Briefing – Gavin Newsom – Candidate for CA Governor
Vision & Biography
Macro: He declares himself a Sargent Shriver Democrat. “The reason I identify with Sargent Shriver in particular is he also had something remarkable that most people in elected office don’t have in common and that is that he never served a day in elected office. And yet he was probably the most transformational figure of the 20th century. VISTA, legal aid to the poor, Head Start, Peace Corps, perpetuated the war on poverty, when we actually pulled one out of three people in this country out of poverty over a four-year period, ’64 to ’68. President of the Special Olympics…”
Professional & Personal Life: In 1991, Gavin recruited investors and founded PlumpJack, a wine shop, which he grew into a thriving enterprise of 23 businesses including wineries, restaurants, and hotels. He is a two-term supervisor, two-term mayor, lieutenant governor, and as a candidate for governor. He is married to Jennifer Siebel Newsom. They reside in Marin County with their four children Montana, Hunter, Brooklynn, and Dutch.
His Views on Key Issues that Impact CA’s Economy, Job Creation & Quality of Life:
On Record: When asked about the conflict between his policy proposals and the governor’s responsibility to balance the state budget…(as Mayor) ”I said no more than I said yes … we made investments but I also made a lot of cuts, and those were challenging…I have no interest in going back to the old ways. I’m not a profligate Democrat. I have bold ideas. I want to be audacious in terms of the goals but I’m not reckless in that context… I really do think Gov. Brown has created a new norm of expectation in terms of fiscal discipline. And it’s incumbent upon the next governor, I think, to model that.”
Level Setting: CA state government is reaching its first $200-billion spending plan - $138.6 – billion for the general fund, the government’s main checking account; $57.1 billion for special funds, largely for safety net and transportation programs; and $3.9 billion for bond debt. That totals $199.6 billion. The general fund goes four places: K-12 schools, higher education, corrections, and health and welfare. Everything else is minuscule, except pensions – see below. Though, state spending plummeted during the Great Recession, falling from $138 billion in 2007 to $117 billion in 2009. During his tenure Governor Brown has been known for being a good steward of the state’s resources by keeping Democratic spending in check, he inherited a $27-billion budget deficit and turned it into a $9-billion surplus, but he also raised income taxes astronomically on the wealthy. First Prop 30 and its extension – Prop 55. The state’s rainy day fund now tops $16 billion. Were these higher taxes really necessary in the rebounding economy? Two, state spending under Brown has risen from roughly $131 billion to $200 billion, 53 percent in eight years. When the current budget was signed last year, it was pegged at $183 billion. In only six months, it grew by more than $5 billion.
Plan: New or expanded programs will be paid for by growing the economy and by using existing resources more creatively and efficiently….some of them, like health care, would be part of the annual budget conversation.
On Record: ”I’m going to assert an ideal, absolutely, unequivocally, without hesitation we need to reform our tax code in this state. And if there’s nothing that the Trump tax cuts have proven, it’s the exposure now we have and the vulnerability we have with the 13.3 percent tax code, 8.84 [percent] on the corporate side, a very high regressive sales tax and then this sort of stale debate around Prop 13’s split roll…I think this is a multi-year effort. I’d rather have this debate than just have an isolated debate around Prop. 13 split roll and another stale debate around oil severance tax. Let’s throw it all in the hopper. Let’s modernize our tax code. Let’s incentivize for the kind of behavior we’re looking for which is growth and inclusion and let us be more competitive, and let us be bold…”
Level Setting: The biggest problem with California tax system is that it was designed for a retail economy that no longer dominates. CA’s economy is largely service based and that basically isn’t taxed. (L.A.’s economy is now 90 percent service oriented) To make up for it, state income taxes are some of the highest in the nation – CA gets half its revenue from its top 1 percent of earners, its top rate is 13.3 percent and 70 percent of the state’s general fund is supported by CA’s PIT and 40 percent of the PIT can be attributed to a little more than 70,000 tax payers. That tax revenue is volatile and unreliable because it’s tied largely to capital gains. Those capital gains dwindle during a recession. And the need to feed the CA’s general fund continues to grow – when Jerry Brown began his first governorship in 1975, California’s general fund budget was under $10 billion and the 2018-19 state budget is now more than $130 billion ($190 with special funds.)
Plan: Question is – as a multi-year effort, what is the first step in tax reform starting in January 2019 and who are his allies?
On Record: On the changing nature of work: “It’s not just labor-saving automation as it relates to driverless trucks, and you know cashier-less grocery stores and what’s happening in the fast food industry, hamburger making machines, but it’s new work styles, new arrangements. It’s contingent work, peak time workers. Which is roughly 25 percent of our economy and it’s a hockey stick it’s going be… Over half the number of people employed are going to be no longer in careers, they’re going to be providing discrete tasks at peak and they don’t have benefits, they don’t have unemployment benefits, workers comp, they don’t have health insurance or retirement security. We have a workforce gap that is growing, and I would argue exponentially, and a divide between private sector and our institution’s bottom line, and this is the issue. And I feel very, very intense that this is the issue that will define the success or failure of this state in the next 10 years, and I just want you to know that this is where I want to spend a disproportionate amount of my time and energy, and I won’t bore you with the details of our individual learning accounts and how we want to do transformation maps of every industry of the state, but let you know that I thought a lot about this, I’ve looked at best practices around the world, including in Singapore, and have been working on this, and I really feel strongly that if the next governor doesn’t focus on this, they will not succeed in that position.”
Level Setting: While the elimination of or substantial changes to occupational categories is not reflected in our region’s currently low unemployment rate, the consensus among workforce experts is that these dramatic changes are on the horizon and will lead to structural unemployment if unaddressed. Workforce development institutions (workforce development boards, higher education, etc.) will need to be rewired to support a new world in which frequent reskilling during the course of one’s career is the new norm. They will need to be outcome driven, clearly demonstrating that their programs lead to high job placement rates. Government funded workforce development programs totals $6.5 billion in the state of California, with roughly one-third coming from federal sources and two-thirds from the state General Fund. Despite significant spending, it is unclear how effectively these programs are leading to meaningful outcomes for individuals and employers, i.e. job placement rates, average earnings per placement, average program cost placement, employer satisfaction, etc. Program impact measurements are critical to prioritize programs with strong results and to eliminate programs with limited impact. The apprenticeship system will need to be strengthened to address critical labor shortages in middle skill occupations. This earn and learn approach is a pathway to living wage jobs with zero debt. Currently, California has 82,000 registered apprentices, primarily in the building trades. There is untapped opportunity to expand this model in new industries such as healthcare and information technology.
Plan: 1) Develop transformation maps for every cluster, industry and region to prepare individuals for jobs that actually exist. Working with the UC, CSU, and community college systems, overlay industry trends, job availability, and educational data, and then develop relevant curriculum to meet those workforce and skills needs. 2) Establish 500,000 apprenticeships by 2029, creating a new vocational pipeline of high-skill workers. Expand both earn-and-learn apprenticeships and successful labor-management programs in growing sectors like advanced manufacturing, energy, health, information technology and hospitality. 3) Provide individual skills accounts for Californians looking for work so they can always refresh their skills, no matter what stage of life. 4) Provide wage insurance to those who lose their job due to automation, similar to the reemployment insurance the federal government provides to individuals who lose their jobs to foreign workers. 5) Provide portable benefits (retirement, vacation and sick leave) to the 1-2 million gig workers in California. 6) Expand the statewide Earned Income Tax Credit for low-income earners and for those out of work.
On Record: “CA officials should set a goal to help 3.5 million new homes get built by 2025 to stem the state’s housing problems…simply put, we’re experiencing a housing affordability crisis, driven by a simple economic argument…CA is leading the national recovery, but it’s producing far more jobs than homes. Providing adequate housing is fundamental to growing the state’s economy…you have to penalize cities that don’t meet their housing elements…local government has to build the housing…(they) are not incentivized to develop housing…(they) love big box retail because that’s all capture…that sales tax. Unless we change the allocation sales tax, property tax, counties capture property tax, we’ve got to change that allocation and then we’ve got to be punitive on the transit dollars and make them contingent upon housing production and to me housing is transportation, transportation is housing.”
Level Setting: Only twice since 1954 — the year the state building industry began tracking permits — have developers built more than 300,000 homes in a year. The highest year on record is 1963, when 322,018 home permits were issued. To reach 500,000 homes in a year, the state would need to replicate its largest production in modern history plus an additional 178,000 homes, a number the state has surpassed just three times in the past 27 years.
Plan: He wants developers to build 3.5 million homes from when he takes office through 2025, a fivefold increase in a state tax credit to finance low-income housing (bringing the state budget cost to $500 million a year) and supports eliminating regulations that he contends make it difficult for developers to produce middle-income homes. He is against the potential rent control ballot measure and believes that the Costa-Hawkins law should be changed to add more renter protections and he plans to link transportation funding to housing goals. He would appoint a cabinet-level homelessness czar who would be responsible for ensuring the state’s housing, criminal justice, healthcare and welfare departments work together on the issue. His proposals relies on spending hundreds of millions of dollars more on low-income homes, approving some development through regional governments rather than solely at the local level and financially rewarding cities and counties that approve housing, especially near transit, and punishing those that don’t.
On Record: “I’m thinking well wait, if I have a poverty strategy that begins with prenatal care, not just preschool, but 0 to 3, where 85 percent of the brain is developed, that’s a [return on investment] you’re going to see 15, 20 years from now, that’s not rewarding in political terms. But by the way, perhaps that’s the closest approximation to an answer of why I think I’m different because I want to approach this issue in a very different way along those lines. The number one predictor of whether or not you’re going to end up in the criminal justice system, number one, is how many words you speak in kindergarten. We talk about the achievement gap, we spent a fortune on it. It’s a readiness gap, not an achievement gap. People aren’t being left behind, they start behind, 85 percent of that brain is developed by the time you’re three. Half the births in this state are Medi-Cal births. Two thirds of people are born with some form of trauma. Unless we address those issues, prenatal care, we’re not going to significantly address that fourth-grade math and reading challenge…I advocate for reforms in the LCAP ][the Local Control and Accountability Plan] and the LCFF and I believe that we are getting to the period, four or five years into it, where we need to be held to account with more transparency.”
Level Setting: Despite their differences, all the candidates know that improvements are needed for California education. With $54 billion of its $183 billion budget going toward education at all levels, the state could reasonably be described as the nation’s largest school district, only with a university system attached. There are unknown questions about how K-12 education will evolve. A recent Public Policy Institute of California study said that the state could continue giving school districts broad flexibility in using state funds to meet local needs and priorities, or it could make targeted spending programs common once more. As to teachers, seventy-five percent of school districts report difficulties when it comes to retaining and recruiting teachers, particularly in special education and STEM classes. One quarter to one-third of all new teachers quit within five years and CA is in the bottom 10 states in per-pupil investment and student outcomes on standardized tests based upon the Common Core have flatlined – in 2017, 49 percent passed the English exam, compared with 48 percent in 2016. In math, 38 percent of students met or exceeded the state’s standard, compared with 37% last year.
Plan: (1) Focus on the First Three Years of a Child’s Life (2) Create a Financial Foundation for College, Beginning in Kindergarten (3) Support Students in Full-Service Community Schools (4) Equip Every Student with Access to STEM Education (5) Attract and Retain Quality Teachers (6) Increase Access to and the Affordability of Higher Education (7) Unleash Educational Data.
On Record: “The UC and state university systems need more money from Sacramento, but that’s not enough to solve their problems…We need to focus on completion, especially in the California State University system, on four- and six-year graduation rates…And we need more degrees for people of color…We need to provide access to every eligible Californian, as a foundational goal. In order to do that we need a significant increase in investment from the state of California…I would appropriate more money to begin with…That’s not going to be an issue if we’re successful in November — you’ve got my word on that…(also) re-establish a statewide coordinating body for higher education much like the former California Postsecondary Education Commission, improve data systems to track student outcomes and make the governing boards of California’s public colleges and universities more diverse.”…wants to see reforms in funding for the state’s college and university systems…tying funding to performance.
Level Setting: The 3 percent funding increases Brown proposed for the state’s four-year university systems in the 2018-19 budget will not generate enough money to avert tuition increases or expand their enrollment capacity. Newsom has opposed tuition increases as a member of the UC Board of Regents. Both systems last year hiked tuition for the first time in six years, and the UC and CSU boards of trustees did not approve planned tuition increases this year, though UC did raise tuition on out of state students. A recent Public Policy Institute of California study indicated that the state’s higher education system is not keeping up with the changing economy. According to that study, “in 2030, if current trends persist, 38 percent of jobs will require at least a bachelor’s degree. But population and education trends suggest that only 33 percent of working-age adults in California will have bachelor’s degrees by 2030 — a shortfall of 1.1 million college graduates.” The California Community College System is a critical gateway to living wage jobs or transfer to 4-year universities. Last year, the Board of Governors adopted a new vision with specific goals that include increasing by at least 20 percent a year the number of students earning an associate degree, credential, certificate or specific skill set and increasing transfers to UC and CSU by 35 percent a year.
Plan: Gavin is laser-focused on restoring the access, affordability, and quality of our state’s public higher education system. He believes the community colleges are the backbone of our economy and one of our most effective tools for upward mobility. His CA Promise initiative will guarantee two free years of community college tuition, create pathways to quality jobs and reduce debt for students pursuing a bachelor’s degree. Will create a new higher education coordinating council to set bold statewide goals and hold institutions accountable to them. Will expand access, improve affordability, bolster transfers and completion rates — and link financial incentives to clear student outcomes.
On Record: On single payer healthcare: “I said I support it and here are the reasons I think we can achieve it, and here’s why I think it’s important that we at least maintain some optimism and at the same time maintain a level of pragmatism. And I’ve said that in front of the nurses, I don’t… people read the speech. I’m sort of dumbfounded the reporting on it versus what I actually said. When I went in front of the nurses and said this is incomplete, [Senate Bill] 562, it was amended 17 times before it was… by the authors by the way, before it was held in the Assembly and we have an enormous amount of work to do. But not just on the Gann Limit and Prop 98 and ERISA issues and 1115 waivers, but 1332 waivers, but also as it relates to the issue no one talks about and that’s the tax deductibility of employer-based plans, which also would go away, which is tens of billions of dollars and matters more in a post-Trump tax world than it did prior. That also has to be addressed. I’m not naïve about any of that and so my pragmatism has always been there, but it’s also based on experiences, as a … mayor I actually achieved something, where none of these others did. I didn’t assert it, I actually fully implemented universal healthcare.”
Level Setting: California currently spends roughly $400 billion per year on health care, according to a Sacramento Bee analysis of national health expenditure data from the Centers for Medicare and Medicaid, projections by state health care analysts and independent health economists. Half of that comes from taxpayers, in the form of federal and state funding for Medi-Cal, the health insurance program for the poor, Medicare for people 65 and older and Covered California premium subsidies. Most of the rest is in the commercial market, with more than 15 million Californians covered through their employers. Annual spending is expected to rise due to soaring out of pocket costs and fewer affordable coverage options. According to the nonpartisan Legislative Analyst’s Office, creating a single-payer system would cost $400 billion per year. California taxpayers would have to pay for at least $200 billion of that amount in new taxes, while no longer paying for healthcare premiums, co-pays, and insurance deductibles.
Plan: Provide healthcare for all financed through a single-payer model like Medicare. Provide a comprehensive healthcare system available regardless of one’s ability to pay, pre-existing medical conditions, or immigration status, and including coverage not only for physical, but also mental and behavioral health issues.
State Pension Reform
On Record: “I did two pension reforms in the spirit and within the law of the California rule. So I don’t think… I mean Gov. Brown was able to do his version of pension reform, which I think we’re too flippant to say it was irrelevant. I mean he got rid of spiking, increased for public safety officers from 50 to 57, 55 to 67 for everybody else. We capped at 117 or $140,000 on Social Security, the high… I mean there were a lot of things in there. He didn’t get as far as he wanted on vesting period for healthcare and he didn’t get as far as he wanted… he argued for 401(k), I don’t necessarily believe that’s some magical solution, but we got the discount rate lowered, 7 percent versus 7 1/2, and we made some reforms that the school districts are appropriately complaining about, but the reason they’re complaining about it, is they were reforms that require at least some acknowledgment of the problem. So those were actual accomplishments within the spirit and the letter of the California rule. So I don’t know that you need to, that needs to be thrown out to actually accomplish more in that space, and I’m committed to accomplishing more in that space. Because it’s a math problem, it’s a progressive issue. It’s crowding out the rest of the… the discretionary budget is only 22 percent this year and I don’t know what the May [budget] revise will look like, so I’m talking about the current fiscal year. And it’s been crowded out. And it’s a major issue in this state and I’m not naïve about it and we’ve got a demographic problem that just makes it truly problematic. It’s an aging and graying population that we’re wholly unprepared for as a nation let alone as a state and that’s the healthcare crisis and, you know, we haven’t even gotten to that. That’s why I want to be bold and audacious.” (L.A. spends 20 percent of its budget on pensions versus 6 [percent] in San Francisco.)
Level Setting: The pension burden on public treasuries, retiree costs will increasingly devour state and local tax dollars that should be funding government services such as education, healthcare and wildfire fighting. It was revealed last year that the cost of retiree benefits in Los Angeles amounts to roughly 20 percent of the city’s general fund, which pays for basic services such as police and parks. In 2002, the cost was less than 5 percent. The state’s two biggest public pension systems are badly underfunded. They’re also the largest and second-largest public pension funds in the country. They’re the California Public Employees’ Retirement System, or CalPERS, and the teachers’ pension fund, CalSTRS. CalPERS has unfunded liabilities — benefits promised compared with anticipated funding — of $136 billion. For CalSTRS, the projected red ink is $87 billion. That’s based on 2016 data, the latest available. If you total up the unfunded liabilities of all state and local public pension systems in California, the projected debt comes to around $333 billion. But that’s a conservative figure based on official reports. It could be up over $1 trillion. California’s first major statewide attempt to reform pensions was the PEPRA (Public Employee Pension Reform Act) legislation, which took effect on January 1st, 2013. This legislation reduced pension benefit formulas and increased required employee contributions, but for the most part only affected employees hired after January 1st, 2013. The reason PEPRA didn’t significantly affect current employees was due to the so-called “California Rule,” a legal argument that interprets state and federal constitutional law to, in effect, prohibit changes to pension benefits for employees already working. CA’s high court is currently reviewing a case that may soften or eliminate the California rule. If the California Supreme Court does dramatically clarify the California Rule, enabling pension benefit formulas to be altered for future work, it will only adjust the legal parameters in the fight over pensions in favor of reformers. After such a ruling there would still be a need for follow on legislation or ballot initiatives to actually make those changes.
Plan: Changes in pension systems should be done with input and buy-in from workers and those who represent them — not something that is done unilaterally. He proposes to set up a fund to front load the cost of that and once you get someone on SSI, it’s fully reimbursable. The cost is associated with signing someone up, by the federal government.
On Record: “Maintaining that framework of fiscal discipline is absolutely essential and it’s going to be made more challenging, you’re right, by an economy that by no means will look like the economy we’ve looked at or enjoyed for the last eight years going forward. It’s not going to be easy, we got to have a growth agenda, we can’t tax away your prosperity, can’t cut your way, gotta grow your way. We have no economic development strategy in the state, never had a champion for economic development. Maybe I’ll give [Gov.] Pete Wilson just a tiny bit of credit with his red carpet strategies, a few other folks down here that were a part of his administration that I actually think did some pretty good work. Jerry’s done solvency well, he’s triaged the state. Arnold promoted wonderful billboards around the world, but we’ve never combined those efforts in any intentional way and I think that’s a real opportunity for the next governor as well.”
Level Setting: In 2011 Lt. Governor Newsom released a Plan on Economic Development (Great Plan, largely ignored by Governor Brown). It was a great plan than and still is a great plan today. He focused on the following eight pillars:
Plan from 2011:
- Gearing up Exports: Next Economy success depends on global trade and production; every sector, cluster and region must embrace exports as a core focus of its economic strategies.
- Reinvigorating Manufacturing: The manufacturing agenda is of enormous importance for California’s competitive position and future prospects. The state needs to design its strategy to bring about a renaissance in manufacturing on a scale commensurate with its importance.
- Driving Innovation: California, and Silicon Valley, wrote the book on innovation. Everywhere, other states and nations are resolved to write the sequel, and they are investing heavily in the capacity to do it.
- Accelerate the Clean Economy: California is recognized as a world leader in environmental advances and the development of clean technology, as high-tech firms in the state move rapidly to expand in areas from solar energy equipment to wind turbines and new types of batteries.
- Skill up for Opportunities: Innovating more, making more, and exporting more will produce another crucial Next Economy attribute: broader opportunities for good-paying jobs at all levels.
- Build Infrastructure: The need for adequate infrastructure undergirds every aspect of the Next Economy agenda.
- Align with Regional Strengths: The global economy is increasingly driven by the competition between and collaboration among an international web of high performing, interconnected metropolitan areas and regions, each serving as the resource base for powerful clusters of enterprises.
- Organize for Success:To revitalize California’s economic competitiveness, its leaders must streamline the clutter of agencies, commissions, offices, and entities engaged in economic development.
On Record: “On day one, I will issue a directive putting California on a clear path to 100 percent renewable energy. It’s achievable and it’s necessary. Frankly, I think we can surpass our 100 percent goal by positioning California as a net exporter of energy to other states and nations. It’s a money maker for us and the natural next step in our global leadership — a classic example of CA innovation. Under the leadership of the state’s Lands Commission, which I chair, CA is reducing its reliance on nuclear and offshore oil energy and moving toward safer, cleaner, and greener alternatives. We must continue diversifying our energy supply — that means increasing our output of solar, wind, geothermal, hydro, and ocean-based energy, all the while improving our energy efficiency through stronger green building standards, construction codes, and efficiency standards for electronics and appliances.”
Level Setting: Last week, the American Energy Society published the following: “Texas produces more than double the amount of wind and solar electricity than California and about 25 percent of all natural gas in the country; CA’s retail electricity rates are 89 percent higher than Texas.” Feedback from investors in sustainable businesses and projects: This is bad on many levels, mainly for those of us fighting this fight. I would think it is also awful for Democrats who think they are supporting a pro-green agenda. Good intentions are not enough. There are many reasons for this, many of which I am sure I don’t fully appreciate, but our view is that some states (North Carolina and South Carolina) permit solar at scale since the state legislatures have opened them up via PURPA (a Federal Law). Other states (Texas, Virginia) are open to solar since they have open markets and permit consumer choice. CA has neither.
Plan: 1) Launch CARPA-E, the California Advanced Research Projects Agency — Energy, modeled after the federal agencies that brought us the Internet and other technological advances. 2) Advance the Governor’s goal of regionalizing the energy grid and making it more flexible. Create a 21st century grid that integrates renewables and electrifies transportation while maintaining reliability.
On Record: Lt. Gov. Newsom is a strong supporter of the $7.5 billion water bond, including $2.7 billion for water storage, that was passed by voters in 2014. While he does not oppose dam projects, Newsom has suggested options such as underground water storage. Newsom wants to apply the same approach California used to achieve higher energy efficiency to the preservation of water. He suggests scaling “effective technologies like drip irrigation to reduce water waste and remote sensing technology to understand how much water is needed to irrigate both fields and residential yards. We’ve got to replenish our groundwater basins and in this era of limited reliability, increase our use of recycled water.” Furthermore, Newsom would like to ensure that every Californian has access to clean drinking water, especially in low-income communities, stating “It’s an embarrassment that so many of our fellow Californians go home at night and can’t drink safely from the faucet or bathe their kids in clean water — and yet still pay their utility bills.” As to the Delta Tunnels “One tunnel might be OK, but two are too many…There is room for cooperation and compromise around a single tunnel…The issue of responsible (water) conveyance — one that protects and advances the health of the delta — has to be a priority of the next governor…But that can’t be our only approach. I strongly believe California must work to reduce our dependence on the Delta by focusing on regional solutions, investing in critical water infrastructure like recycling and ground water replacement, and conservation.”
Level Setting: CA’s developed water supply, water that is produced or brought into a water system through the efforts of people, comes from three main sources: (1) Snow melt from the
Sierra Nevada (2) Local groundwater, and (3) Imported water from the Colorado River basin. The state’s developed water supply is consumed by three main users: Agriculture (62%), the Environment (22%) and Urban (16%). Approximately 75 percent of the state’s precipitation occurs in Northern California and two‐thirds of all precipitation and snow pack melt off occurs in the northern Sacramento Valley watershed. In 2017, when cracks appeared in the Oroville Dam’s spillway, more than 180,000 Californians faced the prospect of floods. The emergency came a few years after Californians had overwhelmingly approved Proposition 1, a ballot measure to spend $7.1 billion on water-storage projects. In the drought-stricken Golden State, where runoff from rain and snowmelt races uselessly into the Pacific Ocean, the proposition won wide support, with voters approving it, two-to-one. But four years after passage, the state water commission has yet to assign a dime of funding for storage. Nevertheless, the CA Water Commission has finally announced its plans to fund new projects with the money from Proposition 1. Many Californians were surprised to learn that the proposition’s fine print stipulated that only a third of the money was ever intended to fund water storage. The rest is earmarked for other projects, ranging from habitat restoration to levee upgrades. Neither the commission nor most of the applicant agencies offer clarity as to how much additional storage the projects will add to California’s normal water supplies in an average year. Even in times of drought, California’s natural and human-made arteries run with the nation’s cleanest, most accessible water. So fundamental is the stuff to the state’s identity and to its residents’ daily lives that CA law recognizes a human right to “safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.” Yet the taps in hundreds of communities produce only toxic brown fluid because years of environmental degradation have contaminated parts of the water table, and because extreme poverty has blocked residents and their leaders from upgrading their water infrastructure or from connecting to the systems of their neighbors. That means that many thousands of Californians can’t brush their teeth or take a shower, much less drink a glass of water from the tap, without risking sickness. It’s a Third World problem in the world’s fifth-largest economy.
Plan: As Governor, Newsom would direct the California State Water Resources Control Board and work with the Legislature to solve this issue of making sure all CA residents have access to clean drinking water. Newsom would also like to strengthen state enforcement on the pollution of California’s lakes, rivers, and ocean. Newsom signed the “No Fossil Fuel Money” pledge, refusing to accept contributions from the oil industry.
On Record: We have strategies to address categorical exemptions for socially desirable projects which gets into CEQA, more negative [declarations], more pre-programmatic [environmental impact reports]. This is a way for me of skinning the cat of alright you’re for CEQA reform, what does that mean? A governor trying a by-right strategy couldn’t get one co-sponsor, it went nowhere. Wiener started the next year with a new bill, did a hybrid, small ball, but there’s ways of skinning this. We’ve got to deal with prevailing wage, it’s not just an environmental issue, it’s deep into some of the issues with organized labor and the reason is, it’s reality. We can lament about it, we can say in a perfect world we wouldn’t have to deal with that, but it’s the reality we have to deal with construction unions and the environmental community and I think we have achieved that for arenas, for ballparks, there’s a strategy that advances itself. We can take the spirit of that strategy and localize it around these other, in other ways that I think could achieve some goals.”
Level Setting: CEQA is California’s statewide environmental protection framework. It requires state and local agencies to give consideration to environmental impacts in regulating public and private activities. With certain exceptions, agency approval of any public or private project which may have “significant impact” on the environment must identify and adopt mitigation measures and feasible alternatives, typically through preparation of an Environmental Impact Report (EIR).The process requires detailed analysis of a broad spectrum of impacts a potential project may have, not only on traditional environmental concerns like air and water quality, biological resources, geological and mineral resources, but also impacts on noise, access to housing and recreation, traffic and even greenhouse gas emissions. CEQA’s broad scope, combined with the potentially enormous financial consequences of environmental scrutiny, has proven to be fertile ground for litigation between developers, agencies, and environmental groups. Increasingly, lawsuits are being filed by labor unions, business competitors, and NIMBs, not for the purpose of enhancing environmental protection, but in anticipation that the prospect of increased expenses, uncertainty, and delay will cause projects applicants to abandon or downsize projects, or even more blatantly, to simply “buy off” the challenger. A 2015 report on the problem, from the Los Angeles office of Holland & Knight, an international law firm, concluded that “the largest single target of CEQA lawsuits … are residential projects” and that these projects “overwhelmingly” involve “non-polluting land uses.” Abuse of the law, the report concluded, has many guises, including duplicative lawsuits that hamstring projects for years and NIMBY resistance mounted by Citizens for This or That, local groups with little or no interest in the environmental issues the law was supposed to address.
High Speed Rail
On Record: “Look, the first phase of this project can get done. The deeper question is can you get the $45 billion on the high end, according to that plan, to get it over the Tehachapi Mountains, San Gabriel Mountains into Southern California? The first phase now, Bakersfield, I loosely define San Francisco to Bakersfield is a project that we can complete with the cap and trade dollars, with the $9.95 billion with the $3.5 billion from the feds and with probably $7 to $10 billion that we have to patch together, and identify new funding. We can get that done. The argument goes accordingly. If you can get that project complete then we will have a real demonstrable project that could excite and enliven federal senses and potentially the private sector to come in and then finance that final leg into Southern California. But in the absence of that, what you’re left with is not a train to nowhere, quite literally a train to somewhere, to one of the fastest growing parts of the state, that will have the benefit of what comes traditionally from fixed rail and that is significant economic growth in and around that corridor in one of the fastest growing parts of the state, the Central Valley. And connect one of the most dynamic parts of the state, Silicon Valley…I was the co-chair promoting $33 billion project when I was out there originally on this project…it’s (now) $77.3 [billion], or a $98.1, that’s the new estimate, billion dollar project, it’s no longer two hours and 26 minutes downtown LA to downtown San Francisco and then spokes down to San Diego and Sacramento, acknowledge all of that. We’re using cap and trade money we never intended those dollars to be used and, yes, we’ve only gotten $3.5 billion from the feds and that was a one-time stimulus because Walker and Kasich and one other governor gave up their high speed rail money and Biden sent it out our way. So you have to be honest about that, but I think this 1,700 folks that are working the 16 big projects that have been completed are testament this is actually finally happening and let us not, let’s not send three and a half billion dollars back to Trump. This money can’t be used to repave your streets. The money will end up in litigation with no project. With a lot of raw feelings. Let’s get phase one done.”
Level Setting: It’s been eight years since the LAO came out with the report that said the bullet train has no hopes of ever getting adequate financing because it can’t guarantee ridership or revenue under Proposition 1A and yet political leaders offer a pro forma endorsement of it.
Plan: Get phase one done – See comments above.
On Record: “We should ensure that as these technologies come to market, transit, walking and biking are always prioritized users on public roads…commit California to a Vision Zero strategy to reduce traffic fatalities and serious injuries to zero…support transit and wants it to have dedicated lanes…wants Caltrans to convert general purpose lanes to HOV lanes for express bus service on highways…wants to preserve California’s gas tax.
Level Setting: A campaign to roll back California’s new vehicle and gas taxes — and the $52 billion they are expected to generate over the next decade for road repairs and transit upgrades — will be on the November 2018 ballot. Polls suggests the race would be close. A statewide Public Policy Institute of California survey taken in January found that likely voters were split, with 47 percent favoring a repeal of the tax and 48 percent opposed. The poll found that 61 percent of Republican likely voters supported a repeal, compared to 52 percent of independent voters and 39 percent of Democrats. In April 2017, without a vote to spare, California lawmakers managed to pass Sen. Jim Beall’s Senate Bill 1, raising gas and diesel taxes and adding an annual vehicle registration fee to repair the state’s crumbling roads and bridges and improve public transit. State transportation authorities already have committed billions of dollars from the new pot of money to highway repairs and traffic-easing projects. And in June, voters will consider a constitutional amendment, Proposition 69, to ensure the Legislature can’t raid the fund for non-transportation purposes. California drivers whose cars are worth less than $5,000 this year began paying a new $25 annual fee for the transportation fund, while those with vehicles valued between $5,000 and $25,000 — about 40 percent of the state’s drivers — pay $50. Drivers of the highest-end luxury cars pay as much as $175 more. The state also will charge $100 per year, starting in 2020, for electric vehicles. The funding doubled the amount of money available for state and local transportation improvements and if the recall does qualify and pass, Caltrans anticipates that roughly half of our major construction projects could be deleted, downsized or delayed significantly.
Plan: Top priorities include expanding public transport, particularly in low-income communities, continue repairs on existing transportation systems, and ensuring new technological innovations like autonomous vehicles are carbon neutral and safe. Newsom has put heavy importance on making sure the state retains the right to regulate automatic vehicles. He also sees new job opportunities to help those who may be displaced by automatic vehicles. Additionally, he wants to increase the number of zero emission vehicles on the road by 2030. Newsom would like the Active Transportation Program should get more state funding.