For Clients & Friends of The Gualco Group, Inc.
IN THIS ISSUE – “It Matters What Species You Kill”
CALIFORNIANS & COMPROMISE
- Only Half of Californians Find Our State Affordable
- New Wildfire Law: A Good, Not Perfect, Legislative Compromise
- LA’s Free Sewage Treatment Ends…in Bakersfield
- Wind Power Blows Ill in Rural Communities
- Miracle Corn: No Fertilizer Need Apply
- Women Driving Future of Mobility
- Future of Work Starts in Tech
2020 ELECTION CYCLE
- 2020 Ballot Dilemma: K-12 Educators Propose $11B Tax-the-Rich Initiative
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.
FOR THE WEEK ENDING JULY 19, 2019
A newly released Quinnipiac University poll found that just slightly more than half, or 53 percent, of Californians believe they can afford to live in the Golden State.
Surveyors spoke to 1,125 California voters between July 10-15, with a margin of error of 3.9 percentage points.
Pollsters found that the perception of California as unaffordable was especially high among people 18 to 34, at 58 percent, and 35 to 49, at 53 percent.
By contrast, 58 percent of people 50 to 64 believe the state is affordable. Those 65 and older, at 68 percent, were most likely to say the state’s cost of living is reasonable.
Most Californians, 78 percent, believe the state has a housing crisis. That number includes both renters and homeowners.
A majority, 74 percent, also believes that the state must build more affordable housing for the homeless. However, 52 percent of Republicans believe the state has a role, compared to 90 percent of Democrats and 71 percent of independents.
Homelessness is a “very serious” problem for the Golden State, according to 82 percent of those surveyed, while less than a fifth of those polled, 17 percent, believed that the homeless are to blame for their situation.
A majority of those surveyed, 59 percent, said that the cost of housing is a major cause of homelessness. An even greater majority, 67 percent, believe the state is doing too little about it.
Commentary from the LA Times
“Nothing’s clean, Howard. But we do our best, right?” the Ava Gardner character tells eccentric Howard Hughes, who is fretting over germs.
It’s one of my favorite movie quotes, one that universally speaks to the human condition — most any condition, particularly politics.
Gardner’s “nothing’s clean” reply is another version of the mantra that propels pragmatic politicians everywhere: “Don’t let the perfect be the enemy of the good.”
America’s political system wasn’t designed by the Founders to produce perfection. It was structured with annoying checks and balances that force compromise to achieve anything significant.
This is a long-winded way of saying that Gov. Gavin Newsom and the Legislature deserve kudos for enacting a hopefully good — if not perfect — law last week aimed at propping up private electric utilities and saving them from going belly up in the next devastating wildfire.
“It was the least bad thing to do,” says one legislative participant in the negotiations. “It’s a feather in Newsom’s cap. He pushed hard to get this done.”
What was bad about it? The smell emanating from Pacific Gas & Electric Co.
Many legislators held their noses while voting for something that smacked of a PG&E bailout, although it didn’t really go that far. The private utility has been widely criticized for failing to maintain its power lines and other equipment that have been blamed for igniting some of California’s worst wildfires.
But the legislative consensus is that PG&E is too big and important to fail. It provides electricity and natural gas for 16 million people — 40% of the state — throughout Northern and Central California.
It’s in bankruptcy now. But if PG&E collapsed completely, what would take its place? Maybe some local governments would purchase small pieces. San Francisco is ruminating on it. But they’d grab off all the good parts and probably leave the most vulnerable wildfire regions — the brushy and tree-saturated foothills — with no power service.
The state certainly doesn’t want to buy out PG&E and venture into the power business. It’s not up to it. It can’t even run the DMV properly.
“Many rooting for this bill to fail want to see the government take over PG&E. If there’s anything worse than big business, it’s big government,” Assemblyman James Gallagher (R-Yuba City) said during the floor debate. He voted for the measure, as did other rural Republicans.
The Assembly overwhelmingly passed the fast-tracked bill 63-10 three days after the Senate did 31-7.
The bill was a late bloomer. Proposed by Newsom based on the recommendations of his wildfire strike force, the measure zipped through both houses in two weeks, a speed permitted only for the most greased bills.
Some skeptics demanded a pause, insisting the Legislature wasn’t being deliberative enough.
Wrong. Lawmakers have been chewing on wildfire issues for two years. It made no sense to vacillate further over how to financially bolster California’s private utilities.
“Essentially we’ve spent the last year and a half — if not more — evaluating these concepts,” says Assemblyman Chris Holden (D-Pasadena), the bill’s author and chairman of the Committee on Utilities and Energy.
Legislators were under pressure to pass the bill before they recessed for their summer vacation last Friday. For one thing, it would have been a bad look if they’d gone off to play for a month at the start of the wildfire season without finishing their work to help the utilities and ratepayers.
More importantly, the bond rating agencies threatened to downgrade all private utilities’ credit ratings if lawmakers failed to act by last Friday. This was considered unfair and potentially financially crippling for Southern California Edison and San Diego Gas & Electric Co.
It could have forced rate hikes for consumers and for Edison — even bankruptcy if a catastrophic wildfire occurred that left the utility liable for billions of dollars in damages.
Besides, SDG&E has been widely praised for its equipment maintenance and wildfire prevention efforts.
“PG&E wasn’t the issue. It was San Diego Gas & Electric and Southern Cal Edison,” says Sen. Bill Dodd (D-Napa), a major wildfire legislator whose wine country district was charred two years ago.
The legislation set up a $21-billion fund available for electricity providers held liable for wildfire damage. Utility customers and utility investors will split the cost. Utility shareholders will also have to spend $5 billion on equipment updating and fire prevention. And PG&E will be required to exit bankruptcy by next July.
“The main aim was to protect ratepayers from rate increases,” Dodd says. “This is a ratepayer bailout if it’s a bailout at all.”
The ratepayers’ contribution to the wildfire fund will be handled through a monthly $2.50 charge they’ve been paying for two decades. It was slated to expire, but now will be extended 15 years.
When the lawmakers return from vacation, they’ll debate about 20 other bills involving wildfire prevention and insurance availability.
Meanwhile, Newsom and former Gov. Jerry Brown have poured an extra $1.2 billion into fire prevention and fighting over the last two years.
Maybe it’s not perfect. But, to paraphrase Gardner, they seem to be doing their best.
It was a match made in heaven, at least for the residents of Los Angeles, but it will soon be coming to an end.
For around 20 years, Los Angeles has shipped a large portion of “biosolids” from its toilets to fertilize a farm it owns just west of Bakersfield.
Bakersfield, in return, has been providing an annual load of 18,000 acre-feet of free water to the farm, Green Acres, in a deal that was meant to benefit both cities. However, Bakersfield is choosing not to renew the water contract with LA, and the farm will have to find another source to irrigate its crops.
“Right now LA is receiving a great benefit by having free treated wastewater for their farming operation,” said Zachary Meyer, wastewater manager for Bakersfield. “Now the city is no longer going to be sending them that benefit and we are going to try to reap the benefits for ourselves.”
The city initially entered into an agreement with a private company in 1985 to send treated wastewater from a nearby plant to the farm for free.
The plant currently treats 17.5 million gallons per day, and is capable of treating up to 32 million gallons per day.
At the time, the agreement provided an outlet for its treated wastewater at no cost, which the city described as a positive.
In 2000, the 4,700-acre farm was transferred to Los Angeles, which has been trucking loads of biosolids, also known as sludge, to the farm for use as fertilizer.
The biosolids are treated human and industrial sewage waste that have been approved by the U.S. Environmental Protection Agency for use on farmlands.
Despite the approval, Kern County residents have been highly opposed to LA’s practice of dumping biosolids at the farm.
In 2006, voters overwhelmingly approved a ban on the use of the sludge on farms in unincorporated county areas. The vote kicked off a protracted legal battle in which Los Angeles won the right to continue trucking the sludge into Kern County.
Throughout it all, Bakersfield has provided water to the farm. However, after the passage of the Sustainable Groundwater Management Act, the value of treated wastewater increased.
“Our best interest economically is not to export it anymore,” said City Manager Alan Tandy.
The Bakersfield City Council voted on Wednesday to notify Los Angeles that it does not intend to renew the water contract, which expires in 2026.
After that date, the city plans to percolate the wastewater back into the earth to recharge Bakersfield’s groundwater basin.
If the city’s treatment plant were operating at full capacity, it could treat at least $2 million worth of water per year, and possibly much more, according to a city report.
“It’s a lot of water and it’s important to the balance sheet,” Tandy said, referring to the water being piped to the farm.
The city said in a report that it could also sell the water to farmers or use it to irrigate public parks.
The city has notified Los Angeles officials about the plan to shut off Green Acres’ water, but has not received a response, according to the city report
In Sherman County, Ore., every family gets a gift at Christmas time.
In this sparsely populated stretch of Oregon where unrelenting winds swirl across wheat fields, wind power has stamped its insignia.
Hundreds of wind turbines tower over the land, whirring as they generate electricity — and money. Wshh. Wshh. Wshh. Each December, households receive checks for $590 in exchange for use of their county as a wind site.
Developers pay the bulk of the money to farmers whose land they lease. A landowner typically gets $8,000 per megawatt per year, and the average turbine’s capacity is 2.5 to 3 megawatts. The county also invests its share of the revenue in infrastructure. Court records show Sherman County — once the second-poorest county in Oregon — has raked in tens of millions of dollars since the first turbines were erected in 2002.
“Wind turbines. What can I say?” said Sherman County Judge Joe Dabulskis, the top elected official. “Whether you’re for them or against them, they have made a difference.”
Some rural communities love wind power. Some hate it. Like it or not, the production of wind energy is expanding in the rural West with new, more efficient technology. At the same time, developers pushing to build turbines at new sites across the region are stirring a brew of new and age-old conflicts: bird and bat mortalities, pushback from rural communities that resist change and obstacles created by the limited power grid infrastructure.
For years, wind was dismissed as a fickle power source that could never meet a significant portion of the nation’s energy needs. New technologies and falling costs, however, are changing the industry.
According to the American Wind Energy Association, since 2009, the cost of wind energy has plunged 69%, making it the most affordable power source in much of the U.S. According to the U.S. Department of Energy, the installation cost for a commercial-scale wind turbine today is $3 million to $4 million. The industry, which for decades relied on tax incentives, is being weaned off subsidies, said Janine Benner, director of the Oregon Department of Energy.
Most U.S. wind turbines are manufactured in the U.S. Benner said Oregon has eight manufacturers. Vestas, the world’s largest wind turbine manufacturer, is based in Portland, Ore.
New turbines, Benner said, are more efficient. Blades are longer. Rotors are better. And they are taller. One of the newest models stands at 650 feet — taller than Seattle’s Space Needle.
But bigger turbines mean more controversy.
Birds and bats have a fraught history with wind turbines, but new technologies are making it easier for winged creatures and wind power to co-exist.
The wind-bird controversy dates to the 1990s, when conservationists found thousands of bats and birds annually — including protected species such as Golden Eagles — dying or being mutilated at California’s Altamont Pass wind farm.
Bat mortalities are often harder to quantify, said Todd Katzner, a research wildlife biologist with the U.S. Geological Survey. Because bats are tiny, their remains often vanish.
Industry advocates say mortalities from turbines are scant compared to millions of annual bird deaths caused by cats, power lines, vehicles or crashes into windows.
Katzner calls this an unfair comparison.
“It matters what species you kill,” said Katzner. “Songbirds probably crash into every house in North America. You never hear of a Golden Eagle killing itself by crashing into a window, but eagles do die from turbine blades. If you killed a million chipping sparrows, it would affect only 1% of the population. If you killed 100,000 Golden Eagles, you’d wipe out the entire U.S. Golden Eagle population twice.”
Researchers are pushing for laws and practices that kill fewer birds. One solution is choosing sites for wind farms away from migratory flyways. But siting is challenging.
In the West each year, more than a billion birds follow the Pacific Flyway — a migration path stretching from Arctic tundra to tropical rainforest.
However, said Garry George, the National Audubon Society’s renewable energy director, tracking birds in the western U.S. is difficult because migration pathways change based on rainfall and plants.
Face-recognition technology isn’t just for smart phones and Facebook. Scientists use similar artificial intelligence-based technologies, such as IdentiFlight, to train machines to recognize and track bird species.
Kevin Martin, director of environmental permitting at Terra-Gen Power, devised a GPS tracking system for protecting endangered California condors from death-by-turbine.
Energy companies pay for and operate these technologies because it’s expected and, sometimes, required. But developers have more to worry about than wildlife. They must also please landowners.
In a 1979 visit to Totontepec, a small town in Oaxaca, Mexico, naturalist Thomas Boone Hallberg marveled at the local maize. The plants grew nearly 20 feet high in nutrient-poor soil, even though local farmers did not apply any fertilizer.
The maize had aerial roots that grew a mucous-like gel just before harvest season. It seemed impossible, but Hallberg wondered if the maize was fixing its own nitrogen: extracting it from the air and somehow making it usable for the plant. He had visited countless towns since moving to Oaxaca in the 1950s, but what he saw in Totontepec stuck with him.
In 1992, Hallberg returned with a group of Mexican scientists. The maize, known as olotón, was almost ready for harvest and its aerial roots glistened with gel. Ronald Ferrera-Cerrato, a microbiologist, took samples back to his lab outside Mexico City to test the bacteria in the gel. His preliminary results, published in a 1996 report, showed that the maize received nitrogen from the air, through its aerial roots, meaning that it effectively had the ability to fertilize itself.
At the time, scientists around the world were puzzling over similar questions. In a 1996 paper in Plant and Soil, microbiologist Eric Triplett, then at the University of Wisconsin, described the possibility of corn plants that fix nitrogen as “the ‘holy grail’ of nitrogen fixation research” because of the potential to reduce fertilizer demand.
It took more than two decades before the suspicions about Totontepec’s maize were confirmed in a peer-reviewed journal. Last August, researchers from the University of California, Davis, the University of Wisconsin, and Mars Inc. — the global food and candy conglomerate — published the results of a 10-year study in PLOS Biology, describing how bacteria that thrive in the low-oxygen environment of the maize’s mucus pull nitrogen from the air and feed it to the plant.
Stepping inside Uber’s self-driving-car campus in Pittsburgh, Pennsylvania, feels like walking onto the set of a sci-fi movie. After checking in with security, you’re ushered past a wall of free snacks (as any good tech startup offers) into a bright open space designed for brainstorming sessions. On the other side of a glass wall opposite the floor-to-ceiling windows is a room that’s more futuristic garage than trendy startup, thanks to a fleet of vehicles all featuring the same spinning device—called “LiDAR”—on their roofs. What you’re seeing are some of the world’s first self-driving cars.
The site is home to the Advanced Technologies Group, ATG for short, the division of Uber devoted to bringing driverless, autonomous vehicles to the mainstream market. Since launching in 2015, ATG has prototyped five different car models, the last of which—a sleek and shiny white Volvo—currently cruises the streets of Pittsburgh (with a backup driver in the front seat; self-driving vehicles are not yet legal in Pennsylvania). That spinning LiDAR? It’s a 360-degree sensor, the car’s brain, so to speak. It is, in part, what makes these cars move without a person manning the wheel; an innovation that is transforming the transportation industry as we know it.
Autonomous vehicles feel freakishly futuristic but could soon be the new normal. And Uber claims they’re necessary. According to data, 1.3 million people die in car crashes every year globally, and 94 percent of critical crashes have drivers to blame(as opposed to car failures or environmental factors). To boot, more than 1 billion cars are sitting idle in the U.S. at any given time, meaning in many cities, up to 20 percent of available land is devoted to parking. With self-driving vehicles, Uber hopes to lower the death toll associated with crashes and decrease the sheer volume of cars on the road. (All autonomous vehicles will be modeled off Uber pool, picking up and dropping off multiple people, rather than transporting a single passenger).
The move away from personal rides and toward a sharing model seems obvious when you consider companies like Airbnb and Rent the Runway, both of which make borrowing feel environmentally friendly and chic. Not to mention cost-effective: Research by investment banking company UBS predicts that autonomous ride-sharing could decrease fares by more than 80 percent by 2030, which would average out to be less expensive than most public transit options.
Behind the industrial machinery, glossy cars, and general cool factor is a team of women quietly working to make the dream a reality. The program is led by ATG’s chief scientist Raquel Urtasun, who works out of the team’s Toronto research and development lab.
Much of the discussion around the future of work focuses on what is already disappearing: jobs in factories, on farms, and in restaurants.
But coming automation-fueled job losses and changes will reverberate far beyond — and eventually reach seemingly safe workers in Silicon Valley and on Wall Street.
- And those in-demand workersmay not be prepared for what’s coming, as the bulk of government and company reskilling efforts are targeted toward the lower end.
What’s happening: A number of companies are trying to prep their high-skilled workers for the future. Google for instance has put a third of its engineering workforce through AI training, and Amazon’s new $700 million upskilling effort will target its Seattle workers as well as warehouse employees.
- “Some of the top firms arerealizing that a lot of their folks who are making six figures are in the bullseye,” says Erik Brynjolfsson, director of MIT’s Initiative on the Digital Economy.
The big picture: But the impact may be larger than the response thus far.
- Pera recent report from Brookings, around 40% of the tasks done by computer programmers and web developers are susceptible to automation. For information security analysts, the number is 65%. For computer network architects, it’s 52%.
- Jobs outside of tech, like radiologists, financial analysts and lawyers, are also at risk.
- “Everyone is going to have to learn new skills — even the most sophisticated technologists themselves,” says Susan Lund of the McKinsey Global Institute.
2020 Ballot Dilemma: K-12 Educators Propose $11B Tax-the-Rich Initiative
California education leaders are floating a 2020 initiative that would tax top earners and corporations to raise an additional $11 billion annually for schools, building off recent polls showing strong voter support to boost K-12 spending, POLITICO has learned.
The move has already alarmed the state’s business community and could create a political dilemma for Gov. Gavin Newsom and Democratic legislative leaders who may be wary of asking voters for another major tax increase, including the third in two decades targeting affluent residents.
The draft measure by the California School Board Association calls for a 1.5 percentage point tax increase on personal income above $1 million, a move estimated to produce $3.5 billion annually for schools. But potentially more controversial is a provision for an additional 5 percentage point increase on corporate income over $1 million, which backers say would bring in another $7.5 billion in revenue.
Unlike general tax increases, which return about 40 percent to K-14 programs, revenues from the CSBA tax increases would go entirely to schools, backers say. The proposal dedicates 89 percent to K-12, and 11 percent to California community colleges.
“Right now we’re continuing to work with the Legislature to see if something can be done at the Capitol that would restore California school funding to appropriate levels to get as close as we were in the ’70s,” a period when California ranked top five in the nation among per pupil spending, said Troy Flint, spokesman for the California School Boards Association.
Some rankings show the state falling to 41st in per-pupil spending, and Flint said that “we really think that it’s the role of the Legislature to reverse four decades of under-investment.”
Absent legislative action, the group would begin gathering signatures in January, Flint said.
The organization’s polling on the matter — four statewide surveys to date — strongly suggest public support for such a route, Flint said. A CSBA poll by Fairbanks Maslin of likely voters in the November 2020 election suggests that nearly two-thirds support a plan to raise $11 billion for the schools — even after negative messaging is employed.
But the latest tax effort has prompted concern among the California business community, which has already galvanized around fighting a qualified 2020 ballot measure backed by a labor coalition called Schools and Communities First.
The so-called “split-roll” effort to increase property tax assessments — supported by big city mayors like Oakland’s Libby Schaaf and good-government organizations like the League of Women Voters — has been estimated to raise $11 billion annually, with approximately $5 billion going to schools and the remainder to other general fund purposes.
Rob Lapsley, president of the California Business Roundtable, said that the school boards association, like backers of the “split roll” measure, “could not be sending a worse signal” to the business community here and abroad about California by suggesting more tax increases are in the future.
“When you compare that with Texas … where will these companies headquarter and grow jobs?” he said.
“There has to be a balance, and that’s going to be what the governor is going to have to lead on going forward,” he said. “California is sitting on the $21 billion surplus, and these measures have no accountability, and no transparency. They do nothing to fix the system.”
California voters in 2004 approved a 1 percent tax on income above $1 million for mental health services. In 2012, they approved separate tax hikes on income above $250,000 for individuals and $500,000 for joint filers; those were extended in 2016.
To date, polls have suggested that the split-roll measure faces far more challenges at the ballot box, with the public lukewarm on the measure that would remove Proposition 13 protections for commercial property.
And that’s before the Business Roundtable this week launched a campaign called FightforProp13, what it promises will be an aggressive effort it says is aimed at educating state voters about the negative effects of higher taxes on the state’s businesses, economy and homeowners.
Lapsley said that should the educators’ proposal make the ballot, the business community “will give every consideration to fighting this one right along with it.”
Flint said that the two major tax-boosting measures on the 2020 ballot could be “complimentary,” not competing.
One former top California Democratic legislator, who did not want to be named, told POLITICO that while it’s understandable the school board organization is aiming for legislation first, a ballot measure appears far more likely.
“They’re trying to leverage the legislative body to move..because it’s less expensive in terms of signature gathering,” the former lawmaker said. “Will you get a member to carry it? Yes. But will it pass [the Legislature]? Doubtful.”
The former lawmaker cited legislative concerns about a possible recession looming and other tax increases potentially on the agenda.