For Clients & Friends of The Gualco Group, Inc.
IN THIS ISSUE – “…Going to Take A Huge Haircut….”
KEEPING THE LIGHTS ON
LEGISLATURE GEARS UP FOR 2019-2020 SESSION
- How Will Progressives Handle Historic Dominance in the Legislature?
- Battered, Shaken State Senate Republicans Stir to Elect New Leader
- LGBT Caucus, 25 Years After “A Party of One”
- Legislature Hires Public Credit Expert as Top Fiscal & Policy Advisor
PUBLIC EMPLOYEES RESTIVE
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 JAN. 18, 2019
Pacific Gas and Electric promises that its customers’ lights will stay on if it follows through on plans to file for bankruptcy this month. But companies that supply the California utility’s electricity may have more to worry about.
PG&E said it would use bankruptcy to resolve huge liabilities arising from two years of deadly wildfires. Such a move would allow the company to try to revoke or renegotiate contracts it signed with suppliers when power prices were higher than they are now. That, analysts said, could hurt companies that borrowed based on the higher prices — especially those whose power comes from renewable resources.
That prospect was underscored this week when credit-rating agencies downgraded the debt of Topaz Solar Farms, which is owned by a unit of Warren E. Buffett’s Berkshire Hathaway and whose sole customer is PG&E, and Genesis Solar Farm, a large project in the Mojave Desert developed by NextEra Energy. Both companies said they were operating normally, but were monitoring PG&E’s problems closely.
“People often think utilities are safe investments, but this is such a crazy situation,” said Daniel Lowenthal, a partner at the law firm Patterson Belknap Webb & Tyler who specializes in bankruptcy and corporate restructuring, referring to PG&E’s suppliers, shareholders and lenders.
“Investors and claimants are going to potentially take a huge haircut on their investments due to a catastrophic situation no one foresaw,” he added.
PG&E, one of the world’s largest electric utilities, faces an estimated $30 billion in damages tied to wildfires that killed scores of people and destroyed thousands of homes and other properties in 2017 and 2018. State officials have blamed the company’s equipment for starting at least 17 of 21 major fires in Northern California in 2017, and they suspect PG&E of causing additional fires last year.
If the company proceeds with a bankruptcy filing, it will be its second in about 20 years. In 2001, PG&E sought Chapter 11 protection after a bungled deregulation of the energy sector by California.
Legal experts said the utility’s looming bankruptcy could be more complicated than its previous filing. PG&E is not insolvent — it has money to pay its current bills — but bankruptcy specialists said it probably faced tens of thousands of claims from people whose relatives died in the fires or whose homes were destroyed, as well as from bondholders, creditors, contractors and others.
Bankruptcy offers the utility the opportunity to reduce how much it must pay those claimants while managing all of their claims in a single case before one judge.
“It didn’t take a crystal ball to figure out what PG&E is doing here is what we call a defensive bankruptcy filing,” said G. Marcus Cole, a professor at Stanford Law School. “This is completely voluntarily. What PG&E is doing is circling the wagons.”
For power producers, especially those in renewable resources, a bankruptcy filing by PG&E could be wrenching.
Gov. Gavin Newsom has pledged to protect the state’s ambitious clean energy goals, which include producing 100 percent of California’s electricity from carbon-free sources by 2045. But the state’s efforts have been complicated by the complexity and wide-ranging impact of PG&E’s impending case.
Some solar power suppliers said they would seek the state’s help to pressure PG&E to honor its contracts.
Bernadette Del Chiaro, executive director of the California Solar & Storage Association, said that members of the group were in discussions with the governor.
“This is definitely the topic of concern,” Ms. Del Chiaro said. “It’s definitely a real thing. Just how extensive it is, that’s the level I don’t understand.”
In bankruptcy, companies can reject contracts with suppliers, forcing them to join other creditors in asserting claims. PG&E could threaten to walk away from older contracts, particularly those with developers of renewable energy that were negotiated several years ago when prices for solar panels were higher than they are now. (Most of the renewable energy the utility uses is solar power.)
If PG&E succeeded in renegotiating the contracts, it could use the money it saved to pay fire-related damages. That could help shield ratepayers from sizable increases in their electric bills.
Analysts at Credit Suisse estimate that PG&E could save $2.2 billion a year by renegotiating renewable power contracts down to current market prices. Those savings could offset the utility’s annual cost of paying off wildfire claims from the last two years, the analysts wrote in a research note.
“It makes a lot of economic sense for PG&E to try and reject the older, higher-priced contracts,” said Clifford J. Kim, a senior analyst at Moody’s Investors Service.
Opening up existing contracts would be problematic for Clearway Energy, which operates seven plants that supply power to PG&E, according to S&P Global Ratings. All but one of Clearway’s plants use renewable energy. The company’s stock price is down nearly 30 percent from its high last year, falling sharply on Monday after PG&E said it would file for bankruptcy. Clearway declined to comment.
Con Edison, the New York utility, is also exposed because it supplies power to PG&E through a subsidiary that has operations in California and neighboring states. PG&E is one of the biggest buyers of electricity produced by Con Edison at installations like the Copper Mountain Solar Project in Boulder City, Nev. PG&E pays Con Edison an average $197 per megawatt-hour for its electricity, compared with the $25 to $30 per megawatt-hour cost of power from new solar plants, the Credit Suisse analysts said.
Michael Clendenin, a spokesman for Con Edison, declined to comment on PG&E’s planned bankruptcy except to say the company was “monitoring any developments.”
Some experts warned that it could be harder than it seemed for PG&E to renegotiate contracts with suppliers. A bankruptcy court could require the utility to pay damages for breach of contract because it still has enough money to operate, Professor Cole of Stanford said.
In one recent utility bankruptcy, an effort by FirstEnergy Solutions of Akron, Ohio, to renegotiate an energy supply contract is mired in litigation. Ohio Valley Energy, a supplier to FirstEnergy Solutions, argued that the contract should be resolved by the Federal Energy Regulatory Commission, which oversees wholesale electricity deals, not by a bankruptcy court. The case is before the United States Court of Appeals for the Sixth Circuit.
The utility could also anger state lawmakers. California’s government is trying to increase the use of renewable energy. But investors might be scared off if they thought utilities that operate in the state could easily renege on their contracts with suppliers.
Some California lawmakers have already expressed frustration that PG&E announced plans for a bankruptcy filing without waiting for them to come up with a solution to the company’s financial problems.
“What we know today is PG&E has put their fate in the hands of the court instead of the Legislature,” said Assemblyman Chris Holden, a Democrat and the chairman of the Utilities and Energy Committee. “We’re just trying to get our arms around what’s next.”
Gretchen Bakke thinks a lot about power—the kind that sizzles through a complex grid of electrical stations, poles, lines and transformers, keeping the lights on for tens of millions of Californians who mostly take it for granted.
They shouldn’t, says Bakke, who grew up in a rural California town regularly darkened by outages. A cultural anthropologist who studies the consequences of institutional failures, she says it’s unclear whether the state’s aging electricity network and its managers can handle what’s about to hit it.
California is casting off fossil fuels to become something that doesn’t yet exist: a fully electrified state of 40 million people. Policies are in place requiring a rush of energy from renewable sources such as the sun and wind and calling for millions of electric cars that will need charging—changes that will tax a system already fragile, unstable and increasingly vulnerable to outside forces.
“There is so much happening, so fast—the grid and nearly everything about energy is in real transition, and there’s so much at stake,” said Bakke, who explores these issues in a book titled simply, “The Grid.”
The state’s task grew more complicated with this week’s announcement that Pacific Gas and Electric, which provides electricity for more than 5 million customer accounts, intends to file for bankruptcy in the face of potentially crippling liabilities from wildfires. But the reshaping of California’s energy future goes far beyond the woes of a single company.
The 19th-century model of one-way power delivery from utility companies to customers is being reimagined. Major utilities—and the grid itself—are being disrupted by rooftops paved with solar panels and the rise of self-sufficient neighborhood mini-grids. Whole cities and counties are abandoning big utilities and buying power from wholesalers and others of their choosing.
With California at the forefront of a new energy landscape, officials are racing to design a future that will not just reshape power production and delivery but also dictate how we get around and how our goods are made. They’re debating how to manage grid defectors, weighing the feasibility of an energy network that would expand to connect and serve much of the West and pondering how to appropriately regulate small power producers.
“We are in the depths of the conversation,” said Michael Picker, president of the state Public Utilities Commission, who cautions that even as the system is being rebooted, there’s no real plan for making it all work.
Such transformation is exceedingly risky and potentially costly. California still bears the scars of having dropped its regulatory reins some 20 years ago, leaving power companies to bilk the state of billions of dollars it has yet to completely recover. And utility companies will undoubtedly pass on to their customers the costs of grid upgrades to defend against natural and man-made threats.
Some weaknesses are well known—rodents and tree limbs, for example, are common culprits in power outages. A gnawing squirrel squeezed into a transformer on Thanksgiving Day three years ago, shutting off power to parts of Los Angeles International Airport. The airport plans to spend $120 million to upgrade its power plant.
But the harsh effects of climate change expose new vulnerabilities. Rising seas imperil coastal power plants. Electricity infrastructure is both threatened by and implicated in wildfires. Picker estimates that utility operations are related to one in 10 wildland fires in California, which can be sparked by aging equipment and winds that send tree branches crashing into power lines, showering flammable landscapes with sparks.
California utilities have been ordered to make their lines and equipment more fire-resistant as they’re increasingly held accountable for blazes they cause. Pacific Gas and Electric reported problems with some of its equipment at a starting point of California’s deadliest wildfire, which killed at least 86 people in November in the town of Paradise. The cause of the fire is under investigation.
New and complex cyber threats are more difficult to anticipate and even more dangerous. Computer hackers, operating a world away, can—and have—shut down electricity systems, toggling power on and off at will, and even hijacked the computers of special teams dispatched to restore control.
Thomas Fanning, CEO of Southern Co., one of the country’s largest utilities, recently disclosed that his teams have fended off multiple attempts to hack a nuclear power plant the firm operates. He called grid hacking “the most important under-reported war in American history.”
If you’ve got what seems like an insoluble problem requiring a to-the-studs teardown and innovative rebuild, California is a good place to start. After all, the first electricity grid was built in San Francisco in 1879, three years before Thomas Edison’s power station in New York City. (Edison’s plant burned to the ground a decade later.)
California’s energy-efficiency regulations have helped reduce statewide energy use, which peaked a decade ago and is on the decline, somewhat easing pressure on the grid. The major utilities are ahead of schedule in meeting their obligation to obtain power from renewable sources.
California’s universities are teaming with national research labs to develop cutting-edge solutions for storing energy produced by clean sources. California is fortunate in the diversity of its energy choices: hydroelectric dams in the north, large-scale solar operations in the Mojave Desert to the east, sprawling windmill farms in mountain passes and heat bubbling in the Geysers, the world’s largest geothermal field north of San Francisco. A single nuclear-power plant clings to the coast near San Luis Obispo, but it will be shuttered in 2025.
But more renewable energy, accessible at the whims of weather, can throw the grid off balance. Renewables lack the characteristic that power planners most prize: dispatchability, ready when called on and turned off when not immediately needed. Wind and sun don’t behave that way; their power is often available in great hunks—or not at all, as when clouds cover solar panels or winds drop.
In the case of solar power, it is plentiful in the middle of the day, at a time of low demand. There’s so much in California that most days the state pays its neighbors to siphon some off, lest the excess impede the grid’s constant need for balance—for a supply that consistently equals demand.
So getting to California’s new goals of operating on 100 percent clean energy by 2045 and having 5 million electric vehicles within 12 years will require a shift in how power is acquired and managed. Consumers will rely more heavily on stored power, whose efficiency must improve to meet that demand.
“Large-scale renewables are disrupting the conventional paradigm of how the grid has been constructed,” said Lorenzo Kristov, who is retired from a long career designing markets and planning the state’s grid. “Wind and solar—you can’t tell them what to do. They are challenging just about every aspect of how the electricity system has worked for decades. We need a lot of new thinking.”
Electricity may be governed by the immutable laws of physics, but it is managed by the California Independent System Operator, known as CAISO.
Electricity is bought and sold in a market, in five- and 15-minute increments. Until a national wave of deregulation in the 1990s, electricity markets functioned as they always had: Monolithic power companies operated as regulated monopolies. Utilities did everything: produced power, sold it and delivered it across lines and poles they owned.
California became one of the first states to deregulate electricity in 1996, and established CAISO to run the grid and the wholesale power market. That turned out to be a short-lived policy resulting in market manipulation by Enron and other energy companies and speculators, who created phony shortages and jacked up prices. Those factors and others eventually plunged parts of the state into periodic darkness; rolling blackouts shocked and panicked consumers and officials alike.
Regulation was suddenly back in fashion. Collateral damage: Pacific Gas and Electric filed for bankruptcy after going $9 billion into debt buying that expensive power for its customers, and Gov. Gray Davis was recalled.
“Could it happen again? It could happen in a flash,” said Loretta Lynch, who was president of the state Public Utilities Commission during the energy crisis. She said state and federal regulators should assert more control over the market and, ultimately, rein in costs to consumers.
The Independent System Operator’s complicated name is in keeping with the profundity of the service it provides: in addition to its role as grid custodian, it’s also a regional transmission operator, shuffling about a third of the power demand in the West.
The state is dominated by three major utilities, PG&E, Southern California Edison and San Diego Gas & Electric. Publicly owned utilities in Sacramento and Los Angeles operate their own systems, as do dozens of smaller districts and cooperatives. But even the community groups that are no long customers of the big utilities are plugged into the same wires and poles.
Much of the interconnection for a Western-wide grid already exists: California is tethered to its neighbors, who buy and sell power from and to each other. They all grab energy as it spins around a 120,000-mile distribution system known as the Western Doughnut, which is fed by more than 500 power companies. And, while some officials worry that regionalization would cede control to other states, there are already 38 regional authorities managing the network.
“Things are moving faster than ever before,” said Mark Rothleder, a CAISO vice president who plans for how renewables and other innovations might affect the grid. It’s critical, he says, to proceed thoughtfully.
“We’re in the middle of change, and because of that … you run the risk of missing something. We don’t have the luxury of just being able to miss it. Because if we miss it, the lights go off. That’s why we look ahead, study what this change is going to do and how do we maintain reliability.”
Help is expected to come, like next-generation storage capacity, from technology. Some of the possible advances resemble souped-up science projects: pumping compressed air underground to store for later use, harnessing tidal energy in the San Francisco Bay, collecting the water that flows through hydroelectric dams and, with that middle-of-the-day solar power, pumping it back up to the facility’s turbines.
Some experts have said the new demands on the grid could collapse it. Bakke and others say those dire predictions aren’t being borne out—so far.
“I would have expected more problems, and I think the reason there haven’t been more is that the electrical engineers are now extremely interested,” she said. After a century of sameness, “they have a good problem to work on.”
As California chews on the problem, other states and even the federal government are watching—as they do many developments that emerge first in California—to see what arises.
“California must try to provide a model that other jurisdictions can copy,” said Matthew Freedman, staff attorney at The Utility Reform Network, a watchdog group. “It will require trial and error and a willingness to experiment. If everything you try succeeds, that means you are not taking enough risks.”
“We are out there now on the skinny branches,” Freedman said, “and that’s where the state excels.”
Democrats’ unprecedented level of power in Sacramento — and new Gov. Gavin Newsom’s embrace of an expansive liberal agenda — has left the business community asking a question with ramifications well beyond California: How are we supposed to kill a bill in this town?
Whereas in many states business interests rely on ideologically like-minded Republicans to carry their water in policy fights, that hasn’t been an option for years in the most populous state in the union, where the GOP’s years-long decline plunged to a new nadir in 2018. The party’s association with President Donald Trump proved toxic, contributing to deep losses in the congressional delegation and at both the state and local level.
And even by the lofty standards of recent progressive dominance here in Sacramento, the 2018 election was a high-water mark. Democrats in both chambers of the Legislature wield two-thirds supermajorities that allow them to pass new taxes without Republican support; pickups of longstanding GOP seats have given them votes to spare. Three quarters of Assembly members are Democrats; there are so few Republicans that becoming the leader of the state Senate GOP caucus would require the support of just five colleagues.
Democrats’ expanded margins now have business groups strategizing on how to exploit the divides in what is now an overwhelmingly one-party government.
“We’re going to need more Democrats than Republicans to kill a bill,” said Adam Keigwin, a former chief of staff who’s now a lobbyist for Mercury. “It’s clearly a different dynamic that we haven’t had before that everybody has to adjust to.”
The new dynamics have national implications, given the size of California’s economy and the state’s national influence on a range of policy areas, including energy, health care and consumer regulation. And in the coming months they’re likely to shape the outcomes of leading issues like worker classification, housing production, clean energy goals and an ambitious health care coverage push.
As California has shaded ever-bluer in recent years, big business has adapted by shifting resources towards electing friendly Democrats rather than sidelined Republicans. The top-two primary system has accelerated that trend: it’s now common to see groups backed by real estate, pharmaceutical, oil and other industries spend millions on a chosen candidate when two Democrats are battling it out in the general election, in addition to spending to boost Democrats over Republicans in key districts.
The collapse of Republican electoral prospects means Democrats are “the only choice the business community has,” said Darry Sragow, a Democratic consultant who publishes an election handicapping guide called the California Target Book.
“If we’re talking about business interests as a whole, they’re perfectly within their rights to be concerned” with the new Legislature, Sragow said. But he argued that it reflects an enduring signal from voters: “Californians have clearly concluded we are going to clean up our environment, that we are going to make this a place that protects our workers both in terms of how we workplace safety and what we pay them.”
The other thing interest groups are counting on: just because you have sixty legislators doesn’t mean you can get them all to agree.
“Two-thirds control of both houses, I don’t think anyone knows what that means,” Sragow said, “because Dems are perfectly capable of turning on each other.”
“Initially the business community liked Republicans because they were 100 percent with them on every issue, but it doesn’t matter if you’re 100 percent on every issue if you don’t have the votes,” said David Townsend, a political consultant who has spent years working to bolster the moderate Democrat caucus.
Plenty of distinctions still exist between California’s legislative Democrats. The fractious and unofficial moderate Democratic caucus has never been a monolith, and in recent years it has lacked clear leadership. Understanding and exploiting divides within the larger Democratic caucus is critical to shaping policy.
“When a caucus gets that big there’s going to be incredible ideological diversity,” said Rex Frazier, president of the Personal Insurance Federation of California. “Some members might be mod on labor issues, others might be on environmental issues, others might be on environmental issues. … The mods for an oil vote might be different from the mods for a banking vote.”
That means that the strategy for business interests will be similar to in the past: finding and exploiting the fissures between Democrats and trying to hold together more-moderate members as a counterweight to the farther left wing.
Since many of the newly elected Democrats claimed swing districts, conventional wisdom might dictate that they would gravitate towards the center. But several observers cautioned against assuming the Legislature would be more moderate: a wave election swept Democrats of all stripes to power, and the fact that the next cycle will be a presidential year — in which higher turnout tends to favor Democrats — could mean new members have less incentive to curb their liberal proclivities.
“Those pickups that went from Republican to Democrat overwhelmingly didn’t even go to moderate Democrats — they went to progressive Democrats,” said Carl Guardino, CEO of a business coalition called the Silicon Valley Leadership Group. “Structurally within the Legislature, the progressives are not only more but are in power.”
“For current members who had ambitious goals blocked by Governor Brown, their view is: ‘I’m putting those right back in and I might even make them more ambitious’” with Newsom, Guardino said, adding that new members “are already going to have that mindset, so we’re expecting a very aggressive and ambitious set of bills to be introduced.”
The 2018 election may have shifted legislative dynamics in another way: while the Senate has long been viewed as the more liberal chamber and the Assembly as the place where ambitious progressive bills die, the math and makeup of the caucuses has flipped that perception.
Still, the fundamental blueprint has not changed, said California Business Roundtable CEO Rob Lapsley, who formerly directed the California Chamber of Commerce’s political operations. “We have a core group who are very far-reaching in what they want to see the state do in its social policies, regardless of its impact on jobs,” he said. “And then we have a core group who are very sensitive to any of the major policy impacts on jobs.”
Interest groups are focused for now on sorting who falls into which group, Lapsley said. He acknowledged that advancing businesses’ agendas in Sacramento will require “more resources and more work,” and he predicted that it would mean a greater focus on appealing to constituents via social media, advertising and enlisting “opinion leaders and influencers” to prevail upon legislators.
He predicted that California’s high cost of living — an issue Newsom also highlighted in his gubernatorial campaign — would be paramount.
“One of the key elements in the discussion that’s going to take place this year is where is California now on the issue of affordability,” he said. “This is now at the forefront.”
California Republicans, battered by deep losses in the 2018 elections, have shaken up their leadership by elevating a social conservative to lead the state Senate caucus.
State senators voted to replace Sen. Patricia Bates with Sen. Shannon Grove on Tuesday, the latest leadership shuffle as the state party searches for a way out of political oblivion. Grove highlighted California’s highest-in-the-nation poverty rate in a statement heralding the change.
“For the sake of the millions of forgotten Californians, our Caucus will work to navigate government with pragmatism and compassion and negotiate with fearlessness,” the Bakersfield Republican said.
The Senate Republican caucus is relegated to superminority status, with Democrats wielding enough votes to pass tax increases or move measures to the ballot without GOP support.
Republicans ceded seats in a pair of critical races this cycle, one in Orange County and the other in agriculturally dominated Central Valley — two onetime GOP strongholds whose forfeiture underscored the scope of the party’s woes.
While some California Republicans have advocated a socially moderate, fiscally conservative platform as a way to appeal to more voters, Grove has embraced an agenda that includes opposing abortion rights despite California’s general embrace of them.
In 2015, Grove courted controversy after she was quoted suggesting that a withering drought was God’s punishment for abortion. Grove denied that account but said in response that “God’s hand is in the affairs of man.”
When Sheila Kuehl of Santa Monica became California’s first openly gay or lesbian legislator in 1994, a cartoonist depicted the occasion.
The drawing’s first panel was “The gay and lesbian caucus goes to lunch.”
The second was “Kuehl, party of one.”
Two years later Carole Migden of San Francisco became the state’s second lesbian legislator, followed by Christine Kehoe of San Diego and Jackie Goldberg of Los Angeles. The four had dinner at least once a month at Goldberg’s house. And after the 2002 addition of legislators Mark Leno of San Francisco and John Laird of Santa Cruz, the group formed an official LGBT caucus.
A quarter-century after Kuehl’s election made history, the caucus numbers seven and has chalked up hard-fought legislative victories—and a to-do list for the future. All its members are Democrats; no openly gay, lesbian, bisexual or trans Republican has ever won a seat in the Legislature.
“You don’t get any respect unless you’re in the room where it happens,” Kuehl said. “And that is symbolic sometimes but it is noticed by society—because you’re making policy for your community as well as for everybody else.”
California’s Legislature has become more diverse over the years, although as CALmatters’ Legislators: Just Like You? interactive demonstrates, it still falls well short of being an accurate demographic reflection of California. Latinos, Asian-Americans and particularly women are under-represented compared to their share of the state adult population.
But the LGBT caucus closely mirrors the state: Nearly 5 percent of Californians are LGBT, according to UCLA Law’s Williams Institute, while just under 6 percent of California legislators are openly lesbian, gay or bisexual. The Senate president pro tem, Democrat Toni Atkins of San Diego, is the first lesbian to lead the chamber. And although the caucus dropped by one this year, it’s because former state Sen. Ricardo Lara, a Democrat from Bell Gardens, became the first gay statewide office-holder when he was elected insurance commissioner.
As for the absence of an openly gay Republican in the Legislature, former GOP Sen. Roy Ashburn said he’s not surprised, but he expects that will change. “There’s still a lot of people in hiding,” he said, “and I’m hopeful that people will be more accepting and loving and it won’t be necessary for people to do what I did in the future.”
No longer a Republican, Ashburn said he regrets votes he cast against ensuring more rights for LGBT individuals. After his arrest for driving under the influence in 2010, he acknowledged in an interview with a radio station in his Bakersfield district that he was gay—saying he felt compelled to address rumors that he had visited a gay nightclub that evening. “I did not live an authentic life,” he said. “ I hurt people who were adversely affected by the votes that I cast.”
Sometimes differences can be forged. Low and Biola University President Barry H. Corey were at odds over a 2016 bill that sought to prohibit any school participating in the Cal Grant Program from discriminating against a student or employee on the basis of a protected class like sexual orientation.
The bill didn’t pass, but the two foes became friends, so much so that they published what they learned in a joint Washington Post piece.
“It’s amazing how quickly biases can be overcome,” they wrote, “…when you realize the person you once thought an adversary is in many ways like you, with a story and passions and fears, and a hope that we can make the world a better place.”
To Low, that’s also why the LGBT Caucus is still needed. He said after working with the caucus, people can gain a new perspective—recognizing that LGBT individuals are not “mythical creatures on TV” but are just like everyone else.
“So that’s where I think it changes people,” he said. “If we’re not there, then people won’t understand.”
Critics of a deliberate emphasis on diversity often contend that lawmakers’ personal traits don’t, or shouldn’t, affect what issues they carry or how they vote—in short, that legislating shouldn’t be personal.
It’s an argument that LGBT legislators have confronted repeatedly. Case in point: the bitter fight in 2001 over passage of a bill creating domestic partners status for the state’s same-sex couples. Majority Floor Leader Kevin Shelley addressed the Assembly about Migden, its sponsor and his San Francisco colleague.
“We all know how tough she is. She’s real tough. You don’t wanna mess with her,” he began. “I went outside with Ms. Migden and she was doubled over in pain—emotional pain—and in tears, and said to me and to others nearby ‘How can they say it’s not about me? How can they say it’s not personal?’
“And so I say to all of you on behalf of my friend Carole, who I know will not say it for herself because she doesn’t want it to be personal in how she articulates the debate. It is personal….And the vote today should be personal for all of us.”
Arguing in favor of the same bill, Goldberg spoke through tears about her partner and their son: “We are a family. There is nothing any of you can say or do that makes us any less a family. But what you can do is make it harder for my family to survive.”
Since passage of that bill, the California LGBT caucus has successfully sponsored:
- A 2003 act expanding to same-sex couples most of the rights and responsibilities that heterosexual spouses already had, such as parental status for a child born during a relationship and access to divorce courts.
- Leno’s 2003 act protecting transgender people and those perceived as transgender against discrimination when renting an apartment or looking for a job.
- Assemblyman Todd Gloria’s 2018 law giving foster children access to health care that affirms their gender with medical interventions such as hormone treatment. The healthcare must be available by 2020.
- A new law co-sponsored by Atkins that allows non-binary people applying for a driver’s license or ID card to mark “X” in addition to “M” for male or “F” for female. (One Californian has already shared the experience of changing their driver’s license.)
So what’s still on the caucus wish list?
Members and advocacy groups plan to advance bills that would provide “cultural competency” training to help teachers build safer and more inclusive learning environments for LGBT students in public schools. Former Gov. Jerry Brown previously vetoed a version of that bill, although a similar one to train law enforcement officers was signed into law.
The caucus also wants another crack at limiting the practice of conversion therapy, the practice of attempting to alter an individual’s sexual orientation through methods such as counseling and prayer.
And it’s still personal. Arguing for his bill to regard conversion therapy as consumer fraud in last year’s session, former Campbell mayor-turned-Assemblyman Evan Low said “You’ve heard testimony about suicidal thoughts, I have also had that. As mayor (in 2010) I could officiate a wedding but couldn’t get married myself.”
But questions were raised about whether the bill would violate the First Amendment rights of therapists. Although proponents insisted it was neutral on religion because it impacted all consumer transactions, Low pulled the bill in what he described as a gesture of good faith to seek common ground.
“The evangelical community is not monolithic, they’re not one in the same,” he said. “So are there certain people who you could change their hearts and mind? Yeah, absolutely. And that’s where I’m working, that’s where I’m spending my energy.”
His approach won Low points with some opponents.
“To his credit, he actually went around and listened to a lot of various pastors who told him ‘why are you attacking us?’ “ said Greg Burt of the California Family Council. “So I think he realized it would be better to try and persuade a chunk of them to come his way than to simply outlaw what they were doing.”
Opponents of the caucus’ agenda insist there should be room in California politics for people or religious organizations that take a different view—and that the LGBT caucus too often advocates ideas that impede on religious freedom.
They cite a bill that would have allowed transgender and gay students to more easily sue private religious universities who violated the school’s sexual conduct rules and faced reprisals up to and including expulsion. The bill was enacted only after that specific provision was removed following tremendous pushback from religious universities. Another law barred employees at long-term healthcare facilities from purposefully not calling patients by their preferred gender pronouns.
“They are seeking to go after organizations that disagree,” Burt said. “That’s what tolerance is all about. We tolerate those who disagree.”
California’s next legislative analyst will be a public finance expert who will come to the Capitol from a top financial credit rating agency.
Gabriel Petek of S&P Global Ratings was named on Wednesday as the state’s next legislative analyst, succeeding longtime analyst Mac Taylor.
Petek will oversee a department responsible for providing an independent review of budgets and policy proposals coming out of Sacramento.
The Harvard graduate and former Boston budget analyst is a registered Democrat who prides himself on objectivity. He will take over at the LAO on Feb. 4.
As a Capitol outsider, Petek said he was surprised when he learned on Wednesday that he’d just been hired.
“I’m still a little bit in shock here but am very excited about it,” Petek said. “I think they hope someone will take a fresh look at the work and the way they operate, and at the same time, have a lot of respect for the work they’ve done to date.”
Petek is the primary credit analyst covering California for Standard & Poors. He has covered the state since 2008. State Sen. Holly Mitchell, D-Los Angeles, and Assemblyman Phil Ting, D-San Francisco, led the search process for Taylor’s replacement. The two lawmakers spoke highly of Petek.
“One of my key priorities throughout this bipartisan process was to identify a new Legislative Analyst who will help the legislature achieve its policy and oversight goals by providing thoughtful analysis and support,” Ting said in a statement. “Gabriel Petek brings strong credentials and experience to the job. I look forward to engaging him in the budget process, so we can make the smartest fiscal decisions for California.”
Taylor, who worked for the analyst’s office for 40 years, long cautioned lawmakers and governors against overspending. Petek, too, has publicly warned about the possibility of a recession due to trade and stock market uncertainty.
“The recent increase in volatility is a concern for the state’s revenue performance,” Petek said.
Public employees are striking across the state in a sign that the year is shaping up to a feisty for labor in California government.
The biggest strike is unfolding in Los Angeles, where some 30,000 teachers walked out of class this week. They want better pay, smaller class sizes and some assurance that they won’t be cast aside for charter schools.
“We’re seeing a level of activism from workers that we haven’t seen in decades,” said Steve Smith, spokesman for the California Labor Federation.
It’s hard to say exactly how many strikes are taking place. The Bureau of Labor Statistics tracks large strikes, in which 1,000 or more employees walk out, but many of the actions taking place in California are for smaller employers.
The number of large strikes declined last year, but union leaders say the smaller ones seem to be gaining traction.
Two trends seem to be driving much of the push for change, said Smith and other state labor leaders.
First, public employees say they’re straining to keep up with the state’s high cost of living. Many of them accepted contract concessions and furloughs during the Great Recession, and they’re trying to make the most of the state’s sound economy.
The average wage for California teachers is $80,600, and the average wage for striking teachers in Los Angeles is about $75,000. It’s good money, but often not enough for families to settle down in high-cost communities like L.A.
“What is steadily increasing in California is the wealth gap. We’ve got teachers in L.A. going out on strike so they can afford to live where they work,” said Kathryn Lybarger, president of AFSCME 3299, a union that represents University of California health workers. Her union went on strike in October, and its contract remains at impasse.
Second, public employee unions suffered a major financial blow in June, when the U.S. Supreme Court handed down a ruling that forbid them from charging fees to workers who did not choose to join them.
That decision, known as Janus vs. AFSCME, cost California government unions millions of dollars a year in revenue they collected in so-called fair-share fees from workers who benefited from contract negotiations but did not want to be in a labor organization.
As a result, many public employee unions are communicating more with workers and trying to demonstrate their value to employees who are no longer obligated to give them a share of their paychecks.
“In the public sector after the Janus ruling, you have unions with a much more active role in engaging membership and demonstrating why people need a union,” said Ken Jacobs, chairman of the UC Berkeley Labor Center.
At AFSCME, Lybarger said, “We had had to go all of our members and say, ‘Being a union member is now optional, so are you going to stand with your union or not? Why do you think your employer wants you to quit your union?’”
After that, Lybarger said, members “see the potential and the need to fight back.”
Government employers counter that their personnel costs are rising significantly, too.
Pension and health care costs are climbing, particularly as the California Public Employees’ Retirement System and California State Teachers’ Retirement System ask schools and government agencies to pay down their pension debts.
That tradeoff between climbing benefit costs and worker requests for raises has been at the heart of disputes between teachers and school districts in Los Angeles and in Sacramento.
Gov. Gavin Newsom’s state budget proposal would give some pension relief to schools by paying down some of their debt to CalSTRS. School districts will be able to use that money for other purposes.
Modesto, where Republicans dominate elected positions in local government, is the scene of two recent public employee strikes.
Hundreds of teachers at Yosemite Community College District walked out in November and threatened to strike again this month. This week, they ratified a contract that nets a 10 percent raise for 330 full-time and 426 part-time teachers at Modesto Junior College and Columbia College in Sonora.
“We were taken to the point of leaving classrooms because it got that bad,” said Jim Sahlman, president of the Yosemite Faculty Association said. “What we are seeing not only in education, but in other professions, is unions are demanding that people are treated with respect.”
On Wednesday, more than 200 Stanislaus County mental health and social services employees were on their ninth day of a strike for better wages and working conditions. Members of their union, SEIU Local 521, spoke for more than two hours at a board of supervisors meeting this week.
“It’s time the board of supervisors take a hard look at the crisis they are bestowing on our community by allowing this work stoppage to continue,” Kate Selover, the union chapter’s president, said in a news release.
A branch of the same union is on strike in Fresno, where about 150 superior court reporters and clerks walked off the job on Tuesday.
The union there wants to restore a 40-hour work week after accepting a shorter, 35-hour work week in a past contract. It argues the court’s contract offer does not keep up with cost-of-living increases.
“When somebody’s paycheck is going to go backwards, that’s not fair,” chapter President Denise Dedmon told The Fresno Bee.https://www.sacbee.com/news/politics-government/the-state-worker/article224654775.html#storylink=cpy