Good morning, California.

“I did get some vegetables in Kings County. They weren’t reportable. They were aimed.”—Dan Richard, outgoing high-speed rail authority board chairman, recalling good times he had trying to persuade Central Valley residents of the wisdom of high-speed rail. Richard’s replacement, Lenny Mendonca, took the gavel at the board’s hearing Tuesday.

Trump pokes Newsom back

The Trump administration wants its $928 million grant back.

The tiff over high speed rail between President Donald Trump and Gov. Gavin Newsom escalated Tuesday, as Trump moved to cancel nearly $1 billion in federal grant money a day after California sued the administration over its attempt last week’s to fund a border wall by declaring a national emergency.

  • The money represents a fraction of the $77 billion project, but sets up a potentially significant legal battle.

Newsom threw the project into turmoil last week, first saying it would cost too much and take too long, but was committed to an initial phase, which he wants to run from Bakersfield to Merced.

  • The governor poked Trump, declaring he had no intention of returning $3.5 billion in federal funds for the project, including $2.5 billion already spent and $928 million to come.

After tweeting that the project was a “green disaster,” Trump officially responded with a letter from the Federal Railroad Administration cancelling Uncle Sam’s minimal investment.

Following termination, FRA also intends to promptly de-obligate the full $928.62 million obligated under the agreement.”

Bloomberg: “In addition, the U.S. Transportation Department said it was exploring legal options to recoup $2.5 billion in federal funds already granted to the project.”

Newsom: “It’s no coincidence that the Administration’s threat comes 24 hours after California led 16 states in challenging the President’s farcical ‘national emergency.’  … This is clear political retribution by President Trump, and we won’t sit idly by. This is California’s money, and we are going to fight for it.”


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Rail proponents poke back, too

Before Gov. Gavin Newsom can alter the scope of California’s delayed and over-budget high-speed rail, he’ll have to contend with Senate Transportation Committee Chairman Jim Beall.

  • Newsom proposed a major change last week in his State of the State address: Run the line between Merced and Bakersfield, not (for now) to San Jose as Gov. Jerry Brown advocated. Newsom said funding doesn’t exist for the San Jose leg.

Newsom last week: “Let’s be real. The project, as currently planned, would cost too much and take too long.”

Beall: “He is a new governor. He has the right to say what he wants. But there has to be a public process.”

Newsom can’t unilaterally alter the project, Beall told me. The California High Speed Rail Authority board, on which Beall sits, must approve changes. The San Jose Democrat said he’ll use the March transportation committee hearing to focus on Newsom’s plan.  

Among Beall’s questions:

  • Will ridership be sufficient on the Bakersfield-Merced line to operate without a subsidy?
  • If not, how would the line be subsidized, given that the law authorizing the project requires that it be operated without a subsidy?

Like others in Silicon Valley, including  San Jose Mayor Sam Liccardo, Beall wants the rail to run to San Jose. Beall and other proponents cite surveys showing that without the Bay Area link, the train will not have enough riders to operate without a subsidy.


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Newsom’s high-speed revision

Concept art from the California High-Speed Rail Authority.

Gov. Gavin Newsom’s proposal to run California’s high-speed rail from Bakersfield to Merced would extend the line 51 miles beyond its current configuration, costing an additional $2.8 billion, Brian Kelly, the high-speed rail authority’s chief executive, said Tuesday.

  • The current plan: A point north of Bakersfield through Fresno to Madera, then to San Jose.
  • Newsom’s proposal: Nix the San Jose leg, but extend the Central Valley portion 34 miles north to Merced and 17 miles south to downtown Bakersfield.
  • Cost of the 171-mile route would be about $17.5 billion. Noting that the state could pay for it and get it operating, Kelly said: “That moves it from abstract concept to high-speed rail.”

One obstacle: The Federal Railroad Administration has not approved its environmental review, pending since last summer.

Soda wars, continued

State lawmakers are again seeking a soda tax.

A statewide soda tax and other measures to reduce consumption of sugary drinks are being pushed again by legislative Democrats.

Among the proposals flagged by The San Francisco Chronicle:

  • Tax soda to offset its health effects at an amount to be determined.
  • Ban soda promotions to lower prices.
  • Ban Big Gulp-style sodas.
  • Warning labels.
  • Prohibit displays of sugary drinks in grocery checkout aisles.

Backers include the California Medical Association and California Dental Association. 

The American Beverage Association: “We are committed to working with the Legislature on effective ways to address its budgetary and public health concerns and to ensure that food and beverages remain affordable for all Californians.”

Back story: The Legislature last year banned cities from passing new soda taxes at the local level, to avert a soda industry initiative would have made it all but impossible for local governments to raise any kind of taxes. That was then. Now legislative Democrats have a veto-proof-and-then-some majority.

Charter school transparency

Legislation increasing charter school transparency zipped through its first committee with Gov. Gavin Newsom’s backing, apparently en route to quick passage.

  • Democrats and Republicans in the Senate Education Committee voted for the measure by Sen. Connie Leyva of Chino and Assemblyman Patrick O’Donnell of Long Beach. Representatives of teachers union and school boards also backed it.
  • The legislation makes clear that charter schools must comply with open meeting, disclosure and conflict of interest laws. It’s a first step. More is coming.

Money matters: Charter school advocates spent $22 million in a failed attempt to elect Newsom’s opponent, former Los Angeles Mayor Antonio Villaraigosa, in last year’s primary. Since then, some donors who support charter schools have contributed to Newsom’s campaign account.

California's tax break for renters hasn't risen since 1979.

California’s renter’s credit could rise for the first time in 40 years and be retooled to direct money to low-income parents under new legislation being proposed by Sen. Steve Glazer of Orinda and Assemblywoman Lorena Gonzalez of San Diego, both Democrats.

Current law: Eligible renters have their tax liabilities offset by $60 for single filers or $120 for joint filers, with no provision for children.

Proposed law:

  • Households with children would receive a $434 refundable credit—meaning they’d be entitled to the credit whether or not they have a state income tax liability.
  • Renters without children would receive $220.
  • Single filers making $41,641 and joint filers making $83,282 or less could claim the credit.

Aimed at workers on the lowest end of the economic ladder, the bill would cost the state about $500 million.

  • The renters credit hasn’t increased since 1979. During that time, rent in California has tripled.

Commentary at CALmatters

Nathaniel Logar, UCLA School of Law’s Emmett Institute on Climate Change and the Environment: Small water systems with the smallest number of customers face the greatest challenges in providing cheap, drinkable tap water. Most small water systems in L.A. County—and statewide—provide safe and affordable drinking water. The problem is that some do not. If we take the human right to water seriously, the place to start is with small water systems.

Dan Walters, CALmatters: When journalists point out Trump’s falsehoods, he typically reacts by denouncing them as “fake media” and even “enemies of the people,” and comes very close to inciting violence against reporters covering his public appearances. That brings us to the newly minted governor of California, Democrat Gavin Newsom.

Please email or call with tips, suggestions and insights, [email protected]org, 916.201.6281. Shawn Hubler, [email protected]edits WhatMatters. Thanks for reading, please tell a friend and sign up here.

See you tomorrow.