For Clients & Friends of The Gualco Group, Inc.
IN THIS ISSUE – “The Prevailing Obsession Among Elected Officials, Donors and Political Consultants”
NEWSOM
- Newsom to Potential Dem Recall Rivals: Don’t Even Think About It!
- Poll Shows Newsom in Strong Position
- New Appointed CA Attorney General Continues Progressive Justice Dept. Leadership
TAXES & LEGISLATION
- California’s Tax Revenue Keeps Rolling
- State Revenue Windfall Creates “Budget Session Like No Other”
- 7 Dem Legislators Oppose New Wealth Tax
- Chamber of Commerce Releases Annual “Job-Killer” Bills List
WATER & POWER
- After No March Miracle Rains, Drought Response Begins
- Golden State Utilities Scramble to Avoid Summer Blackouts
Capital News & Notes (CN&N) harvests California legislative and regulatory insights from dozens of media and official sources for the past week, tailored to your business and advocacy interests. Please feel free to forward.
READ ALL ABOUT IT!!
FOR THE WEEK ENDING MAR. 26, 2021
Newsom to Potential Dem Recall Rivals: Don’t Even Think About It!
Politico
Gov. Gavin Newsom’s camp has one message for Democrats considering a California recall bid: Don’t even think about it.
The mere hint of a candidacy draws immediate condemnation from Newsom attack dog Sean Clegg, while other Newsom surrogates are making clear publicly and privately that any Democratic challenger will become persona non grata in the party.
The topic of a Democrat potentially getting into the race is the prevailing obsession among elected officials, donors and political consultants in California. There are two schools of thought. In one view, not running a backup candidate would be an unforgivable oversight that could allow a Republican to waltz into office with a plurality of the vote. In the other, a Democrat’s entry would signal weakness and disunity when Newsom needs his allies more than ever — potentially ensuring the second question is necessary.
Minutes after POLITICO reported this week that former Democratic presidential candidate Tom Steyer was surveying voters on his recall chances, Clegg tweeted that Steyer doesn’t want to be “the cynical, vulture-investing billionaire who bet against Democratic unity so Trump Republicans can take CA.”
After former Los Angeles Mayor Antonio Villaraigosa called for California schools to reopen immediately amid talk of a potential candidacy, Clegg last week fired off a clear rebuke: “My old friend Antonio will embarrass himself and forever poison his legacy if he runs,” he wrote.
“That’s how you lose,” Clegg, a strategist for Newsom, said in an interview. “We need to hold our base.”
It is all but certain that California will have its second gubernatorial recall ever, likely this fall, based on an official state signature tally released last week. The state’s unique recall system lends itself to a delicate intraparty dance. California asks two questions: first, do you want to recall Newsom, and second, who should replace him if the recall is successful? The rules don’t allow Newsom to appear on that replacement list of contenders who would take his job.
As the prospect of a Villaraigosa candidacy gained steam in recent weeks, other Newsom allies tried to blunt that momentum. Former Assembly Speaker Fabian Núñez declined to share his private conversations with Villaraigosa and stressed that he does not speak for the former mayor, but Núñez predicted that “at the end of the day, all of the Democratic establishment and Democratic activists are going to be on the side of Gov. Gavin Newsom.”
“We can’t make the same mistake twice,” Núñez said, invoking the ill-fated entry of Democratic Lt. Gov. Cruz Bustamante in the 2003 recall won by Republican Arnold Schwarzenegger. “I don’t see Democrats repeating that exercise again.”
If Democrats play their cards wrong and Newsom is recalled without a leading Democrat on the ballot as an option, a high-name ID Republican could take the top job with a quarter of the vote in one of the nation’s bluest states.
“The only time I worry about a Republican [not] winning this seat is if one credible Democrat gets in,” said Anne Dunsmore, who runs one of the recall committees that are on the verge of qualifying the election.
One Democratic lawmaker said this week that California’s two-question approach needs an overhaul. “The crazy thing about our system is that many more people can vote to keep the incumbent in office than the person who ends up replacing the incumbent,” said Sen. Ben Allen (D-Santa Monica).
The dance around the recall forces California Democrats to balance two elemental political motivations: self-preservation and opportunism. Any ambitious Democrat who runs and fails would topple off the career ladder into political oblivion. No one has forgotten the implosion of Bustamante after he jumped into the 2003 race. But the recall also offers a tantalizing chance to leapfrog into the governor’s office.
For now, Democrats have projected unity behind Newsom. At event after event, Democrats seen as potential contenders have pledged their fealty to the governor and lambasted the recall as a partisan distraction.
The governor’s team has also sought to squelch a challenge from the left, reaching out to progressive California Democrat Rep. Ro Khanna to enlist the support of Sen. Bernie Sanders (I-Vt.) and rolling out an endorsement from Sen. Elizabeth Warren (D-Mass.). They’re trying to signal that Newsom may have sometimes fallen short, but he is far superior to a Republican.
“I made the case [to Sanders] that he really needed to weigh in, that this is a Republican attempt to take over California,” Khanna said in an interview. “I understand there may be some progressive disappointment in [progressive] goals not being achieved yet, such as single-payer, but this is the time we really need to unify against the recall.”
Newsom remains in a relatively strong position, with an approval rating hovering around 50 percent — far better than Gov. Gray Davis had before he was ousted by voters. Democrats contemplating a run are likely to wait and see where Newsom stands closer to a likely fall candidate filing deadline.
“If I’m wondering, ‘Am I going to go sailing in 90 days?’ I’m going to wait 89 days and see what the weather is,” said Rob Stutzman, a Republican political consultant who worked for Schwarzenegger.
If Newsom can’t muster a majority to fend off being recalled, a Democrat would enjoy powerful advantages on the second question of whom to replace the governor. California remains an overwhelmingly Democratic state.
The larger risk-benefit calculus could favor the entry of a Democrat who doesn’t currently hold public office and thus has less to lose. Political observers are closely watching Villaraigosa, who lost to Newsom in the 2018 gubernatorial primary. Villaraigosa, a public affairs partner at Mercury, has name recognition and could activate a political support network in Los Angeles, a power base that would counterbalance Newsom’s Bay Area roots.
The former mayor has been coy about his intentions, criticizing the recall without explicitly ruling out a run. But he has been an outspoken critic of continued school closures, a major liability for Newsom. Education policy was a dividing line in the 2018 primary, with charter allies spending millions to boost Villaraigosa and unions rallying to Newsom’s defense.
Steyer also looms. The Democratic former presidential candidate has a long history of wading into California politics, no office to lose but considerable personal wealth to fund a campaign.
And there’s always a nuclear option.
If polls suggest Newsom is in serious trouble as the recall draws closer, the governor could resign from office. That would allow Lt. Gov. Eleni Kounalakis to take over the job and short-circuit the recall tied to Newsom — while undoubtedly raising the hackles of Republicans.
“In September, he could be doing great and we’ll proceed,” said Democratic political strategist Christine Pelosi, daughter of House Speaker Nancy Pelosi. “But if he’s really underwater, it may be that no Democrat could win. Then, he should step down as governor and Eleni Kounalakis should be the governor, and they should cancel the election. In that case, the Democratic Party would retain the governorship.”
Poll Shows Newsom in Strong Position
Politico
Pollster Adam Probolsky and Around the Capitol’s Scott Lay released the poll, which surveyed 900 California voters between March 13-16, and has a margin of error of 3.3 percentage points. Some trends to watch:
— Newsom’s fav/unfav rating: The governor is still above water. Among all voters, Newsom has a 42 percent favorable vs. 39 percent unfavorable rating. The gap is even bigger among voters likely to vote in the recall election — 47 percent favorable to 37 percent unfavorable, which Probolsky notes is “not really typically a rich environment for canceling someone, or for getting them unelected.”
— Recall, pass or fail: Forty-six percent of all voters said they’d vote no on the recall, versus 40 percent who’d vote yes. Among likely voters, again, there was an even bigger gap: 52 percent yes to 34 percent no, the poll shows.
— Gender gap: Forty-four percent of men said they’d vote yes to the recall, but just 37 percent of women said the same — even though recall proponents have said half of those who’ve signed petitions are women.
— Ethnicity: Latino voters seemed the most receptive to the recall in California, with 45 percent saying they back it. And it was downhill from there: 39 percent of white voters were in favor of the recall, as well as 29 percent of Asian voters and 19 percent of Black voters. GOP strategist Luis Alvarado said that’s a warning sign: “Either side would be guilty of political malpractice if they do not have a robustly funded [and] well staffed Latino strategy behind this race.”
The Central Valley is the recall backers’ best bet currently — the only region of California to back it at 52 percent.
California Democrats enjoy a 22 percent advantage in voter registration this year, and “there are at least 10 Democratic majority counties,’’ including Los Angeles (5.8 million voters) and Alameda (962,000), Probolsky and Lay noted. By contrast, there are just two GOP-majority counties in the state: Lassen (15,500 voters) and Modoc (5,000).
That means the recall backers — having just done all that hard work of collecting signatures — have a lot of really, really hard work ahead of them.
https://www.probolskyresearch.com/2021/03/23/newsom-recall-poll/
New Appointed CA Attorney General Continues Progressive Justice Dept. Leadership
New York Times
Gov. Gavin Newsom named Rob Bonta, a Democratic state legislator and loyal political ally, to succeed Xavier Becerra as attorney general, placing an advocate of criminal justice reform and a rising Asian-American progressive at the helm of California’s largest law enforcement agency.
The announcement came slightly less than a week after Mr. Becerra’s narrow confirmation as health and human services secretary for President Biden. It also came at a politically fraught time for Mr. Newsom, who has been under pressure to shore up his base in the face of a recall campaign and to take a hard line on recent racial violence against Asian-Americans.
The son of civil rights activists, Mr. Bonta, 48, was born in the Philippines and will be the first Filipino-American to hold the office. He grew up in California’s Central Valley, where his parents helped organize farm workers before moving to the Sacramento area. Mr. Bonta, who called the appointment “an honor of a lifetime,” is a graduate of Yale University, where he earned a bachelor’s degree in history and his law degree.
A former San Francisco deputy city attorney, Mr. Bonta served briefly on the Alameda City Council before running for the State Assembly, where he has represented the East Bay since 2012. As a legislator, he carried bills to eliminate the use of cash bail — a measure that the state’s voters overturned in November — and to phase out California’s use of private prisons. He also was among numerous co-authors of an unsuccessful constitutional amendment to repeal the death penalty.
Mr. Bonta was endorsed by Democrats seeking to overhaul the state’s criminal justice system, which in recent years has swung back from tough-on-crime policies. Mr. Bonta shares the governor’s opposition to the death penalty and supported a new law that will require him as attorney general to investigate fatal police shootings of unarmed civilians.
The attorney general’s office in California is viewed as a reliable springboard to higher office, and past occupants have included Ms. Harris and former Gov. Jerry Brown. Competition had intensified as it became clear that Mr. Becerra, a former congressman, might return to Washington.
The new state law giving the attorney general a pivotal role in police shootings also heightened interest in the appointment, as civil rights advocates pushed the governor to name someone who would aggressively investigate police misconduct, while law enforcement groups lobbied for a traditional law-and-order candidate.
Against that backdrop, the attorney general vacancy was less a political plum than an opportunity to disappoint factions. House Speaker Nancy Pelosi had urged Mr. Newsom to appoint Representative Adam Schiff, who has long aspired to statewide office, and who, as chairman of the House Intelligence Committee, managed Mr. Trump’s first impeachment. Mr. Newsom also was urged by various groups to name an African-American, a woman, a member of the L.G.B.T.Q. community, another Latino or an Asian-American or Pacific Islander.
Mr. Bonta, who has never campaigned outside the Bay Area, will have to run statewide in two years for re-election, as will the governor’s appointees for Senate and secretary of state and the governor himself, if he is not recalled in special election expected later this year.
State ethics watchdogs last year also questioned Mr. Bonta’s use of a nonprofit to raise money for other nonprofits where his wife worked — an aggressive but legal maneuver that prompted an author of California’s Political Reform Act to recommend a change in the state law.
California’s Tax Revenue Keeps Rolling
CalMatters & Dept. of Finance
Money just keeps flowing into California. Newsom announced this week the Golden State has collected $14.3 billion more than was anticipated in January’s revenue forecast, an influx that follows $150 billion in federal stimulus and an estimated $15 billion state surplus. And the state has already spent around $9.6 billion of the money on $600 stimulus payments for millions of low-income Californians and relief funds for small businesses.
Tax Receipts:
Preliminary General Fund agency cash receipts for the first eight months of the fiscal year were $14.34 billion above the 2021-22 Governor’s Budget forecast of $111.518 billion. Cash receipts for the month of February were $3.801 billion above the 2021-22 Governor’s Budget forecast of $4.994 billion. A significant amount of receipts above the January forecast is due to lower refunds caused by a later enactment date for the Golden State Stimulus than expected at the Governor’s Budget, as well as a delayed opening date of the tax filing season by the Internal Revenue Service.
Personal income tax cash receipts to the General Fund for the first eight months of the fiscal year were $12.777 billion above forecast. Cash receipts for February were $2.973 billion above the month’s forecast of $2.078 billion, largely due to lower refunds due to the issues noted above. Withholding cash receipts were $485 million above the forecast of $6.09 billion. Other cash receipts were $325 million above the forecast of $698 million. Refunds issued in February were $2.196 billion below the expected $4.651 billion. Proposition
63 requires that 1.76 percent of total monthly personal income tax collections be transferred to the Mental Health Services Fund (MHSF). The amount transferred to the MHSF in February was $32 million higher than the forecast of $58 million.
Sales and use tax cash receipts for the first eight months of the fiscal year were $760 million above forecast. Cash receipts for February were $592 million above the month’s forecast of $2.612 billion. February included a portion of the final payment for fourth quarter taxable sales.
Corporation tax cash receipts for the first eight months of the fiscal year were $721 million above forecast. Cash receipts for February were $227 million above the month’s forecast of $165 million. Estimated payments were $106 million above the forecast of $135 million, and other payments were $104 million above the $125 million forecast. Total refunds for the month were $18 million lower than the forecast of $95 million.
Workforce:
California’s annual labor force and employment losses in 2020 were -2.8 percent and -8.9 percent, respectively (previously estimated at -2.3 percent and – 8.6 percent, respectively). California’s nonfarm job loss in 2020 was -7.4 percent (previously estimated at -7.0 percent). The annual benchmark process revised labor market series back through 1976. The state’s unemployment rate was revised up from 3.9 percent in the seven months through February 2020 to 4.1 percent from April 2019 to November 2019 and
4.3 percent in February 2020. The record- high unemployment rate in April 2020 was revised down from 16.4 percent to
16.0 percent.
California’s unemployment rate decreased
to 9.0 percent in January, down from
9.3 percent in December, but
4.7 percentage points higher than February 2020’s pre-pandemic rate of 4.3 percent. California’s labor force fell by 36,500 people, with 764,000 fewer Californians in the labor force in January 2021 than in February 2020.
Housing & Real Estate:
California housing units authorized by building permits increased 14.2 percent from December 2020 to a seasonally adjusted annualized rate of 136,000 housing units in January 2021, 12.5 percent higher than in January 2020. Single-family permits issuance in January 2021 was down 2.6 percent from the prior month and down 2.1 percent from the previous year to 66,000. Multifamily permits issuance increased by 36.2 percent from the prior month and by 30.6 percent from the previous year to 71,000 multifamily units.
nSales of existing, single-family detached homes in January 2021totaled 485,000 units at a seasonally adjusted annualized rate, down 4.9 percent from the prior month but up 22.5 percent from the previous year. The median price of existing, single-family detached homes sold statewide in January was $699,980, down
2.5 percent from the prior month but up 21.7 percent from the previous year.
https://www.dof.ca.gov/Forecasting/Economics/Economic_and_Revenue_Updates/documents/2021/Mar-21.pdf
State Revenue Windfall Creates “Budget Session Like No Other”
CalMatters
During the last cataclysmic recession, California’s state government was forced to cleave billions from its budget to close an historic deficit. This year, thanks to a very unequal economic downturn and a tax code that relies on the wealthy, the state is swimming in cash, even during the pandemic. The waterline inched up even more earlier this week when the California Department of Finance announced that tax revenue is coming in $14.3 billion over an earlier forecast. And now that President Joe Biden has signed the biggest economic relief bill in U.S. history, another wave of moneyis on its way.
The only challenge left for state lawmakers is to figure out how to spend it all.
Before they do, they will have to answer some thorny questions: In a year of unprecedented need, whose pleas for help will be prioritized? Between the governor, who has wielded unprecedented emergency spending power since the beginning of the pandemic, and an increasingly frustrated Legislature, who will ultimately make those decisions and who will oversee the spending? And once the windfall from Uncle Sam arrives, what terms and conditions apply?
“This has not been like any other budget season that we’ve had,” said Assemblymember Vince Fong of Bakersfield, lead Republican on the Assembly Budget Committee. Earlier this year, state lawmakers passed a series of emergency spending bills — on cash assistance, a school reopening plan, rental assistance — breaking from the typical budget-writing schedule.
“In addition to that, you have the state windfall and then you have the federal resources coming as well,” said Fong. “We’ve got so many moving parts. I don’t know if there’s a playbook for that.”
Roughly $150 billion is on its way to California from Washington, D.C., from the $1.9 trillion American Rescue Plan. The bulk of that cash either circumvents the state government — including $40 billion in checks to households and $16 billion in direct relief to cities and counties — or has to be spent on specific programs such as vaccinations, child care or preparing schools for reopening.
But $26 billion will go directly into a state budget already brimming with cash. Those funds come with very few strings attached; in a memo issued Tuesday, the nonpartisan Legislative Analyst’s Office called it “flexible funding.”
Under the broad conditions set by the federal legislation, this latest round of relief money to the state has to be spent addressing some aspect of the “public health emergency” or its “negative economic impacts,” on pay for essential workers, on making up for lost tax revenue or on making “necessary investments in water, sewer, or broadband infrastructure.”
In other words, it can be spent on a whole lot. The state has until the end of 2024 to spend the $26 billion.
There are a few other restrictions. The federal relief bill also prohibits states from using the funds to either prop up their pension systems, something Republicans in Washington were loath to subsidize, or to cut taxes.
The prohibition on tax cuts could prevent California from passing COVID-related relief that enjoys bipartisan support in Sacramento. Those blocked proposals include one that would keep small businesses that received federal loans last year from having to pay taxes on the rescue money, along with tax credits for poorer Californians and housing developers. Last week, Keely Bosler, director of California’s Department of Finance, wrote a letter to Treasury Secretary Janet Yellen seeking some extra flexibility around those rules.
But even with those conditions, the federal bill gives state lawmakers plenty of leeway over how to divvy up the cash. And even in a state the size of California, $26 billion is a significant chunk of change.
In January, Gov. Gavin Newsom put forward his preliminary budget for the current year, proposing a record-breaking $165 billion in discretionary spending. The federal relief money expands that pot of cash by another 16%.
Phil Ting, the Democratic chairperson of the Assembly Budget Committee, contrasts this year’s financial picture with the one California lawmakers faced in 2009. Amid the collapse of the national housing market and substantially less federal relief, legislators cut nearly $16 billion in spending and raised taxes by another $4 billion that year.
“As we learned last time…going too small extends the recession,” said Ting, who represents San Francisco.
And though the incoming federal money and the cushion of extra state tax revenue constitutes an unprecedented budget windfall, Ting said the need is also unprecedented. “It doesn’t feel like that much money given the amount that was lost in the economy.”
Among the expensive problems the pandemic has foisted on state government: Closed schools, a backlogged and chronically dysfunctional unemployment claims system, spiking utility debts and the need to vaccinate every adult in California. Homelessness, wildfire prevention, patchy Internet access and poverty are perennial challenges that haven’t gone anywhere.
The requests from activists and lobbyists are already pouring into the state Capitol.
Last week, a coalition of county governments, hospitals and nonprofits asked the governor to set aside $8 billion for broadband internet.
That came a week after the California Cable & Telecommunications Association sent in its own request that $1 billion go to a high-speed internet development program — and that the state temporarily nix the cable bill surcharge that pays for it.
The California Chamber of Commerce is likewise hoping lawmakers will use some of the extra cash to pay down the state’s unemployment insurance debt, which is set to be paid for with a payroll tax.
Anthony York, a spokesperson for the California Medical Association, which advocates for the state’s doctors in Sacramento, has another idea: “There’s a strong case to be made that much of that money should go to health care and expanding health coverage and fortifying our health care infrastructure.”
He’d like the state to support small physician practices that have struggled as patients have delayed non-essential visits, and to boost the rates that doctors receive from Medi-Cal, the public health insurance system for low-income Californians.
Advocates for low-income Californians say they hope funds are prioritized for those most harmed by the pandemic and economic downturn, even if that demographic employs fewer lobbyists.
“There’s a frenzy I’m sure to come up with good ideas” for how to use the money, said Jennifer Fearing, who lobbies for the state’s association of nonprofits, including Meals on Wheels. “I would surmise that not all of them are tied to our values or to some of the pressing disparities that were really made clear during the pandemic. I would hope we can prioritize those.”
Chris Hoene, executive director of the California Budget & Policy Center, said he welcomes that political debate.
“There’ll be political contention about what should be prioritized and what should receive more funding,” he said. “But that’s certainly a better situation to be in than having to have political fights over who gets cut and who doesn’t get cut, which is what we experienced last time around.”
Another source of political tension: The contention between the Newsom administration and the Legislature over which branch of government has the ultimate say over where this money goes.
It’s a fundamental separation-of-powers debate that’s been brewing in Sacramento for more than a year now. California law gives governors expansive authority to spend money as they see fit during emergencies. Newsom has made ample use of that power since the beginning of the pandemic.
That’s rankled some legislators, including Democrats, who have been complaining since last summer of being snubbed or left out of the loop. Calls for additional oversight have become louder following media reports on no-bid contracts awarded by the Newsom administration to businesses that were either poorly vetted or to political donors or favored businesses.
Because the federal money will arrive in the middle of the budget-writing process, it ought to be subject to the same checks, balances and transparency requirements as any other kind of spending, said Ting.
But the governor’s most recent budget proposal includes a provision that would allow the administration to make use of incoming federal funds for COVID relief however it chooses without notifying the Legislature.
In an Assembly hearing last week, Department of Finance analyst Stephen Benson said the administration would use the power only “in the specific situations where immediate response is necessary.”
Asked whether that provision would allow the governor to spend federal money without approval from the Legislature, Ting said there was legal ambiguity.
“Ask ten lawyers and you’ll probably get 20 different opinions,” he said. But, he noted, “the Legislature’s main authority is to appropriate money.”
7 Dem Legislators Oppose New Wealth Tax
CalMatters commentary
Feeling overtaxed and frustrated with the cost of doing business in California, some of the state’s wealthiest residents abruptly moved out of state in recent months.
Elon Musk, the world’s richest person, went to Texas, which has no income tax. Billionaire Larry Ellison, the CEO of software giant Oracle, moved to Hawaii and relocated his company headquarters to Texas.
While there may not be much sympathy for executives who are choosing to leave our beautiful state, the exodus of these jet-setters has painful consequences for all Californians.
Despite popular political slogans to the contrary, millionaires and billionaires already contribute a disproportionately large share of our state’s income tax revenue. California has long maintained the highest personal income tax rates in the nation for its wealthiest residents. The result: the top 1% of state taxpayers contribute nearly half of California’s personal income tax receipts. They provide vital funds for education, health care and social services.
Amid the COVID-19 crisis, the wealthiest Californians have been crucial to keeping our state budget afloat. Despite the economic calamity afflicting many segments of the economy, the surging stock market has produced higher-than-expected tax revenue for the state. This has resulted in at least a $15 billion budget surplus that will allow the Legislature to reverse cuts to schools, health care and local governments.
The crucial importance of this windfall against the current economic backdrop cannot be overstated. Put simply, if more billionaires flee California, the tax burden on the rest of us will increase.
The pandemic has stripped bare long-standing economic and racial inequities in our state and nation. Small businesses, which employ nearly half of the private workforce, have permanently shuttered in record numbers. Consequently, unemployment has reached record levels. Tragically, people of color are becoming infected and dying from COVID-19 at a much higher rate than the rest of the population.
California Democrats are committed to leading the state to an inclusive economic recovery, but there is disagreement about the best strategy to move forward in a way that lifts up all Californians. Some have proposed new wealth taxes to address income inequality and further bolster state revenues.
We believe there is a better way.
Rather than raising income taxes even higher, we should take focused actions to build on successful strategies that create jobs, drive innovation and support working families.
We should continue to expand the Earned Income Tax Credit, which puts cash in the pockets of the working poor. We need to restore the Research & Development Tax Credit, which spurs the innovation that drives our economy.
We must extend a lifeline to small businesses to help them survive the pandemic. Critically, we must ensure that workers have jobs to return to and our local governments have revenues to provide vital safety-net services.
California will always be an attractive place to live, but there is a tipping point. Proposals that drive away California residents who fund a large share of our state’s budget will ultimately hurt everyone we represent – we will have less money for schools, health care, job training and everything else our communities need. That is why we have joined together to oppose any additional wealth taxes proposed in the Legislature.
Unwise tax policy can sabotage California’s recovery. We must focus on growth that uplifts all Californians. This is the best way to rebuild our economy, create good jobs and make the California dream a reality. The only winners from raising personal income taxes in California will be high-end real estate agents in Texas.
Assemblymember Cottie Petrie-Norris, a Democrat from Laguna Beach
Assemblymember Tom Daly, a Democrat from Anaheim
Assemblymember Tim Grayson, a Democrat from Concord
Assemblymember Sharon Quirk-Silva, a Democrat from Fullerton
Assemblymember James Ramos, a Democrat from San Bernardino County
Assemblymember Carlos Villapudua, a Democrat from Stockton
Assemblymember Blanca Rubio, a Democrat from Baldwin Park
Chamber of Commerce Releases Annual “Job-Killer” Bills List
Sacramento Bee
The California Chamber of Commerce is out with its 2021 list of so-called “Job Killer” bills — 18 bills that CalChamber argues would place employers and the state’s economy in harm’s way. The Chamber annually designates bill opposition and historically defeats a high percentage.
“Many of these bills — particularly the labor and employment ones — seem to be solutions in search of a problem,” CalChamber President and CEO Allan Zaremberg said in a statement. “Are policy makers unaware that unemployment filings increased last month? California employers cannot be the safety net for struggling workers. The billions of dollars coming to the state from the American Rescue Plan should be used to provide the safety net for struggling workers and help get businesses back up and running.”
So what’s got CalChamber so concerned?
Well, there’s Assemblywoman Lorena Gonzalez’s bill AB 1003, which would punish employers found guilty of wage theft with jail time.
“Despite California’s onerous, confusing, and always changing wage and hour laws, (the bill) proposes to criminalize small employers, managers, and supervisors, who in good faith, make a mistake in the application of the law, that even the Labor Commissioner and the courts disagree with on how to interpret,” CalChamber said.
Gonzalez took to Twitter to give her response.
“I didn’t think my view of them could get any lower. I was wrong,” she wrote.
What else made the cut?
https://advocacy.calchamber.com/2021/03/22/calchamber-releases-2021-job-killer-list/
After No March Miracle Rains, Drought Response Begins
Sacramento Bee & Dept. of Water Resources
The rainy season is nearly over, there’s been no “March miracle” and the possibility of parched lawns and fallowed farm fields is growing.
State and federal officials issued remarkably bleak warnings Tuesday about California’s summer water supplies, telling farmers and others to gear up for potential shortages.
The Department of Water Resources, in a rare turnabout, actually lowered its forecast of the deliveries it expects to make to the cities and farms that belong to the State Water Project. In its new forecast, the agency said its customers can expect just 5% of contracted supplies. In December the expected allocation was set at 10%.
The U.S. Bureau of Reclamation, which supplies water mainly to farmers through the Central Valley Project, said that due to worsening hydrological conditions, the 5% water allocation promised to its customers south of the Sacramento-San Joaquin Delta “is not available for delivery until further notice.”
While stopping short of officially declaring a drought — a task reserved for Gov. Gavin Newsom — the announcements served notice that California is almost certainly heading into one. The Department of Water Resources said it filed a revised “drought contingency plan” with the Department of Fish and Wildlife; the document will serve as a kind of road map for managing water supplies and monitoring impacts on endangered species.
“Californians — we know drought, we know how to manage it,” Karla Nemeth, director of the Department of Water Resources, said in an interview. “This is going to test us. We do have the tools that we need.”
She said an official drought declaration is still likely a year away, depending on how much it rains and snows next winter, but already “we’ve had a few conversations about that.” Even without a declaration, state officials want “to start troubleshooting and reaching out to communities so they don’t run into … water supply emergencies,” she said.
The signs of drought are many.
Rain and snow have been well below average, and the state’s network of reservoirs are holding less water than usual. The U.S. Drought Monitor, a weekly snapshot created by the federal government, shows that drought conditions have enveloped 91% of California’s landmass; more than a third of the state is in “extreme” or “exceptional” drought.
Meanwhile, the State Water Resources Control Board announced late Monday that it had mailed early warning notices to 40,000 farmers, municipal officials and others, telling them to prepare for potential shortages.
“Start planning now for potential water supply shortages later this year and identify practical actions you can take to increase drought resilience, such as increasing water conservation measures, reducing irrigated acreage, managing herd size, using innovative irrigation and monitoring technologies, or diversifying your water supply portfolio,” the letter read in part.
Joaquin Esquivel, chairman of the water board, said the letters are intended to notify water-rights holders that their legal rights to pull water from rivers and streams could be limited.
“It’s the reality that conditions are so dry that curtailment is a possibility and we’re wanting everybody to be on notice,” he said.
Esquivel said a drought-emergency declaration by the governor would make it easier to curtail users’ water rights, but curtailment can occur even before the governor acts. In the last drought, some water districts sued the state to protect their water rights, although the state was still able to use curtailment orders to keep millions of gallons of water in the rivers.
Water shortages would affect rural and urban Californians alike. Notably, 19 million urban Southern Californians depend on the State Water Project for roughly a quarter of their annual supply.
“The state’s deteriorating water supply conditions reinforce the need to maintain the lower water use we have seen among Southern Californians since the last drought,” Jeff Kightlinger, general manager of the Metropolitan Water District of Southern California, said in a prepared statement.
During the last drought, considered among the worst in recorded history, farmers idled millions of acres of land while most urban Californians were ordered to limit their lawn watering. Former Gov. Jerry Brown declared an end to that drought in spring 2017, following one of the wettest winters ever.
This year California is enduring its second consecutive dry winter. The Sierra Nevada snowpack — whose spring melt is ordinarily crucial to replenishing the state’s major rivers and reservoirs — is 37% thinner than normal for this time of year. Shasta Lake, the state’s largest reservoir, is one-third emptier than usual for this date, while Lake Oroville is about half as full as it should be.
Rainfall has been about half what it should be in Northern California, and the handful of light storms in recent weeks hasn’t helped much. Sacramento, for instance, has received just 1.29 inches of rain this month; the average is 3.02 inches. For the most part, rain and snow stop falling around April 1.
The meager water projections are especially troubling in California’s $50 billion-a-year agricultural industry, which supplies 100% of the nation’s processing tomatoes, 88% of its strawberries and 57% of its peaches — to name a few commodities that rely largely on the state’s farmers.
U.S. Agriculture Secretary Tom Vilsack, in a letter to Gov. Gavin Newsom, recently declared 50 counties as natural disaster areas due to drought, making farmers eligible for emergency loans and other assistance. Farmers in neighboring counties also are eligible, Vilsack said, meaning farmers in all 58 counties can receive the aid.
The San Joaquin Valley, the heart of California agriculture, is especially on edge. Valley farmers rely on Central Valley Project deliveries that are pumped through the Delta — the fragile estuary whose declining fish populations mean that pumping operations often get scaled back.
In a dry year, the Delta bottleneck can make a bad year even worse, and now the Bureau of Reclamation has put its 5% allocation on hold to south-of-Delta customers.
“We’re bracing for some hard times,” said Joe Del Bosque, a prominent melon and almond grower in western Fresno and Merced counties.
If water allocations don’t improve, “it’s going to be very dire,” he said. “It reverberates through the whole Valley.” Del Bosque said he’s worried about having enough water to plant the organic cantaloupes and other melons he sells to Safeway, Whole Foods and other grocers.
“Also it’s important to keep our people working,” Del Bosque said.
https://www.sacbee.com/news/california/water-and-drought/article250145884.html#storylink=cpy
Dept. of Water Resources announcement:
https://water.ca.gov/News/News-Releases/2021/March-21/SWP-Allocation-Update-March-23
California Utilities Scramble to Avoid Summer Blackouts
San Bernardino Sun
State agencies and electric utilities are scrambling to shore up power supplies in hopes of avoiding the rolling blackouts that left 800,000 California homes and businesses without power during a record-breaking heatwave last August.
That means gas-fired power plants could be called on more, instead of less, at a time when the state is trying wean itself from fossil fuels that produce greenhouse gases.
Already last year, state regulators extended the life of outdated gas-fired power generators in Huntington Beach, Long Beach, Redondo Beach and Oxnard, all of which had been scheduled to shut down at the end of 2020. And now, the state is considering a second extension for the Redondo Beach plant, which is currently scheduled to close at the end of this year.
Environmentalists are at odds with regulators and utilities over how to address the shifting energy landscape. But both sides agree that more needs to be done to meet clean energy goals at a time of when the Diablo Canyon nuclear plant and several gas-fired plants are scheduled to close, climate change is increasing summer electricity demands, and the phasing out of gasoline cars and natural-gas buildings will boost year-round electricity needs.
Legislators are also becoming increasingly aware of the steep challenge ahead if California is to meet its targets of 60% green energy by 2030 and 100% by 2045.
“To meet our state’s goals, we must build six gigawatts of new renewable and storage each year … equivalent to powering approximately 4 million homes with clean energy every year,” Sen. Dianne Feinstein said in a March 19 letter to California Public Utilities Commission President Marybel Batjer. Feinstein called on the commission to let her know of its priorities for possible inclusion in any future federal infrastructure package, such as the proposal now being prepared by the White House.
But the more urgent concern is getting the state through the next couple summers.
Like the deadly February power outages in Texas, California’s shortfalls last summer have been linked to more extreme weather resulting from climate change. The biggest threat to California, though, is heat rather than cold.
Another difference is the extent of the threat, with widespread agreement that California’s electrical grid is more integrated than the grid in Texas, and that California has more contingencies in place to address temporary power shortages.
But as last summer proved, that was not enough.
The state’s “Final Root Cause Analysis” found the rolling blackouts on Aug. 14 and 15 resulted from a combination of increased demand, inadequate supplies, a now-fixed software glitch, the export of power to out-of-state utilities, gas-fired plants unable to run at full capacity and out-of-state suppliers with no energy left to sell to California.
It was a problem anticipated, in part, in a state readiness report for the summer of 2020 that was written by the non-profit, quasi-governmental agency known as CAISO, which coordinates 80% of power delivery in the state. The report noted that if a heatwave extended beyond California to neighboring states that sell energy to the Golden State, there would be risk of an electricity shortage.
In an effort to shore up supplies for this summer, the state Public Utilities Commission on Thursday, March 25, will consider a proposal that, among other things, calls for a 2.5% increase in the amount of energy procured by the state’s three major utilities, Southern California Edison, San Diego Gas & Electric, and Pacific Gas and Electric.
The plan also seeks to reduce demand at critical junctures by adjusting and increasing the possible number of “critical peak pricing” periods when utilities charge the most for electricity, and by allowing large commercial customers to pay a lower rate if they allow the utility to reduce the amount of power available when there’s a threat of blackouts.
But green-power activists oppose the proposal, saying there should be more emphasis on reducing demand and less on increasing supplies from existing sources.
“All of that gas burning is what we need to get away from, but instead we’re leaning into it,” said V. John White, executive director of the non-profit Center for Energy Efficiency and Renewable Technologies. Along with the Sierra Club and other environmental groups, White’s organization wants strict limits on utilities procuring additional energy from gas-fired plants.
White and other environmentalists also are calling for the commission to require utilities to offer more incentives to residential customers — particularly low-income residents — to use less energy during critical periods and an easier process for residential customers with solar panels to sell their energy to the electrical grid.
Edison, which provided recommendations to the commission and supports the proposal, said those suggested alternatives aren’t practical to get in place by summer.
“These programs take a fair amount of effort, so we are focused on what would give us the most resources quickly,” said William Walsh, Edison’s vice president of energy procurement.
And where will the additional energy come from, if needed?
“That’s the key question now,” Walsh said. “There’s only so much that exists. There’s probably very little left so we’ll probably be looking outside of the state.”
He acknowledged that there could be cost increases for customers but said he couldn’t predict how much.
Natural-gas power plants in Huntington Beach and Long Beach fired up long-planned, new generators in 2020. Intended to replace existing units, the new generators are smaller, and get twice as much energy from the same amount of gas. Unlike the old generators, they don’t suck in ocean water for cooling and so do not harm sea life.
The units typically operate only in the evening and early morning, when solar and wind power is minimal. Unlike the old generators, which can take as much as three days to start running, the new units can start up in 20 minutes.
The last of the old generators at those two plants, as well as those in Redondo Beach and Oxnard, most built in the 1950s and 1960s, had been scheduled to shut down in 2020 as part of a state mandate to eliminate power units that harmed sea life. In Redondo Beach and Oxnard, there were no replacements built because of the transition to clean energy. As a result, the plants were scheduled to shut down entirely.
But, last year, concerns over adequate power supplies resulted in extensions for the old units. In Redondo Beach, where local opposition to the extensions was strongest, a new closure date was set for the end of 2021. At the other three sites, the approved shutdown date is 2023.
“The two heat storms in 2020 showed that the California planning margins need to be increased to account for more extreme heat events,” said Public Utilities Commission spokesperson Terrie Prosper. “Concerns for 2021 will carry over into 2022 and 2023, until sufficient new resources can be built to meet the new planning needs based on extreme weather events.”
Then there’s the longer-range energy needs, where renewable energy activists disagree with the commission on several fronts. Differences include including how much clean juice should be required by mid-decade and how carbon emissions are measured in reaching the 2030 goal of a 60% reduction.
The state was ahead of schedule in meeting its 33% reduction goal for 2020, but some environmentalists take issue with that calculation and point to the old gas-fired plants that are still operating to help buoy their case.
While Prosper said the commission has called for 8,000 megawatts of new clean energy over the next four years — including 2,000 megawatts of storage capacity by this summer that was not available last year — activists say that’s not enough. The addition over four years would be a 17% increase to the maximum amount of energy pumped out at any time last year.
One clean-energy proposal getting legislators attention is the prospect of building windmills offshore of Northern California. Unlike onshore wind farms, those offshore would produce energy around the clock because of constant winds, according to Elizabeth Nickerson of Environment California.
https://www.sbsun.com/2021/03/23/california-scrambles-to-improve-electric-grid-for-summer-heat/