Nick Gerda
is an accountability reporter who has covered local government in Southern California for more than a decade.
Published January 22, 2024 4:34 PM
O.C. Supervisor Andrew Do (center left) in December 2023 with his daughter Rhiannon Do (right) and wife Cheri Pham (between them), the assistant presiding judge of Orange County Superior Court.
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Screenshot of a public video posted by Do’s official YouTube channel
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Topline:
County records obtained by LAist show O.C. Supervisor Andrew Do directed an additional $6.2 million in taxpayer dollars — beyond what previously was reported — to his 22 year-old daughter’s group without publicly disclosing his close family connection.
Outside public view: Do directed the grant money to his daughter’s nonprofit under a process in which the group was not named on public meeting agendas and was not discussed in public meetings.
Details of spending unknown: It’s unclear how those dollars were spent, most of which were earmarked by county grant agreements to feed seniors and people with disabilities. Do, his daughter Rhiannon Do and county staff have not provided answers in response to LAist’s repeated questions about the spending over the past several weeks. The group also is long overdue in submitting federally-required audits showing how it spent prior taxpayer funding, according to federal databases and county emails.
By the numbers: It brings the total to $13.5 million in county funding, tallied from government records obtained and published by LAist, that Do is now known to have played a major role awarding to Viet America Society since late 2020 — all without publicly disclosing the relationship.
Key Findings
County records obtained by LAist show O.C. Supervisor Andrew Do directed an additional $6.2 million in taxpayer dollars to his 22 year-old daughter’s nonprofit without publicly disclosing his close family connection.
It brings the total to $13.5 million in county funding — tallied from government records obtained and published by LAist — that Do is now known to have played a major role awarding to the nonprofit since late 2020.
The newly-discovered grants were awarded by Do outside of public meetings. Details of these grants were also not included in public meeting agendas.
Most of the funds were federal coronavirus recovery dollars earmarked to feed seniors and people with disabilities, according to the county’s grant agreements for the money.
Out of more than 100 organizations and cities that received federal pandemic relief money distributed by O.C. supervisors in their districts, the nonprofit received the second-largest amount — all of it directed by Supervisor Do — according to a breakdown the county provided LAist. The funding exceeded awards to the O.C. Sheriff’s Department, and the cities of Fullerton, Santa Ana and Westminster, among others.
Orange County Supervisor Andrew Do directed an additional $6.2 million in taxpayer dollars to his 22-year-old daughter’s nonprofit group — nearly doubling the funding previously reported by LAist — according to county records obtained by LAist.
Those records show a total of $13.5 million in county funding that Do is now known to have played a major role awarding to Viet America Society since late 2020 — all without publicly disclosing the relationship.
The newly-discovered grants were awarded by Do to his daughter Rhiannon Do’s nonprofit outside of public meetings. Details of these grants were also not included in public meeting agendas. Do awarded the $6.2 million within roughly the last year when Rhiannon Do was listed at various times as the nonprofit’s president on county records. The records obtained by LAist show the money was paid up front to Viet America Society for future services.
Do, his daughter and county staff have not provided answers in response to LAist’s repeated questions asking how the $6.2 million has been used by Viet America Society. The group also is long overdue in submitting federally-required audits showing how it spent millions of the taxpayer dollars previously reported by LAist.
“This isn't a story where there's one red flag. This is a story where there are two or three or four red flags,” said Jessica Levinson, a government ethics expert and law professor at Loyola Law School.
This isn't a story where there's one red flag. This is a story where there are two or three or four red flags.
— Jessica Levinson
“It's everything from the timing of when Do started directing the money to the nonprofit, to the change in leadership of the nonprofit, to perhaps, most disturbingly, the lack of information from the nonprofit about where our tax dollars are being spent,” she added.
O.C. Supervisor Vicente Sarmiento said the millions in additional funding LAist found in county records — and the lack of answers about what happened with it — raises concerns about oversight and whether the money was spent as intended under the grants.
“It also really does, I think, make it difficult for the public to feel confident that public funds are being used well and used appropriately,” Sarmiento said, saying the public rightly expects to know how their tax dollars are spent.
“[It] makes it very difficult for us [and] for the public to come to a conclusion other than there's a reason why things don't want to be shared.”
Supervisor Do voted for Rhiannon Do’s group to receive up to $3.1 million from county-funded subcontracts for mental health services, during public votes where he did not disclose the family relationship. (The amount paid out so far under these subcontracts is unknown, because the county hasn’t provided county invoice records LAist first requested more than two months ago. This is long past the disclosure requirements of the California Public Records Act.)
What we found: Details of the latest findings
The $6.2 million was discovered by LAist last month in county payment records the newsroom requested from the county Auditor-Controller’s Office, which issues payments on behalf of the county. That office — which is run by a person elected independently from the Board of Supervisors — provided financial records far more quickly than other county agencies.
The grant payments were made from December 2022 to October 2023 — a period in which Do’s daughter identified herself various times as the group’s president, including in county-funded subcontracts.
California Secretary of State records show Viet America Society was founded in June 2020 and, according to its first tax filing, started with a focus on promoting Vietnamese culture to youths and “feeding the elderly and poor.” Its focus has since expanded to mental health crisis hotline services and war memorial construction, funded by taxpayer money Do helped direct to the group. The group was entirely government-funded in 2021 and 2022, according to its tax filings.
Andrew Do (left) in a short video about the Vietnam War memorial, with Viet America Society founder Peter Pham (right) and Van Tran (center), Do’s chief of staff of external affairs who is running for Do’s seat in this year’s election. Do is termed out and has endorsed Tran.
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Screenshot from video posted by Do’s official YouTube account with the County of Orange logo
Do has told other news outlets that he did nothing wrong. He and his daughter Rhiannon Do have not responded to multiple interview requests from LAist.
Do’s awarding of the $6.2 million to his daughter’s group was previously unknown to the public because he directed the money outside of public meetings, using a process called “district discretionary” funding.
Under this process, each supervisor gets to direct federal and county dollars meant to help people within their district. Do and other supervisors voted in 2022 and 2023 to authorize distributing the money without a requirement that recipients be publicly named in meeting agendas.
A version of the practice was in place during the first year of the pandemic, when O.C. supervisors created an emergency process where more than $200 million in contracts were approved by county staff without being disclosed to the public on meeting agendas. It was a change from pre-pandemic rules that required public votes on large contracts.
The funding method is controversial and has been criticized by taxpayer advocates who point out it operates outside of standard transparency practices for allocating public funds.
Supervisors, including Do, have chosen to name some of the other recipients of their district discretionary funds on public agendas. But a search by LAist of meeting agendas since Viet America Society was founded showed no mention of any of the newly-discovered $6.2 million Do awarded his daughter’s group.
Records show the funding is an outlier
The funding to Do’s daughter’s group is an outlier among $50 million in total federal pandemic relief dollars county supervisors were allowed to distribute in their district under this process.
Out of more than 100 organizations and cities that received this American Rescue Plan Act funding across all five supervisors’ districts, Viet America Society received the second-largest amount — all of it directed by Do — according to a breakdown the county provided LAist.
It was the most funding to any non-governmental organization — topped only by money Supervisor Katrina Foley provided the city of Costa Mesa to build two projects at local parks that the city had planned for years: a new cafe, and an expanded skate park.
Family ties weren’t disclosed
Do did not disclose his family connection, according to a review of public meeting videos, a search of meeting captions, and interviews with three of Do’s four fellow county supervisors.
“It certainly seems to be a lack of sensitivity to the need for public disclosure around areas where there could be an issue of self dealing,” said Tracy Westen, a government ethics expert and past head of the L.A.-based Center for Governmental Studies.
He said Do’s decision to not publicly share his close family connection, while not illegal, can “undermine public confidence in the integrity of government decisions.”
“Anytime there is this appearance of self dealing, there's a need for politicians going over and beyond the strict requirements of the law for disclosure,” Westen said.
In such cases, he said, there’s a strong need for transparency about what happens with government spending.
“The public's entitled to know what happened to their tax dollars in some considerable detail.”
Reaction from other supervisors
Supervisor Don Wagner said he sees nothing wrong with what Supervisor Do did, including not disclosing his family connection, and not requiring that the nonprofit report how many meals were provided.
“It is entirely up to each of us, what sort of reports back we will have or require” for coronavirus discretionary dollars each supervisor distributed in their district, Wagner said.
“I'm not going to second guess any of my colleagues and how they decide they're going to distribute the money,” he added.
As for the nonprofit’s long-overdue audits showing where prior millions went, Wagner said that’s “a fair question.”
“The fact that later they don't comply [with the audit requirements] says, okay, next time we don't give you anything,” he said.
Asked if he was concerned that Do gave Viet America Society an additional $6.2 million after it failed to submit the federally-required audits, Wagner said: “I think that's the question that needs to be asked and answered. And I don't have an answer to that.”
Supervisor Katrina Foley said it’s important for the public to know what happened to these dollars.
“The money is allocated for a specific purpose. We need to make sure it's being used for that purpose,” she said.
“If they can prove that they gave meals to seniors, then the money was used as it was intended. If they can't, that's another story.”
That said, Foley said she trusts county staff put safeguards in place to find out how many meals were actually provided with the newly-discovered grant funding. County staff have not answered LAist’s repeated requests for this information.
Supervisor Doug Chaffee has not responded to multiple interview requests from LAist.
A difference in accountability measures
Grant agreements between the county and Viet America Society reviewed by LAist appear to be missing accountability measures present in grant agreements with different organizations from the same funding source.
With this article, LAist has now detailed $13.5 million in direct county funding and subcontracts that Supervisor Do directed to Viet America Society.
The non-profit received most of those dollars since Do’s daughter has been signing on-and-off as the nonprofit’s president. She is first known to have done so in December 2022.
Rhiannon Do is a full-time law student at UC Irvine. Aside from her role at Viet America Society and a now-defunct company closely connected to it, her LinkedIn profile listed only internships as work experience. That profile is no longer available on LinkedIn and appears to have been removed in recent weeks. When it was available in November, Rhiannon Do listed herself as president of Warner Wellness Center since 2021, the name recently used by Viet America Society to conduct business.
After LAist published its first story, her LinkedIn title changed to vice president at Warner Wellness.
A web of names
Warner Wellness Center has been registered in Orange County as the name for two different California entities led by the same people: one private company and one nonprofit organization.
Since funding began early 2021, the county has listed both Viet America Society and Warner Wellness Center as funding recipients, but Viet America Society has been the underlying nonprofit signing agreements for the funding.
Rotating leadership at Viet America
Records show leadership at Viet America Society has ping-ponged back and forth between Rhiannon Do and its founder Peter Pham, starting around the time Supervisor Do began directing the recently-discovered $6.2 million to the group.
“It’s very messy governance, from what we can tell,” said Rose Chan Loui, a longtime attorney for nonprofits who directs UCLA Law School’s program on philanthropy and nonprofits, after reviewing the group’s public tax filings.
“What’s publicly available really shows a lot of neglect or a lack of knowledge of a lot of different nonprofit laws,” she said, such as needing a secretary who’s a different person than the president. That requirement is detailed in a nonprofit legal guide from the state Attorney General’s office, which regulates charities.
Pham initially said in November that he would speak with LAist, but has not responded to multiple requests since then to arrange an interview. He also has not responded to emailed questions, starting in early December, asking what happened with the millions in taxpayer dollars received by Viet America Society.
Another government document shows Do’s daughter in a top leadership role.
Viet America’s latest tax filing, for calendar year 2022, lists Rhiannon Do as the group’s vice president and Pham as president. It also lists Rhiannon Do as the only director, a position that is typically held alongside other directors to compose a board of directors that is in charge of a nonprofit group. The filing also says she is one of just two officers and key employees at the group, the other being Pham.
That tax filing, posted online by ProPublica, contradicts Do’s claim in his December op-ed that his daughter “was not a director or officer” at the nonprofit.
LAist has been asking Pham and Rhiannon Do in writing and via phone calls for copies of Viet America Society’s public tax filings since Dec. 4, but no filings have been produced. Federal regulations require disclosure within 30 days of a written request — a mandate that also is noted in the tax filings nonprofits are required to submit.
Law school while leading a group handling millions in taxpayer funds
Viet America’s latest tax filing shows Rhiannon Do working an average of 40 hours per week for the group in 2022.
Rhiannon Do started her first year of law school in August 2022, according to a UC Irvine spokesperson. On LinkedIn, she listed herself a president — later changed to vice president — of Warner Wellness during periods that overlap with the school year. Records show she signed as president of Viet America Society in December 2022 and June 2023 on county-funded subcontracts.
UC Irvine law school’s rules state that no student may work more than 20 hours per week, according to the school’s website. And aside from faculty research assistant roles, first-year students cannot be employed without permission from an assistant dean, the rules state.
Her commitments at the nonprofit continued in 2023. She signed as the group’s president and indicated she was the main point of contact for county-funded subcontracts that ran through the whole year.
Citing student privacy laws, a separate spokesperson for the law school declined to comment on whether Rhiannon Do’s work at the nonprofit complies with the school’s rules, and whether she received permission for it.
What’s next: A vote on ethics reforms
O.C. supervisors are scheduled to vote Tuesday on ethics reforms brought forward in response to LAist’s reporting on Do.
The proposal, from Supervisor Sarmiento, would add adult children and siblings to the types of family connections that supervisors must publicly disclose when voting on contracts and other official actions.
If approved, the reforms also would require more public transparency about the district discretionary funding that Do and other supervisors have used to direct money outside public meetings. Supervisors would have to disclose any known family relationships to funding recipients, and in those cases a public vote by the full board would be required.
Additionally, the reforms would require the county to publicly post a log of approved district discretionary contracts on its website every three months, at the end of each quarter.
California’s conflict-of-interest laws
State law requires officials to disclose and recuse themselves when awarding money to spouses or children who are under 18. But it doesn’t apply after their children become adults.
There was momentum to change that back in 2016. The state Senate and two Assembly committees unanimously approved a bill to expand the conflict definition to the adult children, parents and siblings of officials.
That ban would have applied only when officials were aware of a conflict.
It never reached a full vote in the Assembly, and did not become law.
Levinson, the Loyola Law School professor, says Supervisor Do’s actions show it’s time to revisit reforms.
“This is why we should expand disclosure when it comes to money going to family members,” Levinson said.
That kind of disclosure, she added, is “also intended to deter corruption or the appearance of corruption.”
A note on the methodology behind the charts in this story
To arrive at the totals for each recipient of COVID relief money, payments with similar recipient names were combined.
Abound Food Care, Inc. includes "OC Community Resources: Abound Food Care, Inc."
The City of Costa Mesa includes "Office of Care Coordination: City of Costa Mesa, Newport Mesa Bridge Shelter."
Families Forward, Inc. includes "Office of Care Coordination: Families Forward, Inc."
Family Assistance Ministries, Inc. includes "Family Assistance Ministries, Inc. (Contract & Amendment)" and "Office of Care Coordination: Family Assistance Ministries, Inc."
Friendship Shelter, Inc. includes "Office of Care Coordination: Friendship Shelter, Inc."
Human Options, Inc. includes "Office of Care Coordination: Human Options, Inc."
Jamboree Housing Corporation includes "OC Community Resources: Jamboree Housing Corporation."
Public Libraries includes "OC Community Resources: Libraries Laptop Kiosks," "OC Community Resources: Public Libraries," and "OC Community Resources: Library Fall Festival Event."
O.C. Animal Services includes "OC Community Resources: OC Animal Care, Pet Pantry Event," "OC Community Resources: OC Animal Shelter Adoption Fees," "OC Community Resources: OC Animal Shelter November Fees & Pet Food," and "OC Cummunity (sic) Resources: OC Animal Care, Pet Adoption Event."
O.C. Parks includes "OC Community Resources: OC Parks Shade Structure over Playground in Laguna Niguel Regional Park," "OC Community Resources: OC Parks, Dana Point Revetment Project," and "OC Community Resources: OC Parks, Stocking of fish at Irvine Lake."
O.C. Sheriff's Department includes "OC Sheriff's Department: Drug Abuse is Life Abuse," "OC Sheriffʹs Department: BearCat MedEvac Vehicle," and "OC Sheriffʹs Department: Fentanyl Abatement."
South County Outreach, Inc. includes "Office of Care Coordination: South County Outreach, Inc." and "South County Outreach Inc., (Contract & Amendment)."
Trauma Intervention Programs, Inc. includes "Trauma Intervention Programs, Inc. (1st Amendment)."
Spot something that doesn’t look right? Let us know.
Crews clean the scene along Cesar E. Chavez and Eastern avenues, where gallons of crude oil spilled onto the street.
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Andrew Lopez
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Boyle Heights Beat
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Topline:
After months of calls for a town hall, East Los Angeles residents will hear from county representatives about recovery efforts and next steps at the first public update since a May spill released 25,000 gallons of crude oil onto streets and the L.A. River.
When is it? The informational session will take place this Saturday, Oct. 24, from 9 a.m. to noon at the City Terrace Park Social Hall. County agencies and the Los Angeles Regional Water Quality Control Board, which is directing the oil spill cleanup, will present findings from a report submitted by the pipeline operator in August.
Why now: The meeting comes after a July request from L.A. County Supervisor Hilda Solis to Public Works, and after residents have demanded information on the scope of the spill, public health guidance and cleanup updates. At an Oct. 6 Maravilla Community Advisory Committee meeting, residents shared frustrations about the recent environmental disasters affecting East L.A., including the oil spill and the Lineage warehouse fire. One attendee asked why her child’s school wasn’t evacuated on the day of the spill and had questions regarding the county’s response.
Read on... for more on Saturday's informational session.
After months of calls for a town hall, East Los Angeles residents will hear from county representatives about recovery efforts and next steps at the first public update since a May spill released 25,000 gallons of crude oil onto streets and the L.A. River.
The informational session will take place this Saturday, Oct. 24, from 9 a.m. to 12 p.m. at the City Terrace Park Social Hall. County agencies and the Los Angeles Regional Water Quality Control Board, which is directing the oil spill cleanup, will present findings from a report submitted by the pipeline operator in August.
The session will also showcase informational displays and maps, cleanup and recovery updates, environmental monitoring information, a Q&A with agency representatives and resources for residents and businesses.
Residents have demanded more information
The meeting comes after a July request from L.A. County Supervisor Hilda Solis to Public Works, and after residents have demanded information on the scope of the spill, public health guidance and cleanup updates.
At an Oct. 6 Maravilla Community Advisory Committee meeting, residents shared frustrations about the recent environmental disasters affecting East L.A., including the oil spill and the Lineage warehouse fire. One attendee asked why her child’s school wasn’t evacuated on the day of the spill and had questions regarding the county’s response.
“Why didn’t our supervisor host a press conference when it happened?” she asked. “Who is representing us? Why? Why does this always happen here in East L.A.?”
The sentiment was shared by MCAC President Kristie Hernandez, who said at the meeting, “This is the largest oil spill in recent history here in this Los Angeles area… Because there has been a lack of communication of the seriousness of this matter, we are led to believe that it’s just another day in East Los Angeles and that is not okay.”
What was in the oil spill report?
In August, pipeline operator Pacific Pipeline System LLC submitted a 900-page report that outlines the results of extensive soil testing. The report also includes the results of environmental tests requested by Plains All American, which has owned Pacific Pipeline System since 2006.
At the MCAC meeting, Jeremy Barela of the Regional Water Quality Control Board explained that the board is currently reviewing the report’s findings and is preparing a letter to PPS and surrounding cities outlining what further testing needs to be done before a full remediation plan can be created. Residents can track updates on the project here.
Crews clean the scene along Cesar E. Chavez and Eastern avenues, where gallons of crude oil spilled onto the street.
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Andrew Lopez
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Boyle Heights Beat
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The report has identified contaminants including gas and diesel-related petroleum as well as benzene and ethylene, aromatic hydrocarbons, according to Barela.
The contaminants spread into the soil, and while it is understood how deep they went, further testing is needed to determine how far they spread vertically.
“We know how deep that contamination went but further vertical delineation is needed… so we’re going to be requesting further assessment in that sense,” Barela said.
The letter is expected to be sent in October or November, Barela said.
After the letter is submitted, the board will also publish a fact sheet for residents that outlines the work that has been done and what the next steps will be.
How to attend the info session
Presentations on the oil spill report findings and next steps will be shown at 9 a.m., 10 a.m. and 11 a.m. County agencies and the Los Angeles Regional Water Quality Control Board will be available to answer residents’ questions.
Spanish-language materials and interpretation will be available, and light snacks will be provided.
When: Saturday, Oct. 24, from 9 a.m. to noon
Where: City Terrace Park Social Hall, 1126 N. Hazard Ave.
Los Angeles Documenter, Andrew Lopez, contributed reporting for this story from the Oct. 6 Maravilla Community Advisory Committee meeting at Our Lady of Guadalupe Church. The L.A. Documenters program trains and pays community members to document proceedings at public meetings. Learn more about the program here.
Khmer Girls in Action, a nonprofit in Long Beach, has been hosting a haunted house to educate and empower the community on ballot measures and voting best practices since 2010.
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Photo courtesy Khmer Girls in Action
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Topline:
A local nonprofit is using ghouls and ghosts to help people understand complicated ballot propositions.
More details: What if the scariest thing to happen this Halloween is…not preparing for the upcoming midterm election? To combat any jump scares around local ballot measures, Khmer Girls in Action and We Are California are teaming up to host a Party to the Polls: Haunted Mansion on Saturday, Oct. 24, from 2 to 6 p.m.
The backstory: “We are combining political education and the Halloween spirit because, you know, elections are scary sometimes,” said Kelliana Lim, Communications Coordinator for Khmer Girls in Action. KGA, a youth-led community nonprofit in Long Beach, has hosted a haunted house/maze event every election season since 2010.
Read on... for more on the youth-led spooky election event.
What if the scariest thing to happen this Halloween is…not preparing for the upcoming midterm election?
To combat any jump scares around local ballot measures, Khmer Girls in Action and We Are California are teaming up to host a Party to the Polls: Haunted Mansion on Saturday, Oct. 24, from 2 to 6 p.m.
“We are combining political education and the Halloween spirit because, you know, elections are scary sometimes,” said Kelliana Lim, Communications Coordinator for Khmer Girls in Action. KGA, a youth-led community nonprofit in Long Beach, has hosted a haunted house/maze event every election season since 2010.
Student members and KGA staffers select ballot measures they feel affect their community the most and create an immersive haunted house based on those issues. The goal, Lim said, is to provide a fun way for community members to better understand what is going on this election season.
“The haunted maze really showcases a really fun ‘educ-tainment’ type of event for the community to understand how certain ballot measures will impact them and young people,” Lim said.
Khmer Girls in Action’s haunted house from October 2024. The theme was “A Nightmare on Sixth Street.”
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Photo courtesy of Khmer Girls in Action
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This year, KGA honed their haunted house on three ballot measures: Proposition 3, which would tax top earners in the state to fund healthcare and education. Proposition 39, which would require California voters to present government-issued identification when voting at the polls. And Proposition 43, which would change the state’s constitution to require local ballot measures related to extending, increasing or proposing specific taxes driven by citizens to receive a two-thirds vote.
Saturday’s haunted house will feature a spooky maze of rooms visitors will trek through as they are greeted by ghosts and goblins who will foreshadow what kind of impact these ballot measures could have on their community.
This year, KGA is partnering with We Are California, a coalition of advocacy groups across the state, to host a ballot party during the haunted house. Visitors are encouraged to bring their ballot to the haunt, and on a separate floor from the ghouls and goblins, they can get their questions answered.
Aaron Robertson, a Senior Director of Coalition for Catalyst California — the nonprofit, civil rights organization behind We Are California, said their group provides toolkits and other resources to KGA and other groups across the state hosting ballot parties.
“One of the cool things about this campaign is that it is very distributed,” Robertson said. “We’ve been providing resources and toolkits for about 500 ballot parties across the state.” But Robertson said organizations like KGA really take the lead on what these ballot education events look and feel like. Some groups did a 5K run to the polls; others did dance parties and lucha libre events.
We Are California also provides legal trainers who teach community members to become vote protectors on Election Day. Vote protectors identify any intimidation efforts at polling sites.
“We have a centralized reporting mechanism where we are gathering that information and working with the A.G.’s office to triage a response,” Robertson said. Last week, KGA, along with Long Beach Forward, trained community volunteers who signed up to be vote protectors.
“Some people really want to show up for their community and [becoming a vote protector] is a way to do that — they want to go to places that are most at risk for voter intimidation,” Robertson said.
As part of the haunted house, Khmer Girls in Action also provides face painting, a donut-eating contest and trunk-or-treat.
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Photo courtesy of Khmer Girls in Action
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Beyond ballot education, Saturday’s haunted house will also have a trunk-or-treat in the Youth Movement Education Center parking lot. There will also be face painting, a donut-eating contest, a costume contest, music and a party area in case some people “are too scared to go inside,” Lim said.
To learn more about Khmer Girls in Action and their haunted house event on Saturday, Oct. 25, visit theirwebsite.
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Gov. Gavin Newsom presents his revised 2025-26 budget proposal in Sacramento on May 14, 2025.
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Fred Greaves
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CalMatters
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Topline:
Proponents say Prop. 2 would allow the state to shore up its reserves for an economic downturn. Critics say it would only allow state leaders to spend more in the future.
AI revenue: Because California’s tax revenue depends so much on wealthy residents’ stock earnings, the state budget is often caught in a boom-or-bust cycle at the mercy of the market. In recent years, the state has seen robust tax revenue from an AI-fueled economy, which has helped state leaders avoid or delay painful cuts to social services even when they projected significant deficits. But economists have consistently warned the boom may not last, and the federal budget cuts to healthcare and welfare programs this year deepened that uncertainty.
How long have we had a rainy day fund? Before 2014, California leaders and voters established reserve funds several times to weather financial storms, but ended up quickly withdrawing most of those funds, leaving the state with very little savings on hand, according to the legislative analyst.
Read on... for more on Prop. 2.
The question Proposition 2 poses to California voters is simple: Should the state be able to save more money when its economy is booming?
The ballot measure, dubbed the Save for California’s Future Act, seeks to shore up California’s rainy day fund by allowing state lawmakers to sock away up to 20% of the state’s general fund tax revenue — double the current ceiling of 10%.
It would also require the state to save a bigger share of the gains when revenue is growing faster.
Proponents, including Gov. Gavin Newsom and Democratic lawmakers, say the state needs a bigger savings account to weather its volatile economy.
Because California’s tax revenue depends so much on wealthy residents’ stock earnings, the state budget is often caught in a boom-or-bust cycle at the mercy of the market. In recent years, the state has seen robust tax revenue from an AI-fueled economy, which has helped state leaders avoid or delay painful cuts to social services even when they projected significant deficits. But economists have consistently warned the boom may not last, and the federal budget cuts to healthcare and welfare programs this year deepened that uncertainty.
Supporters pitched Prop. 2 as a common sense solution, noting the nonpartisan Legislative Analyst’s Office, which advises state lawmakers, has long recommended the state set aside funding for downturns. The measure is endorsed by a bipartisan coalition of groups, including labor unions, hospital associations and chambers of commerce.
“It doubles the size of the state’s rainy day fund and requires California to save more during strong budget years, so we’re not caught flat-footed when the next downturn hits,” wrote Assembly Budget Chair Jesse Gabriel, an Encino Democrat, and Assembly Appropriations Vice Chair Josh Hoover, a Folsom Republican and the only GOP lawmaker to vote for the measure.
Most Republican lawmakers opposed Prop. 2, stating that the state should use its excess revenue to give taxpayers refunds instead of saving it. They argue that state government already spends too much and that a bigger reserve would merely give state leaders more to spend.
“When they say we're here for fiscal responsibility, it's like the devil offering a Bible study. Don't buy it,” said Assemblymember Carl DeMaio, a San Diego Republican.
How long have we had a rainy day fund?
Before 2014, California leaders and voters established reserve funds several times to weather financial storms, but ended up quickly withdrawing most of those funds, leaving the state with very little savings on hand, according to the legislative analyst.
In 2004, following the dot-com bust, voters overwhelmingly supported Prop. 58, a bipartisan ballot measure that required the state to establish a budget stabilization account and make annual deposits into the fund.
But lawmakers swiftly depleted the fund during the early months of the Great Recession and were forced to make steep spending cuts, borrow money at expensive rates and use accounting gimmicks to weather the rest of the crisis. Under then-Gov. Arnold Schwarzenegger, a Republican, the state Legislature slashed health and welfare funding, scrapped tax credits, furloughed state employees and delayed payments to schools and local governments.
In 2014, as the state’s economy rebounded, then-Gov. Jerry Brown, a Democrat, urged that the state save more. He and the Legislature championed Prop. 2, a bipartisan ballot measure that required the state to save more aggressively and limited when lawmakers could withdraw from the reserves. Nearly 70% of voters approved it.
“When the pendulum swings again, we won’t be forced to raise taxes or make the kinds of harsh cuts that were all too common in recent years,” Brown said in a 2014 op-ed stumping for the reform.
The law requires the state to set aside 1.5% of its general fund revenue and any spikes in capital gains tax revenue each year, with half deposited into the reserves and the other half to pay down state debts. It also made it harder for the state to spend the reserves and carved out portions of the savings for schools.
Under the law, state lawmakers can withdraw from the reserves only when the governor declares a budget emergency and decides that the state is not expected to collect enough revenue in the upcoming fiscal year to match the spending in the three previous budget years.
A majority of state lawmakers must vote to ratify the budget emergency. If approved, they are allowed to withdraw up to half of the rainy day fund balance at once, unless they already withdrew half the balance in the previous budget year and still need to take out more. There are no limits on what lawmakers can use the funds for.
Bigger reserve = more to spend?
Prop. 2 would maintain those withdrawal rules, which critics say would give future governors broad authority to spend down the reserves instead of reining in spending.
“The rainy day fund can be invaded even when it’s not raining, simply because spending isn’t as high as it was within the prior three years,” wrote David Crane, a former economic adviser to Schwarzenegger and founder of Govern for California, a nonprofit fundraising powerhouse that aims to “counter special interest influence.”
“Unless the withdrawal rules change, a larger reserve just lets governors bake in spending based on optimistic forecasts, knowing they can always dip into reserves if revenue falls short.”
In an interview with CalMatters, Gabriel stressed that voters approved those rules in 2014 and emphasized that the measure has bipartisan support. He also dismissed the criticism that the state should just spend less during downturns, likening it to telling families to eat less or downsize instead of dipping into their savings when they fall on hard times.
“I think (the concern) is very misplaced,” he said. “(Prop. 2) is recommended by the experts, because it matches the common-sense wisdom of California families.”
Inglewood city leaders broke ground on a new shuttle bus network, planting ceremonial brass shovels in the dirt outside a Market Street shopping center on Wednesday morning.
Topline:
Inglewood city leaders broke ground on a new shuttle bus network, planting ceremonial brass shovels in the dirt outside a Market Street shopping center on Wednesday morning. They took turns at a microphone praising the $287.5 million Inglewood Transit Connector, which will ferry visitors between the Downtown Inglewood Metro K Line Station and the city’s stadium district. Officials hope the project will jump-start the struggling Market Street shopping corridor.
Why now: Inglewood has transformed into a global entertainment magnet over the last decade, pulling in Super Bowls, World Cup matches and megastar musicians. Locals, though, have protested the costs of the rapid development — traffic jams, rising living costs, old haunts demolished — and asked for more ways to tap into the economic benefits. City officials say the shuttle bus network will help with some of those issues by alleviating traffic jams and driving visitors to spend their dollars at local businesses. Not everyone is convinced.
What's next: Actual construction is set to start in the first week of November, planners say, and the first buses are scheduled to roll out down dedicated lanes just ahead of the 2028 Olympics.
Inglewood city leaders broke ground on a new shuttle bus network, planting ceremonial brass shovels in the dirt outside a Market Street shopping center on Wednesday morning.
They took turns at a microphone praising the $287.5 million Inglewood Transit Connector, which will ferry visitors between the Downtown Inglewood Metro K Line Station and the city’s stadium district. Officials hope the project will jump-start the struggling Market Street shopping corridor.
“We always said that we were going to make Inglewood the city to drive to and not through, and we’re doing that today,” Councilmember Alex Padilla said.
Inglewood has transformed into a global entertainment magnet over the last decade, pulling in Super Bowls, World Cup matches and megastar musicians. Locals, though, have protested the costs of the rapid development — traffic jams, rising living costs, old haunts demolished — and asked for more ways to tap into the economic benefits.
City officials say the shuttle bus network will help with some of those issues by alleviating traffic jams and driving visitors to spend their dollars at local businesses. Not everyone is convinced.
Just a few hundred yards from the ceremony, Amelia Hernandez and her team were packing boxes at Selwyn Jewelers, one of the two dozen businesses at the corner of Market Street and Florence Avenue the city took over through eminent domain earlier this year. The city plans to demolish the shopping center to make way for a 1,000-space parking garage, a bus plaza and a pedestrian bridge crossing Florence to the Downtown Inglewood K Line station.
The jeweler said she’s skeptical the new shuttle system will actually mean more business for local shops, especially those like hers that are more targeted to residents than visitors.
“Everybody comes, parks and leaves,” she said. “What do they expect? [Stadium visitors] are going to the notary public? They’re going to a hair salon?”
Construction is expected to begin in November, planners say
Actual construction is set to start in the first week of November, planners say, and the first buses are scheduled to roll out down dedicated lanes just ahead of the 2028 Olympics. City officials say they hope to bring back automated rail line plans in the future.
Mayor James Butts said the shuttles are only planned to run on event days — Inglewood’s three major venues have hundreds of events between them — and that the city hasn’t yet picked a vendor to run the actual shuttles. The mayor said the city expects to move 10,000 people through the hub on event days.
Eli Lipmen, executive director of the nonprofit Move LA, is one of the transportation activists pushing for the region to tighten up its transportation network ahead of the Olympics. He said that while the city still has a lot of work to do, he is excited to see the shuttle system roll out to provide an alternative to vehicle traffic.
“This station, this area, has needed a transit hub for a very long time,” he said.
City officials say they’re working to relocate displaced businesses
A few shops were still open in the shopping center on Wednesday, but most of the windows were dark or papered over.
Businesses like Red’s Flavor Table and Randy’s Donuts & Chinese Food will be relocating to new digs on Market Street, according to project planners. CVS Pharmacy opened a new store across the street. Selwyn Jewelers is moving to a space a few blocks away.
Hernandez, the owner of Selwyn Jewelers, said the relocation process has been horrific and was poorly planned.
“I’m just left with a whole bunch of ill feelings,” she said.
Other business owners praised the city’s work in a series of short videos.
“Although we are sad to be leaving our current location, we’re happy to continue to stay in Inglewood,” said Sylvia Hollins, manager of Red’s Flavor Table. “We’re going to be on Market Street at a bigger and better location.”