Capital News & Notes
For Clients & Friends of The Gualco Group, Inc.
IN THIS ISSUE – “…Arguing Out Of Both Sides Of Your Mouth”
PRIMARY ELECTION & STATE BUDGET REACH FINISH LINES
- November Contenders: Candidates Barnstorm State Before Tuesday
- Mega-Donors Open Checkbooks
- Primary Lite? Voters Appear AWOL
- CA Republicans Are Now A Third Party
- Brown & Legislature Final Budget Battle
RESOURCES – NATURAL & HUMAN
- Brown Signs 2 Water Conservation Laws
- Cap-and- Trade Greenhouse Gas Market May Be Leaking
- CalEPA Regulators Outgrow A 25-Story HQ
- New US EPA District Director “A Bull Wrangler”
- Brown Appoints New Top Advisor & HHS Secretary
- Latest California Export — Teachers
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 JUNE 1, 2018
READ ALL ABOUT IT!!
November Contenders: Candidates Barnstorm State One Last Time
From the Mexican border to a Palm Springs senior center to an Oakland soul food restaurant, the candidates for California governor rushed to meet voters in the final days before next week’s primary.
A new poll released Thursday magnified the high stakes: Lt. Gov. Gavin Newsom and Republican businessman John Cox pulling farther ahead of former Los Angeles Mayor Antonio Villaraigosa, even as an outside group supporting Villaraigosa poured more than $2 million into last-minute ads blasting Newsom for skipping out on his job.
The poll, from the UC Berkeley Institute of Governmental Studies, put Newsom at 33 percent, Cox at 20 percent and Villaraigosa at 13 percent among likely voters. The top two candidates will go on to the general election. This will likely be the last major independent survey released before people head out to vote Tuesday morning.
Newsom continued a swing on his campaign bus, visiting senior centers in San Diego and Palm Springs on Thursday with his family in tow. He was scheduled to visit a Ladera Heights barber shop Thursday evening.
After meeting immigration activists at the U.S.-Mexican border on Wednesday, Villaraigosa started a 24-hour tour of the Los Angeles area on Thursday. He shook voters’ hands at transit stations, made sandwiches at a popular deli, and dished up taco salad at a soup kitchen.
In Fresno, Cox met with onetime GOP presidential hopeful and pizza magnate Herman Cain. And Republican Assemblyman Travis Allen, who’s resisted calls from some GOP officials to drop out after President Donald Trump endorsed his rival, held his own rally at the border wall earlier this week.
Further north, State Treasurer John Chiang stuck to the Bay Area. He visited the downtown Oakland headquarters of The Greenlining Institute, a social justice group, before getting a private lunch at iconic West Oakland soul food restaurant Brown Sugar Kitchen (which recently closed to the public). This afternoon, he’ll visit local businesses in San Francisco’s West Portal neighborhood.
Chiang, who clocked in at 9 percent in the IGS poll, talked about his advocacy for criminal justice reform and shared stories of his upbringing as the son of working-class immigrants. “I was probably the only 11-year-old who was really excited about the Watergate hearings,” he said.
In a brief interview, he also took a shot at Newsom for his campaign strategy of boosting Cox in an effort to guarantee a Republican opponent in the general election.
“You can’t advocate that you’re leading the charge against President Trump yet pushing for a candidate supported by President Trump,” Chiang said of Newsom. “You’re arguing out of both sides of your mouth.” In contrast, he called himself “the anti-Trump.”
Meanwhile, Delaine Eastin, the former state schools chief, was scheduled to kick off her campaign’s get-out-the-vote efforts with a rally in Union City, where she launched her political career four decades ago, on Thursday evening.
Still, in a state as massive as California, there are only so many voters even the most energetic candidate can shake the hands of in five days — so the political weapon of choice is TV ads. The pro-Villaraigosa group, funded by charter school advocates like Netflix CEO Reed Hastings, released a pair of new spots focusing on Newsom’s decision as San Francisco mayor to take a weekend vacation to Hawaii in the wake of a massive oil spill in the S.F. Bay in December 2007. The ads show a grinning Newsom, and argue that he’s “not gonna work as governor.”
At the time, Newsom’s mayoral administration said the Coast Guard had underestimated the scale of the spill before Newsom left, and that he was in close communication with local officials while he was away.
“I don’t see how my staying would have changed things,” Newsom told reporters in 2007. “I was gone all of two days, and it turned out to be one of the worst weekends of my life.”
The ads also blast the lieutenant governor for a lack of attendance in his current job. Newsom did miss more than a third of the meetings of the boards of regents for the University of California and California State University systems, the Los Angeles Times reported last month. Other candidates also missed meetings while serving on the same boards, but membership on those boards represents one of the few concrete responsibilities of being lieutenant governor.
The ads are the first from the pro-Villaraigosa group to directly take on Newsom. They’ve previously stuck with positive spots about the former L.A. mayor and negative ads against Cox.
The Berkeley IGS poll, which surveyed 2,106 likely voters online between May 22 and 28, had a margin of error of 3.5 percentage points.
Mega-Donors Open Checkbooks for Primary
An unprecedented amount of money from wealthy donors, unions and corporations is flowing into the California governor’s race, giving independent groups — unrestricted by contribution limits — a greater say in picking the state’s chief executive than ever before.
The groups have already spent more than $26 million through Thursday, the most ever spent by noncandidate committees in a gubernatorial primary, according to a Times analysis of campaign finance reports.
“California elections have always been expensive, and the future is even more expensive,” said Jack Pitney, a political science professor at Claremont McKenna College and a former state Republican leader. “The stakes are very real.”
To be sure, California has seen high-spending elections before. GOP nominee Meg Whitman shattered records when she spent $178.5 million on an unsuccessful gubernatorial bid in 2010, including $144 million of her own money. Ballot measures routinely see tens of millions of dollars in spending.
The campaigns, some of which have been operating for years, have spent more than the outside groups — $40.8 million as of Thursday. But in the run-up to primary day, the independent groups are far outspending the campaigns — $20 million to $14 million between May 1 and Thursday, according to financial disclosure documents filed with the state.
A voter-approved 2000 ballot measure limits how much donors can contribute to candidates. For the current election, it’s $29,200 for gubernatorial candidates in the primary. But donors face no limits in how much they can contribute to outside groups, which are formally called independent expenditure committees.
Former Los Angeles Mayor Antonio Villaraigosa has been the biggest beneficiary of outside spending in this race, with charter school backers spending nearly $16 million on efforts to boost his campaign.
The vast majority of that spending has been devoted to airing television ads to promote Villaraigosa. But some of that money has been spent to influence the competition between the two top GOP candidates in the race, an effort to increase Villaraigosa’s chances of coming in second in the June 5 primary and to advance him to the general election against Democratic front-runner Gavin Newsom.
Many political observers say Villaraigosa, who was stagnating in the polls earlier this year, would not have a chance to finish in the top two without the outside groups’ largesse.
“He’s already in a hole and the best he can hope for is the [independent expenditure] money will enable him to edge into the No. 2 spot, and even that is no sure thing,” Pitney said. “Without the I.E. money, he’d be looking to go back to Herbalife,” the multilevel marketing nutrition supplements company Villaraigosa worked for after leaving the mayor’s office.
Other candidates have also benefited from independent expenditures, notably Newsom. More than $6 million has been spent to support his bid, mostly by unions.
Donations to such groups have steadily increased since the passage of the 2000 ballot measure establishing limits on donations to candidates, according to reports by the Fair Political Practices Commission, the state’s campaign finance watchdog agency.
Ann Ravel, former chair of the FPPC and the Federal Elections Commission, said the greatest increase occurred after the U.S. Supreme Court’s 2010 Citizens United decision. The ruling held that limits on independent political spending by corporations, unions and other entities violated 1st Amendment free speech protections.
Even though such donations were already legal in California, “people just became more aware of it because of the notoriety of Citizens United,” Ravel said. Independent expenditure committees “became a much more convenient way for people to funnel money to races,” she said.
Political observers say the uptick in spending by independent expenditure committees increases the influence of the wealthy.
“It’s not as if the candidates don’t know who gives money to their super PACs,” said Dan Schnur, a veteran political analyst who teaches at USC. “If they return a phone call from a $5,000 donor to their campaign very quickly, they’re going to return a phone call from a $500,000 donor to their super PAC a hundred times faster.”
And many of the donors to the outside groups in the governor’s race are donating in far greater amounts.
Villaraigosa’s charter school backers include Netflix co-founder Reed Hastings, who has contributed $7 million; former New York City Mayor Michael Bloomberg and philanthropist Eli Broad, who have contributed $2.5 million each; and major GOP benefactor Bill Oberndorf, who has given $2 million.
Shortly after the charter school proponents backed Villaraigosa, the California Teachers Assn., a powerful force in state politics, steered more than $1 million to Education Organizations for Gavin Newsom for Governor 2018. Other public sector unions, chief among them the Service Employees International Union, gave more than $3 million to Citizens Supporting Gavin Newsom for Governor 2018. That group also received nearly $1 million from health insurance provider Blue Shield of California.
All will have business or interests in front of the next governor.
Ravel said the increase of donations to outside groups has also led to more negative campaigning.
“The difference between I.E.s and a candidate’s own advertising is that the promulgators of I.E. advertising can be a lot more nasty than candidates can — and they tend to be,” she said. “[Candidates] are often not willing to stoop quite as low as independent expenditure committees that are willing to say things that are patently false or really divisive or really nasty.”
Some of the most eyebrow-raising attacks have come from outside groups.
An anti-Newsom digital campaign launched by the Asian American Small Business PAC focused on an inappropriate relationship Newsom had while in office
Another outside group spent about $2 million to attack state Treasurer John Chiang, the most money devoted to opposing a single candidate by an independent expenditure committee, according to filings with the California secretary of state.
Health Care Providers for Fiscal Accountability Opposed to John Chiang, which received funding from Blue Shield, spent much of its money on mailers that don’t mention healthcare, but instead allege Chiang made “billion-dollar blunders” as treasurer. Those ads drew a rebuke from the state Asian Pacific Islander Legislative Caucus, which called the attacks “unfounded and unwarranted” in a letter to the group’s backers.
The pro-Villaraigosa charter school group has sent mailers to GOP voters calling Republican John Cox a “Democratic activist” and using the logo of Hillary Clinton’s 2016 presidential campaign as the “h” in his first name. It also launched a television ad on Fox News aligning Cox with House Minority Leader Nancy Pelosi, and promoting his GOP rival Travis Allen as the true conservative in the race.
That group, Families and Teachers for Antonio Villaraigosa for Governor, has also aired ads and sent mailers featuring former President Obama praising Villaraigosa, though Obama has not weighed in on the race.
The Cox and Villaraigosa campaigns have filed complaints with state regulators alleging outside committees are failing to properly disclose their intents. The FPPC is unlikely to rule on these complaints before the primary.
Independent groups have a mixed record of success.
In the 2010 gubernatorial election, unions spent tens of millions of dollars to support then-Atty. Gen. Jerry Brown during the summer, an effort that was viewed as crucial to stalling Whitman’s campaign. He ultimately won the race by 13 points.
It’s uncertain whether outside groups will have as much of an influence on the 2018 election, though spending by such groups is expected to grow exponentially if Villaraigosa makes the runoff.
“If he’s No. 2, both sides will be very well funded, a lot of it on the I.E. side, particularly for Villaraigosa,” said GOP strategist Rob Stutzman, who is unaligned in the race. “I think so much so that he would be the favorite if he makes the runoff, that’s the irony of his current position.”
Primary Lite? Voters Appear AWOL
Fox & Hounds Commentary
What if they gave a revolution and nobody came? That seems to be the case in this first election of the Trump era in California. For all the supposed anti-Trump energy in this state, the voters are showing no sign of rushing to the polls to register their opposition; in fact, this is turning out to be the sleepiest election in California in years.
The only question in the governor’s race is whether Gavin Newsom will succeed in getting an unknown Republican named John Cox as his November opponent instead of another Democrat. If Newsom is successful, and that’s what it looks like right now, his election as governor is assured and he can spend the fall campaigning around the country for a place on the 2020 Democratic ticket.
The US Senate race has been the biggest yawner since the re-election of GOP Sen. William F. Knowland in 1952. The challenge to Sen. Dianne Feinstein from the left has fizzled; and the best known of the Republican candidates against her is a neo-Nazi Holocaust denier named Patrick Little who was thrown out of the recent GOP state convention.
Election Day in California now Election Month with our heavy vote by mail. Fortunately, it is possible to look at that vote as it unfolds thanks to the very helpful daily absentee vote tracker provided by election expert Paul Mitchell and Political Data Inc. As of today, nearly 800,000 primary election ballots have been received at the counties. The early vote breakdown of the ballots is consistent with off presidential year primary elections: heavily white (72 percent), older, more conservative (seven points more Republican than their state registration), and with minorities trailing. Only 15 percent of the early vote is Latino; 11 percent is Asian.
This will not be the final make up of the primary electorate at all; the Republican percentage will drop as Democrats vote late, and minority/young voter numbers will rise. But by how much? With less than two weeks until the primary, the supposed anti-Trump surge in voters simply has not happened – yet.
The real battle this primary season is at the congressional level. Democrats have well funded assaults on the seven GOP-held congressional districts that Hillary Clinton won in 2016. Democrats probably need to win most of these seats in order to take control of the House of Representatives in November and make Nancy Pelosi House Speaker once again.
The results are mixed in the early vote. Republicans are running well ahead of their party registration in six of the seven districts, and there is a very real possibility that no Democrat will make the top two runoff in one or two of these districts.
Four of the seven districts are in Orange and San Diego counties. In the coastal 48th district, two strong Republicans are competing, incumbent Rep. Dana Rohrabacher and former GOP Assemblyman Scott Baugh. The Democratic side is badly split with several strong candidates.
Democrats early on realized what is at stake; they have spent more than $1 million so far on attack ads against Scott Baugh to keep him from making the runoff; admitting in the process that incumbent Rohrabacher is sure of one run off spot, they just want to make certain a Democrat makes the second.
But thus far turnout in the district looks good for Republicans, with 46 percent of returned ballots so far being Republican, just 35 percent Democratic. However, the overall numbers are very low and there is plenty of time for Democrats to increase their turnout.
There is somewhat the same story in the nearby 39th district being vacated by returning GOP Rep. Ed Royce. Democrats have had a bitter primary between wealthy candidates Gil Cisneros and Andy Thorburn, and there are two other well funded Democrats. Royce is supporting former GOP Assemblywoman Young Kim and most people think she will make one of the runoff spots. But two other Republicans have held office in the area and so Democrats are focusing their fire on Orange County Supervisor Shawn Nelson and former Sen. Bob Huff to make sure they do not make the second runoff spot.
Like the 48th district, the Republican early vote has been strong, with 46 percent of early ballots being Republican, only 34 percent Democratic.
But perhaps the most bizarre congressional race in California is in the southern Orange County-northern San Diego County 49th district. Here GOP Assemblyman Rocky Chavez has led in the public polling with 2016 Democratic candidate Doug Applegate running second. But national Democrats have spent more than $1.2 million attacking Chavez, on the theory that Republican Board of Equalization member Diane Harkey is more likely to be in the top two and they want to make sure Chavez does not make it.
The California Target Book, in its weekly Hot Sheet to its subscribers, reports that a Republican-affiliated super PAC called American Future Fund is spending a quarter million dollars each in support of both Chavez and Harkey, with the hopes that both will make the runoff.
But here the early vote numbers are more favorable for the Democrats. This is the district Rep. Darrel Issa nearly lost to Applegate in 2016, forcing him to retire. While Republicans have a voter registration advantage, Democrats are running even with Republicans in the early vote, and the numbers are high suggesting a large voter turnout in this district.
Across the country, Democratic women have run very well this cycle. One to watch in this district is wealthy Democrat Sara Jacobs whose campaign has already raised more than $1.7 million. According to the Target Book, she just put another $500,000 of family money into her campaign.
With Jacobs and three well funded male Democrats, this is the district to watch for an all-Democratic runoff. It is the only competitive district so far where there is evidence of a Democratic voter surge.
For the rest of the state, the sleeping giant of Democratic Trump haters seems quite content to remain asleep.
CA Republicans Are Now A Third Party
Independents have surpassed Republicans to become the second-largest voting bloc in California, according to a firm that analyzes county voter registration information for campaigns.
Political Data Inc. on Tuesday released its latest count showing that voters registered with no party preference now outnumber Republicans by about 73,000 in California. The company regularly collects raw voter files from county registrars to maintain an updated database of the state’s 19 million voters.
At the close of regular registration, 15 days before the June primary, there were 4,844,803 no-party-preference voters, according to Political Data Inc., compared with 4,771,984 Republicans. Both make up about a quarter of the California electorate, trailing 8,436,493 registered Democrats, about 44.4 percent.
It is the culmination of a trend that has been accelerating for years. California voters have shed their party affiliation at a growing rate, even as state politics are increasingly dominated by Democrats.
“This isn’t surprising,” Matt Fleming, a spokesman for the California Republican Party, said in a statement. “But no party preference doesn’t mean voters are becoming Democrats, and we will continue to reach out to all voters. The rise in NPP suggests that voters are fed up with the status quo in California, which, by any objective measure, is Democrat control of Sacramento.”
The Secretary of State’s Office, which tracks voter registration statewide, did not immediately return an email seeking confirmation of the numbers. It plans to release its own count on Friday.
Paul Mitchell, vice president of Political Data Inc., also noted that, despite falling registration rates, Republicans maintain an outsized influence because they vote more consistently than Democrats or independents.
Republicans and independents who lean Republican made up about 40 percent of the vote in recent elections, he said, a rate that has remained fairly stable.
“Registration numbers don’t beget turnout numbers,” Mitchell said. “This is merely one metric.”
Brown & Legislators Final Budget Battle
The Capitol’s annual budget ritual is entering its final phase this week with an historic twist.
It will be the 16th and last budget for the state’s longest serving governor, Jerry Brown, writing the final chapter of his fiscal record. And it won’t be easy, even though California is, as he said this month, “nearing the longest economic recovery in modern history.”
Ironically, it’s that prosperity, including record-low unemployment and multi-billion-dollar windfalls of state tax revenue, that makes writing Brown’s final budget politically difficult.
Brown sees an $8 billion jump in projected revenues from his initial 2018-19 budget in January, and wants to sock most of it away in reserves to cushion the impact of the inevitable economic downturn.
Quoting pioneer physicist Isaac Newton as he released his revised budget on May 11, Brown told reporters, “What goes up must come down. This is time to save, not to make pricey promises we can’t keep. I said it before and I’ll say it again: Let’s not blow it now.”
The problem is that while Brown wants to save most of the latest windfall, his fellow Democrats in the Legislature yearn to spend.
As a two-house “conference committee” resolves minor issues prior to the June 15 enactment deadline, Brown and legislative leaders will negotiate the biggies, and Assembly Speaker Anthony Rendon and Senate President Pro Tem Toni Atkins have wish lists totaling at least several billion more dollars.
“As we finalize the budget, the Assembly will prioritize investments that expand access and improve affordability in our health care system, and that help cities and counties address the growing homelessness crisis,” Rendon responded to Brown’s revision.
“The budget also must address the needs of CSU and UC students, faculty, and staff. They have made the case for funding to stabilize tuition rates, address rising costs, and enroll more California students. We have heard them.”
Atkins struck a similar note, saying, “We have the rare opportunity to revitalize long-neglected programs for those who need them most, while ensuring that California is financially prepared to weather future economic downturns.”
Chris Hoene, executive director of the left-leaning California Budget Project, captured the Legislature’s desires this way:
“With so many California households struggling to afford the basics, the revised budget’s lack of significant new funding for affordable housing or for subsidized child care and preschool is disappointing. In addition to prioritizing these areas in the final budget, state policymakers also should look to boost CalWORKs (welfare) grants, which have been below the deep-poverty threshold for a decade, increase support for CSU and UC, increase cash assistance for low-income seniors and people living with disabilities, and expand health coverage to undocumented immigrants.”
And how would Democrats spend billions more without, they insist, interfering with Brown’s desire to save more?
They’re leaning on their budget analyst, Mac Taylor, who says the state could have $3.5 billion more in its kitty than Brown projects, thanks to higher projected revenues from continued economic expansion and lower mandatory spending on schools due to enrollment decreases.
If past patterns are any guide, Brown will give a little on spending to help legislators save face with their constituencies that want more money – especially if he can buy them off with some one-time appropriations.
However, he seems dead-set on storing more billions in reserves as a parting gift to his successor, so that when the economy does go south, he will be remembered fondly for his prudence.
Brown Signs 2 Water Conservation Laws
The drought may be over, but California residents should prepare themselves for new and more permanent restrictions on water use.
Gov. Jerry Brown signed a pair of bills Thursday to set permanent overall targets for indoor and outdoor water consumption.
Assembly Bill 1668 by Assemblywoman Laura Friedman, D-Glendale, and Senate Bill 606 from state Sen. Bob Hertzberg, D-Los Angeles, give water districts more flexibility than the strict cuts mandated under Brown’s emergency drought order and will eventually allow state regulators to assess thousands of dollars in fines against jurisdictions that do not meet the goals.
The laws set an initial limit for indoor water use of 55 gallons per-person per-day in 2022, which gradually drops to 50 gallons per person by 2030.
Just how consumers will be required to meet the goals remains unknown.
The Department of Water Resources and State Water Resources Control Board will conduct studies and recommend standards for outdoor use by October 2021. State regulators will consult with local districts, recognizing differences in climate, water availability and demand across the state, to establish outdoor targets. Water districts that have already taken steps, such as recycling, to broaden their water supply could get more leeway even in dry conditions.
California residents used an average of 90 gallons of indoor and outdoor water per day in 2017, down from 109 gallons in 2013, according to the State Water Resources Control Board.
Water consumption typically climbs in the summer months and falls in the winter. Residents used an average of 65 gallons of water per day in March of this year compared to 120 gallons per day in July 2017, for example.
“This is something that has never been done before,” said Hertzberg before the Senate passed his bill on a 24-12 vote on May 17. “We know we are facing challenges. We need to be a government that is prepared and provide the structures so this doesn’t happen again.”
Brown declared a state of emergency in January 2014 and California imposed mandatory 25 percent cutbacks on water use the following year. The state relaxed the temporary restrictions in 2016 and eventually called off the drought a year ago.
Friedman said the changes would make California water use more sustainable and “set us on the right path forward” to handle future water shortages.
“This creates a framework for further work to come,” Friedman said on the Assembly floor. The Assembly passed her bill 43-23, along party lines.
Several Democrats acknowledged how the bills had been amended to address concerns about avoiding a “one size fits all” approach and to remove the opposition of water districts, who initially objected to handing over more control to the state.
Cap-and- Trade Greenhouse Gas Market May Be Leaking
As California accelerates its efforts to reduce greenhouses gases over the next decade, experts are pointing to vulnerabilities in its celebrated cap-and-trade system, weaknesses that could make the state’s goals difficult—even impossible—to reach.
Cap and trade, featuring a market where permission to pollute is bought and sold, is a key mechanism California uses to lower the volume of harmful discharges by industries that are subject to state emissions caps. But as the California Air Resources Board ponders a major retrofitting of the highly complex program, state analysts say that in a little over a decade emissions could soar much higher than the legally binding level.
Checking the math on cap and trade has taken on urgency this year because the state is leaning more heavily on the system to reduce greenhouse-gas emissions. The air board projects the program will account for about 46 percent of annual reductions in coming years, a figure that has surprised many experts.
One calculation is out of California’s control: a possible political shift in Ontario, Canada, after provincial elections there next month. One leading candidate has vowed to dismantle the province’s cap-and-trade system, which participates in California’s emissions-trading market. A Canadian withdrawal could undermine California officials’ message about its stability and growth as they recruit other states and nations to join.
Far more troubling are red flags highlighted in reports from academia, the nonpartisan Legislative Analyst’s Office, independent market experts and other major carbon markets, all concluding that California has a serious problem with too many unused pollution credits.
In the cap-and-trade system, major polluters must either produce fewer greenhouse gases to comply with California’s emissions caps or buy credits to offset their excess emissions from companies that pollute less. Credits are traded at state-sanctioned auctions and on secondary markets. And the state gives some free to utilities, natural-gas suppliers and industries that are vulnerable to out-of-state competition.
Some companies have not yet needed to use up the allowances to stay within state emissions limits and probably won’t have to in the next couple of years, according to some analysts, who estimate there are hundreds of millions of unused credits in the system.
The result is a glut of credits that could allow businesses to keep polluting past state limits in later years, after the overall cap becomes more restrictive. Unless the oversupply is addressed, experts say, polluters will have no incentive to cut emissions to required levels by 2030; instead, industries could continue polluting and use banked allowances to offset their emissions and technically keep them under the cap.
The state Legislative Analyst’s Office foresees a reckoning, estimating that because of excess allowances, actual emissions could be as much as 30 percent over the statewide target by 2030.
One analyst likened the problem to a game of musical chairs that starts with too many chairs and allows participants to save seats for later. The issue has plagued both the European Union’s carbon-trading system and the Regional Greenhouse Gas Initiative, a consortium of nine eastern U.S. states that sells credits for the electricity sector. Both markets have put policies in place to limit surpluses.
In California, lawmakers instructed the air board to examine the issue last year, and the agency has steadfastly maintained that the surplus of credits will not imperil California’s fight against climate change.
Rajinder Sahota, who oversees much of the cap-and-trade program for the air board, has testified numerous times before the Legislature on this topic. On each occasion she has assured lawmakers that the system is working.
“We do not believe that there are unused allowances in the system that will hinder our goals for 2020,” she told CALmatters.
She didn’t address how allowances might play out in subsequent years. But the agency forecasts that the state will also meet its 2030 target, when emissions limits will tighten dramatically, the number of free allowances will come down and the cap-and-trade program will expire.
Among the skeptics is Ontario’s environmental oversight agency. The commission’s annual report in January stated flatly that California has an oversupply of allowances that could last for the life of the program.
“We understand that the board believes…they don’t have an oversupply problem,” said Dianne Saxe, the environmental commissioner of Ontario. “Frankly, we don’t understand it.”
The disconnect will be addressed this week in a hearing before the newly formed Joint Legislative Committee on Climate Change Policies. The committee chairman, Assemblyman Eduardo Garcia, a Democrat from Coachella, said the air board will be grilled on how it intends to manage allowances.
“Our numbers don’t pencil out to be the same numbers they propose,” Garcia said. “We will go back and reexamine the numbers they are projecting. We have some questions about how they got there.”
Danny Cullenward is an energy economist with the climate-change think tank Near Zero and teaches environmental law at Stanford University. He’s also a member of the newly established Independent Emissions Market Advisory Committee that is charged with reviewing the mechanics of cap and trade. He says the air board not only got its projections wrong but also used an incorrect model for its calculations. The board’s most recent estimates are off by 10 percent and used a model that the agency identified in 2010 as problematic, he said in an interview.
“I can’t emphasize enough, this is a basic question of scientific integrity,” Cullenward said. The board has been reluctant to engage outside experts on the issue of allowances, “in a rush to justify that this is not a problem,” he said.
Sahota said external studies have not taken into account that allowances are set aside if they have gone unsold for 24 months—a “self-ratcheting mechanism,” she said, that prevents a glut on the market. The Canadian study, she said, relied on a flawed analysis conducted by Chris Busch, research director at Energy Innovation, a San Francisco-based climate-change and clean-energy think tank.
Saxe, the environment commissioner, stood behind the report’s conclusions, saying, “We did our own analysis.”
Busch, who was among the first researchers to identify the oversupply problem, is a longtime supporter of California’s cap-and-trade system, which he calls the best designed in the world. Busch said he used the air board’s own data to reach his conclusions about allowances, which he said were conservative.
“I sought to engage the air board to evaluate what they thought of the numbers,” he said. “They didn’t want to engage.”
Sahota said she had not read all of the recent reports, but the air board is taking all the research and criticisms seriously.
CalEPA Regulators Outgrow A 25-Story HQ
California can’t fit all of its environmental regulators in its 25-story Environmental Protection Agency headquarters, and it doesn’t want to shell out tens of millions of dollars to find them new digs, either.
Gov. Jerry Brown’s administration found a solution that will sound familiar to any longtime traveler squeezing his knees into tight airplane seats: His agency wants to slash the size of standard cubicles in the EPA headquarters.
The administration is asking lawmakers to set aside $23 million in next year’s budget to gradually reconfigure the headquarters so it can fit another 1,100 workers in downtown Sacramento. The headquarters today has 2,800 cubicles.
If the plan is approved, rank-and-file workers will see their cubicles reduced from 80 square feet to 49 square feet. Supervisors will lose 10 square feet, giving them 70 square feet of space.
It’ll take eight years to finish the makeover, agency Assistant Secretary Eric Jarvis told an Assembly budget subcommittee on Tuesday.
“We will reconfigure all the floors, paint, carpet, and reconfigure all the cubicles,” he said.
The administration contends the smaller cubicles are a better choice for taxpayers because the price of real estate is climbing in Sacramento. Renting space for the workers would cost more than $50 million over eight years.
Brown is making room for a growing headcount of employees regulating air pollution, water quality, recycling, pesticides and other toxic substances. They’ve been adding about 106 employees a year, according to his Finance Department.
“CalEPA anticipates that growth will continue,” the agency’s budget request says.
New US EPA District Director “A Bull Wrangler”
The White House has finally found someone to take on the stress of overseeing President Trump’s fossil fuel-friendly environmental agenda in the heart of hostile territory: California and nearby states.
But there’s one glaring problem.
The guy who will lead the Environmental Protection Agency’s headquarters in San Francisco doesn’t appear to want to live anywhere near San Francisco.
That didn’t stop the administration from hiring Santa Barbara County GOP stalwart Mike Stoker, a politico well positioned to annoy the powers that be in California.
He credits himself with conceiving the “lock her up” chant that Trump rallygoers shouted in their rage against Hillary Clinton. He was the spokesman for one of the state’s most embattled oil companies. He questions the scientific consensus on climate change.
None of those things are disqualifying, even if some in California think they should be. But Stoker’s refusal to work in the liberal City by the Bay has put the administration in a pickle. Instead he wants to oversee the 700 or so enforcement officers, scientists, researchers and others guiding environmental protection in California and nearby states from a small, sparsely staffed Los Angeles satellite office.
That’s a big ask in an agency already reeling from investigations into the travel habits of its leaders, including the taxpayer-funded flights back home to Oklahoma by EPA chief Scott Pruitt, some of which were in the first-class cabin.
Stoker, a former Santa Barbara county supervisor who made his entry into politics in the 1980s as a strident opponent of a ballot measure limiting offshore oil development, did not return calls and emails. A statement from the EPA said only, “Mike Stoker’s duty station is San Francisco.” Officials did not respond when asked multiple times if that is where he would be working.
Environmental groups joined Feinstein in expressing bewilderment that the region chief may keep living in Carpinteria, which is hours from even the Los Angeles office.
“You can’t do that job without face-to-face contact with the scientists, engineers, lawyers, and other professionals in Region 9’s office who do the heavy lifting,” said Eric Schaeffer, a former chief of civil enforcement at EPA who now runs the nonprofit Environmental Integrity Project. “Phoning it in is not going to work.”
Finding a leader for Region 9 was vexing for the Trump administration. One ally of industry after another rejected its overtures to lead the feisty office of career professionals who have little enthusiasm for the Trump agenda. The pay hardly compares to what potential recruits are making in the private sector, the cost of living in San Francisco is crushing and the neighbors are not particularly hospitable to folks carrying the “Make America Great Again” torch.
For such reasons, Stoker is a good fit. A Trump delegate at the 2016 Republican National Convention who delights in mocking liberals on social media, Stoker is a rare commodity on the California coast: a resilient Republican. Pruitt said he “understands the environmental challenges facing the region and will bring a wealth of experience and expertise to EPA.”
“He’s a bull wrangler, and that’s exactly what we need,” said Andy Caldwell, executive director or the Santa Barbara County Coalition of Labor, Agriculture and Business. He said Stoker is skilled at brokering deals among disparate interests.
Stoker’s record suggests he will be an unflinching champion of the rollbacks of fuel economy standards, air quality rules and other federal environmental protections that are riling California’s leaders.
He criticized lawsuits that California municipalities filed against the oil industry for their role in climate change, telling the Santa Barbara News-Press last year that they ignore “the conflicting evidence about global warming, and as we all know, there is conflicting evidence.”
One of the oil companies in the area most despised by environmentalists, Santa Maria-based Greka Oil & Gas, which has a history of regulatory troubles, spills and violations at its California facilities, was represented by Stoker.
That company, now known as HVI Cat Canyon Inc., has been in a years-long legal fight with the EPA and federal prosecutors over pollution from its operations. In 2011 the Department of Justice filed suit alleging a series of spills at the company’s California facilities violated state and federal environmental laws. Last month, the company was hit with a $12.5-million fine by state regulators over violations at an oil field in Orange County.
Stoker’s alignment with forces long at odds with the EPA makes him a particularly troubling pick for environmentalists. “Once again,” said Linda Krop, chief counsel of the Environmental Defense Center in Santa Barbara, “it’s putting someone in charge who actually opposes the mission of the agency.”
Brown Appoints New Chief of Staff & HHS Secretary
Gov. Jerry Brown will close out his last year in office with a top adviser who first worked for him 43 years ago.
Brown on Thursday named Diana Dooley, the secretary of the Health and Human Services Agency, to be his executive secretary, known commonly as chief of staff. She follows Nancy McFadden, who died at age 59 in March.
Dooley, 67, worked for Brown during his first run as governor. She was a special assistant and legislative director for his office from 1975 to 1983.
Dooley has led the Health and Human Services agency since 2011, and previously was president of the California Children’s Hospital Association.
She’ll be succeeded at the health agency by its current undersecretary, Michael Wilkening, 47, of Sacramento. He has worked there since 2008 and previously worked for the state Finance Department.
Latest California Export — Teachers
California’s schools are hiring teachers again. But California’s colleges aren’t producing enough new teachers to meet the demand. So where will the state’s new teachers come from?
Not from other states, if recent history is a guide.
From 2003 through 2016, about 18,000 more elementary and secondary school teachers left California than came from other states, according to a Bee review of U.S. Census Bureau data. The worst losses were during the height of the housing boom, when home prices were peaking, but they have continued throughout the economic recovery.
California saw the largest net loss of teachers to Texas. About 6,000 more teachers left California for Texas than came here from the Lone Star State from 2003 through 2016.
The average teacher salary in Texas is about $52,000, far below the average teacher salary of $77,000 in California, according to the National Education Association. But when adjusted for cost of living, teachers in Texas make about as much as their peers in California.
California school districts estimate they will hire about 21,000 new teachers next school year, according to the state Department of Education
About 11,800 teachers were credentialed through the state’s colleges during the 2016-17 school year, barely half the number credentialed a decade prior, according to the state Commission on Teacher Credentialing.
About 4,200 new credentials were issued to teachers educated in other states in 2016-17, up by about 600 from a decade ago.
As California colleges educate fewer teachers and migration from other states doesn’t make up the difference, school districts increasingly hire intern teachers. These interns can earn permanent teaching credentials while attending college and teaching.
About 4,400 intern credentials were issued last school year, double the number from 2012-13, state figures show.
A recent survey of school districts serving a quarter of the state’s student population found that more than 80 percent hired underprepared teachers in 2017-18. Many urban school districts reported to the Learning Policy Institute that they had hired high percentages of teachers in that year who were not fully certified, including Sacramento City Unified (34 percent), Stockton Unified (54 percent) and Fresno Unified (31 percent).