced the contribution, saying it was not reflective of her or her values.

Political aspirations

Although California’s lieutenant governor position is seen as a largely ceremonial role, it served as a stepping stone for higher office for both Newsom and former Gov. Gray Davis.

As lieutenant governor, Kounalakis has served on the boards of the University of California, California State University and California Community Colleges systems as well as the State Lands Commission. In April 2022, she also became the first woman in California to sign a bill into law when she was acting as governor while Newsom was on spring break with his family.

It is not entirely uncommon for California gubernatorial candidates to start campaigning years in advance. Newsom announced his own campaign for governor in 2015, long before the 2018 race.

“I think she’s in a position where she knows what she wants,” said Andrew Acosta, a Sacramento-based Democratic political consultant. “So why be coy about it, if you can put a marker down and pressure the rest of the field to make a decision?”

Kounalakis has more than $4.4 million in her lieutenant governor campaign account, according to the California Secretary of State’s Office. She told Politico she would be moving those funds to use them for her gubernatorial campaign.

A new poll released Friday by Stanford University’s Deliberative Democracy Lab lays out a vision for the direction Californians are hoping to see the state take in the years and decades ahead.

The poll, conducted in collaboration with the California 100 Initiative and the Goldman School of Public Policy at UC Berkeley, brought more than 700 people together for a weekend in February to weigh 56 diverse policy proposals in the realms of housing, energy, health care and education.

Participants were polled at the start of the weekend and then again at the end, after multiple small group discussions and panels with experts. In many instances, the deliberation led participants to adjust their thinking.

For instance, support for one-stop shops for local business permits soared from 62% to 76% after deliberations. Opposition to California opening foreign offices in its top trading countries, to strengthen its economy and international ties, grew from 19% to 32%.

“There was an appreciation that California faces big problems and it only became more obvious when (the participants) got into the details,” said James Fishkin, director of the Stanford Deliberative Democracy Lab. Given the immensity of the problems, they weren’t giving into simple solutions.”

In broad strokes, the poll results demonstrated that Californians are yearning for more transparency and want the government to work more effectively for its residents and businesses, said Karthick Ramakrishnan, executive director of California 100.

“Do these findings spell hope or doom for California’s future? I’d say it’s a qualified hope,” Ramakrishnan said. “The kind of solutions people are pushing are pragmatic and aspirational — and some are also quite bold.”

Below are the top 10 most supported proposals identified in the poll, and how that support shifted over the weekend.

1. California should strengthen its high school civics requirement to include experiences with participation, discussion, negotiation, and compromise in a democracy. (68.9% → 80.4%)
2. Should California should develop a “one-stop shop” for easier public access to government services dealing with unemployment and poverty? (68.5% → 78.0%)
3. California should require companies to pay users for the use of their data. (64.7% → 69.6%)
4. California should invest in rural areas to ensure that they have adequate funding for infrastructure, such as roads and digital broadband. (70.8% → 73.7%)
5. California should ban home sales to foreign purchasers who do not reside in them. (67.1% → 67.3%)
6. California should increase support for K-12 education by enough to be in the top third of student achievement among the states. (73.4% → 73.2%)
7. California should examine its regulations for business to make sure the benefits are greater than the costs. (73.4% → 73.2%)
8. California should require plaintiffs and defendants in California Environmental Quality Act, CEQA, lawsuits to identify every person or entity who contributes $1,000 or more to either the plaintiff or the defendant in the lawsuit. (61.4% →67.2%)
9. California should encourage the expansion of “one-stop shops” for local permits on a range of items, including water, sewer, electricity, parking, land use, and business licensing. (62.4% → 75.8%)
10. California should provide universal, free mental health care. (73.3% →77.0%)

But just how many workers will be affected and how difficult will it be for them to acquire new jobs earning comparable salaries?

A new analysis released Tuesday offers a rosier forecast than previous predictions.

The report, produced by the nonpartisan think tank Gender Equity Policy Institute, counted about 59,200 workers directly employed by the oil and gas industries in California. And of those workers, the analysis found that two out of three will likely be able to move into new jobs in other industries without any retraining.

For workers at serious risk of displacement and whose skills are not as easily transferable, the report estimates that the projected cost assumed by the state of California to support them with income subsidies and relocation assistance may also be far lower than prior projections.

“Our data absolutely shows that there are people who work in the oil and gas industry who will be negatively impacted by the transition to clean energy, but the big takeaway from our study is that an equitable transition is both affordable and achievable,” said Nancy Cohen, president of the Gender Equity Policy Institute.

Previous studies, including one commissioned by the Western States Petroleum Association, have incorporated a wider array of occupations in the oil and gas workforce, which led to a higher number of people considered at risk of displacement and inflated the cost of potential transition programs for fossil fuel employees.

The new report centers around a major touchstone in the debate around California’s efforts to drastically reduce reliance on fossil fuels: the adverse implications it could have on workers and how much support the state should offer.

The Western States Petroleum Association, a trade group that represents oil operations in California, staunchly rebuked the latest findings.

“Studies like this and the political rhetoric they fuel make it difficult to have the real discussions we need to have about energy policy,” Kevin Slagle, a spokesperson for the Association, wrote in an email. “Californians are much smarter than these groups and some of our elected leaders give them credit for — they won’t buy into simplified and ridiculous claims that don’t match what they see in the real world.”

California aims to reduce reliance on oil and gas

California is progressively moving away from coal, oil and gas and investing more heavily in electricity generation and other clean energy sources. By 2035, the state will ban the sale of nearly all new gas-powered vehicles. And by 2045, state leaders have committed to reaching carbon neutrality, meaning that it will remove the same amount of carbon emissions from the atmosphere as it emits. These moves will affect workers in refineries, trucking, mining and oil and gas fields.

Gov. Gavin Newsom allocated $40 million in the 2022-23 state budget to launch a pilot displacement fund for oil and gas workers, as well as $20 million for a pilot program to train displaced employees in well-capping abandoned oil wells. It is unclear whether the governor will put additional funding into the program in the upcoming budget, especially given the state’s projected $25 billion shortfall.

Still, Cohen hopes the data will help further policymakers’ decisions around support for oil and gas workers at risk of displacement. “A big part of what we want to do is provide solid, empirically based analysis and data to allow policymakers to make sound policy,” she said.

The Institute analyzed public data from surveys conducted by the U.S. Census and U.S. Bureau of Labor Statistics to estimate the number of people employed by the oil and gas industry, as well as their occupations and median incomes. The report’s authors then used state and federal data to analyze the projected job growth by occupation and whether other industries had room to absorb qualified oil and gas workers.

Approximately 20,000 fossil fuel workers are at risk of displacement over the next two decades as demand for their specific skills declines, according to the report. About 80% of those at-risk employees are likely to be paid less for jobs they’re able to find in other industries, the report states. Some occupations that fall under this category include underground mining machine operators, pumping station operators and oil riggers who manage drilling operations.

The Institute estimated that if the state chose to provide income subsidies and relocation support for workers who would likely be paid less in their new occupations, it would cost the state of California, at the high end, $68.9 million annually.

The Institute’s report varies widely from forecasts made in previous studies on the oil and gas industry’s impact in the Golden State.

For example, a 2021 study from the Department of Economics and Political Economy Research Institute (PERI) at the University of Massachusetts-Amherst estimated that assistance programs for California’s fossil fuel workers would cost the state up to $830 million per year. Unlike the Institute’s study, which only calculated financial assistance for employees who faced pay cuts, the PERI study factored in pension guarantees and income-level guarantees for all displaced workers.

Another 2019 study commissioned by the Western State Petroleum Association counted as many as 152,000 jobs in oil and gas in California. Unlike the Institute’s report, that study included gas station employees, which made up 40% of that workforce total. The study then excluded those same gas station employees from its analysis of average employee income in oil and gas industries, therefore inflating average incomes.

The Institute did not include gas station workers in its study because the majority are employed by businesses with attached convenience stores and the state’s transition to clean energy is not likely to put gas stations out of business for decades to come.

Although a reduction in California’s fossil fuel industry is inevitable as oil wells close and refineries shutter, some are questioning recent state regulations and policies that stand to expedite the shrinkage.

California regulators, for instance, are considering a proposal to require that certain truck fleets in California deploy electric vehicles by 2024 and set 2040 as the end date for sales of new medium-and heavy-duty internal combustion vehicles.

Although truck drivers were not included in the Institute’s analysis, Paul Sihota, president and co-founder of Smartway Trucking Co., worries the state’s policies could force him to move his business out of California, leaving some of his employees out of work unless they chose to relocate.

“Our competition isn’t all based in California and we have to compete with their rates,” Sihota said. “If that means we have to move out of state, then we’ll do that.