Category: State Ievel issues

  • “Newsom 2028” in progress

    One has to wonder if our governor is all there all the time.  The weathervane swinging from hard left to sort of maybe right is a wonder to behold.  One can only think that his presidential campaign is underway for 2028.  The Comicle reports that 808,000 acres have burned this far this fire year–more than twice the area damaged in all of 2023.  Completely predictable…because it happens every year.

    Dan Walters at Calmatters.org keep banging the budget gong

    Initially Newsom proposed a $13.1 billion draw from reserves, but the final 2024-25 budget approved in June took just $5.1 billion from the rainy fund and envisions another $7.1 drawdown in 2025-26. It also largely drains two other reserves, including one for schools.  This year’s deficit resulted from a massive overestimate of revenues by Newsom’s administration in 2022, rather than an economic turndown, and some critics have complained that misusing reserves this year could leave them unable to cope with a recession.

    Newsom, whose 2022 projection of a huge budget surplus from explosive revenue gains proved to be incredibly wrong, now wants the state to avoid spending estimates of windfall revenues until they are actually in the bank — a prudence that should have been adopted many years ago.

    While Newsom flies around the country to swing states and any other state that would have him, his team finds time to issue this warning.  As if any sensible city with even modest resources wouldn't already be doing it.  He's gotta get this problem that he has ignored for decades under control before 2028.  B'game better go check the Eucs along the Caltrain tracks and some of the little nooks and crannies on the Bayfront.

    Newsom threat

     

  • Climate Observations: Google, CalFire and You

    This is a placeholder post for when we get to the point where we cannot replace our gas stoves or gas water heaters or gas furnaces or gas barbeques.  Hopefully that day is still a few years away, but the smart bet is the climate fanatics will eventually get us.  When we complain about the costs (many hidden including the soft costs of your time), we will be told to suck it up.

    In the meantime, two types of events are taking place.  There are 3,543 wildfires of more than 10 acres burning right now in California per the CalFire incident page.  Your barbeque is a problem, but Sacramento (looking at you, Newsom, even though I know you are busy thinking about a promotion) still hasn't addressed the real need for more manpower, equipment, forest surveillance, etc.  Year after year, same old story and the news media always acts surprised.  Massive amounts of smoke, emissions, and cancelled insurance policies that end up as a State (read us) liability via the FAIR program.

    And then there are these two tidbits buried in the business news this week:

    Google and Microsoft have vowed to slash emissions by the end of the decade, but new disclosures show their numbers are moving in the wrong direction.   Google’s overall emissions increased by 13.5% from 2022 to 2023, according to its annual sustainability report released Tuesday. They are up by nearly half since 2019. A recent disclosure from Microsoft told a similar story. Its total emissions were up by 29% between 2020 and 2023.

    Big Tech's servers are using so much electricity that they are doing direct connections to power plants with "behind-the-meter" access.  Some observers are worried this will destabilize the grid and it certainly won't make it any cheaper.  Stay tuned so we can alert you when to start hoarding gas appliances. 

  • Graduation Requirement: Let’s have the Legislature go first

    Sometimes you have to laugh at the Sacramento hubris otherwise you will just cry.  Such was the state of affairs last week when the wise folks in Sac added "personal finance" to the required high school curriculum.  From the Merc:

    Last week, California became the 26th state to require high school students to take a stand-alone, one-semester financial literacy course when Gov. Gavin Newsom approved Democratic Assemblymember Kevin McCarty’s bill, AB 2927.  The personal finance course will teach students a range of topics, including banking, budgeting, loans, insurance, investing and credit.

    Schools will be required to offer the course by the 2027-28 school year, and the course will be a graduation requirement for the class of 2030-31.

    “We need to help Californians prepare for their financial futures as early as possible,” Newsom said in a recent statement. “Saving for the future, making investments and spending wisely are lifelong skills that young adults need to learn before they start their careers, not after.”

    I will add they especially need these skills if they want to start a career in politics.  Let's go back to February when two people who understand finance reiterated concerns about the mess called the state budget.  Studying "budgeting" and "credit"?  Let's let the Legislature take the course before the high school kids, please.

  • Prop. 47 Shenanigans around the ballot

    You know things are getting bad in Sacramento when even the SF Comicle starts calling out the legislature as "shady".  An initiative to reverse Prop. 47, which was approved by our clueless electorate a decade ago to reduce the penalties on drug offenses and theft, is headed for the November ballot.  As we noted, the action on the ballot this Fall is in the initiatives.  The shady bits to stymie the initiative are slowing coming out as even Emily Hoeven at the Comicle has caught on:

    Earlier this year, lawmakers unveiled a bipartisan package of bills that would, among other things, create a new crime for serial retail thieves, allow prosecutors to combine certain low-level thefts when charging offenders, permit courts to issue retail theft restraining orders and institute sentencing enhancements for those who steal, resell and destroy especially large amounts of property.  Thus far, the package has been smoothly chugging through the Legislature. 

    But Democrats have now cooked up a scheme to kill most of their own bills if voters approve a ballot measure to reform Proposition 47 — the controversial 2014 initiative that reduced penalties for some drug and theft offenses — which formally qualified Tuesday for the November election.

    Last week, news leaked that Assembly Speaker Robert Rivas and Senate President Pro Tem Mike McGuire planned to amend the Democratic public safety package to make it effective immediately upon Gov. Gavin Newsom’s signature, rather than the customary first day of the new year, and then repeal it if voters approved the Prop 47 reform measure. 

    It was a crafty, if cynical, strategy that effectively left ballot measure supporters with a choice: Either they could support the package of bills, which were all but guaranteed to become law in a matter of weeks, or they could take their chances with the ballot measure, which voters might or might not approve and which would require millions of dollars in campaign funding.

    Click through to the Comicle piece for all the dirty little moves, the virtue signaling about "mass incarceration", demonizing district attorneys and whatever else our betters in Sac who have the super majority can throw against the wall.  It really is appalling.

  • Election 2024: The action is in the initiatives

    Dan Walters at Calmatters.org has distilled the upcoming election for us noting that the candidate-based voting is a forgone conclusion, but the numerous initiatives is where the action will take place.  I grew up in "Taxachusetts" but my home state has nothing on California.  Squeezing more blood from the middle-class stone is on-going and the question is will this be the election where the backlash arrives?  As Walters writes

    The scale of the conflicts is most evident in an initiative, sponsored by the Business Roundtable and anti-tax groups, that would make state and local tax increases markedly more difficult to enact.  It hits Democrats and their allied public employee unions where they live and they have mounted a two-pronged effort to block passage: a lawsuit, now pending in the state Supreme Court, to strike the measure from the ballot, and a competing proposition that would impose a higher and potentially prohibitive vote threshold on the tax measure.

    On crime, he notes the ballot will include an "initiative that would modify Proposition 47, a 2014 ballot measure that reduced penalties for many crimes."  I think of it as the "Walgreen's initiative" after hearing multiple instances of people walking out of the store on B'way with a garbage bag full of stuff.  You want shampoo?  Call a clerk to unlock it.  Today's Comicle has a piece about some Safeway taking out the self-check kiosks and it ain't because they want to hire more checkers.  Walters expects the backlash initiative to qualify.  Further down the ballot:

    Other high-profile measures either qualified or likely to qualify include a business-sponsored initiative that would repeal the Private Attorneys General Act, a two-decade-old union-sponsored law that makes class action lawsuits against employers relatively easy to file. Others include a third effort to make it easier for local governments to enact rent control, a boost in income taxes on high-income Californians to finance pandemic prevention, and an increase in the state’s minimum wage.

    Talk about dumb and dumber.  Let's mess up the rental market, the entry-level job market and kill the Golden Goose all in one fell swoop.  There are five months to go.  We shall see if the voters have had enough or if we get more of the same.  Stay tuned.

  • UC Berkeley: “Cluster hires”. What could go wrong?

    Let's do one more education-related post to keep the streak running.  The Sunday SF Comicle section titled "Insight" provided a rare sliver of insight this week.  I enjoy watching new words being created and this piece brought wider notice to the term "Pretendianism" to describe the act of faking your ethnic background to take advantage of ethnicity-driven hiring programs.  The piece titled "Pretendianism too common in academia" asks the question: How do so many people with no Native ties get away with using a false heritage to infiltrate some of the most rarefied academic spaces in America?

    I'll skip over the details of one Associate professor Elizabeth Hoover's gaming of the system because the article leaked an even more egregious practice at UC Berkeley that probably exists elsewhere in publicly funded academia.  It's hardly news and it's quite profitable as the Other Elizabeth has been proving for more than a decade.

    But deep in the article, this tidbit is revealed

    Contrary to some reports, Hoover was not a “cluster hire,” the faculty member said, which is when several new faculty members identified as members of a minority or historically disadvantaged groups are brought aboard simultaneously — a method has been championed at UC Berkeley to make “an immediate and substantial impact far greater than a few isolated hires.” 

    Yikes!  Is this a "cheaper by the dozen" approach?  Let's not spend time and effort examining individuals' skill sets.  We'll just hire a handful all at once that look the right way.  One wonders if that tactic would survive the "shoe on the other foot" test?  Is it any wonder that campuses are a mess?  California taxpayers are not getting their money's worth, and the faculty lounge is the first place where the shades should be lifted and sunlight should shine.  "Rarefied spaces" indeed.

  • Bay Area Population: More shrinkage, significant shrinkage

    Peeling back the headline that statewide population rose 0.17% for the first time in years, yields the news that the Bay Area continues to shrink.  Are you wondering why we need to tax the people who remain, to the tune of a $20 billion bond, for "affordable" housing in the Bay Area?  Me too.  The original news reports put it at $10 billion, but a few billion more here and a few there and voilà–it's $20 billion per the MTC news release.  As we noted here, the ink isn't even dry on the measly $6 billion bond that Newsom just rammed through.

    Let's go to the tale of the tape:

    A net of about 114,000 people immigrated legally into the state from abroad during 2023, up from a net 90,000 people in 2022 and near pre-pandemic levels. 

    So, trying to outbuild the global desire to move here is a fool's errand most likely to harm those that are still here

    Net domestic migration was still negative, with the state losing an estimated 92,000 people last year from internal migration, but that was far less than the approximate 356,000 net loss in 2021.

    And the local story was one of shrinkage with slight growth in the "outskirts" of the Bay Area where there is room for projects like California Forever that would be privately funded and developed.

               Alameda County                -0.5% 

    San Mateo County             -0.5%

    Marin County                    -0.4%

    Sonoma County                 -0.3%

    Santa Clara County            flat

    Napa County                     +0.4%

    Contra Costa County         +0.1%

    Solano County                   +0.2%

    San Francisco                    +0.1%

    Let's put additional big bonds for "affordable" housing on the back burner, nay back in the fridge, until we see how the regulatory clubs like SB9, builders' remedies, buying up hotels and motels for subsidized housing and Newsom's six bill work out.   As Jerry Seinfeld said to George regarding the shrinkage, "I think they know".

  • California Budget Woes….Woe is Us

    There are two highly capable people outside of the state government that act as watchdogs on where our tax dollars are going.  One is David Crane from Govern For California.  The other is Dan Walters at Calmatters.org.  They are both yelling from the mountain top about the fiscal pit they see below.  Here is a bit of Walters' piece from last week:

    While Gov. Gavin Newsom gallivants around the country as a campaign surrogate for President Joe Biden – and to burnish his own national image – the state budget he proposed just six weeks ago is falling apart at the seams.  Last week, his Department of Finance indirectly acknowledged the budget’s problems, reporting that through January revenues were running $5.9 billion behind the new budget’s assumption for the current fiscal year.  On Tuesday, the Legislative Analyst’s Office, which advises the Legislature, increased its estimate of the budget’s deficit, which Newsom had originally pegged at $38 billion, to an eye-popping $73 billion after toting up Newsom’s proposals and decreasing its revenue estimate.

    When he unveiled his 2024-25 budget in January, Newsom proposed a series of fiscal maneuvers to close the gap, very few of which were actual spending reductions.  He tapped the state’s emergency reserve and dug deeply into the bag of tools that the state has historically used to paper over deficits, including spending deferrals, loans from special funds and accounting tricks, such as a maneuver involving school aid.

    The other watchdog, David Crane, quoted Joe Mathews from Zocala Public Square who zeroed in on the last maneuver a couple weeks ago saying:

    These $10 billion-plus in deferrals don’t include education, which Newsom and legislative Democrats have claimed their budget doesn’t cut. But here, the administration is playing a more deceptive game. The state’s non-partisan Legislative Analyst’s Office found that California is actually reducing spending on schools and community colleges by $15.2 billion, relative to the budget enacted in June 2023.

    The way the state does this is too long and complicated to fully explain here—it involves the convoluted three-part Prop. 98 funding formula. But the short version is that Newsom is charging $9 billion in reductions to the 2022-23 school year and redefining these cuts as a reset of the funding baseline. There are several more billion in school cuts that appear in the budget without any explanation of how they might be achieved.

    That's sort of like backdating a check and asking the recipient to still not cash it for a month while simultaneously saying you didn't really owe the money in the first place.  Except it's a really big check and it really was money owed.  You really have to wonder about Newsom's priorities.  David Crane can probably talk for an hour on the things we are spending Big Money on that don't involve legal California residents getting services.  Or services that are so poorly managed as to be embarrassing.  Mathews and Crane have been having this debate for a long time:

    Why is the budget so out of whack? For years, I’ve conducted a long-distance argument about this topic with David Crane, a former UC regent and state teachers pension fund board member who has founded a political organization, Govern for California, to elect more state lawmakers willing to make tough, public-spirited decisions. Sometimes our debate takes place through former state legislator Ted Lempert’s UC Berkeley class on California government, where we both have been guest lecturers.

    Crane argues that California governance fails because we need people in government who have the courage to take on the state’s powerful labor and corporate lobbies. 

    I argue the problem is structural—that California’s misbegotten governing system and broken state constitution keep pushing the budget out of balance.

    But in this particular budget season, I must concede that Crane has the better side of the argument. California is not in a recession. The governor and the state legislature’s Democratic supermajority have the money and the power to make hard choices now. By deferring so much, they will make it even harder to balance the budget in the future, and push more costs onto the next generation of Californians.

    That's Mathews taking the long view, but I tend to believe we will not have to wait for the next generation to feel the pain.  Rocky (Sly Stallone) was this week's new ex-California resident having bought a big house in Florida.  He's not going to be the last .1 percenter to jump ship.  Happy Election Day!

  • California Exodus: 2023 version

    As we ease into the end of the year, it is a time to reflect on the major trends of the year and assess what they mean for the future.  The elephant in the California room is out-migration, particularly of the people who foot the California tab which is large and growing.  We touched on it in July of 2020 here.  And again in October of 2022 here.  So none of this is news–the news is what little Newsom and the Legislature are doing about it.

    State budget analysts recently projected a record $68-billion deficit in the next fiscal year because of a 25% drop in personal income tax collection in 2023. Some city, county and other local taxing authorities, particularly in the San Francisco Bay Area, have also recorded revenue declines.

    California is heavily dependent on high earners to meet government fiscal needs. Tax filers in the top 1% of income, earning around $1 million and above, have typically accounted for 40% to 45% of the state’s total personal income tax revenue, said Brian Uhler, deputy legislative analyst at California’s Legislative Analyst’s Office, which estimated the $68-billion budget deficit.

    Moody’s Analytics economist Mark Zandi analyzed moves in and out of California for The LA Times using Equifax credit data, to zero in on the age of the movers. He found that since the pandemic in early 2020, California has lost residents in every age group, but by a significant margin the biggest net out-migration came from those 35 to 44 years old.

    Pundits on the Left AND the Right (looking at you WSJ) point to restrictive building codes as a key factor, but I think it is way down the list.  In fact, I'll bet a lot of departures are due to the reverse–over-development and all the quality of life problems it brings.  Or the sense that your single-family neighborhood is threatened by the Yes In Your Backyard crew–YIYBYs.  Right behind that are the oppressive taxes on the high earners and the little tricks being played like the Death Tax that slipped through last election.  Pile on the singularly stupid things like fining stores if they don't have a "gender-neutral" toy section or outlawing gas stoves that causes ridicule from friends all over the country and you have a Perfect Storm.

    As I said three and a half years ago on the first linked post, this is not likely to change any time soon.  There maybe a Black Swan event at some point but they are intrinsically unpredicted.  All we can do it keep talking/posting about it and hope the politicians wake up to reality.  When the effects of the bad policies noted here finally come home to roost, it may be too late.

  • “SFO is sinking fast” while expired legislation is reintroduced.

    The Comicle front page headline blared out the news SFO’s runways are sinking, new research finds in the on-line version.  The print version (below) was even better.

    San Francisco Internation airport is sinking, fast. That’s according to new research, being presented at the American Geophysical Union conference in San Francisco this week.   SFO’s runways are sinking approximately 0.4 inches per year, the fastest among 15 coastal U.S. airports surveyed in new research from Virginia Tech. The research, which utilized submillimeter satellite imagery, found that Los Angeles International Airport’s runways are sinking at roughly 0.1 inches per year, the slowest among the measured locations.

    Subsidence, or sinking, can cause cracking and bulging on runways, a major hazard for aircraft while taking off and landing. SFO isn’t vulnerable to this cracking, but as the water level rises in nearby San Francisco Bay, the airport could be at risk in about 40 years, according to lead researcher Oluwaseyi Dasho, an environmental hazard specialist at Virginia Tech.

    They don't mention why SFO runways are not vulnerable to cracking.  That would have been helpful since they are mostly landfill to begin with.  For those keeping track at home 0.4 inches per year for 40 years is 16 inches–that's some speed bump at 120 mph or more.  And then there is the "seawall" project.

    Airport revenue will pay for the $590 million Shoreline Protection Program, a seawall that will shield the airport from some storm surge and future sea-level rise impacts. Project construction is scheduled to begin in 2025.

    We have our very own Hans Brinker effort going on although it would probably be wiser to emulate Tokyo or Denver and just start working on an adjacent airport out in the East Bay–maybe the Silicon Valley investors hoping to build a new city in Solano County could spare a few hundred acres.  Back in real time, our Rep. Kevin Mullin has reintroduced some of the same legislation that Jackie Speier logged as noted here.  The specifics of the two most important pieces are:

    Reps. Panetta, Eshoo, Mullin, Cárdenas, and Sherman introduced the following pieces of legislation to ensure quieter skies:

    The “Restore Everyone’s Sleep Tonight Act” or the “REST Act” (Panetta)

    Legislation which would authorize an airport to impose an access restriction between the hours of 10 p.m. and 7 a.m. for aircraft.

     

    Reps. Panetta, Eshoo, and Mullin, all Bay Area members, introduced legislation specifically aimed at addressing issues with San Francisco International Airport (SFO):

    The “Serious Noise Reduction Efforts Act” or the “SNORE Act” (Mullin)

    Legislation that would address noise mitigation through soundproofing and other strategies in the communities surrounding San Francisco International Airport.

    This acknowledgement about the noise from take-offs and landings in the press release shows a good understanding of our current situation

    “This legislation requires the FAA to prioritize noise-related health impacts, enables communities to engage with the FAA, establishes standards related to ground-based noise".  We shall see if our local reps can muster any support in Congress.  I applaud the attempt.  Now put some juice behind it in DC.

    SFO sinking

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