California
Tough love plan could end California's unemployment insurance stalemate
When the Great Recession struck California 17 years ago and hundreds of thousands of workers lost their jobs, the state’s unemployment insurance system crashed.
The employer-financed program quickly exhausted its thin reserves, due to a short-sighted political decision six years earlier.
In 2001, the Unemployment Insurance Fund had a $6.5 billion positive balance. But the governor at the time, Democrat Gray Davis, owed big political debts to unions that financed his 1998 campaign. He repaid them by doubling unemployment insurance benefits, contending that the seemingly hefty reserve could cover them without raising payroll taxes on employers.
When recession struck, the insurance fund soon leaked red ink and the state borrowed about $10 billion from the federal government to maintain cash payments. When the state didn’t repay the loan, the feds raised payroll taxes for nearly a decade to retire the loan.
It should have been a lesson for political policymakers about instant gratification and financial responsibility, but it wasn’t.
Shortly after the $10 billion loan was paid off, California was hammered by the COVID-19 pandemic, and upwards of 3 million workers lost their jobs as the state ordered workplace closures.
Once again, the unemployment insurance program had virtually no reserves to cover the sharp increase in claims. Once again it borrowed from the federal government, this time for $20 billion, and once again its failure to repay forced the feds to increase payroll taxes.
In addition to a double dose of financial problems, the Employment Development Department has also experienced managerial failures.
In 2011 Elaine Howle, the state auditor, laid out the department’s shortcomings in a sharply worded report, but when the pandemic hit, they once again became evident. There were massive glitches in responding to legitimate claims for insurance benefits, while the department gave tens of billions of dollars to fraudsters.
Meanwhile employers are still repaying the last loan, and the state’s insurance fund is continuing to run deficits, unable to cover current benefits of nearly $7 billion a year.
With that history in mind, another watchdog agency, the Legislative Analyst’s Office, is urging a complete overhaul of unemployment insurance, declaring the system “is broken.”
Noting that the current state payroll tax cannot fully cover current benefits, much less build reserves, the LAO report projects a “perpetually outstanding federal loan” to keep payments flowing that must be repaid with interest.
The report proposes a four-part tough love approach to a crisis that has been building for more than two decades and cannot solve itself, to wit it advises the state to:
- Increase the taxable wage base from $7,000 per worker to $46,800, tying it to the actual benefits of up to $450 a week. It “would place California among the ten states with taxable wages bases above $40,000 and all other Western states.”
- Adopt two payroll tax rates, one to cover current benefits and another to rebuild reserves. The combined rate of 1.9% would be applied to the $46,800 wage base.
- Base employers’ tax rates on their changes in employment, thus imposing higher costs on employers that reduce their number of workers.
- Refinance the federal loan with a bond backed by payroll taxes and state loans from its internal sources to reduce overall interest costs.
There may be other alternatives, perhaps affecting benefits, but the main thing is that doing nothing will just perpetuate this crisis — even though the politics of the issue are daunting.
It’s been a political stalemate for nearly a quarter-century, pitting unions seeking to protect, or even increase, benefits against employers who don’t want to shoulder increased taxes. Successive governors and legislative leaders have shunned engagement, preferring to kick the can down the road.
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California
Chance of more showers in L.A., with a new storm set to hit Thursday
Showers could linger in Los Angeles on Tuesday following four straight days of rain — and even more rain is likely on Thursday and Friday.
There’s a 20% to 30% of showers and thunderstorms Tuesday across much of Los Angeles County, the National Weather Service said, although it’s expected to be mostly sunny. The thunderstorms will remain a slight risk because of a cold front that ushered in unstable air Monday.
By Tuesday, the cold front will have moved away from L.A., but the cold core of the low-pressure system will still be around. “This will bring enough instability to the area for a slight chance of thunderstorm development,” the weather service in Oxnard said.
Temperatures have chilled with the latest storm. While the L.A. coast and San Gabriel Valley on Monday reached the mid-60s, due to late arriving rain, most of L.A. County’s coastal areas and valleys “struggled to get out of the 50s,” the weather service said.
Wednesday will bring a reprieve with sunny skies, but another storm is expected to enter Southern California on Thursday and continue through Friday.
Thursday’s storm is expected to drop from 0.25 to 0.75 inches of precipitation. That’s on top of the 0.74 inches of rain that fell on downtown L.A. in the 24-hour period that ended at 9 p.m. Monday. Before that, the weekend storm that began Friday brought 2.68 inches of rain to downtown.
For the 24-hour period ending 9 p.m. Monday, Porter Ranch received 1.61 inches; La Cañada Flintridge, 1.5; Northridge, 1.43; Bel-Air, 1.21; Castaic, 1.15; Van Nuys, 1.12; and Beverly Hills, 1.11.
Warm Springs Camp, in the mountains overlooking the Santa Clarita Valley, recorded an 18-hour rainfall total of 2.5 inches by Monday evening.
The storms, thus far, have caused some mayhem but no severe or life-threatening damage in recently burned areas.
By late Monday night, landslides and flooding were reported on a number of roads. The 5 Freeway near Highway 14, between Sylmar and Santa Clarita, suffered flooding Monday afternoon, as did an offramp on the 91 Freeway at Carmenita Road. The California Highway Patrol said there was flooding at onramps to the 10 Freeway in El Monte and the 605 Freeway on the southern border of Baldwin Park.
Mountain roads were hard hit. One motorist on Angeles Crest Highway, a road that winds through the San Gabriel Mountains, became “stuck in mud, dirt and rock” in a northbound lane, while the southbound lane was completely blocked with multiple landslides, according to reports filed to the National Weather Service. Snowplows couldn’t haul away the debris because it was too heavy.
Near the 101 Freeway in Hidden Hills, a number of vehicles hydroplaned as Round Meadow Road flooded near Mureau Road.
Monday afternoon and evening also brought rockslides or mudsldies to San Francisquito Canyon Road, the mountainous route that connects Santa Clarita to the Antelope Valley; a section of Kanan Dume Road, which leads into the Santa Monica Mountains from Malibu; and on Mulholland Highway south of Calabasas.
Snow levels were at around 7,000 feet on Monday but were expected to drop to 5,000 feet by Tuesday. Officials issued a winter weather advisory for the eastern San Gabriel Mountains and the northern Ventura County mountains that is set to last through Tuesday night. About 2 to 5 inches of snow could fall in the mountains.
“As for the Grapevine area, there is a chance of a dusting of snow Tuesday morning as the snow levels lower,” the weather service said. The Grapevine is a key travel corridor on the 5 Freeway that connects L.A. and Santa Clarita with the Central Valley and the San Francisco Bay Area.
The highest point of the Grapevine section is the Tejon Pass, which peaks in elevation at 4,144 feet above sea level. At that location, “some non-accumulating snow is possible,” the weather service said.
California
New roller coaster coming to Legoland California and Florida
Legoland doesn’t have the same mindshare as a Disney or Universal resort, but Merlin Entertainments, the owner of those theme parks, is hoping to get onto the radar of more theme park enthusiasts with an upcoming $90 million expansion.
The Galacticoaster, scheduled to open in 2026 at both the Legoland Florida and Legoland California resorts, will be an indoor family coaster that’s themed to one of the first Lego space sets from the 1970s, when a 100-piece set was considered expansive.
This will be the first new roller coaster at Carlsbad’s Legoland California in nearly 20 years. In Winter Haven, Fla., it will be Legoland Florida’s first new coaster in 15 years.
Legoland hasn’t offered a lot of details about the coaster just yet. The building that will house it, however, will have the same footprint as 10 basketball courts. The track will be more than 1,500 feet long.
California’s Lego Galaxy expansion will also feature two additional themed rides, food and gift shop offerings, and a “Junior Astronaut Training Zone” for toddlers.
Legoland’s expansion comes as Disney is in the midst of a $60 billion capital investment between now and 2033, which includes a variety of planned updates and changes at its park, updating legacy attractions and unveiling what it called “the largest ever” expansion plans for the Magic Kingdom. The company is also adding seven ships to its cruise line fleet, including the Destiny, which will begin sailing on Nov. 20.
Universal, meanwhile, recently launched Epic Universe, a $6 billion new theme park that spans 110 acres, with hundreds more for expansion. Universal, in August, said revenue at its parks was up 19% thanks to Epic Universe.
A $90 million expansion doesn’t come close to matching those numbers, but Legoland doesn’t have to fight at the same level as those companies. Merlin Entertainment, earlier this year, said annual sales hit a record high last year, with revenues jumping 8% to £2.1 billion (about $2.8 billion) in 2024.
Beyond Legoland, Merlin owns the Madame Tussauds museums and the Orlando Wheel at Icon Park, Central Florida’s tallest ferris wheel.
California
Lingering thunderstorms bring flooding risk after atmospheric river drenches much of California – WTOP News
LOS ANGELES (AP) — A powerful atmospheric river had mostly moved through California after causing at least six deaths and…
LOS ANGELES (AP) — A powerful atmospheric river had mostly moved through California after causing at least six deaths and dousing much of the state, but lingering thunderstorms brought the risk of mudslides in areas of Los Angeles County that were recently ravaged by wildfire.
Flood advisories remained in place through Sunday afternoon for LA, Ventura and Santa Barbara counties, where localized showers were still possible after heavy downpours on Friday and Saturday.
“Due to the abundant rainfall the past couple of days, it will not take as much rainfall to cause additional flooding/rockslide conditions,” the National Weather Service said in a Sunday update.
Authorities on Sunday were still searching for a 5-year-old girl who was swept into the ocean by 15-foot (4.6-meter) waves at a state beach in Monterey County on Friday. The girl’s father, 39-year-old Yuji Hu, of Calgary, Alberta, was killed while trying to save his daughter, sheriff’s officials said.
In Sutter County north of Sacramento, a 71-year-old man died Friday after his vehicle was swept off a flooded bridge, according to the California Highway Patrol.
Off the coast of San Diego, a wooden boat believed to have been ferrying migrants toward the U.S. from Mexico capsized in stormy seas, leaving at least four people dead and four hospitalized, the Coast Guard said Saturday.
The long plume of tropical moisture that formed over the Pacific Ocean began drenching the San Francisco Bay Area on Wednesday night and then unleashed widespread rain over Southern California on Friday and Saturday. More than 4 inches (10 centimeters) of rain fell over coastal Santa Barbara County as the storm approached Los Angeles. Parts of the Sierra Nevada received more than a foot of snow.
The weather service said scattered rain could continue through Tuesday in the southern part of the state. Another storm was expected to arrive on Thursday.
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