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IN THIS ISSUE – “California’s tax revenues are famously volatile.”
Gov. Gavin Newsom
POLICY & POLITICS
- California State Tax Revenues in the Caution Zone
- Legislature Has One Month to Resolve Thorny Issues & Expenditures
- Newsom Campaign Urges Entertainment Industry to Support California
- Tech Foundation Policy Summit Menu: Ticket, $10,000; Panelist, $20,000; Legislator Meeting, $35,000
- New Campaign Donor Group Flexes Muscle With “Force Multipliers”
CLIMATE CHANGE & LEAVING CALIFORNIA
- Former Gov. Brown on Newsom’s Climate Change Policies & Sausage-Making
- It’s a Rough Road for Electric Vehicles
- GEICO Abruptly Shutters All California Offices
Capital News & Notes (CN&N) harvests California policy, legislative and regulatory insights from dozens of media and official sources for the past week. Please feel free to forward this unique client service.
FOR THE WEEK ENDING AUG. 5, 2022
California State Tax Revenues in the Caution Zone
Politico & Legislative Analyst Office
Some cautionary economic signals are gaining strength in California just a month after Gov. Gavin Newsom and state lawmakers adopted a record-breaking $308 billion budget.
The Golden State is more likely than not to collect less from personal income, sales and corporation taxes than the $210 billion assumed in the 2022-23 budget, according to a Monday report from the nonpartisan Legislative Analyst’s Office, which advises lawmakers on fiscal issues.
The report notes, however, that “significant uncertainty” remains, and the state could ultimately end up collecting anywhere from $25 billion less than anticipated to as much as $15 billion more — likely ending up about $5 billion below projections.
A recent report from the state Department of Finance offers a similarly mixed outlook: For the first time since the pandemic struck in early 2020, California’s tax revenues in June fell short of projections rather than exceeding them. Cash receipts came in about $2.4 billion less than expected, largely due to lower proceeds from the personal income tax.
H.D. Palmer, a finance department spokesperson, said that although more data is needed to make “long-term extrapolations,” the June numbers suggest that Californians paying their taxes quarterly — who tend to make most of their money from capital gains and stock options — are seeing “a lot of clouds on the horizon” due to rising inflation and interest rates, persistent supply chain issues and global market instability caused by Russia’s war on Ukraine.
Palmer said the two reports underscore “the importance of the actions that we’ve taken” to use California’s budget surplus “sensibly” by expanding reserves and paying down debt, rather than “embarking on a major expansion of state programs … that may very well not be sustainable.”
He added: “It’s something to be mindful of as we consider this final month of the legislative session in terms of … any major potential new financial commitments. … Certainly the administration has one eye on this as we’re looking at the legislation that’s moving.”
Indeed, Newsom cited California’s progressive tax structure in announcing his opposition to Proposition 30, a November ballot measure that would raise taxes on residents earning more than $2 million to fund a variety of climate programs.
Newsom: “California’s tax revenues are famously volatile, and this measure would make our state’s finances more unstable — all so that special interests can benefit.”
Legislature Has One Month to Resolve Thorny Issues & Expenditures
Politico
Sacramento’s concluding legislative sprint will run through a house divided.
Lawmakers returned from recess this week to an ample policy menu for the final feast of 2021-2022 policymaking. Between now and August 31, they will decide whether to let legislative staff unionize , regulate fast food labor , hold social media companies liable for their impact on kids, decriminalize hallucinogens and authorize government-sanctioned drug injection , crack open pay scale data and broker a housing labor truce (along with about 800 more bills on the floor or one committee away). They will discuss how to allocate billions of environmental dollars amid a debate about keeping the lights on.
And Assembly Democrats will navigate it all across a fissure cleaving the caucus.
The fallout from Assembly member Robert Rivas attempting to wrest the crown from Speaker Anthony Rendon continues to enshroud the Assembly like wildfire smoke: there’s an acrid taste in members’ mouths and they don’t know when the air will clear. The noncommittal statement produced by a six-hour June standoff has done little to dispel the discord. Accusations of budgetary retribution abounded in a subsequent, fraught caucus meeting.
That tension will inform how the next four weeks play out. Members on both sides are frustrated and accuse the other camp of acting disrespectfully and divisively. It’s likely the leadership struggle doesn’t get resolved before the final gavel falls. The better bet is that it’s decided after a November election that will profoundly reconfigure the caucus, with the arrival of more than a dozen new members.
The rest of the session will unfold in the shadow of that election. Several departing members will be casting their final votes. Rivas and allies have been working to help candidates to replace the outgoing members win their races. Since electing and defending Democrats is a central role of the speakership, the same is of course true with Rendon. The ties forged with the next class of Assembly Democrats will bear directly on leadership maneuvering.
But the election remains months away. In the meantime, no one believes this is a unified caucus. Will that manifest itself on the floor? People are watching to see if bills unceremoniously die or face unexpectedly close margins. Democrats still have an enormous majority. But interpersonal conflict is always a potent political variable, particularly as passions rise and time dwindles at the end of session. Loyalty and enmity tend to play an elevated role — with concrete implications for what policies pass, in what form.
Newsom Campaign Urges Entertainment Industry to Support California
NY Times
Widening his attack on Republican states for their positions on guns, civil rights and abortion, Gov. Gavin Newsom of California deployed a campaign ad to call on Hollywood to “walk the walk” on liberal values by bringing back their film and television productions from states such as Georgia and Oklahoma.
Mr. Newsom issued the challenge through an ad in Variety that asked the state’s left-leaning creative community to “take stock of your values — and those of your employees — when doing business in those states.”
The Democratic governor simultaneously endorsed a legislative proposal that would provide a $1.65 billion, five-year extension of California’s film and television production tax credit program.
Mr. Newsom’s statements underscored the pressure that intensifying culture wars have placed on U.S. corporations, particularly in states where the Supreme Court’s reversal of Roe v. Wade has severely constrained reproductive rights for women.
Some of the country’s biggest businesses, including the Walt Disney Company, Netflix and Comcast, which owns NBCUniversal, have announced programs to help employees who need abortion access but cannot obtain it in their home states. Hundreds of entertainment figures also have denounced policies in Republican-led states that have weakened safeguards for L.G.B.T.Q. people. Last week, some 400 television creators and showrunners publicly demanded that production companies protect pregnant employees in states where abortion is outlawed.
But entertainment companies have not yet announced major plans to cancel expansions or relocate offices. “Tulsa King,” Taylor Sheridan’s upcoming crime drama starring Sylvester Stallone, has been filming this summer for Paramount+ in Oklahoma.
In Georgia on Monday, Gov. Brian Kemp announced that film and television productions generated $4.4 billion in the state this fiscal year, a new record. “Spider-Man: No Way Home” was filmed in the state, the governor noted, as was the fourth season of “Stranger Things.”
“I was happy to name Gavin Newsom Oklahoma’s Economic Developer of the Year Award in 2021 and I’m glad to see he’s making a run for two years in a row,” Gov. Kevin Stitt of Oklahoma joked in a statement on Wednesday. Mr. Stitt took a similar jab at the California governor last year in reference to the state’s pandemic shutdowns, which Mr. Stitt said drove business to his state.
The Motion Picture Association, the trade group representing major film studios and Netflix, declined to comment on Wednesday.
Moving a production can be exceptionally costly and logistically complex, and some of the entertainment industry’s biggest companies are deeply invested in states with conservative leaders. Disney, for example, has maintained extensive operations in Florida despite a bitter and expensive standoff between its employees and the state.
In widening his attacks to include Oklahoma and Georgia, Mr. Newsom targeted not only two of California’s most aggressive rivals for film, television and other content production but two of the nation’s most conservative states on social issues.
Oklahoma, which aggressively ramped up film production incentives during the pandemic, has banned nearly all abortionssince the Roe v. Wade reversal. And Georgia, which has one of the nation’s most generous packages of film production incentives, has granted fetuses full legal recognition. This week, a Georgia tax agency found that pregnant women could take a $3,000 personal tax exemption for any fetus with a detectable heartbeat.
Mr. Newsom noted that California’s abortion rights are among the most secure in the nation. The state has also enacted some of the nation’s toughest laws on gun safety and civil liberties for L.G.B.T.Q. people.
California’s film tax credit — which the state created in 2009 after productions began decamping for Canada — has been of debatable value, even with an expansion and overhaul in 2014. The incentive allows filmmakers to recoup as much as 25 percent of their spending — up to the first $100 million — on crew salaries and other costs, excluding star salaries. But other states, including Georgia, offer more significant rebates.
Critics complain that the tax credit encourages bidding wars and rarely keeps productions in the state over the long term. A 2019 analysis by the state’s nonpartisan Legislative Analyst’s Office found that one-third of the projects that received the subsidies probably would have been made in California regardless.
“While the credit probably caused some film and television projects to be made here, many other similar projects also were made here without receiving any financial incentive,” the report said.
More:
https://www.nytimes.com/2022/08/03/us/newsom-hollywood-abortion-states.html
Tech Foundation Policy Summit Menu: Ticket, $10,000; Panelist, $20,000; Legislator Meeting, $35,000
CalMatters
Blockchain and cryptocurrency. Artificial intelligence. Facial recognition technology. Health care innovation. The energy industry. Building tech economies in “underestimated” cities such as Fresno. Understanding the benefits of remote work. Helping small businesses thrive online.
Those are among the topics that state lawmakers and tech industry lobbyists are set to discuss today at the luxurious four-star Carneros Resort and Spa in Napa Valley as part of an event dubbed the Technology Policy Summit, according to a draft copy of the agenda I obtained.
The two-day conference — which, according to the draft agenda, began Thursday night with a panel on how 5G technology can help address climate change and was followed by a reception and dinner — comes exactly a week before lawmakers are set to make do-or-die decisions on a slate of controversial tech bills, including proposals to significantly expand kids’ privacy rights online, allow public prosecutors to hold social media companies liable for intentionally addicting youth, and regulate the cryptocurrency industry.
Those bills are all on the suspense file, an opaque, twice-annual procedure in which lawmakers rattle through a list of hundreds of proposals at breakneck speed, passing or killing them without a word of explanation.
Specifically, they are all on the suspense file in the Senate Appropriations Committee, led by Democratic state Sen. Anthony Portantino of Glendale, who is attending the tech policy summit, his office confirmed Thursday.
Lerna Shirinian, Portantino’s communications director, said in a statement: “Senator Portantino has the reputation as being one of the most hardworking and accessible representatives in California, as he tries to meet with as many stakeholders as possible — both in the district and in the Capitol. Conference attendance doesn’t have an impact on who he meets with, nor does it impact his decisions. For the Senator, listening to a panel discussion on a topic is no different than tuning into a podcast.”
Also attending the event is Democratic Assemblymember Robert Rivas of Salinas, who’s angling to become the next speaker of the state Assembly, his office confirmed. Assemblymember Jesse Gabriel, a Van Nuys Democrat authoring a high-profile bill to force social media companies to be more transparent about their terms of service, told me last month he also plans to attend.
Reached by phone Thursday, Ian Calderon confirmed he is also attending. Calderon, a former state Assemblymember who was co-chairperson of the California Legislative Technology and Innovation Caucus with its current co-chairperson, Democratic Assemblymember Evan Low of Cupertino, is now principal at a firm called Majority Advisors. State records show Majority Advisors is registered as a lobbying firm whose sole client is the Crypto Council for Innovation.
According to Calderon’s company bio, he authored as a lawmaker bills related to blockchain and cryptocurrency and in 2015 was named Legislator of the Year by TechNet, a powerful lobbying firm that counts among its members Meta — the parent company of Facebook and Instagram — AT&T, Apple, Google and Amazon.com.
Representatives of TechNet’s member companies were invited to the summit, Dylan Hoffman, the group’s executive director for California, told me. Hoffman declined to comment on whether they planned to attend. Last month, Hoffman told me that TechNet plans “to pursue every legislative avenue to try to stop” the social media liability bill.
The annual summit is hosted by the Foundation for California’s Technology and Innovation Economy, which includes Low’s chief of staff on its board of directors. Lobbyists could attend for a minimum donation of $10,000, speak on a panel for $20,000, and brief lawmakers on a particular topic for $35,000, according to the Los Angeles Times. Low is currently under state investigation for having stopped disclosing donations made to the foundation at his request.
Low said in a statement: “Educational policy summits play a key role in educating legislators on many issues facing our state. Some may mischaracterize this as a one-sided conversation, but this is about policymakers partnering with the innovation economy on how to make California a state that supports growth for future generations to come.”
It’s unclear exactly how many lawmakers will be in attendance this year. But 18 legislators in 2021 — 15 Assemblymembers and 3 senators, all Democrats — reported having received gifts from the Foundation for California’s Technology and Innovation Economy at the time of last year’s conference, according to state records analyzed by CalMatters data journalist Jeremia Kimelman. Almost all reported gifts of about $1,250.
New Campaign Donor Group Flexes Muscle with “Force Multipliers”
CalMatters
Sift through the campaign contributions to Robert Rivas, the Salinas Democrat angling to become the next speaker of the California Assembly, and a name keeps popping up: Govern For California.
The organization’s statewide chapter gave the maximum $9,800 to Rivas in 2021. So did its Marin chapter, Hollywood chapter, Golden Gate chapter, Palo Alto chapter and four others. In the past 14 months, 16 Govern For California chapters have given him a combined $116,000 — nearly a tenth of everything he’s raised this election cycle.
Over the last two years, Rivas’ 2022 reelection committee has been a top recipient of campaign contributions from the Govern For California network, according to a CalMatters analysis of state campaign finance records. During the same period,financial disclosure forms, lobbying reports and Govern For California emails show that his brother, Rick Rivas, has served as both a political advisor to the statewide organization and as a consultant to Robert Rivas’ campaign.
But Assemblymember Rivas is hardly the only beneficiary of Govern For California spending. In the 2022 election cycle so far, the network has donated more than $3 million to more than 110 candidates across California, the vast majority of the money going to 82 running for the state Senate and Assembly.
Govern For California characterizes its 18 chapters as “force multipliers” that amplify the influence of its donors on state politics and government. The 11-year-old organization — the brainchild of 68-year-old Stanford lecturer David Crane, and funded primarily by a group of Bay Area venture capitalists, tech executives and philanthropists — opposes what it regards as excessive sway of labor unions over state policy.
None of the campaign finance experts CalMatters spoke with said they thought Govern For California was doing anything illegal. But Ann Ravel, former head of the Federal Election Commission and California’s campaign finance agency, said its chapter donation operation was “undemocratic,” albeit similar to the model organized labor unions use.
CalMatters reviewed the Govern For California website and other public explanations of its network, analyzed campaign finance records maintained by the Secretary of State’s office, and spoke to people familiar with the organization to understand how it operates.
In April 2020, state campaign finance regulators issued a letter giving Govern For California a green light to establish its network of chapters, each subject to its own campaign contribution limit.
That permission was on condition that “the GFC Statewide Committee and all local chapters are controlled by different individuals, who independently direct and control the entities’ respective contributions,” wrote Dave Bainbridge, general counsel for the Fair Political Practices Commission, which regulates, monitors and enforces state campaign finance laws.
That independence is a murky concept under California campaign finance law.
Crane and Rick Rivas regularly consult with the chairpersons of all 18 chapters; public records and social media accounts show that some are friends and former students of Crane’s.
A majority of the funding for the chapters is funneled through a central network committee. Many of those chapters then regularly make identically sized donations to the same candidates on the same days, using the same treasurer and law firm — to 13 candidates in the final two weeks before the June 7 primary. So far in this campaign, 29 candidates have received contributions from at least half of the chapters.
And while Govern For California chapters received contributions from nearly 250 donors this election, state campaign finance records show that nearly two-thirds of all the money raised came from just 20 people — donors who can, and often do, make separate maximum allowable contributions to the same candidates the chapters are supporting.
Through its chapter arrangement, the Govern For California network has been able to expand its fundraising potential 18-fold. Individual donors can give the maximum amount to each chapter, either by making separate contributions or, like 86% of donations as of late July, routing them through a central “Govern For California Network Committee.” There is even a handy button on the Govern For California website that lets a donor max out to each chapter automatically.
The line between organizations working together toward the same goal and those that are simply different branches of the same big-spending entity can be blurry. A spokesperson for the FPPC declined to comment on whether its enforcement division had ever investigated Govern For California.
State election regulators will typically consider a series of questions when making that fine distinction, said Tracey Wigglesworth, a campaign finance and election attorney who spent five and a half years in the FPPC’s enforcement division: Do the different committees have the same officers in charge? Is one committee paying for another’s legal and administrative costs? Do they get their funding from the same source? And are their contributions “made in concert or otherwise coordinated?”
If the answers to these questions are “yes,” the committees might be considered part of the same entity and find themselves capped under a common, combined contribution limit. But, she said, “this analysis depends on the facts of the case.”
In a response to CalMatters, Crane declined to answer more than a dozen specific questions about Govern For California’s structure and political aims, including its backing of Rivas, who has sought to oust and replace Assembly Speaker Anthony Rendon, a Lakewood Democrat.
Instead, Crane replied via email that CalMatters “apparently developed a thesis for a hit piece before contacting us. I don’t know which special interest put you up to it, but it’s not what I ever expected of your organization.”
Crane has strenuously rejected the notion that Govern For California is doing anything unique or remarkable with its campaign finance structure. In recent emails to CalMatters and to Govern For California supporters, he likened the network’s spending to the way that organized labor groups, which have statewide chapters and local affiliates, transfer money to one another and regularly support the same candidates while remaining legally independent of one another.
“As much as we would enjoy pride of authorship, there’s nothing new about our model,” Crane told CalMatters.
“For too long, only special interests organized political activity in Sacramento,” he wrote in a separate message to the Govern For California mailing list. “The only thing that’s new is that, in 2011, someone started organizing for the general interest.”
That goal — to “create a counter-force to the special interests” — is shared among the chapters, which “all have the same objective,” according to Govern For California’s website. While the group funds Democrats and Republicans, business-friendly moderates and progressives, it generally supports charter schools and raises alarms about the state’s pension liabilities to its unionized employees.
In addition to campaign donations, Govern for California spent roughly $259,000 lobbying state lawmakers in the first six months of this year, records show. Among its top priorities: supporting legislation to lengthen the amount of time that teachers would be required to work before getting tenure and to require the state to make school spending data easier to sift through. The group has also opposed measures to ban “foreign-influenced” corporations from making political contributions and a bill that would allow legislative staffers to unionize.
CalMatters spoke to eight campaign finance experts about Govern For California. Five said its chapter donation model represents something new in California electoral politics, and some found it concerning.
It “seems to be contrary to the spirit of the idea of having contribution limitations,” said Ravel, the former elections watchdog, who also received $25,700 from the Govern For California network when she ran for state Senate in 2020. But, she added, “unfortunately that’s the campaign finance system we’ve been handed by the U.S. Supreme Court.”
But Bob Stern, the former president of the Los Angeles-based Center for Governmental Studies and the FPPC’s first general counsel, said he’s “much less concerned” about Govern For California than big-spending committees backed by a single industry or corporation.
He added that there’s a difference between making recommendations to the chairpersons of a committee, and exerting direct control over its political activity.
“It’s free speech,” said Stern. “It’s me coming along recommending that they support a certain candidate. You can’t stop me from making recommendations, as long as I’m not directing them.”
CalMatters tried to contact the chairpersons for all 18 chapters to understand how they operate and their relationship to Crane and Rick Rivas. The majority did not respond and none agreed to be quoted.
Crane, Rick Rivas and Robert Rivas all declined to answer questions about whether they were using the Govern For California network to advance Robert Rivas’ leadership ambitions in the Legislature. A spokesperson for Assembly Speaker Rendon also declined to comment.
After CalMatters began making inquiries to chapter chairpersons and donors about the Govern For California network, Crane sent an explanation to the mailing list.
“We got the idea from SEIU,” he wrote, referring to the influential Service Employees International Union, which represents 700,000 public- and private-sector workers across 17 local chapters in California.
This election, committees affiliated with SEIU have spent at least $2.9 million in California legislative races, often donating to the same candidates.
Crane’s email highlighted specific contributions this year to an unnamed Assembly candidate from 16 union-sponsored committees, including four SEIU locals, and suggested that these committees — representing teachers, California State University faculty, nurses, steelworkers and other employees — were managing their spending in a manner comparable to the Govern For California network. Campaign finance records suggest that the candidate is Elizabeth Alcantar, a Democrat from southeast Los Angeles who failed to make it into the top two for November alongside the Govern For California network-supported Democrat Blanca Pacheco.
The comparison to unions divided the campaign finance experts whom CalMatters interviewed.
Much more:
Former Gov. Brown on Newsom’s Climate Change Policies & Sausage-Making
LA Times
Even when it comes to addressing climate change — which to former Gov. Jerry Brown is “the No. 1 existential threat to the world” — you can’t escape the realities of politics, or the realities of people’s day-to-day lives.
That was one of the key takeaways from a climate-focused interview with Brown published Thursday in the Los Angeles Times. Brown — who served as governor while current Gov. Gavin Newsom was lieutenant governor, and has a complex relationship with his successor that at times has veered into veiled criticism — weighed in on some of California’s current climate controversies, including Newsom’s contentious plan to stabilize the state’s fragile energy grid by prolonging the use of some fossil-fuel-powered plants and potentially extend the operating life of Diablo Canyon, its last nuclear power plant.
Here are some key takeaways from Brown’s interview:
On dealmaking: “Like sausage, you don’t want to look too closely at how it’s made. When I got the gas tax bill in California, to get the one Republican vote that I got in the state Senate — that senator got $500 million in transportation programs for his district. That is the nature of the legislative process.”
On whether California and the country are doing enough on climate: “This is good what we’re doing — but no, it’s not enough. Even California is not doing enough. The country and state are doing all they can politically, and they’ll do more. But the resistance is huge.”
On setting achievable climate goals: “How many vehicles do we have on the road, and how long are they going to last? If you want to get serious, you could say, ‘OK, in two years we’ll take away all the gas cars, we’ll buy them from you. And you’ll get an electric car in return.’ That’s not feasible. We’re still a fossil fuel civilization. … If you want to win victories, you’re going to have some more oil leases” in order to also get support for more climate-friendly policies.
On Newsom’s controversial energy law: “If you want to get more gas-fired plants, the best thing to do is to shut them all down now. And then when the massive blackouts come, the politics will be so powerful that you’ll get even more gas plants than if you make sure that the lights don’t go out in the meantime. If you push too far, there’s a backlash. … So if you maybe try to move slower, you end up moving faster.”
On whether California should keep Diablo Canyon open: “I’m not going to weigh in on that one. There are a lot of people who have their views. I know some people who think it should not stay open. Other friends of mine, equally intelligent, say, ‘No, keep it open for a while.’”
It’s a Rough Road for Electric Vehicles
CalMatters
Affordable and efficient electric vehicles are critical to California’s efforts to tackle climate change and clean up its polluted air — by 2035, the state plans to ban all new sales of gas-powered cars.
But the state’s incentives and rebates for lower-income people who purchase electric cars have suffered from inconsistent and inadequate funding.
This year’s funding for some of the programs ran out in April — the waitlists have been shut down because of the backlogs. And even for the rebates that are still available, the obstacles are substantial: Program administrators are inundated with requests for the money, resulting in months-long waits — at the same time that prices are surging and electric cars are in short supply.
The troubled state subsidy programs raise a crucial question: Can California enact a mandate that requires 100% of all new cars to be zero emissions when a large portion of the population can’t buy them?
If most Californians can’t afford to replace their old, higher-polluting gas-powered cars, many of Gov. Gavin Newsom’s climate goals are in jeopardy, along with statewide efforts to clean up the nation’s worst air pollution.
New electric cars range in price from $25,000 to $180,000. Many models, including Ford’s popular Mustang and F150 Lightning electric truck, are sold out, with long waiting lists.
“As California transitions to an electric future, these vehicle markups are definitely pricing our clients out,” said Maria Ruiz, a supervisor at the EV Equity Program, which was launched by a Central Valley coalition of clean-air advocacy organizations. “We’ve seen markups as high as $15,000. So that sadly has been a big challenge.”
So far, it’s unclear how successful the state’s subsidy programs have been in cutting greenhouse gases because the Air Resources Board has failed to adequately measure it, according to an audit by the state’s Legislative Analyst’s Office.
Since 2010, California has allocated more than $1.84 billion to a hodgepodge of three programs: the Clean Cars 4 All Program, the Clean Vehicle Rebate Project and theClean Vehicle Assistance Program, according to Air Resources Board data. In exchange, over those 12 years, about half a million Californians have received grants or rebates for buying cleaner cars or replacing older cars.
The Clean Vehicle Rebate Project, which receives the bulk of the state’s funding, has distributed 478,364 rebates since its launch in 2010, while the Clean Vehicle Assistance program has assisted buyers in purchasing 4,438 clean vehicles since 2018. Clean Cars 4 All, which only serves residents in the state’s most polluted regions, has taken 12,800 pre-2007 model year cars off the road since its launch in 2015.
All of the programs, which award up to $7,000 or $9,500 toward the purchase of an electric car, have income limits. The rebate project is for residents with incomes up to $135,000. Clean Vehicle Assistance and most Clean Cars 4 All programs accept applications from residents with incomes at or below 400% of the federal poverty level — equivalent to $54,360 for an individual. (The U.S. Senate also appears poised to enact a $7,500 federal tax credit for individuals with incomes less than $150,000.)
“Before the pandemic and the rise in prices, we do have evidence that these (state) programs were sort of effective and encouraged people to buy electric vehicles,” said Erich Muehlegger, an associate professor of economics at University of California, Davis. “But the challenge right now is that these programs are facing really, really strong headwinds because of the high prices of electric vehicles.”
Following a 2020 executive order from Newsom, the Air Resources Board has drafted a proposed regulation that would phase out gas cars, beginning with 35% of 2026 models. The aim is to put 5 million zero-emission cars on California’s roads by 2030 and slash tailpipe emissions, California’s largest source of planet-warming pollutants.
But one of the biggest challenges with the transition to electrification is the financial obstacles faced by lower-income households.
The state’s programs designed to help them have been plagued with inconsistent and inadequate funding ever since they were launched years ago.
Most of the funding — $1.27 billion of the total $1.84 billion over the past decade — has come from the state’s cap-and-trade program, a market for buying and selling greenhouse gas credits that fluctuates in quarterly earnings. The rest is supplied in the state budget, which is approved by the Legislature and governor.
Lisa Macumber, an Air Resources Board official who oversees vehicle incentive programs, said insufficient funding has shut down the programs several times throughout the years. Some years, there are so many applicants that there’s barely enough money to keep the programs open for six months, let alone an entire year, she said.
While applications for the Clean Vehicle Rebate Project, the biggest of the programs, are still being accepted, the volumes are high and the delays substantial: People must wait on average more than two months to be notified if they’re selected or rejected, and then they must wait longer to receive the money.
Last fall and winter, it was even worse because of the pandemic. People were waiting an average of eight months before their requests were processed, Macumber said.
Another program, Clean Vehicle Assistance, closed in April because funds ran out; the waitlist is closed to new applicants due to backlogs. The San Joaquin Valley’s and San Diego’s Clean Cars 4 All programs also are shut down due to depleted funds, although those programs in the Los Angeles basin, Bay Area and Sacramento recently reopened for applications.
Macumber said more funding from a $10 billion zero-emission vehicle investment in the state budget is on the way, but it’s unclear when that money will come through.
“It’s a very challenging landscape,” Macumber said. “Our programs have to be able to adjust based on the funding we receive each year.” That leads to confusion for residents, she said.
Californians who need the funds the most — those with incomes below 225% of the federal poverty level — are not accessing the program as quickly as other income groups. (The federal poverty level is $13,590 for an individual.)
“Higher income groups were able to go through the process and purchase new zero emission vehicles faster, resulting in depleting funds quickly,” Macumber said. “The majority of very low-income consumers need help through the application process and need more time to find proper, mostly used, vehicles. By the time they’re at the point to purchase their vehicles, funds were not available.”
Some lawmakers worry that these problems are standing in the way of making cars accessible to those who would benefit the most because they live in regions with some of the poorest air quality.
The lack of rebates and long waitlists aren’t the only obstacles in getting Californians to universally buy electric vehicles. For many, a lack of charging infrastructure in their homes and communities is a big hurdle.
Most public charging stations are clustered in urban, coastal areas. About 1.2 million chargers will be needed for the 8 million zero-emission cars expected by 2030. State data shows that currently there are only about 80,000 with another 123,000 on the way – falling far short.
More:
GEICO Abruptly Shutters All California Offices
Sacramento Bee
GEICO has closed all of its 38 California agent offices that sell auto and homeowners policies and other lines and has also ended the practice of selling insurance through telephone agents in the state.
The closures are resulting in more than 35 layoffs in the Sacramento area and hundreds statewide. The GEICO office in Roseville only opened in July 2021. GEICO put out a press release at the time saying it would meet the insurance needs of all Placer County residents.
The California Department of Insurance is following GEICO’s actions, said California Deputy Insurance Commissioner Michael Soller. “We are monitoring to make sure consumers are protected,” he said in a statement.
A GEICO spokesperson would not comment on the new changes but said the company was not leaving California. “We continue to write policies in California, and we remain available through our direct channels for the more than 2.18 million California customers presently insured with us,” the company said in an unsigned emailed statement to The Sacramento Bee.
The changes leave online options through a computer or a mobile device as the only way to obtain a GEICO policy in California GEICO is one of the largest property and casualty insurers in California but Soller said consumers have options.
He said more than 130 companies compete for private passenger auto business and more than 70 companies write homeowners insurance. GEICO’s actions in California come as company commissioned Walk-In agents and phone sales remain open in other western states. GEICO is also advertising on its website for a new sales agent at an office in Naples, Florida. It’s unclear if GEICO is losing money in California and the moves are part of a strategy to reduce business.“
The insurer stopped new policy phone sales in California several months ago. GEICO is part of Berkshire Hathaway, the publicly traded company run by famed investor Warren Buffett.
https://www.sacbee.com/news/california/article263946861.html#storylink=cpy