CVIndependent

Mon06012020

Last updateMon, 20 Apr 2020 1pm

Jaelyn Deas and her four best friends shared everything, including late-night study sessions in the library at San Jose State University, and a never-ending preoccupation with how they’d pay for their tuition there.

The one thing they didn’t do together? Graduate.

While she was juggling a major in international business, a minor in Japanese and a job to help keep up with her expenses, Deas fell behind, and her friends put on their caps and gowns and walked across the stage in May without her.

It was her friends who were defying the odds. Fewer than 20 percent of her classmates who entered San Jose State in 2014 finished in four years—less than half the national average.

That didn’t make Deas feel any better. She considered quitting or transferring to a community college. Then she was summoned to the financial aid office, where she learned that the university, part of the California State University System, was giving her a grant of up to $1,500 to help her get across the finish line.

“I walked out of the office crying. I had no idea something like this existed, and it took a burden off my shoulders,” said Deas, who is on track now to earn her bachelor’s degree before the year is out.

It’s one example of the many ways that California is taking on seemingly intractable problems that are plaguing higher education nationwide.

These include the longer-than-expected amount of time it takes students to graduate; high dropout rates; financial aid that doesn’t cover living expenses; courses that cost more than students will earn from what they learn; institutions that prey on veterans and others; financial-aid applications so complex that many students never bother with them; admissions policies that favor relatives of donors and alumni; credits that won’t transfer; pricey textbooks; and “remedial” education requirements that force students to retake subjects they should have learned in high school, often frustrating them enough to quit.

Not all of the initiatives have succeeded, nor is California the only state that’s trying them, often in the absence of reforms at the federal level. That program at San Jose State to help students make it to graduation by offering them small bursts of financial aid, for instance, was pioneered at Georgia State University.

But California is bucking a national trend: Most other states are continuing to reduce, not increase, their higher education budgets. With a higher education budget of $18.5 billion in 2019-2020, it has invested heavily in helping community college students transfer into four-year programs; spent more than $50 million on food banks and other programs to combat student hunger and homelessness; opened an online community college to serve people who are already working; and boosted state grants for students with children, among other initiatives.

Meanwhile, all but four states are spending less on higher education, per student, than they did in 2008, according to the Center on Budget and Policy Priorities. Those spending more? Hawaii, North Dakota, Wyoming—and California.

Some of what is happening here is inspiring similar reforms around the country. After California took on the NCAA in September by requiring that college athletes be allowed to sign paid endorsement deals, for example, legislators in New York, Florida, Minnesota, Nevada, Ohio, Pennsylvania and South Carolina started mulling comparable legislation. That prompted a decision by the NCAA to let college athletes benefit from the use of their names and likenesses, though the association is still working out the details.

Fueling the reforms and the funding behind them are a projected shortage of workers with the necessary degrees to fill the jobs of the future; a public backlash in response to budget cuts made during the recession; and a concern that the state had been abandoning its long tradition of high-quality, low-cost education.

Californians remember “when younger generations could truly expect to live a better life than their parents and grandparents. And that dream has been fading,” said David Chiu, a member of the State Assembly from San Francisco who is active in education issues.

“That’s why so many of us have been focused on how do we bring this back,” Chiu said. “Because we had that history, because we knew what a well-functioning higher education system could do, we aspire to that again.”


California’s Challenge

Over the course of a century, California built the country’s top-ranked public research university and its largest and most affordable community college system. Today, there are 10 University of California campuses, 23 Cal State (CSU) campuses, and 115 community colleges.

A California resident in 1960 could earn a bachelor’s degree at the world-class University of California, or UC, for just $60 per semester in “incidental fees”—about $500 in today’s currency. That same year, the state adopted a master plan for higher education: The UC would serve the top eighth of graduating high school seniors, while the top third would be eligible to attend a CSU campus. The community colleges would be open to all.

The goal, writes historian John Aubrey Douglass, was “broad access combined with the development of high quality, mission differentiated, and affordable higher education institutions.”

But in the coming decades, politicians of both parties responded to economic downturns by cutting higher education funding, causing tuition to rise. The trend peaked during the recession that began in 2008, when UC hiked undergraduate tuition by nearly a third in a single year.

The price of undergraduate tuition and fees, when adjusted for inflation, has increased sixfold in the last 40 years at the University of California, and is 15 times higher at California State campuses, according to the independent California Budget and Policy Center.

Only one student in 10 graduates in four years at Cal State Los Angeles; that number’s fewer than one in five at nine of the system’s other campuses.

In a poll of likely voters by the Public Policy Institute of California, 53 percent said the higher education system was going in the wrong direction, and 56 percent that an education was growing less affordable.

Like many states, California is behind in its progress toward a goal of increasing the proportion of adults with a college or university credential, according to the Lumina Foundation, which tracks this; today, fewer than half of its adults have one, short of the target of 60 percent by 2030 set by the advocacy group the Campaign for College Opportunity. (Lumina is one of the many funders of The Hechinger Report, which co-produced this story.)

“That number gets a lot of play across the street,” said Jake Jackson, a Sacramento-based research fellow at the Public Policy Institute of California, or PPIC, gesturing toward the state Capitol.

At the same time, California’s student population has changed in ways that foreshadow national trends, becoming more ethnically diverse, with growing numbers coming from low-income families in which they are the first to go to college. No racial or ethnic group constitutes a majority here; 39 percent of residents are Hispanic, while 38 percent are white; 14 percent are Asian; and 6 percent are black. More than a quarter are immigrants.

Those demographics have allowed for experimentation with ways to encourage college-going by people from a variety of backgrounds.

Doing this isn’t easy, even here. Cristina Mora remembers feeling lost and adrift after leaving her close-knit Latino neighborhood in Los Angeles to enroll at UC Berkeley in 1999, “like there had been a clerical error, and I’d been admitted by mistake.” She didn’t attend a professor’s office hours until her junior year, finally converting the Cs and Ds she’d been earning into A-pluses.

Today, Mora is an associate professor of sociology at Berkeley and a mentor to other first-generation college students. She says UC has made strides in attracting diverse applicants by increasing recruiting in previously ignored areas such as the Central Valley and towns along the Mexican border, and making it easier for community college students to transfer. Students of her generation returned to their communities, she said, bringing with them “a sense that the UC system provides an opportunity, and that these are places that would be welcoming.”

But black and Latino students today still are less likely than their peers to graduate from UC or CSU institutions in four years and are underrepresented on the state’s most selective campuses. Among UC students, they take on higher-than-average levels of debt.

“We have a long history of not catering to these populations,” Mora said.

If policymakers are going to close California’s graduation gap, they’ll have to figure out how to meet the needs of students like Mora once was, and Deas is today. And if California can do that, perhaps the rest of the country can, too.


Helping Students Graduate

Some of what is happening in California leverages the state’s vast power of the purse. For starters, the state is trying to increase the number of transfer students—especially from its community colleges—accepted by both public and private universities.

Then-Gov. Jerry Brown threatened in 2017 both to withhold a $50 million allocation to the UC system unless it increased its share of transfer students, and to strip private colleges and universities of their eligibility for the $2 billion Cal Grant program unless they did a better job admitting transfers.

Brown wanted some public universities with low numbers of transfers to take one transfer student for every two freshmen, a goal they’ve largely met. In addition, the private, nonprofit member institutions of the Association of Independent California Colleges and Universities have agreed to collectively enroll 3,000 transfer students annually by next year.

The state invested $75 million last year to try to raise those low CSU graduation rates and plans to spend another $75 million this year. The rates have already slowly started to improve, with 27.7 percent of CSU students now finishing in four years, up from 19 percent in 2015. (The most recent available national average is 42 percent, the U.S. Department of Education says.)

Some of that extra money has gone toward adding sections of courses that were filling up too fast. Not getting into the classes he needs is a big fear for student James Soberano, a San Jose State freshman majoring in computer engineering who was pecking away at his laptop in the student center.

“I definitely want to be out of here in four years,” Soberano said. “If not, I’ll be taking summer classes to be sure I am.”

San Jose State has also added 30 new advisers in the last three years, a university spokeswoman said. Data analysis is being used to pinpoint bottlenecks, such as those overcrowded courses. The “Spartan Completion Grant” that Deas got is part of a program that began last year for seniors who are within two semesters of earning their degrees and meet other requirements. They can receive up to $1,500 per semester. The university says that 70 percent of recipients have graduated.

Another effective way of speeding students toward degrees is by eliminating noncredit remedial courses, which require them to repeat subjects such as algebra and English. More than four in 10 college students across the country end up in remedial—also called “developmental”—classes. That costs students $1.3 billion a year, according to the Center for American Progress, and many simply give up.

In California, 80 percent of community college students were being sent to remedial courses in English or math, and only 16 percent of them earned a certificate or associate degree within six years, according to the PPIC.

In response, in 2017, California’s community colleges began putting less-well-prepared students into credit-bearing introductory courses with extra tutoring. The CSU system, too, started doing this last year, and now also funnels students with low high school grades or standardized test scores into special preparation programs in the summer before their freshman years.

Though some faculty members have objected to the changes, early studies suggest they’ve led to big improvements: 63 percent of community college students who went directly into transfer-level English composition courses with tutoring successfully completed them, compared to 32 percent who went to remediation.


Costs Outside the Classroom

Bright murals decorate the walls of UC Berkeley’s Basic Needs Center, framing the entrance to a food pantry laden with organic mac and cheese, fresh produce and bread from a nearby bakery.

Students who have trouble affording food and rent come here to do their grocery shopping, sign up for public benefits or meet with counselors. A community kitchen is under construction, and volunteers use a bicycle with a custom trailer to pedal around nearby neighborhoods, collecting excess produce from residents’ gardens.

The center is the result of student activism spotlighting the nontuition costs of college in a state where the price of housing has reached staggering heights. The goal: to ease students’ stress about food and shelter so they can focus on their studies.

Researchers have documented widespread food and housing insecurity among students across the country, and the purchasing power of the federal Pell Grant, which can help cover living costs, is at a historic low. California students spend an average of $2,020 a month, or $18,180 per nine-month academic year, on food, housing, books, supplies and transportation, a survey released in September by the California Student Aid Commission, or CSAC, found.

California is well-equipped to address college affordability because, unlike in many other states, every low-income student who has completed high school within the previous year and meets academic requirements is entitled to a state scholarship, the Cal Grant, that helps pay his or her tuition.

While hundreds of thousands of students still miss out on the grants each year because they took time off before college, this tradition of comparatively generous tuition assistance has nevertheless freed policymakers to think about how to make the other aspects of college more affordable, said Lande Ajose, senior policy adviser on higher education to Gov. Gavin Newsom.

“For six of the last seven years, tuition has remained flat at our colleges, and yet we find the cost of college increasing, and that is because the cost of living is increasing,” Ajose said.

The California Assembly passed a bill this year that would have made it easier for all students with financial need to access Cal Grants and tied the amount to their full cost of attendance. Though the Senate left the measure stranded in its Education Committee because of concerns about the price, its authors, the governor’s office and higher education advocates say that they are discussing how to move forward on another version in the next session.

Given California’s size and diversity, Ajose said she hopes the solution they come up with can serve as a model for the rest of the country.

“Just as California’s student population is becoming more diverse, that’s not the time to disinvest in higher education,” she said. “That’s the time to double down on investment in higher education, if we really care about equity.”

California has thrown a lot of other ideas at making college more affordable.

The California State system and some UC campuses have substituted cheaper digital books and open-source materials for textbooks, for example, which the CSAC found cost California students $1,080 a year.

The CSAC itself last year began to address the complex process of applying for financial aid, which research shows makes prospective students less likely to enroll in college in the first place, by creating a more user-friendly website and making it easier to compare the costs of different schools.

In a pilot program by the California Policy Lab, redesigning and simplifying letters sent to 130,000 high school students about Cal Grants made them 9 percent more likely to register for the online Cal Grant system by June of their senior years. “That’s a lot of new students able to attend college and improve their career options,” said the lab’s executive director, Evan White.

Many campuses are opening food pantries like the one at UC Berkeley, holding outreach fairs to sign up students for the state’s version of the federal food stamp program, or starting emergency housing programs—all backed by that more than $50 million in this year’s state budget to help deal with student hunger and homelessness.

Those funds came after students packed legislative hearings over the past two years to testify about rising rents and having to work 30 hours a week on top of their study time. That kind of activism also stands out from what is happening in most other states, where students lack strong statewide organizations or are less involved in state politics, said Max Lubin, an Education Department official in the Obama administration who started the advocacy group Rise while a graduate student at Berkeley. The group provides paid fellowships for students to spend a semester lobbying politicians on college costs.

“California higher education leaders have learned in the last couple of years that they can get a lot more done by working with students than in conflict with them,” Lubin said.

The state is trying to help older students, too, a challenge also facing the rest of the country. More than 35 million Americans over the age of 25 have some college credits but never got degrees, the Census Bureau says; 29 percent of undergraduate and 76 percent of graduate students are 25 or older, the U.S. Department of Education reports. But many juggle families and jobs, and aren’t eligible for state financial aid.

This year, Gov. Newsom successfully pushed to provide students at public universities and colleges who are parents of dependent children with as much as $6,000 a year for books, child care and other nontuition expenses on top of tuition aid. An estimated 29,000 parents qualify, the governor’s office says. In September, the state debuted an online community college designed especially for people 25 to 34 who are already working but don’t have a college degree or certificate.

Legislators also filed several bills to tighten regulation of for-profit colleges and universities, which often serve older, low-income students. One would have required these schools to prove that the educations for which they were charging graduates resulted in jobs that paid enough to justify the cost—similar to the Obama-era “gainful employment” rule that has been blocked at the federal level by the Trump administration—or lose their access to state financial aid.

That proposal, which was introduced by Chiu, was beaten back by industry lobbying, but, in a compromise, the state will begin to collect information on graduates’ income and debt, by institution, so that consumers can make better-informed choices about which programs will and will not pay off.

“We’ll have a pretty good sense of how many schools are failing our students and exactly who they are. We can then decide what the consequences of that should be,” Chiu said.

Several other measures to crack down on for-profit schools stalled, thanks in part to the for-profit colleges’ aggressive lobbying campaign. But advocates say they were only the first salvos in an ongoing battle.

“In large part, it’s because of the federal retreat on oversight of for-profit colleges that California lawmakers are seeing a need to elevate the state’s attention” to it, said Bob Shireman, a senior fellow at The Century Foundation who served in the Clinton and Obama administrations.

With the entire structure of for-profit college oversight in California up for renewal next year, said Shireman, he expects that some of these proposals will be raised again. That will continue to put the state in direct opposition to the Trump administration on higher education regulation, as it is on many other issues.

Few clashes are as pitched as the fight over who gets to decide whether veterans in California can use their GI Bill benefits to attend for-profit Ashford University, which the state’s attorney general has accused in an ongoing lawsuit of misleading students, including veterans.

That tug of war began when the state stepped in to block veterans who enrolled at Ashford from receiving taxpayer-funded support. In response, the U.S. Department of Veteran Affairs in September stripped authority from the state veterans education agency to determine veterans’ benefits eligibility there.


Experimentation at Scale

California is not the only state trying to improve the success rates of its students, or to make policy in the absence of federal action; amid the partisan bickering in Washington, D.C., the Higher Education Act, which covers all federal regulations over higher education and which Congress typically reauthorizes every four to six years, hasn’t been updated since 2008.

Louisiana last year started to require high school seniors to complete the Free Application for Federal Student Aid. Texas will also require this, beginning in 2021-22. Currently, 30 percent of undergraduates or aspiring undergraduates never fill out this form, forgoing the chance to receive financial aid; a third of them would have qualified for a federal Pell Grant, research supported by the American Academy of Arts and Sciences found.

Colorado is dropping remedial courses beginning in 2022, and universities and colleges there have already started getting rid of them.

Many states have resorted to enforcement actions, lawsuits and new laws to crack down on for-profit colleges and universities and loan-servicing companies they say cheat or mislead students.

At the federal level, a House bill—introduced by U.S. Rep. Adam Schiff of California—would create a pilot program to help community colleges pay for free meals for students who can’t afford to buy food.

But few other states are trying as many reforms at once as California, or can do so at such scale; its financial aid program is the nation’s biggest, and its community colleges alone have a collective enrollment of 2.1 million.

California still has to figure out how to cope with the challenges that come with that scale. Each year, tens of thousands of qualified applicants are turned away from UC and CSU campuses due to lack of space.

But California’s size will also continue to make it a laboratory for innovation, Kevin Cook, associate director of the PPIC Higher Education Center, said.

“There’s a lot of interest from large funders,” he said. “Because of the size of the state, if you can make something work here, it will probably work anywhere else.”

This story about California higher education was produced by CalMatters, a nonprofit news venture covering California policy and politics, and The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. This story also appeared in CalMatters, The Hechinger Report and NBC News.

Published in Features

Millions of California renters are about to receive some of the nation’s strongest protections against rent hikes and evictions—and the primary advocacy group for California landlords is OK with that.

State legislators this week passed AB 1482, a bill from Assemblyman David Chiu, a Democrat from San Francisco, which limits annual rent increases to 5 percent plus the rate of inflation (typically 2-3 percent). Modeled after a first-in-the-nation Oregon measure adopted earlier this year, the bill also requires landlords to provide a “just cause” for evicting tenants and, in some circumstances, pay for tenants to relocate.

“We do not have time for those suffering in our streets,” Chiu said after the bill’s final passage. “We do not have time for those (who are) one rent increase away from eviction and homelessness.”

Gov. Gavin Newsom has lobbied fiercely for the bill in recent weeks, arguing that the measure is necessary to combat the state’s twin gentrification and homelessness epidemics. Half of all California renters—more than 3 million households—spend more than 30 percent of their income on rent, meeting the federal government’s definition of “rent-burdened.”

“These anti-gouging and eviction protections will help families afford to keep a roof over their heads, and they will provide California with important new tools to combat our state’s broader housing and affordability crisis,” Newsom said in a statement. The bill now awaits his signature.

Here are five takeaways from the most ambitious renter-protection bill the state has passed in recent memory.

The new measure would curb extreme rent hikes, and it’s stronger than what Oregon passed. But it’s not conventional rent control.

Oregon made national headlines when it became the first state in the country to pass a statewide measure capping how much landlords could increase rents. Often characterized as rent control by the national press, the Oregon law limited yearly rent increases to 7 percent plus inflation.

Although Chiu’s bill imposes a tighter cap—5 percent plus inflation—the assemblyman has been very careful to frame the measure as “anti-rent-gouging,” as opposed to typical rent control. Fifteen California cities currently impose some form of traditional rent control on apartments, with the legally allowable rent increase hovering between 1 and 4 percent. Chiu’s bill also does nothing to prevent landlords from raising rents when a tenant leaves, a provision called “vacancy control” that is often associated with how rent control worked decades ago in places like Santa Monica and Berkeley.

“Words matter. This is not rent control. This is an anti-rent-gouging bill,” said Assemblyman Rob Bonta, Democrat from Alameda, a co-author of the bill.

So how many renters will the new California law actually help?

While landlords have access to proprietary data that can better answer that question, publicly available data can’t. A UC Berkeley study of 10 gentrifying California communities found that over a five-year period, the average yearly rent increase exceeded 10 percent about once every three years. An analysis by the real estate data company Zillow, working with admittedly incomplete data, found that about 7 percent of California renters would have benefited from Chiu’s cap in 2018. While a minority of California renters will enjoy real savings from the new law, those who do benefit are very likely to be low-income and thus most vulnerable to rent hikes.

Mike Wilkerson, an economist with ECONorthwest, which analyzed the Oregon plan with proprietary landlord data, said the majority of major rent increases in Oregon are occurring in lower-cost units. He suspects the same is true of California.

“Really, what this is doing is protecting lower-rent units, where we’re consistently seeing rents going up,” Wilkerson said shortly after the California bill was introduced. “And the benefit is preserving more units to be naturally affordable.”

Some opponents of the California legislation argue that the measure could backfire: Landlords, they say, may treat the rent cap not so much as a limit on what they can charge but as a benchmark for what they should charge—especially if they fear future unanticipated costs or having to take a tenant to eviction court.

“The large property owners can build this cost into their business because they have a lawyer on payroll,” said Sid Lakireddy, president of the California Rental Housing Association, an advocacy group for smaller landlords. “That’s not the case for mom and pop (landlords) throughout the state.”

Although the rent cap has received most of the attention, the eviction protections are arguably more controversial. And a “third rail” of California housing policy gets very lightly touched.

In most parts of California, landlords can evict a tenant without stating an explicit reason why they don’t want that renter in the property anymore.

When Gov. Gavin Newsom said in August he wanted to strengthen the rent-cap bill, he mostly meant he wanted to see “just-cause” eviction protections included. Assuming Newsom signs the bill, California landlords will have to list one of several specific reasons why they want a tenant out, such as dealing drugs from an apartment or failure to pay rent on time. Landlords who want to convert a unit into a condo or move a family member in will have to fork over one month’s rent to the displaced tenant for relocation assistance.

Marcos Segura, an eviction defense lawyer with the nonprofit Central California Legal Services, said a relatively small minority of his clients in the Central Valley are evicted without cause. Most of the time, landlords accuse them of not paying rent or otherwise breaking the lease.

But he says “just cause” protections could prove beneficial in preventing landlord retaliation. When landlords do evict tenants without cause, he says, it’s often because tenants have been complaining about shabby living conditions.

“If you take that option away from landlords, where they can serve no-cause eviction notices, in those cases, it would make all the difference in the world,” Segura said.

To compromise with landlords and developers, Chiu exempted an increasingly popular swath of California rental housing from his rent cap: single-family homes. While single-family homes owned by investment firms would be subject to the new measure, those owned by “mom and pop” landlords—the vast majority of the single-family-home rental market—would be exempted.

Even with that carve-out, Chiu’s bill represents the largest expansion of renter protections in recent California history, applying to 8 million renters, according to estimates from the lawmaker’s office.

Many of the renters live in cities that already have local controls but aren’t eligible for it. A state law passed in 1995, colloquially known as “Costa-Hawkins,” bans cities from expanding rent control to units built after 1995 and in some cities limits control to units built well before then. In Los Angeles, for example, rent control can apply only to units built before 1978.

Chiu’s bill would apply to all eligible California rental units built at least 15 years ago, meaning units built as recently as 2005 would be subject to rent caps.

That would be a major shift in California housing policy. Costa-Hawkins has been considered a “third rail” for the California Legislature for decades. While AB 1482 doesn’t actually touch the language of the 1995 law—cities would still be banned from expanding tighter rent limits on newer properties—millions of new housing units would be subject to a legal limit on rent increases.

Developers say the measure shouldn’t impede new construction, and they don’t oppose it. But no signature housing-production legislation will accompany the rent cap.

For those concerned with California’s million-unit housing shortage, the most compelling argument against a rent cap was that developers kept saying it could impede the construction of new housing.

While California apartment builders generally forecast annual rent increases of 2 to 3 percent when lining up financing for their projects, the flexibility to raise rents to what the market can bear helps persuade investors to plow money into the often uncertain and time-consuming process of building new housing.

But even before Gov. Newsom’s public comments, the California Building Industry Association—the premier lobbying group for California developers—announced it would not oppose the bill after it exempted new construction from the rent cap for 15 years.

“The new construction exemption is key, because it’s hard to get investors to invest in multifamily units on a 10-year window; it just doesn’t pencil out,” said Dan Dunmoyer, head of the group. “Fifteen years is a balance of what is doable for attracting capital. Anything less than that just makes it harder to bring investors to California.”

The organization’s withdrawal of opposition was also notable, because it has had mixed success in pushing through legislation it says would ease regulatory burdens and allow for more housing. Many Capitol insiders thought packaging a pro-development bill with a pro-tenant bill was a logical way to ensure that both could become law.

In Oregon, a bill that allowed developers to build fourplexes in areas zoned exclusively for single-family homes was passed shortly after the rent-cap bill. A similar developer-backed effort in California, SB 50, fizzled this year.

When making public comments about strengthening the rent cap bill, Newsom also publicly embraced SB 330, a bill from Sen. Nancy Skinner, a Democrat from Berkeley, that would limit many of the tools developers say cities use to stymie new housing.

Dunmoyer says Skinner’s proposal is a step in the right direction. But he admits it wasn’t the big boost to housing production that developers had hoped for, considering Newsom’s audacious goal of 3.5 million new housing units by 2025.

“I’m not surprised (the rent cap bill passed) because I’m a political analyst who looks at the dynamics—it’s easier to regulate than reform,” Dunmoyer said.

This is a big win for Newsom, who angered a key interest group to make it happen.

Gov. Gavin Newsom kind of needed this.

Shortly after a state ballot initiative that would have allowed cities to expand rent control failed overwhelmingly last November, Newsom (who very quietly opposed it) said he wanted to broker a deal between tenant groups and landlords. He reiterated his desire in February in his inaugural State of the State speech, calling on lawmakers to send him a package of renter protections he could sign into law this year.

Newsom’s late efforts to strengthen the bill by adding eviction restrictions and tightening the rent cap flipped opposition among key interest groups. While he was able to secure a compromise from the state’s biggest landlord lobby, he angered the powerful California Association of Realtors, who thought the governor was breaking a deal they had struck on a softer version of the rent cap.

The Realtors are a major source of fundraising for California Democrats, contributing nearly $1.38 million in campaign funds to sitting Democratic lawmakers and $2.5 million to the state Democratic Party since 2017. Since the stronger bill was introduced, Realtors have flooded Democratic lawmakers with phone calls and emails.

How Newsom’s intervention will affect future relations between the Realtors and state Democratic leaders remains to be seen.

The Realtors have a reputation for holding a grudge, no matter the party involved. After Rep. Mimi Walters, a Republican from Irvine, voted for a Trump tax-reform plan the Realtors opposed, the state and national realtor advocacy groups spent $3 million supporting her 2018 Democratic opponent, Katie Porter. Porter won.

The big landlord lobby is OK with this. Which could hurt the prospects for rent control at the ballot box in 2020.

The California Apartment Association and its allies spent more than $70 million against a statewide rent-control initiative in 2018, defeating it by nearly 20 points. That victory gave landlords a major rhetorical advantage in pushing back against Chiu’s bill: Californians had already been given an opportunity to expand rent control and voted it down.

So why cave now, less than a year removed from that decisive victory?

Progressive firebrand Michael Weinstein, president of the Los Angeles-based AIDS Healthcare Foundation, is currently collecting signatures for yet another statewide rent-control initiative for the November 2020 ballot. Weinstein maintains Chiu didn’t go far enough to protect tenants. However, landlords can now say lawmakers have already moved to curb excessive rent increases and egregious eviction practices without endangering new development.

“We will argue the state has already spoken on this topic; we will argue this is a balance; we will argue everyone came to the table and found some common ground finally for a temporary solution,” said Debra Carlton, lobbyist for the California Apartment Association.

Landlords may have also gained assurances from key Democratic leaders that they may oppose, or simply mute their support for, rent control in 2020. Asked by the Los Angeles Times whether the California Apartment Association had requested that Gov. Gavin Newsom oppose Weinstein’s potential initiative, Carlton gave no comment.

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

Published in Politics

The turmoil in the for-profit college industry has affected California as much as any state, with the closures of major chains leaving thousands of students deeply in debt and their educations on hold.

Meanwhile, the state agency in charge of regulating private colleges and vocational schools has struggled to enforce California law—and now lawmakers and agency officials are seeking to tighten oversight of the troubled sector.

A package of seven bills unveiled by Democratic state legislators would make major changes to the standards for-profit colleges must meet to operate in California.

One proposal, AB 1340, would bar schools from enrolling California students in programs designed to prepare them for careers if their students’ debt after graduation rises above a certain percentage of their incomes. It’s based on a “gainful employment” rule adopted by the Obama administration and since delayed by U.S. Education Secretary Betsy DeVos. The rule aimed to hold schools accountable for their promises to provide students with a path to a stable career.

“The story is commonplace—students taking out thousands of dollars of loans to enroll in a career-training program they have been led to believe will lead to a job, only to discover they’ve got themselves in a horrible financial hole with no return on their investment,” said the bill’s author, Assemblymember David Chiu of San Francisco.

A previous attempt to enact a California version of the gainful employment rule failed. But that was before California joined 17 other states in suing over the rule’s delay, and DeVos announced her intention to repeal it altogether.

About 160,000 California students attend degree-granting for-profit colleges, with many more studying for a career at one of the state’s for-profit vocational schools. Those numbers include 10 percent of black undergraduates, according to a recent study by the Campaign for College Opportunity.

This number includes veterans who use GI Bill money to pay for both tuition and living expenses. Another bill, by Assemblymember Susan Eggman of Stockton, would prevent colleges from using GI Bill funds to rely more heavily on taxpayer money than federal law otherwise allows.

A third, AB 1344 from Assemblymember Rebecca Bauer-Kahan, would expand the number of state rules with which out-of-state colleges enrolling California students in online programs must comply.

A staffer at the California Association of Private Postsecondary Schools, which represents many of the state’s for-profit colleges, said no one was available to comment by press time on the legislative push.

Chiu said he was inspired to work with colleagues on the issue after an investigation last fall by CALmatters and The Sacramento Bee that found California’s Bureau for Private Postsecondary Education often failed to enforce state laws designed to prevent predatory recruiting and other abuses at for-profit schools.

The bureau was inspecting schools less than half as often as California law requires, the investigation found, and had a backlog of nearly 1,200 unresolved student complaints, many of which had been pending for years. Some students said their complaints of fraud had been dismissed with little explanation.

This month, the bureau’s parent agency, the Department of Consumer Affairs, announced it had created a special five-member task force of current and retired investigators to reduce the backlog.

The bureau will also be reorganized, with its current enforcement chief transferring to an administrative role, and a new special investigator with experience in complex investigations hired to oversee complaints, said spokesperson Matt Woodcheke.

The reorganization “was a long time coming, and we hope that moving forward, the bureau is much more well-positioned to serve the needs of students in California,” he said.

Bureau staff said they had reduced the complaint backlog by about a quarter since November—though it’s unclear whether that was due to staffing changes or to the bureau’s decision to close out pending complaints if a student did not respond quickly to a letter asking if they wished to continue their case.

Attorney Megumi Tsutsui, a member of the bureau’s independent advisory committee who also represents students in fraud cases, said she hoped the new attention to complaints would lead to more thorough investigations.

“It’s great that they’re putting all these resources in place,” she said. “What I wouldn’t want them to do is just find ways to close cases by marking them done and moving on.”

If lawmakers pass AB 1340, and Gov. Gavin Newsom signs it, California would be the first state in the nation to establish its own gainful employment rule. At least some of the responsibility for enforcing the rule would likely fall to the bureau.

Chiu said he and his colleagues would be monitoring the bureau’s evolution closely.

“At this time when our students are being defrauded and victimized, we need the bureau to step up,” he said.

This story and other higher education coverage are supported by the College Futures Foundation. CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics

In one of his first official actions, Gov. Gavin Newsom has directed state agencies, including the one that oversees Medi-Cal, to negotiate as a block to demand prescription drug-makers lower their prices.

The move will make California the nation’s largest negotiator with pharmaceutical companies, and could become a model for other states—if it works.

“Right now, with all the gridlock in Congress, we are seeing quite a bit of state action on prescription-drug pricing—and we hope that advances as much as it can until we can see some change in Congress,” said Peter Maybarduk, who specializes in medicine access at Public Citizen, a consumer advocacy group based in Washington, D.C.

“California government has power,” he continued. “It is a large enough economy and large enough state to influence pharma behavior and dictate terms.”

It’s such an attractive idea that it seems to have united the progressive Newsom with his political nemesis, President Donald Trump. Both have espoused the wisdom of the government consolidating its massive purchasing power so it can bargain hard with drug companies and cut the best deal for taxpayers.

Trump campaigned on the notion of harnessing the federal government’s bargaining power to reduce drug prices for programs like Medicare, but the idea went nowhere, because it’s prohibited by federal law: Congress specifically barred the federal government from negotiating Medicare drug prices—a restriction defenders describe as free-market protection and critics deride as a giant pacifier to Big Pharma.

Still it remains a simple and appealing idea in a nation confronted by rapidly rising prescription drug costs. A recent Harvard/Politico poll found the No. 1 priority voters have for the new Congress is reducing the cost of prescription drugs.

There’s a reason it’s top of mind. A study released this month in the Journal of Health Affairs found that the cost of brand-name drugs rose each year between 2008 and 2016—by more than 9 percent per year for oral medicine, and more than 15 percent for injectable medicine. Specialty drug prices soared even higher each year.

In his executive order, Newsom said California has seen prescription drug prices rise 20 percent annually since 2000—and that the 25 most expensive drugs account for half of the state’s spending on pharmacy costs. So far, Newsom’s office has not released any estimates of how much it expects the new bargaining plan to save.

“We will use both our market power and our moral power to demand fairer prices for prescription drugs,” Newsom said during his inauguration speech Monday.

That same day, he told the state’s Department of Health Care Services to begin negotiating the purchasing of prescription drugs for all 13 million recipients of Medi-Cal, the state’s health-care system for low-income patients. Currently, the state only represents 2 million of them, while the rest are on managed health plans that negotiate their own drug rates.

“The governor is the only one that can do this; he is the only one that can force everybody to the table,” said Democratic Assemblyman Jim Wood of Healdsburg, who heads the state Assembly’s health committee.

He said the consolidated bargaining power is vital to address skyrocketing drug prices. With nearly one in three Californians on Medi-Cal, and its budget of $250 billion, even small savings could be significant.

“The savings we’ll be able to enjoy from less spending on prescription drugs,” Wood said, “will help offset some of the additional costs that we’re going to be incurring to expand coverage for other people in California.”

Massachusetts was the first state to enact a “bulk Rx buying plan” in 1999. States eventually started joining forces, and now there are five bulk-buying programs that include multiple states, with some reporting significant savings. Three of those are focused on buying drugs for Medicaid recipients, according to the National Conference of State Legislatures.

The oldest one, focused on Medicaid pooling, was created in 2003 with four states and has now grown to 10, including Michigan, Minnesota, Montana, New York and North Carolina. It represents 3.8 million Medicaid recipients—still less than a quarter of the Medi-Cal recipients California will be bargaining on behalf of.

In its last session, the California Assembly approved a bill that would have created a prescription drug bulk-purchasing program for the state, but it was then held by its sponsor, San Francisco Democratic Assemblyman David Chiu. His office cited a lack of support from then-Gov. Jerry Brown. And nearly two decades ago—in another effort to decrease drug expenses—the state authorized the Department of General Services to buy prescription drugs for state or local agencies through a bulk purchasing program, but the program hasn’t been used much.

The governor’s plan also calls for eventually giving private employers the option to join the consolidated purchasing block, although how that would work is still vague.

As for the expected drug-industry opposition, the Pharmaceutical Research and Manufacturers of America said it’s reviewing the proposal.

“We welcome the opportunity to work with the governor and his administration on comprehensive solutions to the problems patients are facing accessing and affording their medicines,” said spokeswoman Priscilla VanderVeer.

Gerald Kominski, senior fellow at the UCLA Center for Health Policy, lauded the idea of using market power to obtain the lowest prices possible, but predicted that drug-makers would unleash a campaign against it inside and outside of California.

“They will start running ads that are going to scare people—that if you are on Medi-Cal, you are no longer going to get this drug or this drug,” he said. “There will be dark music and maybe a doctor in the scene shaking their head 'no' saying you are no longer eligible for this or for that.”

For the health plans that currently serve the majority of Medi-Cal patients, efforts to get better prices are welcome, said John Baackes, CEO of L.A. Care Health Plan. With 2.5 million Medi-Cal patients, it is the largest Medi-Cal managed plan in the state.

“We are supportive of investigating the idea, because logically it says if the state is negotiating for 13.5 million people, they can do a lot, maybe more than what we can do for 2 million people,” he said. “It’s worth it to see if it will produce better pricing.”

But the details are going to matter, Baackes said. There has been no information yet on how it will be administered or how the state would handle customer service.

Even California, with super-sized buying power, can only bargain so far. Larry Levitt, senior vice president of the Kaiser Family Foundation, called Newsom’s approach “promising.” But he noted that the state can’t walk away from a negotiation, because it has an obligation to make sure that Medi-Cal recipients can access the drugs they need.

“Leveraging the purchasing power of the state is certainly a smart move,” said Sacramento Democratic Senator Richard Pan, chair of the Senate Health Committee. But he added a caveat: “We want to make sure it’s done in a way that ensures that people have access to the medication they need.”

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

Published in Politics

After a man held a knife to her throat, forced her into her car and repeatedly raped her, Helena Lazaro underwent a painful and humiliating medical forensic examination.

The 17-year-old wanted her attacker caught.

She never imagined the evidence collected in what is known as a rape kit would sit untouched for years by the Los Angeles County Sheriff’s Department. By the time she finally discovered the identity of her attacker, prosecutors couldn’t charge him with the rape—because the statute of limitations had expired in California.

“I think about that 17-year-old girl, the 25-year-old girl, the 30-year-old woman—all the versions of myself who have suffered,” Lazaro says. “That suffering could have ended much sooner.”

Victims’ rights groups estimate that hundreds of thousands of rape kits remain untested at police departments and crime-lab storage facilities nationwide. Thus far, a partial inventory of California by the End the Backlog Initiative has identified some 9,000 untested kits. But the precise number remains a mystery, because most states, including California, don’t inventory rape kits, and rape survivors sometimes struggle to get information about their own cases.

Law enforcement might opt not to submit kits for DNA and other analysis for any number of reasons—the case may be solved or cleared without the need for test results, or officers may regard it as a low priority. But another reason so many kits gather dust is financial: Processing costs an estimated $500 to $1,500 per kit, sometimes more.

Legislative efforts to count and clear the rape-kit backlog, to track the kits and to mandate all new kits be tested have failed over the years in California, with the powerful law-enforcement lobby citing the burden on labor and local police budgets. This year appears to be no different: Some legislation that would reform rape kit collection has been watered down. Other bills await approval from lawmakers charged with weeding through bills that carry a price tag, who often reject popular measures because of their cost.

The responsibility for submitting rape kits for testing largely falls to local police departments and county sheriff’s offices. But a growing number of states have gotten involved—reacting to a public outcry and to evidence that testing rape kits puts serial rapists behind bars. In recent years, California has “encouraged” law enforcement to submit kits within a certain time frame and legalized a victims’ bill of rights. But unlike many other states, California has stopped short of mandating testing or even paying to calculate the depth of the backlog.

One legislator has even resorted to a novel approach to crime-solving: A bill would ask California taxpayers to donate directly to the rape-kit backlog fund when filing their state income tax returns.

“It takes significant resources and political will, getting leaders to engage in this problem and say it’s a priority and (that they) want to fix it,” said Ilse Knecht, director of policy and advocacy at the Joyful Heart Foundation, a national nonprofit that works on sexual assault.

Tracking these kits, Knecht argues, is one way the public can hold law enforcement accountable for failures to prioritize sexual assaults as violent crimes, blaming the victim or only testing rape kits if a stranger committed the assault. Those cultural, subjective circumstances are the reason she and other advocates believe every rape kit ought to be tested—to end the discretion, and some say discrimination, involved in rape-kit testing.

“I think the injustice of this situation is obvious but bears some repeating,” said Assemblyman David Chiu during testimony before a Senate committee in June. “When kits are untested, survivors do not get justice.”

Chiu, D-San Francisco, authored AB 41, which would require local law-enforcement agencies to log all future rape kits into a California Department of Justice database—although the bill does not require the kits to be tested. It’s a small step toward the eventual goal of testing all rape kits, but even so, simply tracking new kits has garnered opposition from the California State Sheriffs’ Association, which argues the reporting requirement would divert limited resources from critical services.

“If agencies report this information, there will be a database about who has untested kits and why they are untested,” said Cory Salzillo, legislative director of the sheriffs’ association. “That doesn’t necessarily translate into convictions.”

Salzillo also challenges the premise that every rape kit should be tested, citing cases in which a person who committed a rape admitted to it; both the victim and the perpetrator agree a sexual encounter took place; or if a victim has recanted. However, it’s hard to know what percentage of untested kits stem from solved cases in California, because law enforcement isn’t required to report the information.

Lazaro still doesn’t know why the Los Angeles County Sheriff’s Department didn’t submit her test for analysis or why her case remained unsolved for so long. She spent her final year of high school terrified of her unknown attacker, who had threatened to kill her and her family if she ever reported the attack. When authorities did send Lazaro’s evidence kit for testing in 2003—seven years later—they didn’t tell her they had found a match. Her case never moved forward.

She didn’t learn the name of that match until 2009, after the sheriff’s department responded to an inquiry from a local rape-crisis agency. Lazaro said she was told that the results had never made it from the lab to the sheriff’s department, and received an apology. But by then, California’s 10-year statute of limitations on rape had expired. (Last year, Gov. Jerry Brown signed legislation that removes the statute of limitations on new sex crimes.)

Capt. Carlos Marquez from the Los Angeles County Sheriff's Department declined to comment on the case, saying he was about to meet with Lazaro.

At first, Lazaro was relieved when she finally learned that the man authorities had identified through testing as her rapist—a long-haul truck driver from Ohio—was in prison for sexually assaulting his wife: That meant Lazaro was safe. She believed her case had just slipped through the cracks. But then she learned about the hundreds of thousands of women nationwide whose rape kits have never been tested.

“I hate that I have to argue that it should be important enough to say, ‘We need to prevent women from being raped,’” Lazaro said. “We track information about so many other crimes. Why is this an exception?”

Lawmakers on the Senate Appropriations Committee have put Chiu’s bill on the suspense file, meaning it has a cost to the state and will be heard later this summer. Similar bills have died twice before in appropriations committees.

A recent Senate analysis concluded that Chiu’s rape-kit reporting bill presents a “potentially significant workload cost of more than $100,000 a year to local law-enforcement agencies statewide,” although that cost would likely be reimbursed by the state. Related legislation that would ban the destruction of a rape kit in an unsolved case for 20 years could cost the state $3 million for a new storage facility, along with $150,000 in ongoing costs. That bill, AB 1312 by Democratic Assemblywoman Lorena Gonzalez Fletcher of San Diego, initially contained a provision that would have mandated the submission and testing of all newly collected rape kits. But that was it stripped from the bill because of its cost.

“Funding shouldn’t even be a question,” said Harriet Salarno, chair of Crime Victims United Charitable Foundation, whose daughter was murdered; she has been working with victims for the last 37 years. “Public safety is a constitutional right. Public safety is a priority. They are using funding as an excuse.”

Critics say the cost of testing a rape kit is far outweighed by the cost of crimes prevented. In 2016, the Begun Center for Violence Prevention Research and Education at Case Western Reserve University in Ohio released a study that showed Cuyahoga County, Ohio, had saved $48.2 million by averting future sexual assaults after testing its 4,347 unsubmitted rape kits. A report by the U.S. Justice Department noted that Detroit alone had identified more than 400 serial rapists through the testing of backlogged kits.

A growing number of states have taken steps to address the backlog. Arkansas, Iowa, Louisiana and Minnesota now require law enforcement to inventory untested rape kits. Connecticut, Illinois, Ohio and Michigan require all rape kits be tested within certain timeframes. California joins Kentucky, Oregon, Pennsylvania and Utah with laws that give survivors the right to know the status of their rape kit, according to the Joyful Heart Foundation, which runs the End the Backlog campaign.

Congress has also stepped in. Since 2015, federal lawmakers have approved $131 million for the Sexual Assault Kit Initiative, and federal agencies have awarded millions in other grant dollars to help law enforcement and crime labs with their backlogs. The California Department of Justice, Orange County, the Riverside Police Department, the Alameda County District Attorney’s Office and the Contra Costa County District Attorney’s Office have all benefited from funding, according to the Department of Justice.

Still, lawmakers have been reluctant to mandate that law enforcement test all future rape kits, eliminate the backlog of untested rape kits or even do a statewide count to determine the backlog that exists.

Democratic Assemblyman Evan Low, from the Silicon Valley city of Campbell, said that’s why he put forward AB 280—to find an alternative way to raise funds to eliminate the rape kit backlog. His bill would add a check-off box to personal income-tax forms that allows taxpayers to donate directly to the Rape Kit Backlog Voluntary Tax Contribution Fund. If approved by lawmakers and signed into law, California taxpayers would have to donate at least $250,000 a year for the box to stay on the form.

The idea, however, hasn’t been well-received among advocates for sexual-assault victims, who commend Low’s intent, but argue the funding should come from law-enforcement budgets.

“This is the criminal-justice system. Laws have been broken, and you can’t prosecute without criminal evidence,” says Patti Giggans, executive director of Peace Over Violence, who worked with Los Angeles area public officials after Human Rights Watch in 2009 revealed more than 12,500 untested rape kits in the county.

“I don’t know of any other crime where you go to the public,” she added.

Low is the first to admit that his bill is “not the ideal nor perfect solution” to address the backlog. “I am in agreement that we, as a state and public jurisdictions, should adequately fund this for justice to be obtained,” Low says. “But, that’s not the reality.”

Lazaro, whose attacker was never charged with her rape, wants lawmakers to think about survivors like herself when these bills come before them. She is still traumatized by what happened to her at the car wash just four blocks from her home in Downey. And she wonders how her life might have been different had law enforcement immediately submitted her rape kit for testing.

“It changed my life,” Lazaro said. “And I’m just now starting to come to terms with how much of my life was stolen.”

Samantha Young is a contributor to CALmatters.org, a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics