April 27, 2018 – News & Notes

Capital News & Notes

For Clients & Friends of The Gualco Group, Inc.

IN THIS ISSUE – “It Feels Like Extortion”


  • What the Voters Never Know: Endorsement Deals Struck by Governor Candidates
  • Poll Finds Villaraigosa in Free Fall; Passed by GOP Candidates
  • Gas Tax Repeal On November Ballot, Backers Say
  • Business Groups Support Higher Hurdles for Tax Increases
  • Assembly Speaker Angry at Union Attack on Embattled Member


  • Water Commission Now “Eager” to Fund Reservoirs
  • Both Water Bonds Qualify for Ballot

Capital News & Notes (CN&N) harvests California legislative and regulatory insights from dozens of media and official sources for the past week, tailored to your business and advocacy interests.  Please feel free to forward.

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FOR THE WEEK ENDING April 27, 2018



What the Voters Never Know: Endorsement Deals Struck by Governor Candidates

What kinds of agreements has the next governor of California made with interest groups that sway decisions in the state Capitol?

Voters will never know.

The answer lies in a raft of secret questionnaires that candidates complete as they seek endorsements from a range of groups that will lobby them after they’re elected—and remind them of what they committed to before they won.

Labor unions, environmentalists and associations that advocate for gay rights, police and charter schools are among the dozens of groups that have endorsed candidates in the governor’s race. Such seals of approval can come with infusions of campaign cash and help politicians raise their profiles as they seek votes across an enormous state.

Public endorsements can serve as a helpful signal to voters, giving a sense of the candidates’ alliances and priorities. But what many voters don’t realize is that the endorsements are more than a sign of affection. They are the result of private concurrence between groups that represent narrow interests and candidates competing to represent the public.

Jessica Levinson, a professor at Loyola Law School and president of the Los Angeles Ethics Commission, compared the secret questionnaires to private conversations with lobbyists, “or any closed-door meeting where you try to extract a promise from a lawmaker in exchange for x.”

“In its worst framing, it feels like extortion: ‘You say this, and therefore you get our [endorsement]. If you don’t say this, you don’t’.”

CALmatters asked the six major candidates for governor—Democrats Gavin Newsom, Antonio Villaraigosa, John Chiang and Delaine Eastin, and Republicans John Cox and Travis Allen—to share the questionnaires they’ve completed in seeking endorsements for the June 5 primary election. None did.

We also asked several interest groups to share the candidates’ answers. They wouldn’t.

Both sides generally agree to keep the records confidential. Some organizations even emblazon their documents with the words “Do not copy.”

The style of the questionnaires varies, with some requesting thoughtful explorations of policy issues and others listing pages of yes/no questions. Some include a “pledge” section—for example, asking candidates to sign their names and promising to “actively and publicly support” workers organizing a union.

In some cases, the result is private covenants on such questions as: Will you ban fracking? Limit the growth of charter schools? Support tougher punishments for repeat criminals? Maintain the pension system for government employees?

Getting the answers in writing helps interest groups get what they want after politicians are elected.

“If we are lucky enough to endorse the candidate that wins the office, it’s a good place to point back to and a level of accountability for what they said when they were running,” said Jim Araby, executive director of the state’s United Food and Commercial Workers union, which endorsed Newsom.

Its members include grocery-store clerks confronting technological advances that threaten to wipe out jobs, as well as competition from online vendors that are not unionized. If Newsom is elected and then makes decisions that contradict what he told the union during the endorsing process, Araby said, he wouldn’t hesitate to pull out the questionnaire.

“We would have that as a point of reference in any conversation we had with him and his staff. Our union is not afraid to hold people accountable, Democrats or Republicans.” Two years ago it funded a campaign to oust a Democratic assemblywoman after she voted against the union on two bills.

In declining to make any of his completed endorsement questionnaires public, Newsom said the forms don’t allow for the nuances that answers deserve.

“I’d rather give you the raw, unvarnished, actual answers that do more than just three sentences that can be taken out of context in a questionnaire,” Newsom said during an interview with CALmatters.

He and the other five major candidates each sat for lengthy interviews with CALmatters journalists, going into depth on numerous public policy questions. But none would disclose the forms they’ve completed, saying they’re doing plenty to communicate their positions to voters publicly.

“I’ve participated in… 10 forums already,” said Cox, a Republican endorsed by the California Pro-Life Council. “I don’t believe there is any instance when I put something down in a questionnaire… that I wouldn’t say in public.”

Many lobbying groups say keeping the answers out of the public eye allows candidates to be more candid.

“We think that if they have to worry about us taking it to the press, sharing it around with people, using it in ways that they wouldn’t feel comfortable with, it may have a chilling effect on the amount they would be willing to share,” said Gary Borden, executive director of the political advocacy arm of the California Charter Schools Association.

Charters—public schools that do not have to follow all of the same regulations as traditional campuses—have become a big player in the gubernatorial race. The charter association has endorsed Villaraigosa, who clashed with teacher unions and took control of several low-performing schools when he was mayor of Los Angeles. Charter supporters have already poured $10.2 million into a fund paying for ads supporting Villaraigosa.

The questionnaire may not be the only factor in an endorsement decision. Like most influential groups, the charter schools association also interviews candidates to discuss issues in greater depth. But its questions indicate some key priorities, asking whether candidates support changing the formula for funding schools, limiting charter-school expansion or applying a conflict-of-interest law that school boards must follow to charters, which are now exempt.

Villaraigosa said he’s answered dozens of questionnaires in the course of the campaign and doesn’t see the need to make them public.

“All of these groups have asked that they be confidential and… that’s what we’ve done,” he said. “We have a lot of transparency in this election, a lot of eyes watching…. People have a good view of where we all are.”

Though the charter school group would not disclose candidates’ responses, it shared a blank copy of its three-page questionnaire with CALmatters.

Many groups wouldn’t even do that.

The Sierra Club, California Teachers Association, Service Employees International Union and California Labor Federation would not provide their blank questionnaires.

CALmatters obtained some from other sources. They show that the California Teachers Association asks if candidates will back more regulations for charters, which compete with traditional schools to attract students and the taxpayer funding that comes with them. Many charters employ non-union teachers, an element in the ongoing feud between charter supporters and teacher unions.

The teachers association, which endorsed Newsom, also asks candidates if they will oppose using student test scores as an element in determining teacher salaries; support collective bargaining for school employees; and oppose replacing the pension system for public employees with a 401k-style retirement plan.

Teachers association spokeswoman Claudia Briggs said the questionnaire is a tool meant to help union members only.

“This is their process,” she said. “Beyond their membership, it’s not a public document and there is no requirement to share it.”

The director of Sierra Club California similarly said the group’s members expect their questions and candidates’ answers to be kept private.

“We have a policy of not talking about how they respond to the questionnaires because we promised them in advance we won’t do that,” Kathryn Phillips said, noting that the club instead published an explanation of why it endorsed Newsom.

Some groups do not use questionnaires—but still pose questions that are hidden from the public. The California Business Roundtable, which includes 30 large corporations, interviews candidates about their positions on health care, budget and energy policy, then sends the answers to the member companies, said president Rob Lapsley. He declined to say specifically what the group asks.

Other groups post blank questionnaires on their web sites but will not share candidates’ answers: the Howard Jarvis Taxpayers Association, an anti-tax group that has not yet endorsed a gubernatorial candidate, and the California Police Chiefs Association, which endorsed Villaraigosa.

One outlier to the secrecy trend is the National Union of Healthcare Workers, which endorsed Newsom and published its questionnaire with his answers.

With groups across the political spectrum interested in holding politicians accountable, why not make the process public? Isn’t it supposed to be voters who wield that power in a democracy?

Steve Smith, spokesman for the California Labor Federation, said his group has batted the idea around. As an umbrella organization with many unions that are members, Smith said, the change couldn’t be made quickly. But they’ve discussed moving to a model where the questions—and candidates’ answers—are posted online for the world to see.

“It’s a pretty broad process right now, but it’s an internal one,” Smith said. “Making it an external one is not out of the realm of possibility.”



Poll Finds Villaraigosa in Free Fall; Passed by GOP Candidates

The two major Republican candidates in the race to succeed Gov. Jerry Brown are battling for second place to make the November runoff, while Democratic Lt. Gov. Gavin Newsom has strengthened his lead, according to a new poll from UC Berkeley’s Institute of Governmental Studies.

The poll shows businessman John Cox preferred by 18 percent of likely voters in the June 5 primary, while Assemblyman Travis Allen, R-Huntington Beach, won support from 16 percent. Both are well ahead of Democrat and former Los Angeles Mayor Antonio Villaraigosa, who dropped to 9 percent, down from 17 percent in December, and well behind Newsom, preferred by 30 percent.

“Both major Republican candidates are now holding an advantage over Villaraigosa for finishing second in the top-two primary,” said poll director Mark DiCamillo.

The poll, conducted April 16-22 , also “is good news” for Newsom, DiCamillo said. The former San Francisco mayor had 30 percent of likely voters behind him, up from 26 percent in December. “I think he can be expected to be one of the candidates, if not the top candidate, to move on to the November general election,” DiCamillo said.

The latest results come about five weeks ahead of the primary, when California voters will send the top two vote-getters, regardless of party, to the November runoff.

State Treasurer John Chiang had 7 percent support from likely voters. Former schools chief Delaine Eastin had 4 percent, and 13 percent of voters are undecided.

Republicans are more likely than Democrats to turn out and vote this June — giving Cox and Allen an advantage over the other Democratic challengers, DiCamillo said. That could be even more good news for Newsom in the general election, when, historically, Democrats and independents turn out in greater numbers.

The poll also suggested voters haven’t yet formed an opinion about Allen, a little-known lawmaker in the minority party, or Cox, who has never held elected office. Cox has run unsuccessfully for multiple offices, including twice for Congress in Illinois, for the 2008 Republican nomination for president and for Cook County Recorder of Deeds.

Less than a quarter have a favorable view of Cox, while 9 percent have an unfavorable view and 68 percent have no opinion, suggesting they don’t know him. Allen has similar results – 20 percent favorability compared to 8 percent unfavorability. Another 72 percent of likely voters have no opinion.

Bill Whalen, a Republican and research fellow at the Hoover Institution, said the conservative uprising against California’s so-called “sanctuary state” law and undocumented immigrants could be fueling support for Republicans, but he said to remain competitive, they’ll have to appeal to independents and “disaffected Democrats.”

“There aren’t enough Republicans in California to do the trick,” Whalen said, speaking of winning the governor’s race.



Gas Tax Repeal On November Ballot, Backers Say

Republican activists said that they have collected at least 830,000 signatures for an initiative to repeal recent increases in California’s gas tax and vehicle fees, more than enough to qualify the measure for the November ballot.

The activists need 585,407 signatures of registered voters to qualify the ballot measure.

Because signatures are still being processed and counted by the campaign, backers hope to have 900,000 by the time they begin turning them in to the counties on Friday, according to Carl DeMaio, a former San Diego City Council member and organizer of the drive.

“The breadth and depth of voter anger over the car and gas tax hikes is just amazing,” said DeMaio, who hosts a radio talk show. “We are seeing Democrats, independents and Republicans sign the petition and volunteering to carry the petition, people from all walks of life.”

The initiative targets a law approved in April 2017 by the Legislature and Gov. Jerry Brown that is expected to raise $5.4 billion annually for road and bridge repairs and improvements to mass transit.

The money comes from a recent 12-cents-per-gallon increase in the gas tax, a 20-cent increase in the diesel fuel excise tax and a new annual vehicle fee ranging from $25 for cars valued at under $5,000, to $175 for cars worth $60,000 or more.


The petition drive raised more than $2 million with significant contributions from the California Republican Party and Republican members of Congress from California, including House Majority Leader Kevin McCarthy of Bakersfield and Reps. Ken Calvert of Corona and Mimi Walters of Irvine.

Republicans hope the issue will help their candidates for office in this year’s election and hurt Democrats who support the higher taxes.

“I think this is going to put Democrats in real bad spot,” DeMaio said.

A spokesman for Brown declined to comment until the signatures are filed.

DeMaio said there were approximately 20,000 volunteer petition circulators who brought in more than 250,000 signatures, with the rest collected by paid circulators who received $1 to $2.50 per signature.

“It’s a pretty comfortable margin [of signatures] that we have been able to hit here,” DeMaio said.

Opposition will grow, he said, as more Californians get their annual vehicle registration notice.

The repeal campaign hopes to raise $5 million for the campaign to pass the constitutional amendment, which would not only repeal the increase in the gas tax and vehicle fees but require future increases to be submitted to voters.

“We know that Gov. Brown and his cohorts are going to spend an amazing amount of money to mislead voters,” DeMaio said. “But I feel pretty confident that we will repeal the gas tax.”



Business Groups Support Higher Hurdles for Tax Increases

Business groups are prepared to spend tens of millions of dollars this year on a California initiative that would make it more difficult to raise state and local taxes.

The proposal, which is currently gathering signatures for the November ballot, would increase the threshold for passing any new tax or tax hike to two-thirds of voters or an elected body — a change that supporters say is necessary after several recent court decisions weakened previous voter-approved initiatives to protect taxpayers. It would also require the money from those taxes to be spent on specific purposes.

“When we see a slowdown in the economy, as you know, money gets moved around quickly,” said Rob Lapsley, president of the California Business Roundtable, who is leading the campaign. “We at least want to make sure that the money is going where it’s intended to go.”

Coca-Cola, Pepsi and other beverage companies have already contributed millions of dollars to the effort, as they face a wave of public health-driven soda taxes in cities across the country that appear to be hobbling sales. Increasingly subjected to new taxes by local politicians trying to close municipal budget deficits, more major industries, including oil, are prepared to jump in.

But cities and organized labor are joining together to fight back against the measure, which they argue would devastate their communities.

SEIU California executive director Alma Hernandez said cities are still struggling to recover from the economic recession. Hampered by the historic protections of Proposition 13, which keep property taxes relatively low in California, she said, cities are looking for other ways to pay for the services they provide.

“It’s a sheer anti-tax measure, because they know that local voters are willing to fund the things they care about,” she said. “It’s such an overreach and shameless self-interest.”

Under California law, local tax increases that contribute to general funding can win with a simple majority vote, while special taxes earmarked for a specific purpose, such as fixing roads, and parcel taxes already require two-thirds. New state taxes passed by the Legislature also need a two-thirds vote.

Lapsley said businesses are concerned that those standards are rapidly eroding.

A California Supreme Court decision last year raised the possibility that special taxes could pass with a simple majority if they qualify through the local initiative process rather than being placed on the ballot by elected officials, though that has yet to be tested legally. It would significantly undercut Proposition 218, sponsored by the business community in 1996, to set the two-thirds bar for local special taxes.

Business groups lost another lawsuit last year over California’s cap-and-trade system, where heavy industrial polluters buy credits to offset their carbon emissions. They unsuccessfully argued that program, created by the Air Resources Board, was an illegal tax under Proposition 26, an initiative they pushed in 2010 to narrow the types of regulatory fees that the state can impose.

And future threats loom. An effort already underway for the 2020 election aims to scale back the part of Proposition 13 that reduces commercial property taxes.

“Given where we are, there’s no protections anymore,” Lapsley said.

Provisions in the California Business Roundtable initiative directly address those court decisions, such as a requirement that any charge created by a regulatory agency come back to the Legislature for final approval.

Lapsley said the ultimate goal is accountability and transparency about how taxes are spent. Cities are facing growing budget pressures from salaries and pensions, he said, and they should not be able to take money that voters designated for other services to fill those holes.

The measure would eliminate the ability to pass any local tax with a simple majority vote, even if it is intended for general funding.

Since 2010, about a fifth of the 995 tax measures that have gone before voters in local elections passed with more than 50 percent but less than two-thirds support, according to the California Taxpayers Association.

In November 2016, for example, 59 cities and counties considered general sales tax increases of up to 1 cent, according to an analysis by the website California Local Government Finance Almanac. While all but eight of them passed, 30 were approved with a simple majority.

The battle over the California Business Roundtable initiative will likely be costly and contentious; Lapsley expects his campaign could run $30 million or more.

The American Beverage Association has already contributed more than $4 million, the vast majority of what the committee has raised so far. The trade group, which represents soda, bottled water, juice and energy drink companies, said in a statement that as “an original member of the Prop. 26 coalition,” it supports “efforts to restore its protections.”

But Hernandez said the measure is about big corporations, many of them based outside the state, trying to protect their bottom line.

“They recognize the trend that voters are approving measures because they see them as responsible for some of the social ills of our communities,” she said.

The beverage industry is under particular pressure. After batting back bills at the Capitol for years, Berkeley became the first city in the country to pass a local tax on sugary drinks in 2014.

Similar proposals have since spread nationwide, including to San Francisco and Oakland in 2016. While the industry spent more than $30 million fighting those measures, both cities passed their taxes with about 60 percent of the vote.



Assembly Speaker Angry at Union Attack on Embattled Member

The decision by a politically powerful labor group to openly campaign against an embattled Los Angeles-area lawmaker drew a sharp rebuke from Assembly Speaker Anthony Rendon.
The Lakewood Democrat lashed out hours after the State Building and Construction Trades Council of California filed paperwork for a political action committee to defeat Assemblywoman Cristina Garcia (D-Bell Gardens). Garcia, who’s seeking her fourth term, took an unpaid leave of absence in February following allegations of sexual misconduct. She has denied the reports and an Assembly investigation remains underway.
Rendon didn’t criticize the labor group by name, insisting instead that the decision was driven by oil and gas industry interests.
“This is a thinly veiled attempt by Big Oil and polluters to intimidate me and my members. It is an affront to my speakership,” Rendon said in a statement. “We are proud of the work that the Assembly has done to increase jobs and wages while defending our environment. We will vigorously defend the members of our caucus from any ill-advised political attack.”
A statement from the labor group, which sparred with Garcia last year on her effort to link new climate change policies with a crackdown on air pollution, said it had decided to “reverse” past support for her.

“The Trades have thousands of hard working members in Garcia’s district, and we look forward to lifting up another Democrat in the 58th Assembly to better represent them and their families,” said the statement.
The political action committee’s campaign finance filing on Friday listed nonmonetary “in kind” contributions from Erin Lehane, a public affairs consultant aligned with the building labor group. Lehane said she had begun “researching” Garcia in November. In January, a former legislative staffer accused her of groping him in 2014.
Lehane, who identified herself as a spokesperson for the labor group’s political action committee, said on Friday that she believed Garcia’s “hypocrisy threatened a movement that will dictate how much harassment and abuse my daughter will face in her work life.”
Garcia, who has been an outspoken advocate for women in the #MeToo movement, has complained that her political opponents helped fan the flames of the accusations. Through a campaign consultant, she declined to comment on Friday.
Rendon’s critique came on the heels of a full-page ad in The Times on Friday, partly paid for by the Trades Council, that criticized “well-funded ivory tower elites” who push proposals that hurt the oil and gas industry.
“We are the real jobs that fuel the real California economy,” read the advertisement.



Water Commission Now “Eager” to Fund Reservoirs

California took a big step toward launching a new multibillion-dollar wave of reservoir construction.

After being accused of being overly tightfisted with taxpayer dollars, the California Water Commission released updated plans for allocating nearly $2.6 billion in bond funds approved by voters during the depths of the drought. The money will help fund eight reservoirs and other water-storage projects, including the sprawling Sites Reservoir in the Sacramento Valley and a small groundwater “bank” in south Sacramento County.

In its new blueprint, which remains tentative, the Water Commission nearly triples the amount of money it will spend compared to a preliminary allocation it put out in February.

With climate change expected to diminish the Sierra Nevada snowpack, the new reservoirs are seen as a way of bolstering California’s ability to store water. Sites, a $5.2 billion project straddling the Glenn-Colusa county line, and the $2.7 billion Temperance Flat reservoir east of Fresno would become the two largest reservoirs built in California since Jerry Brown’s first stint as governor in the 1970s.

“The entire commission is eager to get all of this money out the door and fund these projects as fast as possible,” said Armando Quintero, the commission’s chairman. The agency will hold hearings in early May and make its final determination in July.

The money comes courtesy of Proposition 1, a water bond approved by voters in 2014. Local water agencies promoting 11 different projects applied for a share of the money, but in early February the Water Commission declared that most of them weren’t eligible for nearly as much funding as they requested. The applicants were deemed eligible for a total of just $942 million, about one-fifth of what they wanted and considerably less than what’s available.

The result was instant controversy. Lawmakers and others said the commission was thwarting the will of the voters; one legislator appeared at a commission meeting dragging a child’s red wagon full of petitions demanding the money be spent in full. The protests peaked amid concern that another drought was coming, although late-spring storms have eased some of those fears.

On Friday, the commission said eight projects now are considered eligible for almost $2.6 billion in total. That roughly matches the amount of available dollars. (Voters authorized $2.7 billion in spending, but the pot shrinks to just under $2.6 billion because of bond-finance costs and other expenses.)

What changed since February? The commission says the applicants have done a better job of making their case for the funds.

Although the bond was touted in large part as a drought-relief measure, the rules governing Proposition 1 say the state’s dollars can’t be used for water storage. The funds can only go toward the elements of a project that would provide “public benefits” such as flood control, recreation and — especially — improvements to the environment.

In the initial analysis, the Water Commission said most of the applicants didn’t adequately spell out their public benefits and what they’re worth financially. That left the project proponents struggling for a response.

For instance, proponents for Sites Reservoir, which would feed off the Sacramento River and hold twice as much water as Folsom Lake, have argued that it would create a much-needed pool of cold water to support the region’s dwindling Chinook salmon population. But the water agencies promoting Sites have struggled to prove the monetary worth of the additional fish.

“Tell me what the dollar value is of a returning salmon with any accuracy,” Jim Watson of the Sites Project Authority said in February.

After weeks of back and forth with Sites officials, the Water Commission’s staff has agreed the project is eligible for $933 million in Proposition 1 dollars, up from $662 million originally earmarked.

Joe Yun, the Water Commission’s executive officer, said more explicit project proposals benefited Sites and other applicants. “They’ve provided the information we needed to substantiate the benefits,” Yun said.

The staff gave Sites additional credit for extra water it could deliver in summer for the nearly-extinct Delta smelt. But the dollars are still well short of the $1.4 billion the reservoir’s backers are seeking, and Sites Project Authority Chairman Fritz Durst said in a prepared statement that “we think there is still room for discussion.”

Temperance Flat, on the San Joaquin River, was completely shut out in the Water Commission’s initial analysis. Now it’s eligible for $171 million in funding, out of $1 billion requested. The reservoir is expected to cost nearly $2.7 billion.

A small groundwater bank proposed by the Sacramento Regional County Sanitation District is eligible for $244 million, up slightly from its initial allocation.

Two Bay Area projects that originally had been denied any Proposition 1 money now are in line for funding. Expansions of Los Vaqueros Reservoir in Contra Costa County and Pacheco Reservoir east of Gilroy have been slated to received $400 million each.



Both Water Bonds Qualify for Ballot

Two different water bonds are set to appear on the California ballot this election season, after a $9 billion measure gathered enough signatures to qualify in November, according to the Secretary of State’s Office on Wednesday.

Primarily backed by farmers, water districts and conservation groups, the ballot initiative would split funding between each of their priorities, distributing $3 billion to water quality improvement projects, $3 billion to watersheds and fisheries, and about $1 billion to protect habitats. The rest of the funding, about $2 billion, would be divvied up between water delivery and storage projects.

The initiative became the first to have its signatures verified for the November ballot this year.

Jerry Meral, a former Brown administration water official best known for helping develop the Delta Tunnels plan, authored the measure. He has been attempting to qualify a water bond since at least 2015.

The Legislature has already put a $4 billion bond on the June ballot to fund parks, water and climate change preparedness, with about $1.2 billion for water projects. Voters also previously approved a $7.5 billion water bond in 2014.


By | 2018-05-07T09:54:02+00:00 May 7th, 2018|Air Quality|