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Rosy budget forecast
Newsom proposes spending $349 billion with big increase for schools.
Just what department stores will look like or whether they will survive is a question that continues to play out.
Macy’s announced this week that it would be closing its Tracy store in the West Valley Mall after already shuttering stores at Newpark in Newark and in San Mateo. The management slated its anchor store on Union Square in San Francisco for closure and now is exploring re-use options. It has already closed and sold its men’s store on the eastern side of Union Square.
That same block contains the showpiece Neiman Marcus store with its striking rotunda that annually hosts a magnificent Christmas tree. It’s now gone and the future of the store and the entire corporate enterprise is in doubt after the parent company Saks Global filed for bankruptcy. The firm also operates Saks Fifth Avenue and its off-price companion.
The luxury chain is struggling just as is the upscale Macy’s change. Macy’s owns its two stores at the troubled Stoneridge Shopping Center in Pleasanton that will see the JCPenney store close at the end of February. It also has its furniture store in the Rose Pavilion shopping center. The Danville-based company that owns the store has indicated they will be announcing a tenant that is new to the market in the near future.
In the meantime, it’s notable that two ladies I know in Pleasanton, who once frequented the Stoneridge Macy’s, now go elsewhere—one to Broadway Plaza in Walnut Creek and the other all the way out to Tracy (for the time being). That’s a sad, sad commentary on what was once a superior mall property.
Gov. Gavin Newsom, as he is wont to do, released remarkably optimistic economic forecasts when he presented his proposed budget last week. The governor and his team project just a $3 billion shortfall that will need to be closed, compared with $18 billion that the non-partisan Legislative Analyst estimates.
Quite a difference. Lawmakers and the governor will get serious about the budget once tax returns are submitted in during April and the governor releases the May revision.
What’s clear at this point is that schools, despite the budget cuts most are wrestling with given the end of the federal Covid cash gusher.
Education will do quite well under provisions of Proposition 98 assuming lawmakers and the governors follow through with it. The proposition, passed by voters in the lean times of the 1990s, guarantees schools and community colleges about 40% of the state general fund. That’s about $125.5 billion in Newsom’s proposed $349 billion budget, up about $29 billion from the current year. That’s a gusher of tax receipts largely connected to AI companies.
Newsom’s proposal contains $27,400 per student, sharply up from the $20,500 spent in 2022-23. Both are now way above the national average of $17,700. Sadly, despite the growing investment, the results continue to be abymuysal, particularly for Black and Latino students.
It’s system that screams for reform, be it competition (something the powerful teachers’ unions fear and fiercely oppose) or truly teaching in different ways such as individual instruction for students at their own pace. Given the union influence in Sacramento, that’s unlikely.
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The Neiman Marcus store in San Francisco with the iconic Rotunda restaurant on the top floor is still open.