Guest Post by Joe Guzzardi
California’s Department of Finance announced that the state faces a mammoth $54 billion COVID-19-created deficit which will, going forward, put the state’s countless public services at risk. Gov. Gavin Newsom projected an 18 percent unemployment rate, a 21 percent drop in new housing permits and a 9 percent decline in personal income.
The grim statistics are worse than at any time during the Great Recession. Newsom described the newest economic forecast as “jaw-dropping,” with COVID-19 wiping out California’s $16 billion rainy day fund and General Fund revenues projected to decline over $41 billion.
State officials anticipate that K-12 schools, community colleges, health care and social service programs are in jeopardy unless California gets a federal bailout. California’s critics who claim Newsom’s over-reaction to COVID-19 contributed to the deficit – Newsom is the first governor to demand that all his 40 million residents stay at home – nevertheless credit the governor with moxie for petitioning the feds for billions in emergency funding. This is the same Newsom that has sued President Trump’s administration more than 60 times, and has at various times called the president “a bully,” “a joke and a racist.”
Given the irrational hostility that Newsom and his Attorney General Xavier Becerra, who has publicly echoed the governor’s sentiments, have demonstrated, President Trump should demand a quid pro quo before he signs off on a California financial assistance package.
President Trump could offer funding in exchange for California enforcing, instead of illegally defying, federal immigration regulations. A Federation for American Immigration Reform report found that of the nation’s total $116 billion annual cost to subsidize illegal immigration, California ranked the most dependent on taxpayer subsidies at $23 billion per year.
Broken down, the $23 billion doled out to California’s roughly 3 million unlawfully present illegal immigrants and their children includes $8.1 billion to offset education costs, $7.4 billion to cover medical and other welfare-related services, and $2.8 billion paid into the justice system.
A good starting point for the Trump administration before he approves California funding would be to demand that Newsom revoke several disastrous laws that his predecessor Jerry Brown signed. The California Values Act, SB 54, eliminated many commonsense procedures regarding illegal immigrant violators. SB 54 forbade California law enforcement personnel from cooperating with Immigration and Customs Enforcement. Unless ICE has a federal court-issued warrant, or the perpetrator is a sex offender or has committed some other major crime, the jailed illegal alien cannot be turned over to federal authorities.
Another law, the Employment Acceleration Act of 2011, banned state agencies from requiring private employers use E-Verify which would ensure that only citizens and legal immigrants can keep recently obtained employment. E-Verify is an especially important program for American workers in post-COVID-19 recovery period. Since mid-March, more than 4 million unemployment claims have been filed in California.
Finally, Newsom should end California’s sanctuary state status, an open invitation for illegal immigrants to come to California, work and take advantage of the state’s nonenforcement laxity. California and 20 of its counties have declared themselves sanctuaries.
For more than a decade, California has advocated for illegal immigrant privileges dating back to 2011 when it approved in-state college tuition rates to nonresidents. Subsequent administrations followed up with issuing driver’s licenses to aliens and providing health care coverage for alien children.
The math on the proposed tradeoff – immigration enforcement in exchange for bailout money – is interesting. If California were to cooperate with the White House on immigration enforcement, the $54 billion deficit could be nearly eliminated within two years – $23 billion per year times two years equals $46 billion in alien expenditures saved.
California can’t have things both ways. Flagrantly flouting immigration laws, trashing President Trump, and then putting its hand out and expecting to receive billions is unfair to the 41 million unemployed Americans who abide by the rules.
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Umm, howsabout just…NO!
Why in flying F**K should ANY state get money for anything related to this whole cluster?
By not giving them any money, CA will have no choice but to stop handouts as there literally will be nothing to hand out. Pretty simple.
This has always been the solution to illegal immigration. If there is no free housing, free healthcare, SNAP, etc etc then there is no real incentive for whole families to come here.
Open up the migrant worker visas. Let them come, due whatever migrant work they want to do, then leave when it’s up. No staying, no moving elsewhere to try and fly under the radar for cash jobs.
I have personal experience with how illegals come here and game the system. And not in ways you think. There is a huge black market trade in stolen identities where gangs churn out Social security cards of deceased people, and yeah, even alive ones.
When I was in restaurant management the owner was Ecuadorian and became a US citizen. He employed Guatemalans, Ecuadorians, San Salvadorans, Mexicans, Bolivians. They were all here on either expired tourist visas, college visas, or no visa. He paid them cash. I left when he wanted me to start signing off on I-9 forms with obviously fraudulent or stolen Social Security numbers. I will say this. They all WANTED to work. Some worked two or three jobs. They were not drug dealers or criminals. The problem was they came here and got paid cash, used stolen SS numbers to get drivers licenses and Section 8 housing as they all now showed no income and usually had a wife and 2, 3, or 4 very young children, all of which were born here. The wives barely spoke any English at all.
I spent an entire weekend in Queens and did not hear nor speak one word of English. I saw the side of this like most people do not. I went to a Baptism where 300 people were in attendance. Not one word of English was spoken to me. But the party was great, no one got into a fight, the kids were polite, the food was great, the music awesome. No cops showed up. This culture has strong family values.
There does have to be a better way to get hardworking people who want to come here and work on a path to citizenship that doesn’t take 7 to 15 years to happen.
Ecuador is not a bad country, but like much of S America is poor, with little opportunity for poor people to advance just because it takes everything they have to get food and pay for housing.
The other issue is many of these people are just not skilled labor. Sure they can clean hotels, and cook food, and cut grass, but these jobs don’t pay much and so no matter how hard they work, they are never going to be able to afford rent and all of life’s general expenses on the up-and-up. So they prefer cash so they can still get benefits for housing and food. Trust me when I tell you, I did not know any engineers, doctors, or lawyers among them.
And much of their income goes back to their country of origin anyway.
I heard the stories of how much they paid the coyotes to get here. I heard the harrowing journeys, and what especially the women endured.
I don’t want to see anyone trafficked or abused just to come here. But the incentives are there and this is the problem. Just opening the borders is not going to make it magically go away, because then we would be flooded with unskilled workers looking for cash jobs that absolutely require them to get benefits just to live.
And it leaves the door wide open for the criminal element. Gang members, drug trafficking, human trafficking. Anyone who thinks these types of people would not take advantage of it is seriously fooling themselves. Cash, under the table workers are doing themselves no favors as they are open to work place abuse, sweat shop conditions, serious sexual harassment.
I don’t have the answers, but what we are currently doing is not working.
“…and much of their income goes back to their country of origin anyway…”
Illegal migrants take entry-level jobs away from US citizens, they increase the cost for taxpayer-funded “public services”, and they suck money out of the local economy. Why are the employers who profit from this scam allowed to continue?
John I think there is no actual “will” to enforce this. I think the token raids we see are for the benefit of he American public, and not reality at all. Every single illegal I knew had zero fear of being deported as long as they obeyed the law and had jobs. And in reality, these are not the people that are the problem.
Residing in NC I saw what happened to migrant workers who picked tobacco. They lived in shacks provide to them by the tobacco corporation. They were 100% taken advantage of. The wage they got, which at that time was probably 200 per week, was a windfall in comparison to where they came from.
I can tell you unequivocally that spoiled, lazy american citizens will not go pick tomatoes, oranges, apples, walnuts, or tobacco for any amount of love or money.
The real jobs being taken are H1-B visa holders. These are the ones taking skilled American jobs away from ALREADY EMPLOYED AMERICANS. WHO NOW HAVE TO TRAIN THEIR REPLACEMENTS.
This is a criminal enterprise in my opinion and should be abolished. But it won’t happen because the powerful lobbyists behind these corporations want it that way.
I do not care if seasonal visa holders come here and pick our produce. I care very much that H1-B visa holders come here and not only take American jobs, but then are fast-tracked for citizenship.
We need to get real about where we think actual Americans will work because I can tell you it ain’t the tobacco fields of NC and Virginia.
We need to eliminate H1-B visas completely and bring back manufacturing. The only way to do that is to encourage small manufacturers to start up, and grow, via tax breaks and easing of regulation.
Fabric, textiles, auto parts, plastics, metal parts, electronics. These all can be done regionally and by small companies. But they are crushed by payroll taxes and real estate taxes, mandatory insurance BS, all that jazz. And the big companies will not want the competition for their overseas made crap. Then some union tries to convince the employees to unionize for “more money” and “benefits”. When in fact these unions only want to drain these poor slobs of union fees so they can politically lobby for more and more and more.
It’s a never ending money grab on every single level while the working man and woman is left holding the bag.
Same topic but in another part of the world. New Zealanders do the same to Australia. They just don’t get it through their thick heads that, if they were not here we wouldn’t be spending a large amount on welfare for young kids and other public expenditure. BTW they have the worst work attitude I have ever had to encounter in my 34 years in the workforce.
Clean up the welfare rolls, get rid of illegals and you will see Americans doing the jobs they will not do when being paid to do nothing.
Pup,
Have you updated your real estate correction prognostication?
No. Because the stock market is still being artificially inflated, people, even those not in the market, think everything is fine. They tend to use that as their bellweather. Also the lyin’ “Realtors” keep saying how house prices are going up and up and the interest rate is down, down, down. Both of these things are true, but it doesn’t mean everything is “fine”. We have a massive amount of people on forebearance, another huge amount that could not get forebearance, and then we have thousands and thousands of HOAs that probably are not collecting fees, dipping into their reserves to pay what they have to pay. Then there’s all the multi family owners that are not collecting rent.
Remember the lenders changed their lending guidelines about 50 days ago. Why? What did they see that everyone else missed? They raised the minimum credit score requirements and downpayment requirements:
https://www.inquirer.com/business/loans-residential-trends-credit-requirements-scores-mortgages-homes-20200423.html
Because they know the shit is going to hit the fan.
Also keep in mind Wells Fargo recently suspended ALL LOANS to independent small car dealers. That is huge news that no one is talking about.
Hertz filed for BK. Who’s next? Avis?
Airlines are getting approval to suspend service to 75 airports.
The largest used car auctions have been doing “tele-auctions” effectively killing the business because really no one in their right mind is going to buy bulk used cars this way:
https://www.forbes.com/sites/maryannkeller/2020/04/14/used-car-market-signals-delayed-recovery-for-auto-industry/#58e1bc022a16
The signposts are there, it’s just no one is looking.
Housing is not an island unto itself.
The used auto industry is generally fairly insulated from down turns because the same car can be repo’d and sold over and over again in a quick turn time, but if the next guy or gal can’t get financing then those repos stack up and it’s game over.
I think money printing, low rates, and the oblivious nature of the average John and Jane Public will keep things floating along but it can’t last forever.
My 24 year old daughter and husband just bought an 8,000 square foot home. They are moving as I type. Her husband’s family owns a private REIT which has 6,000 rental units and over 1,000,000 square feet of commercial space as assets. They don’t seem concerned in the least.
in 2005 literally NO ONE believed the housing market was going to go belly up either. Everyone was wine and roses. Triple A credit ratings were handed out like candy to everyone who wanted them. I lived it. I got my license in 2005. Every single agent out there was living large, selling houses to anyone with a pulse and pen.
There is an everything bubble now. Housing will most likely hang on the longest, as it typically does, but when it goes, it crumbles hard and fast.
I wish no one to lose everything, but reality and the underlying rot is there if you know where to look.
It is impossible for hard asset prices like real estate to keep going up and up, along with rents, and income to stay flat, along with massive unemployment, riots, looting, and the like, retailers filing BK, hospitals bleeding cash from no patients, states a hair’s breadth away from bankruptcy, and housing to be magically unaffected.
Everything is cyclical.
What do you mean Commiefornia cannot have it both ways ?
Socialists and Communists always have it both ways !
Always in a position to force others to pay them and supporters and employees well and double down on their foolish ideas regardless what happens to the host . IT is a parasitic life style that kills all it encompasses .
I totally agree. Newsom needs to clean things up before he goes begging Trump for bailout money. Otherwise, suck it.
Subsidize stupidity and take a wild ass guess at what you’ll get more of?
Friggin idiots run the place and the same goes for half of the people who live there.
The China Flu did not cause any disruption. The over-reaction by government caused all the turmoil.
What did Nancy Reagan say? Oh, right.
Just Say No!
So, what you’re telling me is, nothing is really “free”.
Who knew ?
Or pass out speeding tickets at the Indianapolis 500 after the race is over.
https://www.newcaliforniastate.com/