The Brief

It’s official: California voters will not be asked to overturn the Los Angeles “mansion tax.”

A measure to eliminate Measure ULA — and similar taxes across the state — was headed for the November ballot. But a last-minute deal in Sacramento convinced the initiative’s sponsor to pull it just before the deadline to remove qualified statewide measures from the finalized ballot.

The Howard Jarvis Taxpayers Association agreed to shelve its measure on Thursday because state lawmakers swiftly passed language for a substitute measure. It will ask California voters to raise the threshold for passing new special taxes to two-thirds, up from the simple majority courts have ruled is sufficient to pass many special taxes, such as Measure ULA.

Jon Coupal, the taxpayers association’s president, celebrated the deal in a statement.

“It’s a tremendous turnaround,” he said. “The Legislature voted to make it harder to raise taxes by advancing a constitutional amendment, ACA 22, to close a loophole that had allowed some special taxes to pass with less than the two-thirds vote required by Proposition 13.”

Winners and losers

The founding of the Howard Jarvis Taxpayers Association dates to the 1978 passage of Proposition 13, which ushered in an era often called the “taxpayers’ revolt.” Proposition 13 created statewide limits on property taxes that remain in place today.

But where the taxpayers association sees victory in this week’s Sacramento deal, another powerful group sees defeat. Real estate developers and investors bankrolled the Howard Jarvis initiative in the hope of pressuring state lawmakers to reduce tax rates levied on the sale of high-value properties by Measure ULA and similar “transfer” taxes in other cities.

But the deal cut in Sacramento this week leaves existing transfer taxes untouched, said Mott Smith, board member of the Council of Infill Builders.

“The Howard Jarvis Taxpayers Association got its major objectives fulfilled,” said Smith, also an adjunct professor of real estate at USC who has co-authored research concluding Measure ULA has depressed development in the city.

“The industry supporters that got them there really got absolutely nothing,” he added. “It is an absolute Game of Thrones twist at the end of this process. Nobody thought this was going to happen.”

‘Mansion tax’ reform stalls… again

Smith and other economists, housing advocates and developers have pushed for new limits on Measure ULA. Nearly 58% of city voters approved it in 2022 following a campaign that described the policy as a “mansion tax.” Previous attempts at the local and state levels to roll back the tax, or stop it from applying to new apartment buildings, have all failed.

The latest attempt at reform briefly coalesced around legislation unveiled earlier this week.

Assembly Bill 736 would have allowed Measure ULA to continue taxing the sale of mansions — defined as single-family homes selling for more than $5.4 million — at current rates, which can be as high as 5.5%. But it would have capped tax rates at 1.5% for non-mansions, such as apartment buildings, retail centers and other types of commercial and industrial properties.

Pro-development housing advocates with the group California YIMBY — as in “yes in my backyard” — argued the bill would have helped “fix the problems with poorly-designed transfer taxes” and “preserve the ability of local governments to expand housing supply.”

The bill, co-authored by Bay Area Assemblymember Buffy Wicks, now faces an uncertain future.

“Politics is often about navigating imperfect choices,” Wicks said in a statement. Getting the Howard Jarvis measure off the November ballot means local revenue raised by Measure ULA and other transfer taxes is no longer at risk of being eliminated, she said.

“At the end of the day, protecting those resources for our local communities is the responsible path forward,” Wicks said.

Why this fight still might not be over

Measure ULA supporters celebrated the death of the Howard Jarvis measure, saying its removal safeguards funding for L.A. affordable housing development and tenant aid programs.

“The best programs we have to build affordable housing and prevent homelessness through ULA were at risk, and — at least for now — they're not,” said Joe Donlin, director of the United to House L.A. coalition. He estimated that AB 736 could have cut tax revenue by up to 50%.

Measure ULA has raised $1.2 billion since taking effect in April 2023. Tens of millions of dollars have already been delivered to tenants in the form of rent relief, legal defense in eviction court and other assistance programs. Other funding has helped subsidize the development of nearly 800 income-restricted housing units.

But the city has run into roadblocks on spending much of the money for its intended purpose. New tenant aid contracts remain held up by outgoing L.A. City Attorney Hydee Feldstein Soto, who has refused for more than a year to approve long-term funding for the city’s lead eviction defense contractor.

The City Council is also still mulling changes to get more housing built by loosening strict limits that make Measure ULA dollars hard to pair with other sources of affordable housing funding.

Even with the Howard Jarvis measure now off the ballot, L.A. voters could still be asked to make decisions on other “mansion tax” reforms in November.

The L.A. City Council is considering placing two local measures on the November ballot. One would cancel the tax on new apartment buildings within the first 10 years of their construction. The other would exempt Palisades Fire victims who end up selling their properties.

Both of those reforms need further debate and approval from the City Council before they would be confirmed for the November ballot.

As for the deal Howard Jarvis hatched with state lawmakers, it remains possible that the taxpayer group could achieve none of its goals. If a majority of California voters reject the new measure to make special taxes harder to pass, future tax hikes along the lines of Measure ULA would still be allowed to take effect with a simple majority vote.

The Los Angeles Unified School District is preparing for possible “Super El Niño” storms that could damage schools and lead to closures, the district announced in a media release Tuesday.

District staff are clearing drains, trimming trees and checking roofs, windows and doors. LAUSD is also testing emergency equipment, including pumps and emergency lighting systems, and stocking supplies such as flashlights and drinking water.

“Preparing for severe weather starts well before the first raindrop,” Superintendent Andrés Chait said in a statement. “We can’t control the weather, but we can take steps now to protect our students and employees and help our schools stay ready.”

The district will monitor weather patterns using information from the National Weather Service and local emergency officials, it said.

LAUSD encouraged families to update their contact information to ensure they receive district calls, texts and emails. Families should also monitor weather alerts, follow emergency officials’ instructions, avoid flooded roads and review safe routes to and from school, according to the release.

“Preparing for a storm is a shared effort — from the crews maintaining school buildings to the principals reviewing emergency plans and the families making sure they can receive critical updates,” LAUSD said in the release. “By taking these steps before the rain begins, Los Angeles Unified is working to help students and employees stay safe and keep school communities as prepared as possible for the winter ahead.”

Southern California is likely in for a solid dose of rain this week, just days after heat and Santa Ana winds helped fuel several wildfires across the region.

Forecasters expect the bulk of the rain to roll into the Los Angeles basin Wednesday night and continue into Thursday morning, with a small chance of thunderstorms and hail.

The San Fernando Valley, San Gabriel Valley and coastal areas across L.A. and Orange counties could get around an inch over the next few days. Hills and mountains could get up to 3 inches.

“We could see some pretty high rain rates,” said National Weather Service meteorologist Mike Wofford. “It's a good storm for this time of year — it's a little stronger than what we would see normally.”

The possibility of significant rain in the mountains raises concerns about flooding in areas recently burned in wildfires, particularly around the Bryson Fire burn scar near Malibu, which is only a few days old. Burn scars can’t absorb heavy rainfall and are susceptible to landslides.

The National Weather Service has issued a flood watch for the Santa Monica Mountains and surrounding communities from Wednesday afternoon through Thursday. That means heavy rain there could flood streets, creeks and rivers. The flood watch area includes both the Bryson Fire and Palisades Fire burn scars.

This will also be the first nontropical storm of the season, meaning it’s moving into the region from the north. Most storms that hit Southern California follow a similar path, especially during the winter, unlike the tropical storms that formed off the coast of Mexico and brought muggy weather to the region this summer.

Nontropical storms also bring cold air to the region. On Wednesday and Thursday, forecasters expect highs in the 60s and 70s. High elevations will be even cooler.

The science research institute that would likely receive $4.2 billion in public taxpayer money if voters approve Proposition 38 this November had only three employees as of last month — far fewer than the 51 staffers it planned to have hired by last year.

Public statements and public records CalMatters obtained raise questions about how well prepared the institute is to shepherd so much money if the bond measure passes.

Prop. 38 would allocate up to $8.4 billion in bonds for scientific research on diseases and cures concerning the immune system, with an emphasis on finding treatments for Alzheimer’s, cancer and heart disease. The ballot language stipulates that a single, unnamed research institute would receive half the bond’s money to conduct research and partner with other researchers if it meets highly specific criteria. Bonds are a type of debt that must be repaid.

Previous reporting by CalMatters found only one institute in California currently meets those criteria: the California Institute for Immunology and Immunotherapy. The institute’s principal funder is billionaire Gary K. Michelson, who wrote Prop. 38 and is by far the largest donor to its political campaign.

Backers of the proposition said state bond money is needed to stabilize research funding after President Donald Trump repeatedly attempted to cut existing and future federal science grants.

The measure’s critics say Prop. 38 is well-intentioned but poorly designed because it overlooks the many established public and nonprofit university and hospital research labs in California. They also say California should not subsidize subsets of scientific research and instead should support research more broadly.

CalMatters obtained documents that included the five-year business plan of the California Institute for Immunology and Immunotherapy. The plan was part of the formal affiliation agreement between UCLA and the institute, which the two parties signed in August 2024. Among other details, the agreement requires the institute to pay UCLA 7.5% of the net revenue of any drugs and technologies developed by the institute’s staff. The institute is one of the founding tenants at a UCLA-owned research park in West Los Angeles, where the institute is leasing 235,000 square feet of research space, the institute says.

Far fewer employees than plan called for

Between summer 2024 and summer 2025, the institute committed to hiring “approximately” 51 employees, including six executives, five “world-class” scientists who can lead research labs, and 40 other employees, such as data scientists, lab technicians, biologists and administrative personnel. Between 2025 and 2027, the institute would hire roughly 90 more workers, including 10 research lab leaders, according to the agreement.

But John Mazziotta, a senior UCLA official who also serves as a board member of the immunology institute, last month said the institute has hired just three employees: a chief operating officer, a general counsel, and a scientific advisor, and “they're well into the search” for a director. Mazziotta, the CEO of UCLA Health and vice chancellor for health sciences at UCLA, made his comments during the Sept. 16 UC Regents meeting.

The Yes on Prop. 38 campaign has repeatedly refused to comment on whether the bond was written specifically for the immunology institute. Claudia Briggs, a spokesperson for the campaign, told CalMatters in July that whichever nonprofit receives the $4.2 billion portion of the bond fund should be a sophisticated one that “is prepared to accelerate lifesaving research immediately while maintaining the highest standards of scientific quality, accountability, and stewardship of public funds.”

At a September press conference, a Yes on Prop. 38 spokesperson appeared to confirm CalMatters’ findings that only one institute currently qualifies to be the one to receive half the bond money. “It is very likely that CIII, which is a research institute affiliated with UCLA, will qualify for half of the funds under the current criteria,” said Robin Swanson. CIII is the initialism for the immunology institute.

According to the five-year plan, the institute was supposed to spend $25 million on personnel between 2024-25 and 2025-26 and $45 million total on operating expenses in that time, including maintenance, utilities and rent. It was also supposed to spend an additional $167 million in that time on capital expenses, such as construction and demolition. However, Mazziotta told UC regents that the institute had so far spent a total of $20 million on “operating expenses, hires” and other expenses.

The Yes on 38 campaign refused CalMatters’ request to interview Michelson for this story, as did Michelson himself in a separate email. A spokesperson for the institute, Becky Warren, sent a written statement that didn't answer CalMatters' questions about employing far fewer people than the five-year plan laid out. Instead, she highlighted the promise of the institute and a few of its milestones, including signing the affiliation agreement with UCLA and clearing a state environmental review of its forthcoming research facility.

The institute won’t get state bond money if it isn’t ready to begin work, “plain and simple,” wrote Swanson, the Yes on 38 spokesperson, in an email. She stressed that though the institute very likely qualifies, the ultimate decision to award half the bond funding is up to the California Department of Public Health.

Institute facility will be built by 2028

The UCLA research park that houses the institute isn’t slated to be fully built until at least late 2028, according to the agenda item of the September UC regents meeting. The research park is a former mall UCLA acquired in late 2023 that’s now undergoing major retrofitting.

But the 2024 affiliation agreement between UCLA and the institute anticipated this. The agreement permitted the institute to use UCLA health research space on another campus property on an interim basis. Mazziotta told regents that research is underway there.

Mazziotta also told the regents the institute's construction costs are not fully funded — it still needs roughly $100 million. He said UCLA was in serious talks with a donor to provide about $50 million to the institute.

If Prop. 38 passes, the bond funding would be provided in increments based on how often the institute requests new money that senior state officials approve. If all the funds are depleted, Californians would repay the bond at a rate of $500 million to $600 million annually for about 20 years.

Institute would be exempt from public records act

CalMatters submitted the public records request to UCLA, which must comply with the California Public Records Act. The institute, as a private nonprofit, does not have to comply. And while Prop. 38 would channel billions of dollars in taxpayer money to the institute, the proposition’s language specifically exempts the nonprofit that will receive the $4.2 billion from state public meetings laws, political reform laws and the public records act. The other half of the funds would go to a council that’ll pick projects led by researchers from a limited pool of universities and nonprofits. The council would generally be governed by the state’s political reform act, which prohibits financial self-dealing.

Briggs defended the institute’s exemption in Prop. 38, writing that applying state transparency laws to existing private organizations would “not fit well with how private entities are organized and operate.” Instead, she noted the selected nonprofit institute would be required to publish annual reports on its research progress and financial plans plus commit to annual state audits, among other disclosures written into the ballot measure.

Still unclear to the UC regents is the relationship between UCLA and the institute on matters of public disclosure. Four senior UCLA officials sit on the institute’s board. So is a document held by those UCLA officials public because it’s related to UCLA affairs or private because it’s related to the institute’s affairs? UC’s general counsel couldn’t explain where that dividing line is after a regent member asked him. The regent member, Michael Cohen, said he wants more clarity when the regents meet again in November.

Gov. Gavin Newsom and the California Democratic Party endorsed Prop. 38, as have dozens of patient and research advocacy groups, plus the state GOP. The union of graduate students and post-doctoral researchers, whose pay often relies on science research funding, has also endorsed the proposition. The union doesn’t represent faculty.

Money raised in support of Prop. 38 now exceeds $66 million, including at least $61.2 million in contributions from Michelson and his policy institute. Roughly $14 million of that includes loans from Michelson. The no camp has raised about $8,800

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.