Good morning, California. This is Ben Christopher filling in for Dan Morain. Dan will be back tomorrow.
“With all these rich kids making millions of dollars in Silicon Valley, they’re bidding up the price of real estate. And the automation is such that a lot of people are now what they call redundant because the economy, it doesn’t have a role for them. And that’s where creative political leaders are going to have to find a way to tame capitalism.”—Gov. Jerry Brown in an interview with NPR’s Ari Shapiro this week.
White Californians are almost twice as likely to own a home than black Californians.
California voters may have doubled down on Democratic rule in last month’s midterm elections, but many are feeling downright despondent about the future of the state’s economy, according to a new poll from the Public Policy Institute of California.
A majority of respondents said the state’s economic good fortunes were not being equally distributed and predicted that future generations will be worse off.
By the numbers:
- Fifty percent of adults predict that children growing up today in California will be worse off financially than their parents.
- Two-thirds said the state was divided into “haves and have-nots.”
- Forty-five percent said they fall into the latter category—including 56 percent of African Americans, 61 percent of Latinos, 58 percent of those with a high school education, and 59 percent of non-voters.
That racial disparity in sentiment matches another new report.
- White Californians are almost twice as likely to own a home than black Californians, the California Budget and Policy Center finds.
All that economic angst seems to have translated into higher support for big state safety net programs. Majorities told PPIC that universal healthcare and tuition-free community college should be a high or very high priority for the incoming class of state lawmakers.
- There was less enthusiasm for universal preschool, one of Gov.-elect Gavin Newsom’s top priorities. For more poll results, click here.
FSB Core Strategies: Public Affairs. Ballot Campaigns. Legislative & Regulatory Fights
Speaking of the economy
A 2017 Los Angeles rally to allow undocumented youth access to Medi-Cal.
California has a $15 billion projected budget surplus and a 4.1 percent unemployment rate, writes CALmatters’ Judy Lin. But no one is expecting the party to last. So Lin reached out to economists up and down the state, soliciting their best advice for Gov.-elect Gavin Newsom.
Among the suggestions from the experts at Stanford, UC Berkeley, Beacon Economics, the Center for Continuing Study of the California Economy and elsewhere:
- Put more control of development at the state level.
- Expand Medi-Cal to all, even the undocumented.
- Keep anti-poverty programs fully-funded.
- Pull the plug on the Delta tunnels.
- Invest in a world-class data infrastructure.
- Don’t count on that budget surplus.
For a deeper dive, click here.
A Newsom advisor enters the revolving door
Jason Kinney greets state officials and staffers as the 2019 legislative session starts.
“The week Gavin Newsom was elected governor,” writes Laurel Rosenhall of CALmatters, “three Sacramento lobbyists quit an influential firm where they’d been partners for many years. Two filed paperwork to launch a new lobbying shop. The third, Jason Kinney, de-registered as a lobbyist and immediately became a key member of Newsom’s gubernatorial transition team.”
- Kinney, who worked with Newsom to pass the marijuana ballot measure in 2016, is poised to follow Capitol wise men such as Bob White and Darius Anderson into a time-honored slot in Sacramento—that of gubernatorial advisor.
- Unlike those two, he is also poised to cash in on a nascent cannabis industry that is expected to become a $5.1 billion enterprise in California by next year.
Rosenhall outlines the questions that go with wearing so many hats in one town at the same time.
Loyola Law School professor Jessica Levinson, a former president of the Los Angeles Ethics Commission: “Who is he really serving? Is he a hired gun for the marijuana industry? Is he a public servant working on a gubernatorial transition? The answer very likely is all of the above. The question is… can he do all of those things at the same time without raising a potential conflict of interest.”
Struggling to cut a water deal
The San Joaquin River.
State water regulators voted Wednesday to go ahead and divert billions of gallons of San Joaquin River water from farms and cities to revive struggling fish populations, never mind an 11th-hour compromise brokered by Gov. Jerry Brown.
- Under the mandate—or “water grab,” as Central Valley farmers have dubbed it—water ordinarily allocated to ag and cities in the Bay Area and Southern California instead will boost flows through the river and the ecologically fragile Sacramento-San Joaquin River Delta.
- Board members of irrigation districts in the Central Valley declared after the vote that they’d be seeing the state in court.
But wait: Water board members—all of whom are Brown appointees—said they still might consider the governor’s compromise, a voluntary, $1.7 billion deal environmental groups don’t love, but in which farmers would give up some water and pay into a fund to restore spawning grounds and improve fish habitat.
Water Resources Control Board Chairwoman Felicia Marcus told The Sacramento Bee’s Ryan Sabalow that the agreements are “potentially quite good” but “the devil’s in the details.”
The hardline vote pressures a handful of Central Valley water districts who’ve resisted coming to the table and allows, as they say, further study.
- State water regulators have been trying to win voluntary concessions on their water rights since 2011.
As CALmatters’ Julie Cart explained in 2016, the state’s goal is to “recalibrate the water flows that have drained vital rivers down to as low as 10 percent of their natural levels—just a fifth of the 60 percent flow scientists say is necessary to preserve the ecosystem.”
The Camp Fire smolders in Butte County.
California’s 2018 wildfire season finally has a price tag: $9,051,601,316.
- That, says state Insurance Commissioner Dave Jones, is the total value of insured property losses from the Camp Fire that incinerated much of Paradise, and the Woolsey and Hill fires in Ventura and Los Angeles counties.
That 10-digit figure is likely to grow, Jones says: “As the claims get perfected, as individuals get access to their former homes and neighborhoods, as they dialogue with their insurance companies and share more information about the scope of their loss, we expect these numbers to rise.”
Included in the number: nearly 29,000 damaged homes across the state, 10,564 of which were completely destroyed. Even in the massive insurance industry, that’s a lot of money.
California insurance industry lobbyist John Norwood: “You’ve got to assume that the last six to ten years of underwriting profit is gone.”
What that massive sum does not include are the homes and businesses that were uninsured or underinsured. Nor does it include the loss of life, which currently stands at 89 dead.
- If the insurance industry is worried about another high payout year, they aren’t saying so. Mark Sektnan, vice president of the Property Casualty Insurers Association of America spoke to the the Mercury News:
“We’re still seeing a healthy competitive marketplace. Companies will continue to write in these areas. Prices may be a little higher, but we’re not hearing that there’s an availability crisis.”
In other fire news, The Sacramento Bee reported that Pacific Gas and Electric found broken piece of equipment on a high-voltage tower in the area where the Camp Fire started, just east of Paradise.
Saying goodbye to Newsom the Elder
Justice William Alfred Newsom III
Yesterday afternoon, a spokesperson for Gov.-elect Gavin Newsom put out the following statement:
“The Newsom family is deeply saddened to announce that the Governor-elect’s father—avid environmentalist and retired Justice William Alfred Newsom III— passed away peacefully this morning at 9:59 A.M. at his home in San Francisco. Justice Newsom was a proud, lifelong Californian, a public servant of profound accomplishment and a powerful voice for individual rights and environmental protection.”
Who was William Newsom? From a CALmatters profile on his son from before the election:
“Newsom’s father was the legal fixer for oil scion-turned-composer and philanthropist Gordon Getty. He later became a judge, appointed by his pal, Gov. Jerry Brown. ‘Politics was a way of connecting with him,’ Newsom said of his father. ‘In high school, getting him to come to a game would be one of the biggest days of my life.’”
Commentary at CALmatters
Garry South, Democratic strategist: Why are California Republicans so misaligned with voter sentiment? They delude themselves into believing there is a silent conservative majority out there somewhere, if only they can put up the right candidates.
Dan Walters, CALmatters: Cases pending before the state Supreme Court could have a huge impact on the pensions of public employees. They specifically involve challenges to a mild pension reform sponsored by Gov. Jerry Brown but could result in a broader ruling that would open the door to pension benefit reductions.
Pressing Prop. 13 Questions?
Few things affect more aspects of California life than Proposition 13, and few conversation topics are as likely to devolve into a shouting match.
- If you’re confused about how the landmark property tax ballot initiative has shaped the state’s housing market (but don’t want to get yelled at for asking), tune into KQED’s Forum today from 9-11 a.m. CALmatters’ housing reporter Matt Levin will be on, starting at 10:15 a.m.
And if you haven’t already, check out the project Matt did with with public radio reporters across the state, which explains with video, maps and text how the proposition has affected a single Oakland block.
Please email or call with tips, suggestions and insights, [email protected]
See you tomorrow.