For Clients & Friends of The Gualco Group, Inc.

IN THIS ISSUE – “So Goes California, So Goes the Rest of the U.S.”

OUR NEXT GOVERNOR

CALIFORNIA EVOLVING

WATER

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.

Stay current daily!  For our focused updates via Twitter: @jrgualco / @robertjgore / @gualcogroup

READ ALL ABOUT IT!!

FOR THE WEEK ENDING OCT. 12, 2018

 

Newsom & Cox Trade Barbs at Only Debate

Gavin Newsom and John Cox traded barbs this week in what was likely the only gubernatorial debate ahead of the Nov. 6 general election, with Newsom chastising Cox as a Donald Trump-backed Republican with thin policy plans, and Cox countering that Newsom and his fellow Democrats have rendered California unaffordable.

“I hope that we can compare and contrast…our specific tangible plans, because there’s a profound contrast,” Newsom said during the hourlong debate aired live on KQED public radio, criticizing Cox for pressing for solutions to the state’s housing affordability and homelessness crisis without offering detailed policy ideas.

“He criticizes and identifies problems, but with all due respect, doesn’t have the details and the strategies to actually solve them,” said Newsom.

“I have a lot of specific plans,” Cox shot back at one point when discussing the state’s housing needs, without elaborating. He later denounced broader policy ideas Newsom has advanced, saying “all these plans don’t mean a thing if we can’ t change a lot of these laws that are adding to the costs that are driving housing prices an apartment prices through the roof.”

Cox, the San Diego businessman, said the former two-term mayor of San Francisco is to blame for the state’s acute challenges with homelessness and the high cost of housing. He suggested several times that questions about social issues, such as gay marriage, were a waste of time.

“My vision for California is where people can afford to buy a house or pay rent that’s affordable, they can afford gasoline, water, electricity…they don’t have to see homeless all over the street,” Cox said. “Gavin’s been part of the political class that has led this state downward.

“Gavin’s been in office for 16 years here in California and he’s not done much about this problem and it’s gotten worse and worse and worse. We’ve got to bring down the cost of housing,” Cox said.

Newsom has acknowledged the housing problem has grown far worse over the past eight years, under both his watch, and Democratic leadership. He has called the growing crisis — California has more homeless people than any other state in the nation, and the population is growing in coastal cities — “inhumane” and “unacceptable.”

He said during the debate that the issue of “wealth disparity” and “income inequality” are issues that define all others.

“We have to address the issue of cost of housing. We have to address the issue of affordability…we have to address the issue of homelessness,” Newsom said. “And we have to tackle the vexing issue of health care and the issues related to health care that are devouring the state budget.”

The debate gave voters the only snapshot since the June primary of where candidates differ on issues, including criminal justice sentencing, protections for undocumented immigrants, guns and gay marriage.

“The important issue in this race is affordability,” Cox said, adding that discussion about anything other than economic issues “is just to occupy time.”

Cox has been media shy during the campaign, and has narrowly focused his message on the state’s affordability challenges and repeal of the 2017 gas tax increase, refusing to discuss other issues that have arisen, such as climate change and abortion.

Newsom repeatedly blasted Cox for past comments Cox has made, including those opposing gay marriage, saying in the past that gay rights could “open the floodgates to polygamy and bestiality.” Cox responded: “I’ve evolved on those issues.”

Still, Newsom sought to paint Cox as out-of-touch with California’s electorate due in large part to his past comments casting doubt on human-caused climate change, and strong support of relaxed gun laws and the National Rifle Association.

Cox declined initially to go into detail on his views on guns, saying “I don’t know,” what California should do differently. He then said “We need to treat mental illness.” He later added that “Criminals don’t care about gun control…more laws aren’t going to do the job.”

Cox also denounced California’s “sanctuary state law,” suggesting it protects criminals, and said he’d work to overturn it. He also called again for construction of a border wall between the U.S. and Mexico, and doubled down on past comments saying that California companies that employ undocumented workers should face legal consequences.

“I think we should not be hiring people who have broken the law and cut in line,” Cox said.

Newsom shot back: “Sanctuary counties are not more violent, more dangerous than non-sanctuary cities and counties… It’s about building trust. A victim of crime or a witness to a crime is more likely to come forward if they’re not worried about local law enforcement” turning them over to immigration authorities, Newsom said.

“I fear under a Cox administration working hand in glove with Donald Trump, that our policies — our progressive and enlightened policies on immigration — will roll back to the dark ages,” he added.

Newsom and Cox also differed on several laws California has enacted this year, including those that end the state’s cash bail system and put California on a path to acquiring 100 percent of its electricity from non-carbon renewable sources by 2045. Cox opposes both laws and Newsom supports them.

https://www.fresnobee.com/news/politics-government/election/article219671930.html#storylink=cpy

 

Profile: Newsom

For eight years, Democrat Gavin Newsom bided his time as California’s lieutenant governor, a job with little responsibility and little interest to him. He was so eager to start the next phase of his political life that within three months of winning a second term in 2014 he announced his candidacy for governor.

Now he’s a heavy favorite to defeat Republican John Cox in November and become California’s top elected official. And already questions are coming about what many believe is his ultimate goal: president.

Newsom says he’s not considering that possibility. Yet few believe him, he acknowledges, not even his friends. They’ve seen him as presidential timber since he was a high school student wearing a suit and tie to school.

With perfect hair, sparkling teeth, deep-pocketed supporters and a meteoric rise to national prominence, Newsom always seems headed for something bigger. Right now, he insists, that’s limited to being governor of the nation’s most populous state.

“I have no interest in anything to do with any of that,” the former San Francisco mayor said of a run for president. “I mean, I don’t know how else to say it. It’s just anathema to anything I’m interested in in life.”

Newsom relishes the idea of replacing Trump administration foil Jerry Brown as governor and being the point for California’s resistance to the president. Left unsaid is that perch leaves him perfectly situated to create a more appealing national profile for Democrats should he decide the White House no longer is anathema.

Riding in the back of his campaign bus through the Central Valley recently, Newsom went over his life story and pushed back on the persistent narrative that’s dogged him since the start of his political career — that he had a privileged upbringing and rode the coattails of his father’s wealthy and connected friends to political success.

He doesn’t deny his father’s friends are wealthy and connected. Bill Newsom was close to Gordon Getty, who inherited a multi-billion-dollar oil fortune, and was lifelong friends with Brown, who also was governor during Newsom’s youth. Getty invested in Newsom’s first business.

Cox has seized on the narrative to paint Newsom as out of touch and opportunistic.

But Newsom, about to turn 51, insists that ignores his struggles as a child with dyslexia raised by a mother who held multiple jobs and moved all the time, and a father who, despite his connections, faced constant financial pressures. His parents separated when Newsom was young.

“I grew up very differently,” he said. “Everybody thinks I was born at 18 or 20.”

He was privileged to know the Gettys, he said, and to get experiences he’d never otherwise have, like foreign vacations they paid for as a teenager. But it wasn’t his whole reality.

“Going on vacation once a year was not my life 360 of the other days,” he said. “My life was working. Mom crying at night because she’s struggling and stressed out.”

With help from Getty and, he said, 12 other investors, Newsom was in his 20s when he opened his first business, a San Francisco wine store called PlumpJack. The PlumpJack portfolio would grow to include boutique hotels, wineries, bars and restaurants mostly in Northern California. Newsom has largely stepped away from the business and turned over management to his younger sister, Hilary.

Newsom said he hasn’t decided how he’d build a separation between his businesses and his role as governor. He said he’ll fully step away from all decision-making but won’t sell his interests.

California Democratic power broker Willie Brown, then San Francisco’s mayor, gave Newsom his first political job when he appointed him to the city’s Parking and Traffic Commission and later, at the urging of longtime local Democratic lawmaker and operative John Burton, to a vacancy on the San Francisco Board of Supervisors. Burton and Newsom’s father were childhood friends.

“I thought that he’d serve the city quite well,” Burton said. “And life’s proven I’m a prophet.”

At 36, Newsom was San Francisco’s youngest mayor in a century when just three months into his term he ordered marriage licenses be granted to same-sex partners, a move that immediately thrust him into the national spotlight.

He was credited with advancing the civil rights of gays and lesbians more than a decade before the U.S. Supreme Court legalized gay marriage nationwide. But he also was faulted by many Democrats for foisting the issue into the 2004 presidential campaign, in which Republican George W. Bush was re-elected, long before same-sex unions were widely accepted outside liberal coastal enclaves.

Thousands of couples were married in San Francisco before the state Supreme Court shut it down.

Now, the decision is central to his pitch to voters — that he has the courage to do the right thing, no matter the consequences.

As mayor, he also was known for his homelessness and health care initiatives, and for scandals in his personal life.

His “Care Not Cash” program reduced cash assistance for people living on the streets and replaced it with housing and services. “Healthy San Francisco” provides basic health care to everyone in the city, even those living in the country illegally, funded largely by businesses and the city’s general fund.

But he had a sometimes rocky relationship with the San Francisco Board of Supervisors. His ambitious pledge to end homelessness never came to fruition and that problem now is more pronounced than ever.

After his glamorous marriage to prosecutor-turned-Court TV personality Kimberly Guilfoyle ended in divorce, it came to light he’d had an affair with an aide who, at the time, was married to Newsom’s campaign manager and close friend. In his current race, he says he’s been open and honest about the episode and learned from it.

Guilfoyle went on to work for Fox News and now is dating Donald Trump Jr., the president’s son. Newsom married Jennifer Siebel, an actress and filmmaker whose work has focused, among other things, on gender stereotypes. They have four children.

Newsom has focused his campaign on opposition to Trump. He supports a state ballot issue to rescind a gas tax increase earmarked to improve infrastructure. Cox has made the repeal a focus of his campaign.

Newsom also has pledged to build 3.5 million housing units by 2025 to provide more options for poor and middle-class families, a promise many experts find overly ambitious, and to extend health coverage to the uninsured, including immigrants living in the country illegally.

On the campaign trail, Newsom memorizes his speeches and all the facts and figures that go in them, a necessity because of dyslexia, a disorder that makes it difficult to read and comprehend written words.

“I just have to quadruple prepare, which is just not easy,” Newsom said, then added: “But look, I’m only here because I do all this.”

During his recent bus tour, he demonstrated the laborious coping mechanism he’s developed to retain what he reads. He underlines important information, then goes back and rewrites key points in his own hand. He dates the page and stores them in binders separated by subject matter.

“You will never find my fifth-grade teacher (to) say, ’I always knew he was going to be governor,’” he joked. “There’s no teacher in my life — they’re all just sitting here going, ‘How the hell did that happen?’”

https://www.apnews.com/e71b90b894644286919878b7d5d04196

 

Profile: Cox

The California governor’s race may look like a battle between two wealthy men, but Republican businessman John Cox says there’s one big difference between him and his Democratic opponent, Gavin Newsom: “I struggled.”

Cox, 63, mentions his roots in virtually every campaign appearance, usually with the shorthand, “I was raised by a single mom on the South Side of Chicago.”

The longhand is more complex.

His father did abandon the family when Cox was a baby, but his mother then married another man who was present for much of Cox’s youth — and often beat him. He identified with his mother, and the political corruption he says he saw through her eyes contributed to his view as an adult that professional politicians are destroying the system.

That feeling gnawed at him for years, eventually inspiring him to run for office four times — losing every time — and pay for a couple of anti-politician initiatives that never made the ballot.

Cox’s mind wasn’t on politics as he grew up in Illinois. Since he was in seventh grade, he said, he wanted to be a lawyer. He liked to argue, and he wanted to have a more secure financial life than his mother, a schoolteacher, and his stepfather, a postal worker. He worked two jobs to pay his way through community college and the University of Illinois at Chicago. He worked as an accountant to put himself through law school.

Cox says the fact that he had to work hard as a young man makes it easier for him to relate to the 1 in 5 Californians living in poverty.

“I had to work my way through college. I didn’t get a scholarship. I didn’t have money to start my own business. I had to build capital day by day, ever single day,” Cox said on The Chronicle’s “It’s All Political” podcast, “The struggles I had growing up give me a feeling of empathy for people who are struggling today. I had to worry about where my next meal was coming from. I had to worry about being able to pay the rent.”

But Cox’s empathy for the poor doesn’t translate into wanting to increase funding for public education or move toward a universal health care system. Instead, Cox is a mainline conservative on economic issues who believes that removing government regulations will help lower costs for everyone.

On social issues, he’s a devout Roman Catholic who opposes abortion rightsand the death penalty, but says he would enforce laws governing both. And although he says he didn’t vote for Donald Trump in 2016, he’s come around — he gladly accepted the president’s endorsement before the June primary, and he backs Trump’s plan for a wall along the Mexican border.

Cox wasn’t always that conservative. Then again, he wasn’t always John Cox.

He was born John Kaplan. His father abandoned the family when Cox was 3 months old. He believes his mother “was impregnated against her will,” which helps to explain his opposition to abortion even if a pregnancy results from rape.

“My mom would tell me that if abortion had been legal, she would have aborted me, probably,” Cox said. “And I think I had a right to live.

His mother remarried before he was 4 years old, and he took the last name of his stepfather. That’s also when the family left the South Side and moved to the suburbs. Cox said the man beat him, but not the two children he fathered by Cox’s mother.

“We all go through difficult times in our lives and we all overcome them,” Cox said. “The good news is that (his stepfather) worked nights at the post office, so I didn’t see him much.”

His mother, Priscilla Cox, worked as a school librarian and reading teacher at schools in the city. She felt that many of the principals were unqualified and owed their jobs to their political connections with the local aldermen. It made an impression on her son.

“I saw firsthand the corruption in those schools. And it put the notion in me that is something that I had to fight against,” Cox said.

His mother was a Democrat, and as a boy, Cox used to put on a white shirt and tie and do impressions of John F. Kennedy, whom his mother idolized. And it was as a Democrat that Cox got his first taste of politics.

At 21, he ran to be a delegate to the 1976 Democratic National Convention for Jimmy Carter. He and a slate of fellow reformers lost, he said, squashed by Chicago Mayor Richard J. Daley’s Democratic machine.

Soon after voting for Carter, Cox began to lose his affinity for the Democrats. He was just beginning his accounting and legal career, and was appalled by how much people were paying in taxes. He gravitated toward Ronald Reagan’s brand of low-tax small government, and in particular, the free market philosophy of New York Rep. Jack Kemp. Cox served on Kemp’s national steering committee for his 1988 Republican presidential campaign, and his interest in politics grew.

He began running for office himself in Illinois, this time as a Republican. He ran for Congress, for Cook County recorder of deeds, and for the U.S. Senate in 2004, when one of his opponents was a state legislator named Barack Obama. In 2008, he even briefly ran for president — “a bit of a lark,” he said, mostly to protest President George W. Bush’s prosecution of the Iraq War.

His motivation for running remained the same in each race: to fight the influence of money in politics.

“I think corruption is the biggest evil of our time,” Cox said. “I wanted to get the money out of politics. I wanted people to have affordable housing and affordable health care. I believe these things happen when we have a robust free market.”

At first, his views on immigration were more in line with Kemp’s. Cox recalled that Kemp admired how “people came here and started their own business and grabbed a piece of the American dream. That’s the secret sauce. That’s the reason this country has done so much better than any country in the world. We’ve welcomed immigrants to our shores.”

Cox’s view on immigration changed, however, when he moved to San Diego in 2011 in search of warmer weather with his second wife, Sarah, and their young daughter. (Cox has three daughters with his first wife. Their marriage of 22 years was annulled.)

“Now I live in San Diego and I see the drugs and the gangs and the human trafficking that goes on there,” Cox said. Trump’s wall may not solve all the problems, he said, but it would help.

And something appealed to him about California’s political system: the initiative process. No longer could the Democratic political machine block his anti-corruption ideas. Now — after building a legal, accounting and real estate empire with assets of more than $200 million — he could open his own wallet to take his anti-corruption message directly to the people.

“I thought, ‘Gee, maybe some of my ideas about getting money out of politics and working against corruption could work in California, because you can do ballot initiatives and change the Constitution,’” he said.

In 2016, he spent more than $373,000 on an unsuccessful attempt to qualify a ballot measure to force politicians to wear the corporate logos of their top donors when they appear at official functions — similar to how NASCAR drivers sport their sponsors’ logos. He got the idea from a Bill Maher comedy bit.

Cox said it was a way to show the “absurdity” of the influence that wealthy people and unions have on the political system. Yet Cox illustrates the outsize power of that influence.

Of the more than $8 million Cox has raised for his gubernatorial campaign, $5.5 million has come from Cox himself. Last year, he spent $2 million on another measure that didn’t make the ballot, one that would have had voters elect as many as 12,000 local representatives to advise the 120 members of the Legislature in Sacramento.

He said the effort was crafted to deal with the state’s biggest problem — how “the political class” isn’t helping ordinary Californians.

It has become the core of his message: Democrats, who hold all the political power in California, are responsible for the state’s high poverty rate, skyrocketing homeless population and exploding housing prices.

“This is a wonderful place to live. There’s a thin layer of people who are doing well. But most everybody else is struggling,” Cox said. “They’re working two jobs. Saving almost no money. Living in crackerbox apartments, paying though the nose for rents. This is no way to run a state, and the political class here doesn’t want to answer to it.”

In early 2016, Cox started making plans to run for governor because, “I wanted to have a say in running the state. I thought my business expertise, and the experiences that I had growing up, coming up from nothing, would give people some comfort that I had empathy for people who are struggling. Because I struggled.”

But Cox’s prescriptions for how to fix California’s problems are heavier on critique than solutions. The policy section on his campaign website wasn’t fleshed out with meatier proposals until mid-September. Even now, it seems more focused on criticizing Newsom than on explaining what Cox would do as governor. Here’s the entirety of the section of the policy agenda on homelessness:

In Gavin Newsom’s San Francisco, the playgrounds are littered with drug needles and the sidewalks are covered with human feces. Instead of fixing the root problem, they’ve just hired $130,000 a year “poop police” to walk around the city with shovels. That’s not a policy, it’s an admission of defeat.

Unlike other states, the majority of those on California streets are there simply because they’ve been priced out of their homes. By rapidly increasing the supply of affordable housing, we can help those people help themselves, and then focus on treatment options for the mentally ill and substance addicts. Two different problems. Two different solutions. John Cox will prioritize them both.

To Cox, no one personifies the inactivity and indifference of the political class better than Newsom, the former San Francisco mayor who he says was “born with a silver spoon in his mouth” — a portrayal that isn’t entirely accurate.

Newsom’s father, Bill Newsom, was a judge whose connections to the wealthy Getty family helped fund his son’s business empire. But Newsom’s parents were divorced when he was 2 years old and he was raised by his mother, Tessa, who worked three jobs when he was growing up. Newsom attended Santa Clara University on a partial baseball scholarship and student loans, and worked as well.

Much like the story of Cox’s early life, the longhand is complex.

https://www.sfchronicle.com/politics/article/California-s-John-Cox-the-politician-who-13287320.php]

 

Neither Candidate Looks Like Most Californians

No matter who wins in November, the next governor won’t resemble most Californians. In a state where Latinos outnumber whites, women outnumber men and the median family income is just under $64,000 a year, both gubernatorial candidates are white men who earn more than a $1 million a year.

José Antonio Romualdo Pacheco Jr., who served briefly as governor in 1875, remains the only non-white male to hold the office. The last governor from rural California was Earl Warren, who was elected during World War II. Warren grew up in Bakersfield in the early 1900s and later became chief justice of the U.S. Supreme Court. No woman has ever been elected governor.

“I think there are many folks who are very disappointed that we’re again going into the general election under these circumstances,” said political scientist Mindy Romero, director of USC’s California Civic Engagement Project. “Breaking that barrier can inspire and signal to others that times have changed.”

California has made strides elsewhere. Women have represented the state in the U.S. Senate since 1993, including Sen. Kamala Harris, who is of Jamaican and Indian descent. Four of California’s statewide officers are Latino or Asian American, the Assembly speaker is Latino and earlier this year Toni Atkins became the first lesbian leader of the state Senate.

“But there is still something about the governor’s race … being the top elected official in our state,” Romero said. “Californians don’t know a whole lot about politicians, but they do know who the governor is.”

While Newsom and Cox have vastly different political views, they share some similarities. Both spent most of their lives in big cities — Newsom in San Francisco and Cox in Chicago. Both own Teslas and live in exclusive, expensive parts of California.

Newsom and his family own a home in Marin County that is more than 4,000 square feet and worth $4.2 million, according to the real estate website Zillow. Cox and his family live in a 6,700-square-foot home worth $3.3 million in a Rancho Santa Fe gated community.

From those perches, Newsom and Cox have vowed to end the critical shortage of affordable housing in California and address the explosion of homelessness in the state, where an estimated 134,000 people are on the streets or have no permanent place to live.

Both candidates say voters should consider their life experiences, including difficult upbringings, and the ideals and accomplishments that have defined their adult lives. Their wealth is a reflection of success in business, an accomplishment that requires intellect, responsibility and a grasp of the inner workings of job creation and the economy — essential traits for California’s next governor, they said.

Harmeet Dhillon, one of California’s representatives on the Republican National Committee, said voters should be more concerned about a candidate’s ability to improve their lives than their gender or the color of a politician’s skin. Still, she noted that Neel Kashkari, the Republican nominee in the 2014 governor’s race, was Indian American, and the GOP nominee in 2010 was a woman, former EBay President and Chief Executive Meg Whitman. Their Democratic challenger was Jerry Brown, who won both elections.

“In my party, we’re post-racial,” Dhillon said. “The Democrats are more hung up on it.”

Among the biggest blind spots for politicians in Sacramento are the issues facing rural California, since the vast majority of lawmakers represent urban areas, Assemblywoman Anna Caballero (D-Salinas) said.

“It’s a fight to get them to recognize that one size doesn’t fit all,” said Caballero, who is running for state Senate.

One glaring example, she said, was the landmark legislation recently signed by the governor that will require all of California’s electricity to come from clean power sources by 2045. The legislation limits the credit given to hydroelectric power as a renewable energy source, and that is expected to increase utility bills in the Central Valley — one of the hottest regions in California.

“It totally left out rural California,” Caballero said. “We need a governor who’s going to listen.”

http://www.latimes.com/politics/la-pol-ca-california-governor-affluent-white-men-20181006-story.html#nws=mcnewsletter

 

“Economic Reckoning” Dead Ahead?

It has the highest concentration of billionaires in the country. It exports more computers than any other state. It is the nation’s largest producer of agriculture products by far: More than $6 billion in dairy products alone last year.

California is an economic powerhouse — now the fifth largest economy in the world after surpassing the United Kingdom in total output this year.

But this state may be facing a financial reckoning at the very moment that Jerry Brown is stepping down as governor: a possible recession coinciding with deepening concerns about its fiscal stability. His two potential successors — Gavin Newsom, the Democratic lieutenant governor, and John Cox, a Republican business executive — have significantly less experience than Mr. Brown, a fixture in California for nearly a half a century and through five national recessions.

California is now on the verge of putting one of the world’s largest economies in the hands of a relatively untested governor.

The ability of Mr. Brown’s successor to navigate California through challenging fiscal times could be critical to assuring both the state’s continuing economic durability and its outsize contribution to national prosperity.

“So goes California, so goes the U.S.,” said Christopher Thornberg, the founding partner of Beacon Economics, a consulting firm in Los Angeles. “It is far and away a dominant source of job growth in the U.S.”

Amid all its successes, California has become a stark example of economic disparity, illustrated by the juxtaposition of homes selling for tens of millions of dollars in the hills of Los Angeles and colonies of tents a few miles away along Sunset Boulevard. A disproportionate amount of this state’s wealth is being generated in the Bay Area, where an explosion of new tech companies has produced jobs with six- and seven-digit salaries. In Santa Clara County, the heart of Silicon Valley, average pay tops $130,000 per year.

A severe lack of affordable housing has fueled concern by business and political leaders of a labor shortage, because there will be no place middle-class people can afford to live. “We are going to have a two-million-person gap in about 20 years,” said Anthony Rendon, the Democratic speaker of the State Assembly. “I can see that getting bigger if we can’t figure out the housing crisis.”

Policies embraced by President Trump — including tariffs on Chinese goods and a crackdown on undocumented immigrants — could be harmful to this state’s economy, home to a vast network of farms already struggling to find field workers, and to the nation’s two largest ports.

The tax bill enacted by Congress is raising the cost of living for many homeowners by limiting the deductibility of state and local taxes, which are high in California, though some have done better under the new code. A drive to repeal a gas tax, on the ballot this fall, could undercut Mr. Brown’s ambitious effort to rebuild roads and bridges and blast a hole in the next governor’s budget.

And by nearly every account, a national recession is overdue. Another economic downturn could be especially devastating to this state, with a tax system heavily reliant on high-income wage earners. The last one resulted in the loss of one million jobs across the state.

“Jerry Brown has warned of the chances some headwinds on the economy coming down the pike are pretty high — we are not prepared for that,” said Austin Beutner, a former Wall Street investment banker and deputy mayor of Los Angeles, who is the superintendent of the Los Angeles school district. “We haven’t modernized the tax base and reformed the property tax system. We haven’t done the hard work to make sure if there is a change or a correction, the resources are there to do the things the state has to do.”

Mr. Newsom and Mr. Cox have both spoken of the huge economic challenges facing the state, pointing to widespread poverty and homelessness that both men — invoking the same phrase — say, “happened on our watch.”

Their responses reflect their political philosophies. Mr. Cox has called for cuts in taxes and regulations, while Mr. Newsom has advocated increased spending on early childhood development, higher education and health care. But both Mr. Newsom and Mr. Cox have steered clear on offering detailed plans on how they might manage one of the world’s most powerful economies.

“The California Dream is predicated on upward mobility and the upward mobility cannot exist if people can’t afford to live here,” Mr. Newsom said in an interview. “The issues that are highlighted in terms of how we are not performing are legit. The richest and the poorest state. It has to be addressed.”

Mr. Cox, in contrast to Mr. Brown and Mr. Newsom, said he did not think a recession was necessarily in the state’s near future. Still, he described California as a place that had become increasingly difficult to live in.

“The economy has grown,” he said in an interview. “And it has obviously helped people at the top. And everyone is working, the unemployment rate is pretty low. But people can’t make it here. And a lot of people are thinking of moving.”

Many of those people who are moving out are younger residents, heading for places like Texas, Arizona and Nevada, apparently after concluding that California has become too expensive, according to a report by the state Legislative Analyst’s Office.

Economists also expressed concern that the exit of Mr. Brown could open the way for more spending by the Legislature. Mr. Brown has a reputation of pushing back on expenditure demands by the Legislature, unions and other interests that he saw as potentially wasteful. Mr. Newsom, who polls suggest is likely to win this race, is a former mayor of San Francisco who has appealed to liberal voters and has the support of the California teachers’ union.

“What Governor Brown has done is try to maintain a certain amount of fiscal discipline in his party, which I don’t see the next Democratic governor doing,” said Juliet Musso, a professor of state government at the University of Southern California. “I haven’t heard a lot of talk about fiscal reform, and that’s not something that’s going to play with the base he has been speaking to.”

Mr. Newsom said he would prove to be as much of a fiscal steward as Mr. Brown. “I think people, to the extent they are concerned, I think they’ll be soon assuaged of that concern,” he said.

But in the same interview, he said he would push to restore cuts in early childhood education and higher education that took place under Mr. Brown. He has also called for a statewide single-payer health care system. “It’s time to guarantee prenatal care, in-home nurse visits, and access to quality pre-K for every child in California,” he said in his latest television advertisement.

California’s economy is a colossus, with a diverse set of industries that is unmatched in the United States. There is Silicon Valley in the Bay Area, which has become a dominant economic driver in the state. The farms that blanket the state’s vast center grow two-thirds of the nation’s fruits and nuts. The entertainment industry is still thriving in Hollywood (or more accurately, across Los Angeles.) And Southern California is home to two ports that receive nearly 40 percent of all foreign goods shipped into the country, plus a sprawling warehouse and transportation network needed to distribute them across the country.

This state has accounted for 20 percent of the nation’s economic growth since the end of the Great Recession. Unemployment is at a historic low. And after struggling under a $26 billion deficit, the state has a budget surplus of nearly $16 billion.

But at the same time, the gap between the richest and poorest is wider here than almost anywhere in the country. California’s poverty rate, at 19 percent, is the highest of any state.

The state’s ability to finance its operations has been complicated by two powerful forces. The first is Proposition 13, an initiative passed by voters in 1978 that imposed caps on property taxes. The second is its income tax system, which is volatile because it is heavily reliant on the top 1 percent of income tax payers. About 70 percent of the state’s revenues come from personal income tax.

There has been a clamor to change Proposition 13 — which would likely require another voter initiative — and to rewrite the income tax system to make it more reliable. But Mr. Brown was governor when Proposition 13 was passed in 1978 and it was a searing experience for him: He campaigned against it, but quickly moved to embrace it after voters rebuffed him.

Over these past eight years, he has refrained from tackling either Proposition 13 or the state tax system, making it clear he saw both as losing battles.

If Mr. Brown, who enjoyed abundant political capital and good will, was not willing to take on the fight, it seems unlikely that Mr. Newsom or Mr. Cox are going to step into that ring. “It’s not politically popular to say let’s try to have a less progressive income tax system,” Professor Musso said.

Both Mr. Newsom and Mr. Cox said they agreed the tax system needed to be reformed, but have resisted offering detailed ideas on how they would enter such politically complicated terrain.

Mr. Cox for example, said he would look for “other sources of revenue.” When asked for examples, he responded: “I don’t know. But I’d be more insistent on cutting the spending. I think this state wastes incredible amounts of money.”

The revamp of the tax code enacted by Congress could prove damaging to California if wealthy people start fleeing to lower-tax states. “The difference between California and other states is now much larger, and we have no idea of how people are going to react to that,” said Irena Asmundson, the chief economist at the California Department of Finance.

But the next governor will have one advantage that Mr. Brown did not. Mr. Brown pressed the Legislature, as the economy recovered, to create a rainy-day fund to carry the state through an economic downturn — a buffer against the kind of cuts imposed eight years ago. There is now $14 billion in the fund.

Toni G. Atkins, the Democratic president pro tem of the State Senate, applauded the creation of the fund, but noted that it was dwarfed by the size of the deficit the state faced during the last recession.

“That amount of money doesn’t go as far as you think,” she said. “We know what it felt like to go through a decade of serious recession. We had a really hard time. I am part of a last class of legislators who came here when we faced a $26 billion deficit. Those who came after us may feel somewhat different. They didn’t have to make $26 billion in cuts.”

https://www.nytimes.com/2018/10/10/us/california-economic-recession-jerry-brown.html?emc=edit_ca_20181011&nl=california-today&nlid=8082316620181011&te=1

 

From Purple to Deep Blue – Political Changes in the Golden State

CalMatters Commentary

The evolution of California from a Republican-leaning purple state into one that’s deeply blue is one of the most dramatic chapters in the state’s political history.

Republicans dominated statewide elections in the 1980s and into the 1990s, only to quickly decline into an irrelevance that will be underscored again this year by more defeats – possibly including the loss of several congressional seats.

Conventional wisdom has it that the GOP brand was irrevocably damaged in 1994 when Republican Gov. Pete Wilson, while seeking a second term, campaigned for a ballot measure, Proposition 187, that would have, if upheld by the courts, eliminate all public benefits for undocumented immigrants.

It worked for Wilson as he defeated Kathleen Brown, current Gov. Jerry Brown’s sister. Republicans that year also claimed half of the other statewide offices and won nominal control of the Assembly.

However, so goes the theory, Proposition 187 alienated the state’s burgeoning Latino population, which had previously given a substantial share of its votes to Republicans, and sparked a surge in Latino political involvement that lifted Democrats into domination.

Unquestionably, Proposition 187 contributed to the Republican slide, but another event of the era – the end of the Cold War and the resulting devastation of Southern California’s aerospace/defense industry – was also a major factor.

More than a million people, many if not most defense industry workers and their families, fled from Southern California to other states, and took their pro-Republican voting patterns with them.

Immigrants from other countries quickly neutralized Southern California’s population loss and a strong, Latino-oriented labor movement emerged. The political effect was to shift Los Angeles County, which has a quarter of the state’s population, from semi-neutral in statewide elections to strongly Democratic, tilting the entire state.

Finally, as a shrinking Republican Party made an ideological turn to the right, it lost ground in the suburbs, once GOP bastions, on such issues as abortion, environmental protection, gun control and gay rights while crime, which had fueled the party’s success in previous decades, shriveled as a hot-button issue.

The latest pre-election voter registration data from the secretary of state’s office graphically display California’s political reorientation from “Reagan Country” into the self-proclaimed capital of the anti-Donald Trump “resistance.”

Twenty years ago, when Democrat Gray Davis was winning an election to succeed Wilson, Democrats claimed 46.7 percent of the state’s registered voters and Republicans 35.6 percent. Since then, the Democratic share has actually decreased a bit to 43.8 percent, but GOP voters have plummeted to just 24.5 percent, while independents, officially “no party preference,” have more than doubled from 12.6 percent to 26.8 percent.

However, polling by the Public Policy Institute of California also found that independents lean Democratic by a 4-3 margin, so the real Democratic voter base is well over 50 percent, even in affluent suburban counties. It’s no accident that the most embattled Republican congressional seats this year are in Orange County.

Latinos are the state’s largest ethnic group, with about 40 percent of the population, but they are still just 21 percent of the likely voters this year while whites are 59 percent, according to PPIC’s research. Thus, the most important shift of political allegiance over the last generation has been that of whites, particularly in the suburbs and particularly women, who identify as Democrats far more than do men.

The bottom line: California’s deeply blue electorate is mostly white, mostly female, mostly middle-aged or older, mostly middle- or upper-middle class and mostly homeowners.

https://calmatters.org/articles/commentary/how-california-shifted-from-pro-gop-purple-to-deep-blue/?utm_source=CALmatters+Newsletter&utm_campaign=21cbc06eec-WHATMATTERS_NEWSLETTER&utm_medium=email&utm_term=0_faa7be558d-21cbc06eec-67854805

 

Which Legislators Wrote the Most New Laws?

The 2017-2018 legislative session is effectively over and focus has shifted to the November election. With a new governor coming to power in the coming months, it’s worth examining which lawmakers have had the most success implementing their agenda. Paul Payne of Sen. Bill Dodd’s office crunched the numbers.

Over the last two years, 1,875 bills have cleared Gov. Jerry Brown’s desk. Here are the lawmakers who have authored the most laws:

T-1 — Sen. Ricardo Lara, D-Bell Gardens (34 bills)

T-1 — Assemblyman Evan Low, D-Campbell (34)

T-3 — Dodd, D-Napa (31)

T-3 — Sen. Jerry Hill, D-San Mateo (31)

T-5 — Assemblywoman Cecilia M. Aguiar-Curry, D-Winters (29)

T-5 — Sen. Bob Hertzberg, D-Los Angeles (29)

7 — Assemblyman Richard Bloom, D-Santa Monica (27)

T-8 — Sen. Hannah-Beth Jackson, D-Santa Barbara (26)

T-8 — Sen. Mike McGuire, D-Healdsburg (26)

T-10 — Assemblyman Marc Berman, D-Palo Alto (25)

T-10 — Assemblywoman Monique Limón, D-Goleta (25)

T-10 — Assemblyman Mark Stone, D-Scotts Valley (25)

*Note: The Republican with the with the most bills signed was Assemblyman Brian Maienschein of San Diego, with 24.

https://www.sacbee.com/news/politics-government/capitol-alert/article219711725.html#storylink=cpy

 

“He Kept the Cats Herded”: Former Assembly Leader Dies

Former California Assemblyman Thomas Hannigan, a respected Solano County leader who spent decades in office, died Tuesday. He was 78.

Hannigan, a Democrat, rose to the powerful majority leader position in the lower house, spending 26 years in elected office.

“He was a fourth generation Solano County resident,” said Erin Hannigan, his daughter.

Born May 30, 1940, in Vallejo, Hannigan graduated from that city’s St. Patrick-St. Vincent High School in 1958.

He attended the University of Santa Clara, “where he met my mother (Jan Mape),” his daughter said. “She was in the first class of 100 women that were allowed to go to school at Santa Clara.”

Hannigan graduated in 1962 and married Mape on June 1, 1963. Erin was born nearly a year later.

In 1963, Hannigan entered the U.S. Marine Corps, where he eventually rose to the rank of captain.

“And shortly after I was born, my mother was pregnant with my brother and my father got orders to report to Vietnam,” Erin Hannigan said.

With a one young child at her side and another on the way, Erin Hannigan said her mother went to her husband’s superiors and said, “Now is not a good time.”

Hannigan nevertheless served a nine-month tour of duty in Vietnam, something he was reluctant to speak about, his longtime friend John Burton, a former state Senate leader and California Democratic Party Chairman.

“He never blared his own trumpet,” Burton said.

Eventually, Hannigan and his family moved to Fairfield, where he worked as a realtor. Drawn to public service, Hannigan sought to be appointed to the Fairfield Planning Commission, only to be turned down.

“And he said, ‘Well fine. I’m going to run for city council,’” his daughter said. “So he did. And he won.”

Hannigan served on the Fairfield City Council from 1970 to 1974, the year he was elected to Solano County supervisor.

Four years later, Hannigan won election again, this time as state assemblyman for the 4th district. He would go on to serve in the Assembly until 1996, including nearly a decade as majority leader.

Hannigan was well-respected on both sides of the aisle during his years in Sacramento.

“Tom was always courtly, kind and considerate,” said California State Librarian Greg Lucas, who added that Hannigan was a “gifted majority leader who kept the Democratic cats herded.”

Burton said his decades-long friendship with Hannigan began when the latter arrived at the Legislature.

“He was a guy of immense intellect and integrity,” Burton said. “He was one of a kind. A decent goddamn person.”

Burton recalled how Hannigan, unlike many lawmakers, took the time to show new legislators the ropes.

“He would reach out to the newbies and just help them navigate their way through the system,” Burton said.

Though Hannigan became well known as a champion of water development and protection, Burton said “he was not out there to put his name on a bill.”

After leaving office in 1996, Hannigan was appointed by then-Gov. Gray Davis to serve as director of the California Department of Water Resources until his retirement in 2003.
https://www.sacbee.com/news/politics-government/capitol-alert/article219868020.html#storylink=cpy

 

Water Bond Redux – Prop. 3

California voters may be feeling a sense of deja vu when they consider Proposition 3, an $8.9 billion water bond on the November ballot to fund a long list of water projects — from repairing Oroville Dam to restoring Bay Area wetlands to helping Central Valley farmers recharge depleted groundwater.

Didn’t the voters recently approve a big water bond? Maybe two of them?

Yes. And yes.

In June, California voters passed Proposition 68, a $4.1 billion parks and water bond. About two-thirds of that money, however, was earmarked for state parks, open space, forests and beaches.

And during the depths of the drought in 2014, voters overwhelmingly gave thumbs-up to another water measure, Proposition 1. That $7.5 billion bond has funded water recycling, conservation and new dam projects, including $1 billion to expand Los Vaqueros Reservoir in Contra Costa County and to construct a new reservoir near Pacheco Pass in in southern Santa Clara County.

But more is needed, say supporters of Proposition 3. California is an arid state with a growing population, a fragile farm economy, climate change threats and lots of fish and wildlife in need of help, they contend.

“We are not done fixing our water system,” said Jerry Meral, who wrote the proposition and has been its main promoter. “We need to bring it up to date.”

Lots of people agree. Prop 3 has been endorsed by U.S. Sen. Dianne Feinstein and Republican gubernatorial nominee John Cox, although Gov. Jerry Brown and Cox’s chief rival, Democratic Lt. Gov. Gavin Newsom, have not taken a position.

The measure is backed by union groups like the California Labor Federation, and business organizations, including the California Chamber of Commerce and the Silicon Valley Leadership Group.

Also endorsing it are most of the state’s major farm organizations, led by the California Farm Bureau Federation; and many of the state’s environmental groups, including the Nature Conservancy, National Audubon Society, Peninsula Open Space Trust, Save the Redwoods League and Save the Bay — but not the Sierra Club.

Critics call the 39-page measure a costly boondoggle. They have characterized it as a giveaway to the same organizations who helped write it.

Unlike the last two water bonds, which were put on the ballot by state lawmakers after public hearings, this one was written mostly by Meral, a former deputy secretary of the California Natural Resources Agency in the Brown administration, kayaking pioneer and longtime environmentalist who has organized other bond measures over the past 30 years. Meral shopped around the draft language to roughly 300 groups and many of them ended up donating to the campaign after making suggestions on what it should fund.

“It was all negotiated behind the scenes,” said Kathryn Phillips, director of Sierra Club California, which opposes Prop 3. “There are some things in there that are good, but not enough to justify all the bad things. A lot of the money is going to a few big farming interests in the Central Valley.”

Along with the Sierra Club, other opponents include the League of Women Voters, Friends of the River, Restore the Delta and Assembly Speaker Anthony Rendon, D-Los Angeles.

The chief item that irks many critics is $750 million to repair the Friant-Kern Canal and the Madera Canal, which run across about 200 miles of the San Joaquin Valley from Chowchilla to Bakersfield. The canals are critical for irrigating farms and have been damaged by years of farmers over-pumping groundwater, which has led to the ground sinking.

Critics say the farmers should pick up the bill for the canals.

“Whoever benefits from a key water project should be the ones paying for it from their rates,” said Phillips. “You’ll have people from all over the state paying for a few factory farms in the Central Valley.”

But supporters say many of the growers are small farmers, and there are statewide interests at stake.

“Everything we eat comes out of there,” said Meral. “We just can’t let it go. You might also say, why should the state pay for urban water conservation? Why should the people who don’t have kids pay for schools? An agricultural water supply means we have a food supply. You have to invest in the state.”

The No campaign has not raised any money. The Yes campaign has raised $4.7 million so far. Much of that has come from farm groups, such as Western Growers ($275,000), the California Fresh Fruit Association ($215,080) and the California Rice Industry Association ($200,000).

Large donations also have come from duck-hunting groups, such as the California Waterfowl Association ($495,000) and Ducks Unlimited ($400,000). There is significant money in the bond to fund wetlands restoration, which benefits ducks and geese.

The bond also includes $2.49 billion for restoring watershed lands, including $200 million for Sierra Nevada forests, $100 million for San Francisco Bay, $200 million for the Salton Sea, $150 million to restore the Los Angeles River, $80 million to remove Matilija Dam in Ventura County and $60 million for land conservation around Lake Tahoe.

There is another $2.12 billion for water recycling, storm water capture, upgrades to drinking water plants and conservation programs, such as funding lawn replacement programs and rebates for low-flush toilets.

There isn’t any money for new dams or for Brown’s controversial Delta tunnels plan. There is $200 million toward the $1 billion Oroville Dam repair, $250 million for Bay Area projects that could include expanding Los Vaqueros Reservoir, and another $1 billion for groundwater cleanup and management, much of which is expected to go to farm areas under a state grants program.

Bonds are like IOUs. The state sells them to investors, and then pays them back with interest, usually over 30 or 40 years, with money from the state general fund. Between 1993 and June 2018, California voters have approved 32 of 40 bond issues, an 80 percent success rate.

“This measure is basically a Christmas tree for a whole lot of people,” said Jay Lund, director of the UC Davis Center for Watershed Sciences. “It’s hard to turn down a big pot of money. I would give it a very high probability of passing.”

https://www.mercurynews.com/2018/10/10/proposition-3-smart-water-plan-or-costly-gift-to-farmers/

 

Colorado River Water Agreement Reduces California’s Share

DENVER (AP) — Seven Southwestern U.S. states that depend on the overtaxed Colorado River have reached landmark agreements on how to manage the waterway amid an unprecedented drought, including a commitment by California to bear part of the burden before it is legally required to do so, officials said Tuesday.

The agreements are tentative and must be approved by multiple states and agencies as well as the U.S. government. But they are seen as a milestone in the effort to preserve the river, which supports 40 million people and 6,300 square miles (16,300 square kilometers) of farmland in the U.S. and Mexico.

“I think it’s a critical step,” said Pat Mulroy, former manager of the Southern Nevada Water Authority, which serves Las Vegas and other cities, and now a senior fellow at the University of Nevada-Las Vegas law school.

The agreements create a collection of drought contingency plans designed to manage and minimize the effects of declining flows in the Colorado and its tributaries. Some plans were made public Tuesday. The U.S. Bureau of Reclamation, which manages major reservoirs across the West, is expected to release others Wednesday.

A nearly two-decade-long drought has drained the river’s two largest reservoirs, Lake Mead and Lake Powell, to alarmingly low levels. The Bureau of Reclamation says the chances of a shortfall in Lake Mead are 57 percent by 2020. If that happens, mandatory cutbacks would hit Arizona, Nevada and Mexico first.

The reservoir never has fallen low enough to trigger a shortage.

California agreed to soften the blow by voluntarily reducing its Colorado River use by about 6 percent if conditions are bad enough, said Jeffrey Kightlinger, general manager of the Metropolitan Water District of Southern California, a wholesaler serving 19 million people.

Kightlinger said California wanted to avoid having Congress or the U.S. Department of Interior step in and dictate a solution. “We wanted to control our own destiny and not leave things up to a political process,” he said.

Even with the plans in place, the impacts will be painful for some.

“We’ve been letting farms know they are undoubtedly going to have to change their irrigation practices,” said Paul Orme, an attorney who represents four Arizona irrigation districts in that state’s internal discussions on drought planning. “Irrigate less land with less water.”

Orme said farmers in the districts fear they will be affected disproportionately under the plan.

“Everyone recognizes something additional needs to be done,” he said. “It’s just how we get there internally is what we’re trying to work out.”

The two major components of the plans cover the Upper Basin, where most of the water originates as Rocky Mountain snowfall, and the Lower Basin, which consumes more of the water because it has more people and farms.

Colorado, New Mexico, Utah and Wyoming are in the Upper Basin. Arizona, California and Nevada are in the Lower Basin.

It will likely be next year before all seven states and the U.S. government approve the plans, said Karen Kwon, Colorado’s assistant attorney general. Mexico agreed last year to participate in drought planning.

Reaching the agreements was a complex and delicate task because the river is not controlled by a single agency. Instead, it is governed by interstate compacts, international treaties and court rulings, known collectively as the law of the river.

Water managers have warned for months that a shortage could have catastrophic effects on agriculture and the economy of the Southwest. But the states were always expected to reach agreements on drought plans because of their history of cooperating on Colorado River issues.

“This is the way things should be done,” said Ted Kowalski, who heads the Colorado River Program for the Walton Family Foundation, which has funded river restoration projects in the U.S. and Mexico.

“It’s a much preferred method of solving water management decisions than litigation or politics,” he said.

The Colorado River faces shortfalls for the foreseeable future because of what is called a structural deficit — the users along the river and its tributaries are legally entitled to more water than the river actually carries. That’s because the original allocations, made in 1922, were based on water flows that were abnormally high.

Drought, climate change and demand from growing cities are making things worse.

The drought plans rolled out this week are a first step, but the states must find ways to put water back into the river, said Mulroy, the former southern Nevada utility chief.

Desalinizing seawater and recycling wastewater are possibilities, she said.

“As important as the drought contingency plan is, it’s a tourniquet, it’s a Band-Aid, it is not the be-all and end-all that would solve the structural deficit that exists in the river,” Mulroy said.

https://www.apnews.com/2b4d4384a1d34e6f9f810310573962b6/US-states-agree-on-plan-to-manage-overtaxed-Colorado-River