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IN THIS ISSUE – Is Texas the New California?
CALIFORNIA CRITICAL ISSUE TRENDS
- Half of Your Neighbors Are Thinking About Moving Out of State, Poll Finds
- Housing Poll is a Warning to Governor & Legislators
- A Tale of Two Kinds of Counties – Healthy & Not So
- Where the Youngest Californians Live
POLITICS & POLICY
- Historic Low 7% Turnout in Special Election – Legislators Ponder More Laws to Encourage Voters…But Do They Care?
- 3 Women State Officers Eye 2026 Governor’s Race
- State Controller “Gravely Concerned” About New Billion-Dollar State Ledger
- US DOI Sues State Water Board Over River Flow Standards
- California Oil Producers Optimistic
- Bill Gates Dishes Dirt – Blogs on Carbon & Soil
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.
READ ALL ABOUT IT!!
FOR THE WEEK ENDING MARCH 29, 2019
A record-high share of Californians say the affordability of housing is a big problem in their region, and a majority support Governor Gavin Newsom’s spending plan to increase housing production. These are among the key findings of a statewide survey released today by the Public Policy Institute of California (PPIC).
When asked how much of a problem housing affordability is in their part of the state, about two-thirds of California adults (68%) say that it is a big problem. In addition, 47 percent of adults say that housing costs are making them seriously consider leaving the part of the state where they currently reside. Most who are seriously considering moving say they would leave the state rather than relocate in California.
“Housing affordability is considered a problem in every major region today, and this is causing many Californians to think seriously about moving out of the state,” said Mark Baldassare, PPIC president and CEO.
The share of Californians saying that housing affordability is a big problem varies by region, with majorities holding this view in the San Francisco Bay Area (80%), Los Angeles (74%), Orange/San Diego (71%), and the Central Valley (56%). About half of Californians in the Inland Empire (49%) say that housing affordability is a big problem there.
In his state budget plan, Newsom proposes $1.8 billion in one-time spending to increase housing production, including an expansion of state tax credits to develop low- and moderate-income housing. After hearing a short description of the governor’s proposal, solid majorities of Californians (72% adults, 65% likely voters) favor it. An overwhelming majority of renters (82%) approve of the governor’s proposed spending to promote housing production, well above the 62% of homeowners who hold this view.
This survey gauges Californians’ views on specific challenges facing the state and on proposals in Newsom’s spending plan to address these challenges:
Commentary from CalMatters
PPIC released its latest poll and it found that housing affordability had zoomed to the top of the public’s consciousness – so much so, in fact, that nearly half of adults and voters say the cost of housing makes them seriously consider moving, even if it means leaving the state.
Residents of Los Angeles are the most likely Californians thinking about pulling up stakes – not surprisingly because the mismatch between incomes and housing costs is the most acute in that community. Largely due to housing costs, Los Angeles County has the state’s highest level of poverty.
The poll found that most Californians support Newsom’s plan to spend $1.8 billion to increase housing production, which is not surprising, given the depth of concern about the issue, even though it’s no more than a drop in the housing bucket.
PPIC, however, did not test sentiment on the more far-reaching Newsom proposal to spur housing construction – giving regions tighter quotas for zoning enough land for new housing and threatening to withhold transportation funds from localities that fail to meet the goals.
“If you don’t reach the goals we’re going to take (transportation) money from you,” Newsom threatened while presenting his proposed 2019-20 budget.
The threat drew sharp opposition not only from local government officials but legislators from Newsom’s own party, saying he would be wrong to use funds from the state’s new gas tax as a club for more housing. He then backed down a bit, postponing any threat of losing gas tax money until sometime next decade.
The PPIC poll does, however, serve as a warning to Newsom and legislators that they must do some serious policymaking about a crisis so serious that it might compel Californians to flee from the state.
The state should be building 200,000 units of new housing a year, but it is struggling to create half of that number.
While having enough land zoned for housing is one factor in raising production, there are several others, including local red tape and building fees and even finding enough carpenters and other workers.
Still another factor is the threat in the Legislature to change a state law that limits local rent control ordinances, which would discourage new rental housing construction.
California already loses more people to other states than it gains – Texas is the No. 1 destination – and housing costs are a major factor in that exodus. A recent nationwide data study found, for instance, that young professionals moving from the San Francisco Bay Area to Austin would see overall living costs cut in half, with comparable housing at least two-thirds less.
Moreover, housing costs are now seen as a major barrier to new job creation in California because employers in high-cost regions cannot lure enough employees.
For all those reasons it should be, as the PPIC poll indicates, at the very top of the political agenda.
A new study revealing California’s healthiest, and least healthy, counties highlights the divide between both urban and rural California as well as richer and poorer counties.
The study, published Tuesday by the Robert Wood Johnson Foundation and the University of Wisconsin Population Health Institute, ranked every county by two metrics: Health outcomes, measured by factors such as premature deaths, percentage of people in poor or fair health, the number of poor physical and mental health days taken and babies with low birthweight; and health factors, measured by factors such as health behaviors, clinical care, social and economic factors and the physical environment.
The findings showed that that the Bay Area, Napa Valley and Southern California were home to some of the healthiest counties in the state, while the least healthy counties all were found in rural Northern California and along the Central Valley.
Here are the top 10 healthiest counties in California, according to the report:
- Marin County
- San Mateo County
- Santa Clara County
- Placer County
- Orange County
- San Francisco County
- Napa County
- Sonoma County
- Ventura County
- San Diego County
And here are the top 10 least healthy counties:
- Lake County
- Siskiyou County
- Modoc County
- Trinity County
- Plumas County
- Yuba County
- Kern County
- Tulare County
- Fresno County
- Humboldt County
Elsewhere in the state, San Luis Obispo County ranked No. 15, Sacramento County No. 29 and Stanislaus County came in at No. 33.
In many cases, the healthiest counties are also the wealthiest counties.
Marin County, the healthiest in California, also claimed the highest median income ($63,110) in the state, according to a 2015 report from the California Franchise Tax Board. Lake County, the least healthy county in the newly released study, also had one of the lowest median incomes for 2015 — $29,955.
So how big is the divide between Marin and Lake?
About 11 percent of Marin County residents recorded being in poor or fair health last year; 18 percent, nearly one in five, of Lake County residents did. Lake County residents also declared, on average, one more poor physical and mental health days than did Marin County residents.
Again and again, Marin County residents reported generally healthier behaviors than did Lake County residents: Fewer smoked (10 percent to 15 percent), there was less adult obesity (18 percent to 24 percent) and much greater access to exercise opportunities (99 percent to 65 percent).
Meanwhile, Lake County residents led Marin County residents in alcohol-impaired driving deaths (41 percent to 30 percent), sexually transmitted infections (443 cases of chlamydia per 100,000 to 295 cases of chlamydia per 100,000) and teen pregnancies (36 per 1,000 females to 7 per 1,000 females).
Lake County residents also were less likely to have health insurance and have a much harder time finding medical care than do residents of wealthier Marin County. While there are 680 people for every one primary care doctor in Marin County, in Lake County that ratio is 2,140 to one.
Among the social and economic factors in the two extreme ends of the study, Marin County has a 2.9 percent unemployment rate and approximately 8 percent of its children live in poverty. In Lake County, the unemployment rate is 5.7 percent and nearly a third of all children live below the poverty line.
While the study found good news in many counties across the state, that good news wasn’t universal.
“The data show that, in counties everywhere, not everyone has benefited in the same way from these health improvements,” the study found. “There are fewer opportunities and resources for better health among groups that have been historically marginalized, including people of color, people living in poverty, people with physical or mental disabilities, LGBTQ persons, and women.”
In California, that disparity often falls along racial lines.
While 55 percent of overall Californian households own their homes, that number falls to 34 percent for black residents of the Golden State. Hispanic and American Indian/Alaska Native people also fell below the average.
Childhood poverty is also much more common among racial and ethnic minorities, with black and Hispanic children much more likely to live below the poverty line.
Housing, that omnipresent California crisis, hits the black community particularly hard — about 30 percent of black households report a “severe housing cost burden.”
“The collective effect is that a fair and just opportunity to live a long and healthy life does not exist for everyone. Now is the time to change how things are done,” the report concluded.
Demographic statistics about populations can’t explain everything about why our communities are the way they are: What motivates someone to move to a new city, or to start a family or not, differs from one person to the next. But they’re helpful for spotting trends and exploring larger economic forces.
I recently talked with Tina Daley, the head of demographic research for the state’s Department of Finance, about the trends she’s keeping an eye on and what we can learn from them.
She said her office had been looking at migration and housing affordability. One data point that jumped out was which cities had the biggest shares of young people.
Here are the top cities for residents ages 25 to 34, according to 2017 data from the American Community Survey and compiled by Ms. Daley’s team:
- Mountain View, with 24.4 percentof its 81,443 residents ages 25 to 34.
- San Francisco, with 23.5 percentof its 884,363 residents
- Sunnyvale, with 22.5 percentof its 153,656 residents
- Costa Mesa, with 21 percentof its 113,821 residents
- Santa Clara, with 20.7 percentof its 127,131 residents
Notice a trend?
They’re all on or near the coast. And with the exception of Costa Mesa, which is just inland from Newport Beach, they’re all in the Bay Area, where Ms. Daley said young, highly educated workers were moving, often from other high-cost metro areas like New York.
“The people who can afford it are still moving there,” she said.
That might not surprise anyone who’s ever heard about wealthy millennials making San Francisco their playground.
But what Ms. Daley found more interesting was how different the list was when she looked at cities with the biggest shares of residents under 40. Here’s that ranking:
- Perris, with 69.9 percentof its 77,895 residents
- Madera, with 68 percentof its 65,506 residents
- Lake Elsinore, with 67.6 percentof its 66,412 residents
- Lynwood, with 66.1 percentof its 71,115 residents
- Davis, with 65.8 percentof its 68,985 residents
These are all inland communities with less expensive housing. Why the contrast? Ms. Daley said it’s because “under 40,” includes children. This, she said, signals that families are seeking out places where they can afford to live.
Right now, that’s translating into long commutes for parents who may live in faraway inland suburbs but work in the expensive coastal cities, though Ms. Daley noted things like telecommuting are on the rise.
“People are becoming more flexible,” she said.
And while she didn’t want to speculate about how those kinds of changes will shape where Californians work and live in the future, she said it was an exciting challenge.
“There are these new issues,” she said. “So how do we get the data to figure out what’s going on?”
This Tuesday, voters in Long Beach turned out to elect a new state senator. Odds are that’s news to you—even if you happen to live in Long Beach. A preliminary tally indicates that less than a measly 7 percent of the district’s registered voters cast a ballot.
Even by the subdued standards of an off-year state Senate special election, single-digit turnout marks a historic low.
Perhaps unsurprisingly, some Democratic legislators in California—a state that already makes it easier to vote than almost any other—are trying to make it even easier. Assemblyman Evan Low, a Silicon Valley Democrat, is the latest to take up that cause.
Low’s bill would make election day a state holiday, giving the day off to state employees and closing schools and college campuses. Supporters say the holiday would allow more schools to serve as polling stations and let college students volunteer as poll workers.
Low has also proposed changing the state constitution to allow 17-year-olds to vote. If it passes the Legislature by a two-thirds margin, it would require voter approval—assuming it survives any legal challenges.
Such proposals have become an increasingly easy political sell here. With
But the evidence is still out as to whether these measures have a significant effect on voter behavior one way or the other. And given the political and legal challenges facing this year’s latest round of proposals, state lawmakers may have run out of obstacles to knock down between the California voter and the ballot box.
One study that took into account registration restrictions, the presence of voter ID laws and automatic voter registration programs anointed California the third easiest state for voting. Only Oregon and Colorado make it easier—and the researchers did not even account for some of California’s most recent reforms.
California allows would-be voters to register on election day, to vote well before an election and to so by mail, and to pre-register as long as they will turn 18 by election day. More than 200,000 teenagers pre-registered in the lead up to last year’s election, according to the Secretary of State’s office. The state also pays the postage on mail-in ballots and automatically registers eligible voters when they visit the DMV (in theory, anyway).
Of the various policy levers that lawmakers can pull to make it easier to vote, Kati Phillips, spokesperson for the voter-rights advocacy group Common Cause California, identified the most effective: automatic voter registration, early voting and wide-scale vote-by-mail programs.
She described Low’s proposal as “a cherry on top,” though maybe “not dinner.”
Benjamin Highton, a political scientist at UC Davis, is a little more skeptical. He says that the time, hassle and other “costs” of voting are “contributing factors” to turnout—but they’re relatively small ones. Same-day registration might boost turnout by “five percentage points or less typically,” he said.
Additional changes to election law are likely to produce diminishing election returns, he said.
“When costs are small,” he added, “you can’t reduce them that much more and the explanation for lack of higher participation is more on the benefit side.”
In other words, it’s possible that most non-voters in California eschew voting not because the process is difficult, but because they don’t see the value in doing so.
“That’s a much tougher problem for policymakers to solve,” said Highton.
There is some evidence to back up Highton’s claim. In the Cooperative Congressional Election Study surveyconducted after the 2018 midterm elections, just over 1 in 10 nonvoting Californians said they stayed away from the polls because they were either “too busy” or faced overly long lines at polling places—time constraints that might be solved with a holiday.
California law also guarantees employees two-hours paid time off to go the polls and gives voters the ability to register to vote my mail online.
But in Sacramento, the effort to ensure that voting is easy enough may have already peaked. Bills to establish an election day holiday have been introduced three times in the Legislature—twice by Low. Both of Low’s past efforts have been left to die in the Assembly appropriations committee, reflecting the fact that even his Democratic colleagues worry it might not be worth the cost and disruption.
Shirley Weber, a Democratic Assemblywoman from San Diego, expressed those concerns during the bill’s first committee hearing earlier this month.
Given the various ways in which California law already makes it convenient to vote, she wondered “whether it’s necessary at this point.” She nevertheless voted for the proposal, as did the other Democrats on the committee.
Meanwhile, 45 percent of non-voters said they either didn’t know enough, didn’t like their choices, had no interest, simply forgot or were not registered to vote.
Another possible reason for lower turnout, said Thad Kousser, a political science professor at UC San Diego, is voter fatigue.
Whereas voters in parliamentary democracies might only vote for one party over another a few times every decade, Californians are invited to vote in primaries, special elections and general elections, and are expected to puzzle over byzantine initiative language and determine who might make the best city auditor.
The race to become California’s first woman governor has officially started.
At a Sacramento Press Club luncheon on Tuesday, Lt. Gov. Eleni Kounalakis, State Treasurer Fiona Ma and California Controller Betty T. Yee all said they are open to running for the state’s top position in 2026, when Gov. Gavin Newsom would term out of office.
Together for the first time since their election, the three statewide leaders spoke about their families’ immigration backgrounds, holding President Donald Trump’s administration accountable following the end to special counsel Robert Mueller’s investigation and the rise of women in California politics.
Kounalakis — who is the state’s first woman lieutenant governor and a former ambassador to Hungary under President Barack Obama — said she was inspired by lessons learned from Hillary Clinton’s 2016 presidential campaign and eventual loss to Trump.
“I thought that would feel good, to be able to bring down the glass ceiling along the way,” Kounalakis said, referencing a famous Clinton quote.
“We’re still not there yet in being able to see women as leaders,” she continued. “If there’s one incredible thing that came out of 2018, you now have all of these role models. Now younger women coming up have more models to follow, and voters can associate women leaders with other women leaders who they know have served them well.”
This is the first time in California history that three statewide constitutional offices are held by women, a fact that Kounalakis, Ma and Yee said reflects voters’ interest in seeing more women in elected positions.
“I think voters do like to vote for women given the opportunity,” said Ma, who is the first woman of color to be state treasurer and a former member of the Legislature. “They see women work really hard, we try to do the right thing, we use our social skills of communication and also listening a lot. And folks saw that and we were really successful all down the levels of government.”
Yee was elected for her second term as controller in November, and is the tenth woman elected to statewide office in California history. In November, she was the top vote-getter on the California ballot. Her 8 million votes surpassed Newsom’s 7.7 million.
“The day of women waiting to be asked to run is over,” Yee said at the Press Club.
State Controller Betty Yee is “gravely concerned” that problems with the state’s accounting software could undermine California’s credit worthiness, she wrote in a recent letter to legislators.
Efforts to tie a new computer program into the state’s legacy systems have delayed monthly cash reports and are threatening the accuracy of the state’s annual financial report, which is typically published at the end of April, Yee wrote.
If the annual report is inaccurate, it could negatively affect the state’s credit rating, which influences borrowing costs for spending on things like infrastructure projects.
The computer program, called Fi$Cal, has cost the state more than $900 million and has repeatedly been delayed since its 2005 launch. Yee, echoing a January recommendation from the state auditor, said more delays are needed.
“We need to pause and direct resources to making Fi$Cal work as it was intended to work,” she wrote. “Continuing to push ahead by adding features that do not work or bringing more departments into the troubled system will cost taxpayers exponentially more in the long run.”
Yee addressed the state Senate and Assembly budget committees in her March 18 letter.
Assemblyman Jim Patterson, R-Fresno, a member of the Assembly’s budget committee, said Yee’s letter should add new urgency to the state’s efforts to improve its use of technology.
“It’s amazing to me,” Patterson said. “We are the fifth-largest economy on the planet, we’re almost 20 years into the 21st century, we’re the home of Silicon Valley and we have such a fouled up accounting system that it jeopardizes our credit rating.”
Sen. John Moorlach, R-Costa Mesa, who sits on the Senate budget committee, said the state should consider closer scrutiny of the third-party vendors tasked with implementing most of its new technology.
“It’s just getting to be too much of a common thing, whether it’s Fi$Cal or the DMV or name the department,” Moorlach said.
Yee sent a follow-up letter March 22 clarifying that while she is concerned about the state’s reporting abilities with the new program, she has “no concern about the state’s cash position or overall fiscal health.”
The federal government Thursday added to the pile of lawsuits challenging new state requirements to boost river flows in order to help struggling fish populations.
The U.S. Department of the Interior, which manages California’s largest irrigation supply project, argues that the flow standards will interfere with its operation of the New Melones Dam and reservoir on the Stanislaus River.
The federal complaint, filed in both state and federal court, is the 11th lawsuit launched against the State Water Resources Control Board since it voted in December to require greater flows in the Stanislaus and two other tributaries of the San Joaquin River.
Like the other lawsuits, the new Interior complaint argues that the board did not adequately analyze effects of the new rules under the California Environmental Quality Act.
“The environmental analysis by the California State Water Resources Control Board hid the true impacts of their plan and could put substantial operational constraints on the Department of the Interior’s ability to effectively operate the New Melones Dam, which plays a critical role in flood control, irrigation, and power generation in the Sacramento region,” Assistant U.S. Atty. Gen. Jeffrey Bossert Clark said in a statement.
State water board attorneys said they could not comment on the litigation.
Nearly a dozen lawsuits have been filed by groups on all sides. Conservation groups argue that the standards aren’t strong enough, while users of river water say they will force draconian cuts to their supplies.
The litigation was expected because the new state standards represent an unprecedented move to reduce river use by San Francisco and some of the oldest farm irrigation districts in California.
Indeed, opponents argued last year that if the board adopted stronger flow requirements, it would start a years-long legal war.
To avert that, state officials are trying to negotiate settlements that would relax the flow requirements if water users agree to significant habitat restoration that would increase salmon populations.
The Interior lawsuit marks another skirmish in the ongoing battle between California and the Trump administration over environmental regulations.
In a separate matter, the water board is expected to vote next week on rules that would strengthen state protections for wetlands and seasonal streams that will lose federal protections under a rollback of the Clean Water Act.
Optimism is strong among local oil producers that recently healthy barrel price levels will hold steady enough to justify new investment through the end of this year, even as market-related conditions remain in flux and state regulatory complications threaten to sideline proposed drilling and other oilfield projects.
Kern County oil companies large and small are expressing confidence that local crude prices, ranging lately in the $60 to $70 range, are high enough for them to at least maintain their current levels of production. Some say they plan to ramp up production in 2019, which would help the local economy even if it doesn’t necessarily translate to expanded payrolls.
“I see this range we’re in maintaining for the rest of the year,” said local independent producer Ken Hunter, who expressed encouragement about what he said appear to be new oil discoveries in the area of Old River Road and Highway 166. “I think the price is sufficient to support more drilling going forward.”
The local industry’s positive outlook is tempered by factors outside its control, such as worries prices could fall as a result of a slowing global economy. There is also growing frustration with permitting delays caused in part by dual project reviews by two separate state agencies.
Relatively stable prices have lifted the outlook. Although prices dropped near the end of last year, leading to a decline in the number of onshore drilling rigs active in California, both measures quickly picked back up again.
On Friday, the industry benchmark Baker Hughes rig count showed 15 active rigs in the state, up from January’s average of eight. All last year the monthly average dropped no lower than 14 rigs.
Price volatility remains a threat as Venezuela, a major oil producer, continues to suffer through a shaky political situation. Also, it remains unclear whether the Trump administration will continue to waive certain restrictions on Iranian oil exports.
Despite all that, supply and demand appear to be balanced and the industry looks healthy, said veteran Bakersfield oilman Gene Voiland.
“I just don’t see any real movement, pending some crazy stuff in the world,” he said. “I would say the industry is healthy.”
Fred Holmes, the dean of local oil production agreed the current pricing environment looks positive, adding, “We’re holding our own.”
One of the largest local producers of oil and gas, Chatsworth-based California Resources Corp., said it expects to spend between $300 million and $385 million this year, much of it in local oilfields. It said that should be enough to maintain existing activity levels while offering operational flexibility in case market conditions change.
Several smaller producers voiced impatience with the pace of oilfield project reviews by the state Division of Oil, Gas and Geothermal Resources — historically the primary regulator of petroleum production in California — and the Central Valley Regional Water Quality Control Board, which in recent years has seen its oversight of oil projects expand.
Such complaints are not new but their persistence in the face of industry and political pressure from Kern County has become a source of growing frustration.
Hunter said conventional oil project proposals tend to win approval in a straightforward and timely manner these days. But those involving wastewater injection or enhanced recovery technologies, such as those using steam, take a painfully long time lately, he said.
DOGGR issued a statement saying it has approved 601 oilfield permits so far this month and that 299 applications remain to be processed, 141 of them for drilling projects. The agency said it has processed 7,408 permits since May.
Steve Layton, president of E&B Natural Resources Management, a medium-size oil producer based in Bakersfield, said it’s not so much a question of whether project applications will be approved but when. He said the reason appears to be the dual-agency review process.
He said the resulting uncertainty deters investment that would otherwise bring about a significant increase in local economic activity.
But it’s unclear whether such investment would lead to a boom in conventional employment.
Hiring in local oilfields has been constrained since prices plummeted in mid-2014, and many companies now rely heavily on contract workers, an arrangement that gives them greater flexibility than bringing on full-time employees.
“It’s just the nature of the business,” Layton said. “Those (contract) jobs are just as important as the jobs of the people working for the oil companies. We can’t forget that. They are all jobs and they’re good jobs.”
Layton said he remains positive about the year ahead.
“I do see a solid year ahead of the industry,” he said. “There are a lot of projects that are on the books that our companies have that are being reviewed by the various agencies.”
“Assuming the permits come through,” he added, “I think you’ll see a good bit of activity.”
Here’s a mind-blowing fact: there’s more carbon in soil than in the atmosphere and all plant life combined. That’s not a big deal when left to its own devices. But when soil gets disturbed—like it does when you convert a forest into cropland—all that stored carbon gets released into the atmosphere as carbon dioxide. That’s one reason why deforestation alone is responsible for 11 percent of all global greenhouse gas emissions. (Another reason is that forests and grasslands are natural carbon sinks. Clearing them reduces the planet’s capacity to remove carbon dioxide from the air.)
The microbes in soil can also create greenhouse gases when they come into contact with fertilizer. Synthetic fertilizers revolutionized how we feed the world, but they release a powerful greenhouse gas called nitrous oxide when broken down by those microbes. Natural fertilizers like manure aren’t any better, because they release greenhouse gases as they decompose.
So how do we fight climate change caused by agriculture? We can’t simply get rid of soil—or stop growing crops, using fertilizer, and raising livestock. There are some changes that societies can make—people in level 1 and 2 countries will eat more meat as they move up the income ladder, so people in level 3 and 4 countries could consume less to compensate, for example—but at the end of the day, people need to eat.
That’s why the goal with agriculture is not to reduce the amount created, but to reduce emissions per product. I’m involved with a group called Breakthrough Energy Ventures that is backing a number of creative solutions to tackle the problem. Because every country and every culture approaches food production differently, there are a lot of different ways to do that. Here are some of the ones I find most interesting: