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May 2019 Public Policy Roundup

Publication date: 
Wednesday, May 29, 2019

Thank you to everyone who support and attended our 2019 Philanthropy in the State Capitol events! We had a successful event, convening nearly 40 funders – community foundations, corporate giving programs and private foundations from across the state – to share stories, strategies and visions for the future with state legislators. Over the course of one day with 44 meetings, we demonstrated the role which philanthropy plays in co-creating positive change through our investments in communities. We focused our conversations on the importance of the Census, and why more than ever, we all must do our part for a fair and accurate count.

This month’s Public Policy Roundup focuses on economic and community development policies, the future of California’s representation in Congress, the census, immigration and more, including:

  • Opportunity Zones, related statewide policy proposals, and a call to action for our grantmakers concerned with displacement.
  • Research from the California Department of Finance on changing growth rates, and how that means California could lose representation in Congress.
  • Updates on Measure HHH and the County Juvenile Justice Coordinating Council
     

Any feedback or comments on this newsletter is always greatly appreciated.

 

Philanthropy Takes Action: Donor Advised Funds

In March, we shared with you that California State Assembly Member Buffy Wicks introduced Assembly Bill 1712, a bill sponsored by CalNonprofits related to donor advised funds (DAFs).

We took serious issue with the broad, vague and undefined powers delegated to the Attorney General’s Office and the bill’s findings, steeped with misinformation and misperceptions about philanthropy. Through our advocacy efforts with the League of California Community Foundations, we were able to halt the bill’s advancement in the Assembly Judiciary Committee. You can read our letter of opposition here.

We look forward to our conversation with stakeholders to have a thoughtful and constructive discussion in June.

 

Census Focus: Slow Statewide Growth Means California Could Lose a Congressional Seat

At the beginning of the month, the CA Department of Finance released a report detailing 2018 demographic and housing trends. The population growth rate between January 2018 and January 2019 was 0.47 percent, the lowest rate in the state’s history. The slowed population growth is attributed to the significant decline in the number of births, which was down by 18,000 in 2018 compared to the previous year. Based on these trends, Election Data Services, an election data analytics firm, estimated that at the time of the 2020 Census California is in a likely position to lose one congressional seat.

The infographic below demonstrates the effects that the catastrophic wildfires have had on the state’s population and housing displacement. The Camp Fire of Butte County displaced nearly 83 percent of the population of the Town of Paradise and destroyed 90% of the town’s housing, causing many of the displaced population to move to surrounding cities such as Chico or Sacramento. The graph also shows the growing migration inland as the costs of coastal living continue to rise.

The slow growth in population coupled with a challenging Census environment makes California particularly vulnerable to losing political representation in Washington, DC, affecting philanthropy’s investments in voter engagement efforts in communities.

 

Update on Opportunity Zones

At our Public Policy Conference, over 60 funders packed into a breakout session to learn how Opportunity Zones (OZ) would affect communities throughout the Southland. Since our conversation, several new resources and opportunities have emerged where philanthropy can leverage its experience:

The John S. and James L. Knight Foundation released a brief on How Philanthropies Leverage Opportunity Zones. The brief echoes many themes from our conference discussion, including convening stakeholders, capacity building in communities affected by OZ, catalyzing innovation and providing information.

U.S. Housing and Urban Development (HUD) has published a Request for Information (RFI) related to Opportunity Zones. Philanthropies can lend their intellectual capital to the questions raised by HUD, including how OZs can benefit existing residents, end homelessness and coordinate among different agencies. The deadline to respond is June 17, 2019. If you are interested in preparing a response, we are happy to provide assistance or coordinate different funders.

 

Background on Opportunity Zones

A new federal financing tool could significantly impact up to 3 million California residents across 57 of the state’s 58 counties. Opportunity Zones, established through the Tax Cut and Jobs Act of 2017 (TCJA), promise to bring in more private investment dollars to under-invested neighborhoods. In order for a census tract to be eligible for an Opportunity Zone designation, it must be nominated by the Governor’s Office and it must have a poverty rate of 20 percent or higher, or meet other related criteria. Opportunity Zones incentivize private investment through a reduction in long-term capital gains tax liability. Individuals and corporations that invest in a Qualified Opportunity Fund are eligible. Investors may still have to pay California state taxes on capital gains, though. Community advocates worry that the volume of private investments could result in displacement and that the investments will not benefit current residents. The stated goal of Opportunity Zones is to benefit residents of ‘distressed’ communities but it does so by waiving capital gains tax liability, even though over 90 percent of taxpayers that earn capital gains are in the top twenty percent of earners.

 

HUD Request for Information

On April 22, 2019, HUD requested input on how to best leverage HUD’s tools and resources to maximize the positive impact of Opportunity Zones. The deadline to respond is June 17, 2019. HUD expressed interest in all suggestions but requested specific responses to a series of questions, including:

  • What role can HUD play in helping to ensure that existing residents, businesses, and community organizations in Opportunity Zones benefit from the influx of investment? And, how can HUD properly evaluate the impact of Opportunity Zones?
  • How can HUD coordinate federal interagency efforts between investors, business owners, local education and child care educations, human services agencies, state and local leaders, nonprofit organizations, economic organizations, and tribal leaders?
  • What policies would help community-based applicants, including recipients of investments opportunity funds, identify and apply for relevant federal resources?
  • And, how might Opportunity Zone investments support the goal of ending homelessness?
     

HUD published information showing the extent of current investments in designated Opportunity Zones, including:

  • Nearly 2.4 million persons live in HUD-assisted housing located in Opportunity Zones;
  • There are over 370,000 Public and Indian Housing units within Opportunity Zones;
  • Over 20 percent of nation’s Housing Choice Voucher (HCV) holders live within opportunity zones. This amounts to nearly 1 million people; and
  • Over 500 healthcare facilities with FHA mortgage insurance are within Opportunity Zones.

 

Focus on State Efforts to Implement Federal Opportunity Zones Program in California

While Governor Jerry Brown’s Administration already designated 879 census tracts to become Opportunity Zones (OZ), there is more to be done for state and local policies related to OZ investments.

OZ encourage private investments in “distressed” communities by providing a reduction in long-term capital gains tax liability. Individuals and corporations that invest in a Qualified Opportunity Fund are eligible. While investors receive reduction in federal tax liability, they may still have to pay California state taxes.

The California Budget & Policy Center raised concerns related to OZs and gentrification, stating, “While the benefits to wealthy investors are clear, there is no guarantee that subsidized investments will positively impact current residents of designated OZs.”

State and local leaders will continue to contemplate how investments in OZ can benefit current residents. For example, Governor Newsom’s May Revised Budget Proposal partially conforms to federal provisions on deferred and reduced capital gains for investments in California OZ, specifically for investments that include green technology and affordable housing and these may be leveraged with the state’s Infill Infrastructure Grants.

Interested grantmakers can read more about California’s Budget & Policy Center report on OZ here.

 

Research

Measure HHH Dashboard: Tracking Progress of Supportive Housing Unit Development

As the City of Los Angeles continues to seek proposals to develop supportive housing for people experiencing homelessness, the Housing and Community Investment Department (HCID) has released infographics on the number of supportive housing units in the development pipeline, funds committed to these projects, and the target populations that will be served by these units. Track the development of supportive housing and learn more about HHH on the HCID dashboard website.

 

Knowledge Capture: Public Policy Conference

Public Policy Conference Morning Plenary: Generational Opportunities to Lift California’s Most Impoverished Children

During the morning plenary of our Public Policy Conference, speakers Chris Hoene of the California Budget & Policy Center, Kim Patillo Brownson of First 5 LA and Giannina Perez of Governor Gavin Newsom’s Office discussed how philanthropy can educate, advocate and partner with state and local government for equitable early childhood investments. A key takeaway was that private grantmaking from funders will be smaller than state investments, and therefore funders should consider using policy, advocacy and communications campaigns to organize stakeholders and catalyze systems change beyond what can be accomplished through individual private grantmaking.

 

Afternoon Plenary: Governor’s Proposed 2019-2020 Budget

Antonia Hernandez of the California Community Foundation and Lisa Hershey of Housing California discussed the Governor’s proposed budget and its long-term implications, some of which include how the next statewide healthcare battle is not necessarily about increasing coverage but rather increasing access. They emphasized the importance of tackling housing and healthcare together, and how Governor Newsom plans to create new affordable housing, preserve existing housing, and serve those currently experiencing homelessness.

Review conference materials and resources here. You can also watch video of the morning and afternoon plenary sessions here.

 

Community Events

County Juvenile Justice Coordinating Council (JJCC)

The next LA County Juvenile Justice Coordinating Council (JJCC) meeting is scheduled for Friday, May 31, in Whittier, from 10 am to 12 noon at Liberty Community Plaza. The meeting provides an opportunity to share lessons learned and insights into better serving youth and their families/caregivers in Los Angeles County. Created in 1966 in response to state legislation, the JJCC oversees county funds related to justice reinvestments for young people. On April 30, the LA County Board of Supervisors approved a new budget plan (approximately $28 million - $31 million annually) developed by the JJCC. Read more about the plan here.

Additionally, in February, the County approved a historic Public/Private Partnership between the LA County Probation Department and two SCG members, the Liberty Hill Foundation and the California Community Foundation. For more information on the JJCC and the JJCPA click here.

 

California Immigrant Integration Initiative

Grantmakers Concerned with Immigrants and Refugees will host their second quarterly California Immigrant Integration Initiative (CIII) on June 12. The meeting will address Governor Newsom’s administration immigrant policies and how they impact GCIR and partner organizations.

Grantmakers can register for the meeting here. Northern California funders can attend in person in the San Francisco Foundation’s Koshland Room, while all others can attend via video conference.