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IN THIS ISSUE – “Stewing in a Mix of Resentment and Desparation”
- Legislative Analyst Seeks to Curtail Governor’s Emergency Spending Powers
- Newsom’s School Re-Opening Deal Unlikely to Blunt Recall
- Governor’s Unusual State of the State Speech: Late & in LA
- Disneyland Closure Has “Profound Impact”
- Another Dry Year Looms – Sierra Snowpack Just 61% of Normal
- Chevron, Microsoft & Schlumberger Building SJV Carbon Capture Plant
- Stockton Guaranteed Income Experiment: Success or Overstated?
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.
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FOR THE WEEK ENDING MAR. 5, 2021
Legislative Analyst Seeks to Curtail Governor’s Emergency Spending Powers
CalMatters & Legislative Analyst’s Office
If lawmakers approve Gov. Newsom’s proposed budget, there would be “no reasonable checks and balances on the governor’s COVID-19 spending authority,” according to a striking Tuesday report from the nonpartisan analyst that advises the state Legislature. But the report doesn’t just take issue with Newsom’s proposal — it also critiques the underlying laws that make it possible, apparently hinting that the Legislature should consider changing them.
The Legislative Analyst said, “Our concerns … are reflective of the larger problems associated with the state’s emergency spending authorities that allow the governor to spend an essentially unlimited amount of funds on emergency-related activities with very little opportunity for legislative oversight.”
The report comes as a lawsuit to limit Newsom’s emergency authority — brought by Republican Assemblymembers Kevin Kiley and James Gallagher — awaits a ruling from a California appellate court.
Newsom’s budget proposal would extend by one year his administration’s ability to allocate emergency funds with minimal legislative notification, setting a new deadline of June 2022. It would also allow his administration to spend new federal or private funds without legislative approval or notification, in what the legislative analyst characterized as “a significant expansion of already fairly broad authority” and “an overreach of administrative authority.”
Legislative Analyst’s report:
https://lao.ca.gov/reports/2021/4393/Oversight-Emergency-Spending-030221.pdf
Newsom’s School Re-Opening Deal Unlikely to Blunt Recall
Politico
A long-awaited deal to encourage California’s schools to reopen may provide families hope, but it’s unlikely to swiftly improve Gov. Gavin Newsom’s political standing.
It has been almost a year since California schools shut their doors indefinitely to combat the coronavirus. In the months since, the protracted closures have become a primary source of the public anger propelling an effort to recall Newsom from office.
Republican contenders have lambasted the Democratic governor, with former San Diego Mayor Kevin Faulconer making a habit of holding campaign events outside schools and blasting Newsom again Monday for not demanding that they open immediately. Fed-up parents have mobilized across party lines.
Some of the most consequential political damage to Newsom has already been done, with recall organizers feeling confident they will qualify their special election this month. It may be too late for the governor to turn the tide against hundreds of thousands of voters who have signed petitions; he may now be focusing on saving his job ahead of a potential campaign.
Those dynamics have created a political imperative for Newsom to show progress. While he hailed a deal Monday for “creating conditions where we expect in-person instruction,” political observers said the legislation itself might not yield quick dividends for the embattled governor. The general reaction seems to be less a celebration than a shrug for now, especially since closed schools aren’t opening overnight.
“When it comes down to it, I’m not sure the public really cares,” said professor Julie Marsh, director of the University of Southern California’s Policy Analysis for California Education, noting that “pandemic fatigue has set in for many families” and “for some, they’re going to look at this and wonder what took so long and feel it should’ve happened sooner.”
In recent weeks, Newsom has spoken often of the need to move fast and pressured allies by warning that union demands would prevent schools from reopening this year.
After months of negotiations, Newsom and legislative leaders unveiled a pact to expedite the process by offering money to school districts that begin to return students by the end of March, including in areas of the state with higher infection rates. Plummeting coronavirus rates and Newsom’s decision to set aside vaccine doses for educators should put more schools in position to recommence in-person learning.
Even as Newsom touted the deal, it highlighted the limits of his authority over a decentralized archipelago of locally governed school districts. The agreement offers incentives for districts to reopen but does not require them to do so.
Democratic strategist Katie Merrill noted that “there’s a lot of carrot in this deal and not a lot of stick” — and voters could hold Newsom accountable if the carrot isn’t enough to entice school districts and unions.
“The governor doesn’t have a lot of control over that,” Merrill said, “but he’ll pay the price if the local school districts and teachers unions don’t reopen schools.”
Some parents immediately signaled that the plan will need to clear a high hurdle of skepticism. A statewide group advocating for schools to resume in-person instruction denounced the plan as a weak half-measure, noting it would allow some schools to remain closed and arguing for elected officials to take a more forceful approach.
“This isn’t a breakthrough, it’s a failure,” Berkeley parent and Open Schools California member Pat Reilly said in a statement. “Make no mistake, there will still be closed schools and kids left behind a month from now and months afterwards until the Governor, legislature or the courts force them open.”
The deal is unlikely to affect the recall’s chances of qualifying for the ballot. Proponents have been gathering signatures for months, capitalizing on widespread discontent that spiked during a second lockdown this winter. They claim they have already collected enough signatures to trigger an election, and the mid-March deadline to submit signatures will likely arrive before parents see much concrete reopening progress.
Meanwhile, teachers unions and reluctant families may resent the governor and lawmakers dangling money to reopen by April 1. While the deal preserves local control, school employee groups have been reluctant all year to return and have accused reopening proponents of minimizing their safety concerns.
If a funding influx does accelerate the reopening process, it’s not clear that would dispel the parental pique that has fueled an anti-Newsom backlash. The likeliest scenario is that some schools will welcome back students part-time during the waning months of the typical academic year.
They also will focus on the youngest grades, leaving middle and high schoolers home to wait for several more weeks. District-by-district decisions mean that process will look different depending on where families live.
“I think when the details come out, it’s going to leave a lot of people frustrated,” said Andrew Acosta, a Sacramento father and Democratic campaign consultant. “I think that’s where they are and where they’re going to be for the rest of the school year.”
For parents who have been stewing in a mix of resentment and desperation for nearly a full year, those partial and uneven results may not be enough to allay a deeply ingrained sense of disappointment with public officials who couldn’t get kids back to classrooms earlier or more fully. Democratic consultant Robin Swanson noted that, with the largely reviled former President Donald Trump gone, voters “are looking to hold leaders accountable for their frustrations” — Newsom among them.
Governor’s Unusual State of the State Speech: Late & in LA
CalMatters
Newsom’s administration announced the governor will deliver the annual State of the State speech on Tuesday. That’s the latest date in California history — never before has a governor delivered the State of State address after February, according to records maintained by the California State Library.
It will also be unusual in that Newsom will deliver it remotely from Los Angeles County in the evening, rather than in front of the state Legislature in Sacramento during the day. I talked with CalMatters political columnist Dan Walters, who’s been covering state politics for nearly 60 years, about the significance of these changes.
Me: “What do you think about the timing?”
Dan: “Prime time television, prime time television! Since the Legislature can’t convene anyway, you might as well get the maximum TV exposure out of the thing by doing it in LA.”
Me: “I wonder if he was waiting to have the speech until more schools announced they’re going to be reopening.”
Dan: “He could not really deliver a State of the State message with the whole school issue still unsettled. … He needs to have the indicators pointing upward: COVID infections down. Schools are reopening. The economy’s good. Bright future’s ahead. And you can give me all the credit … and not vote for the recall.”
Disneyland Closure Has “Profound Impact”
Hollywood Reporter
Disneyland closed its gates March 14, 2020. Before that time, the park only had been shut for 24-hour periods after major national events, such as the assassination of John F. Kennedy and the Sept. 11 terrorist attacks. Locked in a standoff with Gov. Gavin Newsom on when the park can reopen amid a pandemic, Disney has taken a financial hit — $2.6 billion in the past quarter alone — and furloughed thousands of employees who don’t know when they’ll return to work.
Anaheim Mayor Harry Sidhu notes that the theme park’s closure has had a “profound impact” on the region. “Unemployment in our city is now 9 percent, or 15,000 people, and has been as high as 12 percent — numbers not seen since the Great Recession,” Sidhu says. “Anaheim faces a $115 million budget deficit from lost revenue from hotel stays and visitor spending.”
An effort is underway to break the stalemate with the state. On Feb. 4, California Assembly Members Sharon Quirk-Silva (D-Buena Park) and Suzette Valladares (R-Santa Clarita) proposed legislation aimed at speeding along a reopening. The bill would allow Disneyland to reopen if Orange County moves into the “moderate” pandemic risk tier (a seven-day average rate of 1 to 3.9 cases per 100,000 tests) rather than when it hits the “minimal” tier (less than 1 case per 100,000 tests). The county remains in the “widespread” tier as of March 1 with 11.7 COVID-19 cases per 100,000 tests. Disney hasn’t commented on the bill, but Sidhu’s office has endorsed it.
In the meantime, Disneyland employees are hurting. “We know members are experiencing economic stress because of the pandemic,” says Chris Duarte, union president for Workers United Local 50, which represents food and beverage employees in the Anaheim park.
“Struggling to pay rent, mortgages and other bills is something we hear in online chatter or directly when people contact us looking for assistance options. We’ve heard of some individuals contemplating leaving California because of the stress but are not aware of anyone pulling that trigger.”
In one bit of good news for employees, the Downtown Disney shopping and dining district — which has been partially open since July and resumed outdoor dining in January — will see the return of 1,000 union workers as California Adventure expands shopping and dining in March.
For the better part of last year, SoCal theme parks have been at odds with the state as the businesses pushed to reopen. In October, Disneyland Resort president Ken Potrock criticized state guidelines as “arbitrary” and “unworkable.” Disney’s Walt Disney World serves as a counterpoint case study. The Florida location, which reopened July 11, has enforced temperature screenings, social distancing, new cleaning procedures and a face covering mandate. (Disney didn’t comment for this story, nor did Newsom’s office.)
The California Attractions and Parks Association, the group repping parks including Universal Studios Hollywood, Six Flags Magic Mountain and Legoland, has been the main voice advocating a reopening.
“COVID transmission rates are improving, and the vaccination distribution is underway, yet California’s major theme parks have no timeline and no realistic pathway toward reopening if left in the yellow/minimal tier of state guidance,” says Erin Guerrero, executive director of CAPA.
In early January, Disneyland’s Toy Story Parking Area was converted to a COVID-19 vaccination site, with six clinics offering the two-shot Pfizer vaccine to eligible individuals. Disney has not said how long it will host the site, and the state hasn’t unveiled a timeline for when nonessential workers and younger adults will be eligible for the vaccine.
There’s evidence the public is feeling safer about visiting parks again. During the week of Feb. 25, about 27 percent of Americans said they felt comfortable returning to an amusement park amid the pandemic, per data intelligence firm Morning Consult, which conducts weekly surveys of 2,200 U.S. adults. That percentage marks a high in public confidence since 20 percent stated the same during the week of June 5.
Mayor Sidhu has been among the leading political voices in calling on Newsom to change course with reopenings. “We need a clear path forward for the phased reopening of our theme parks, convention center and sports venues,” he says. “We can continue our progress against coronavirus as we work on safe and gradual economic recovery of our city.”
UBS Research, a division of the investment bank, forecast in a Jan. 22 report that Disney’s parks division isn’t expected to “approach historical performance and attendance metrics” until the end of fiscal year 2022. And for the Anaheim park, UBS noted: “At this point we do not expect it to reopen until mid-2021 and will likely face 25 percent capacity limitations for some time.”
Moody’s senior vice president Neil Begley says the financial impact of a closed Disneyland has been worse than expected. “We predicted the potential impact as early as January [2020], but we did not contemplate a multiyear impact — and in the beginning, neither did anyone else,” the analyst says.
Top Disney execs have noted the longer road to recovery for the location. “There’s no doubt that when we reopen a park after it’s been closed for a prolonged period of time, there’s going to be some reopening costs,” Disney CEO Bob Chapek said at a Morgan Stanley event March 1. “We’ve got to go rehire labor, which we’re more than glad to do. We want to put people back to work.”
Tina Taipale, a 42-year Disneyland employee who has kept her role as security duty manager during the pandemic, adds that workers are ready to return when the park is reopened. “We have great safety protocols and the PPE [personal protective equipment] and supplies we need,” notes Taipale. “I feel safer here at work than I do going pretty much anywhere else.”
Another Dry Year Looms – Sierra Snowpack Just 61% of Normal
San Jose Mercury News & Dept. of Water Resources
Highlighting the second dry winter in a row, the Sierra Nevada snowpack on Tuesday was just 61% of its historical average for this date, the latest signal that California appears headed toward summer drought conditions, with water restrictions possible in some areas for the first time in five years.
The last major storm system in the state was more than a month ago, when an atmospheric river drenched the Bay Area and Central Coast in late January. Weeks of unusually sunny, dry weather came before it, and have come since. As a result, this winter is shaping up to be similar to 2014, state water officials said Wednesday, a year when California was firmly in the middle of its historic 2012-2016 drought.
“Absent a series of strong storms in March or April we are going to end with a critically dry year on the heels of last year’s dry conditions,” said Karla Nemeth, director of the state Department of Water Resources. “With back-to-back dry years, water efficiency and drought preparedness are more important than ever.”
Water officials across California have watched the dry weather nervously, and have begun to plan for water conservation, and in some cases possible mandatory water restrictions. Many agencies are expected to make their final decisions later this month or in early April.
“All indications are that we are in a drought,” said Rick Callender, CEO of the Santa Clara Valley Water District, which provides water to 2 million people in Santa Clara County. “We’ll recommend to our board tighter restrictions. I’m not sure yet if they will be mandatory or voluntary.”
The East Bay Municipal Utility District, which provides water to 1.4 million people in Alameda and Contra Costa counties, plans to make a decision by late April about whether to impose summer water restrictions, district spokeswoman Andrea Pook said.
Light rain is forecast for this weekend in the Bay Area. A storm system is expected to arrive in the North Bay late Friday afternoon and spread across the region into Saturday. But rainfall amounts will only total about a quarter inch in most Bay Area cities, and about half an inch in the coastal mountains, according to the National Weather Service.
It won’t be enough to help the state out of its a deep rainfall deficit. Most Bay Area cities and Los Angeles have received about 40% of their normal rainfall totals, and only a month remains in the state’s winter rainy season, which typically ends around the beginning of April.
Typically, December, January, February and March are the four wettest months of the year in California.
A year like this one hasn’t happened often since California became a state. The seven-month period from July 1 to the end of February has been the seventh driest in San Francisco in the past 172 years, since 1849 when records began. And over the same time, the Northern Sierra Nevada, which is key to the state’s water supply, is suffering through it sixth driest season, according to calculations from Jan Null, a meteorologist with Golden Gate Weather Services in Half Moon Bay.
How much snow falls every winter is critical to California’s water picture. The snow, which forms a vast “frozen reservoir” over California’s 400-mile long Sierra mountain range, provides nearly one-third of the state’s water supply for cities and farms as it slowly melts in the spring and summer months. The melt sends billions of gallons of clean, fresh water flowing down dozens of rivers and streams into reservoirs.
After a dry year last year, which did little to replenish them, most of the state’s largest reservoirs are currently below historical averages for this time of year.
Shasta Lake, the state’s largest reservoir, near Redding, is currently 50% full, or 68% of normal for this time of year. Lake Oroville, in Butte County, is 38% full, or 55% of normal. New Melones Lake, in the Sierra Foothills of Calaveras and Tuolumne counties, is in better shape, at 65% full, or 106% of its historic average. And San Luis Reservoir, near Los Banos, is 58% full, or 68% of its historical average.
According to the U.S. Drought Monitor, a weekly federal report, 84% of California is in at least a “moderate drought,” while 29% is in a “severe drought,” including Napa, Solano, Inyo and San Bernardino counties, along with much of the Sacramento Valley.
If the dry weather persists in March and April, fire danger will be heightened this summer and fall because moisture levels in grasses, shrubs and trees will be low. Add to that, temperatures are rising due to climate change. Last year was the hottest year recorded on Earth since 1880 when modern temperature records began, according to NASA and NOAA, the parent agency of the National Weather Service. The seven hottest years since 1880 have all occurred in the past seven years.
Each community in the state has different water supply conditions. Some areas have large amounts of water stored in underground aquifers, if the geology near them is favorable, while others do not. Other places have more reservoirs, or recycled water projects, or in the case of San Diego and Santa Barbara, new ocean desalination plants built in recent years.
One thing that is a near certainty for nearly every California community, starting in April or May: There will be a new push by city water departments and regional water districts to ask people to use less water on landscaping, take shorter showers and check homes for leaks. In some cases those requests will be public relations campaigns. In others, they will come with financial penalties for water use over certain levels, as happened during the 2012-16 drought in many areas.
“It’s safe to say we will end this year dry,” said Sean DeGuzman, chief of the state Department of Water Resources Snow Surveys and Water Supply Forecasting Section. “It’s important that we’ll have to plan accordingly.”
Dept. of Water Resources water supply forecast and links:
Chevron, Microsoft & Schlumberger Building SJV Carbon Capture Plant
Reuters
Chevron Corp is partnering with Microsoft Corp, oilfield services firm Schlumberger NV and privately held Clean Energy Systems to build a carbon capture plant in California, as the U.S. oil major expands investments in renewable technology.
Fossil fuel companies have faced increased pressure in recent years to reduce emissions, spend more on low-carbon energy and disclose the impact their production has on climate change.
Chevron said on Thursday the plant, located in the city of Mendota, will convert agricultural biomass to electricity, and almost all the carbon captured in the conversion of agricultural waste would be stored underground.
The venture adds weight to plans outlined by California’s Air Resources Control Board last month to start phasing out all agricultural waste burning in the valley by 2025.
The companies expect to start engineering and design work on the plant immediately, with a final investment decision next year, Chevron said in a statement.
Once completed, the companies expect the plant will use about 200,000 tons of agricultural waste and remove around 300,000 tons of carbon dioxide every year.
https://www.reuters.com/article/us-chevron-renewables-mendota-idUSKBN2AW1UB
Stockton Guaranteed Income Experiment: Success or Overstated?
Associated Press
After getting $500 per month for two years without rules on how to spend it, 125 people in California paid off debt, got full-time jobs and reported lower rates of anxiety and depression, according to a new study.
The program in the city of Stockton was the highest-profile experiment in the U.S. of a universal basic income, where everyone gets a guaranteed amount per month for free. Announced by former Mayor Michael Tubbs with great fanfare in 2017, the idea quickly gained momentum once it became a major part of Andrew Yang’s 2020 campaign for president.
Supporters say a guaranteed income can alleviate the stress and anxiety of people living in poverty while giving them the financial security needed to find good jobs and avoid debt. But critics argue free money would eliminate the incentive to work, creating a society dependent on the state.
Tubbs, who at 26 was elected Stockton’s first Black mayor in 2016 after endorsements from Oprah Winfrey and Barack Obama, wanted to put those claims to the test. Stockton was an ideal place, given its proximity to Silicon Valley and the eagerness of the state’s tech titans to fund the experiment as they grapple with how to prepare for job losses that could come with automation and artificial intelligence.
The Stockton Economic Empowerment Demonstration launched in February 2019, selecting a group of 125 people who lived in census tracts at or below the city’s median household income of $46,033. The program did not use tax dollars, but was financed by private donations, including a nonprofit led by Facebook co-founder Chris Hughes.
A pair of independent researchers at the University of Tennessee and the University of Pennsylvania reviewed data from the first year of the study, which did not overlap with the pandemic. A second study looking at year two is scheduled to be released next year.
When the program started in February 2019, 28% of the people slated to get the free money had full-time jobs. One year later, 40% of those people had full-time jobs. A control group of people who did not get the money saw a 5 percentage point increase in full-time employment over that same time period.
“These numbers were incredible. I hardly believed them myself,” said Stacia West, an assistant professor at the University of Tennessee who analyzed the data along with Amy Castro Baker, an assistant professor at the University of Pennsylvania.
Tomas Vargas said the extra $500 a month was enough for him to take time off from his part-time job and find full-time work that paid better. He said he was depressed at the start of 2019, but now says he is happier and healthier.
“Every day I get to wake up and enjoy my kids,” he said. “My wife, we enjoy time together. We didn’t have that before.”
Tubbs cheered the results, telling reporters on a conference call to “tell your friends, tell your cousins, that guaranteed income did not make people stop working.”
Matt Zwolinski, director of the Center for Ethics, Economics and Public Policy at the University of San Diego, reviewed the study and said it is “really good news for supporters of a basic income guarantee.” But he said the study is limited because it only lasted two years, and people are unlikely to drop out of the labor force if they know the extra money is temporary.
“Tubbs’ claim that this experiment proves that a basic income doesn’t negatively affect employment is overstated,” he said.
Researchers found the people who got the money reported lower incidences of anxiety and depressive symptoms when compared to another group of people who did not get the money. Those findings could be key to next year’s study, which will look at how participants fared during the pandemic.
“It will allow us to ask the question: To what degree did that $500 serve as a financial vaccine as people were entering the pandemic,” Baker said. “The fact that folks went (into the pandemic) in a much stronger position, I think, bodes really well for the ways in which cash can really alleviate chronic strain.”
People got the money once a month on a debit card, which let researchers track how most of the people spent it. Less than 1% of the money went to tobacco and alcohol.
Tubbs, who lost his reelection bid as Stockton’s mayor in November, said his goal is to convince state and federal lawmakers to implement guaranteed income programs on a larger scale. Aside from conservatives who object to big government spending, opposition also comes from labor unions that worry the government would end other social safety net programs to pay for it. Yang’s plan would have cost nearly $3 trillion a year to provide a guaranteed income to everyone.
“That’s a question these experiments are not designed to answer,” said Steve Smith, communications director for the California Labor Federation.
Still, guaranteed income programs seem to be gaining momentum. More than 40 mayors have joined Mayors for a Guaranteed Income, with many planning projects of their own. A proposal in the California Legislature would offer $1,000 per month for three years to people who age out of the state’s foster care system. And in Congress, Republican U.S. Sen. Mitt Romney of Utah has proposed expanding the child tax credit to send most parents at least $250 per month.
Tubbs said that’s a big difference from when he first announced this guaranteed income program four years ago.
“How the pendulum has swung,” he said.