CAN THE POSSIBLY PASSED PROP. 1 HELP SOLVE HOMELESSNESS?

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MARCH 22, 2024, OR THEREAFTER

  

BY THOMAS D. ELIAS

     “CAN THE POSSIBLY PASSED PROP. 1 HELP SOLVE HOMELESSNESS?”

 

        The possible passage of Proposition 1 raises one very basic question: Could it help solve homelessness or merely be another financial boondoggle helping a few but leaving the crisis in the streets essentially unsolved?

 

        First, there is no doubt this measure can help some of California’s approximately 180,000 unhoused. Its $6.4 billion cost will provide more than 11,000 new treatment beds for people with serious mental and emotional problems, reinforce the treatment they can already get in some counties through the relatively new and unproven Community Assistance, Recovery and Empowerment (CARE) court system and possibly reduce some of the homelessness now so visible on streets and parks all around California.

 

        But some informed estimates held during this winter’s campaign that it could not solve more than 2 percent of the problem.

 

        Which raises an obvious question: if this estimate is correct, is that enough of an improvement to justify the $310 million the state’s general fund will likely pay in each of the next 30 years to repay the bonds?

 

        The money would be added onto the $10 billion to $13 billion now distributed each year to counties for mental health care and drug and alcohol treatment. Roughly one-third of that money comes from a tax on those with $1 million-plus incomes that’s been levied for this purpose since 2005.

 

        That tax would continue under Prop. 1, so there will be no substitution of bond money for tax funds, and the new money should strictly be an add-on.

 

        With about 70 percent of Californians listing homelessness as California’s biggest unsolved problem, there was plenty of reason to vote for this proposition, but it's fate was still uncertain after Election Day. But the new bond’s proceeds might seem like a drop in the bucket considering that about 47 percent of today’s homeless are afflicted with mental or emotional illness, with another 150,000 others in similar difficulty now housed in prisons at a cost of about $130,000 per year.

 

        Some experts said during the Prop. 1 campaign that the urgency of the problem makes every dollar coming in constructive. But maybe not, if that gives voters the sense they’ve just done something important, causing them to become frustrated with government when they see the bonds solving only a bit of the crisis.

 

        For sure, the mental illness problem is severe. For one measure, there’s $217 million just spent by the Golden Gate Bridge, Highway and Transportation District on adding steel netting to prevent suicides by jumping from that landmark span.

 

        Californians who voted for this measure were probably correct to do it, even if it couldn’t by itself solve homelessness or mental health crises. Every dent in the problem represents improvement in the quality of life for many who have been unhoused.

 

Part of the background of Prop. 1 was the realization that one in every 20 California adults now lives with serious mental illness and the more treatment beds available, the more likely some progress can be made treating those who need help. At the same time, one in 13 California children of school age suffers serious emotional disturbance and one in 10 Californians has some sort of substance abuse disorder.

 

        One little publicized part of Prop. 1 speaks to this last issue, allowing a small percentage of current mental health spending to be used against substance abuse. Since substance abuse from alcoholism to opioid dependence can lead straight into to mental illness, this might help with both mental illness and drug dependency.

 

        It all amounts to a measure of how Californians are still paying for the single biggest error made by Ronald Reagan, who as governor in the 1960s and '70s engineered the closing of most of this state’s mental hospitals, which were never replaced.

 

        Reagan planned to set up smaller halfway houses to replace those institutions, letting recovering mental illness patients ease back into society while still getting treatment. Those homes never materialized and homelessness has proliferated steadily ever since.

 

        If Prop. 1, combined with CARE courts, can solve even a small percentage of today’s problems, it would be a positive. But if it’s too little and doesn’t accomplish much, then – if it narrowly passes –. it will go down as a waste of public money. The proof, as usual, would be in the performance.

 

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    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

 

UTILITY PROFITS: UNSPOKEN FACTOR IN ROOFTOP SOLAR FIGHT

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MARCH 22, 2022, OR THEREAFTER

BY THOMAS D. ELIAS
      “UTILITY PROFITS: UNSPOKEN FACTOR IN ROOFTOP SOLAR FIGHT”

 

      A new judgment day arrives soon for rooftop solar development in California, with the state’s Public Utilities Commission due to issue a rewrite of its abortive attempt to dun current and future residential solar owners unprecedented sums, thus discouraging development of home-based solar energy.

 

        Never mind that more than 1 million homes in this state have solar panels, making California a world leader in localized use of energy from the sun.

 

        Never mind also that cutting back expansion of rooftop solar would compel utilities like Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric to buy ever more energy from solar thermal plants in remote parts of the state’s vast and sun-drenched deserts.

 

        There’s nothing these privately-owned, profit-driven utilities want more than that. For them, buying power from distant solar farms means vast profits. That’s because getting the desert’s solar power to cities requires hundreds of miles of new transmission lines, which cost many billions of dollars.

 

        Since the private utilities get a guaranteed rate of return (e.g. profit) on capital investment that usually varies between 10 percent and 14 percent per year for 20 years, the more desert-based solar thermal, the more money they collect from customers.

 

        So it was no wonder the utilities all lined up behind the PUC’s clumsy first attempt at cutting back rooftop solar. They even financed the largest “citizen” group pushing for that change.

 

The attempt, killed just before it could be adopted in late January, would have assessed new monthly fees for owning rooftop solar, also reducing payments to owners when they send excess energy to the state’s overall electric grid.

 

        Opponents call the present system a “subsidy” of the rich by the poor and others, including renters who don’t control their rooftops. And it is, to a degree. But those folks would pay far more in rate increases from new solar thermal transmission lines than they now pay in unofficial subsidies to rooftop solar owners.

 

        Not a single official analysis of the PUC’s now-dormant proposal even mentioned this key fact. The precise amount of new rate increases to assure utilities profit from new power lines remains unknown, because no one can yet predict how much more solar thermal power they will buy.

 

        Because the PUC’s plan did not mention this reality, it was incomplete and deceptive. Similarly, when PG&E happily applies for rate increases to pay for undergrounding many of its fire-prone lines, it also won’t mention its guaranteed new profits.

 

        Gov. Gavin Newsom also didn’t mention this when he demanded the PUC change its proposed new solar pricing system. He responded only to complaints from rooftop owners who disliked the planned new structure and to complaints it would cost thousands of “green” solar-installation jobs.

 

        But there is no doubt the PUC knew it was ignoring a vital factor in the pricing of solar power.

 

        Said a February 2021 PUC study on electric rates of the last 10 years and the next decade, “The growth in rates can be largely attributed to increases in capital additions…in transmission and distribution.”

 

        The study went on to forecast a 10-year average annual price increase for power from PG&E at 3.7 percent. The figures were 3.5 percent for Edison and 4.7 percent for SDG&E.

 

        That would give each company guaranteed rate increases just about the same as those they’ve gotten over the last nine years, when PG&E prices rose by 37 percent and SDG&E rates by 48 percent, according to the report.

 

        It is plain dishonest for the PUC and critics of the present rooftop solar program to ignore this reality and claim the pulled-back proposal would have meant savings for renters and lower-income electric customers.

 

        But dishonesty rarely stops the often scandal-plagued PUC. It has played ball with the utility companies, in matters as varied as wildfire expenses, by reportedly not collecting fines it claims to assess and by forcing customers to pay for the Edison-caused shutdown of the San Onofre Nuclear Power Station (SONGS).

 

        The discredited rooftop solar plan was part of that old song, and the new plan will be, too, unless it strongly factors in utility profit increases and rate hikes that would follow decreased rooftop solar installations.

       

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     Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, go to www.californiafocus.net

NO DEAL IS BEST DEAL ON SPLIT ROLL

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MARCH 22, 2019, OR THEREAFTER


BY THOMAS D. ELIAS
          “NO DEAL IS BEST DEAL ON SPLIT ROLL”

           It’s open season these days on ballot initiatives, propositions placed on California’s ballots every two years after hundreds of thousands of voters sign petitions to put them there.

          The as-yet-unnamed and -unnumbered initiative known as the “split roll” is not exempt.

          Thanks to a 2014 law, legislators and others state officials who don’t like ordinary citizens to make this state’s biggest policy decisions now can maneuver to get already-qualified initiatives taken off the ballot. If they work out a deal with the initiative sponsors, the measure will go away.

          For the split roll measure, whose sponsors including the League of Women Voters gathered more than half a million signatures, that means it would not be Californians at large deciding what is arguably the most important tax issue now before the state, but rather a bunch of insiders.

          British Prime Minister Theresa May, opposing a second national referendum on whether the United Kingdom should pull out of the European Union, said for much of the winter that holding a second vote “would undermine public faith in democracy.”

          That’s just what a back-room deal taking the split roll initiative off the November 2020 ballot would do.

          No doubt, split roll would upset quite a few applecarts. But that is what the early 20^th Century Republican Progressive Gov. Hiram Johnson had in mind when he engineered the initiative process to let voters make key decisions.

          Make no mistake, the split roll verdict is a key decision. It would make the first significant change in Proposition 13 since that landmark property tax-cutting measure passed by almost a 2-1 vote in 1978. For almost 41 years since then, commercial property has been taxed at the same rate as residential, owners of both types paying 1 percent of the latest purchase price, plus a 2 percent yearly increase. Property in the same hands since 1975 gets taxed at 1 percent of its assessment that year, plus the same 2 percent annual increment.

          Split roll would change this formula for commercial property, while leaving homes alone. Business property would immediately be taxed based on current valuations, bringing in as much as $11 billion in new government revenue every year. Business interests like chambers of commerce around the state will fight this change.

          But the question may never actually get to a yes-or-no vote. Last summer, for example, the Legislature passed new privacy rules entitling all Californians to know what information Internet giants like Google and Yahoo and Facebook and eBay and Amazon have about them. They will soon be able to prohibit companies from selling that information and force companies to delete it after they learn what’s been gathered.

          That was progress, but a far cry from the ballot initiative those new rules replaced. The original would have forced companies to get consumer permission before gathering, maintaining or selling information on what Internet searches people make, what they buy and what products they look at but don’t buy – and much more.

          Initiative sponsors scrapped those things when they compromised with Big Internet, sparing the sponsors from having to raise many millions of campaign dollars while still risking a loss and a return to Square 1.

          This was the kind of compromise intended when the 2014 law passed. But it deprived voters of a voice via a classic backroom deal made shortly before the deadline for ballot measures to be assigned proposition numbers.

          Now Gov. Gavin Newsom has said he’d like to broker a deal staving off an expensive and emotional campaign over Proposition 13. He wants to simplify California’s tax code in the process and make it more fair, at the same time making the state budget less dependent on income taxes generated by stock and bond investments.

          No one is now claiming a far-reaching tax deal is likely or even possible. But if it happens and it takes the split roll off the ballot, voters will again lose the chance to make an important decision that could affect all Californians for many years to come.

          And that would be a major detriment to democracy.

         
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    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

WHO THOUGHT FOR RONNIE? HE DID – WITH NANCY

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MARCH 22, 2016, OR THEREAFTER

BY THOMAS D. ELIAS
    “WHO THOUGHT FOR RONNIE? HE DID – WITH NANCY”

          Barely three weeks after Ronald Reagan became the first professional actor ever elected governor of California, in late January 1967, he gave an hour of his time to a small class of Stanford University graduate students led by the great Prof. William Rivers.

          The class first attended his weekly news conference, then visited Reagan’s office before lunching with Lyn Nofziger and William Clark, later to be Reagan’s White House press secretary and national security adviser, respectively. The class only briefly encountered his wife Nancy Reagan, who died this week.

          At the time, many so-called political experts doubted Reagan was smart enough to have masterminded his accession to the California governor’s office, then and now recognized as one of the half-dozen most powerful political jobs in America.

          Reagan fed into that thinking at times. He often answered complex questions with simple aphorisms. When someone asked him whether he would give students at UC Berkeley, then staging large protests almost daily, a voice in university policy, he responded that “You can’t run a ship by polling the crew.” More than 23 years later, when I last interviewed him in his post-presidential office high in the Fox Plaza skyscraper in Los Angeles, he still spoke the same way.

          That kind of answer to multiple queries prompted the question I asked in the title of a column about that 1967 visit in the now-defunct Menlo-Atherton Recorder, then a weekly newspaper I edited: “Who Thinks for Ronnie?”

         

          There were several candidates. The always-pithy Nofziger was one. So was Clark, later named by Reagan to the state Supreme Court and still later as Secretary of the Interior. There was also Michael Deaver, an aide who served Reagan for 30 years, most as his deputy chief of staff. And there was Edwin Meese, chief of staff in Sacramento and later U.S. attorney general. Reagan biographer Lou Cannon wrote that Meese “was able to explain complex ideas to Reagan” in ways akin to Reagan’s own speaking style.

          All these men eventually dropped away; yet, Reagan remained the same, proving none of them was the puppeteer his political skeptics long hoped to uncover. But one figure was at his side steadily through many of his Hollywood years, during his eight years as governor, in his losing 1976 campaign for president, through his White House years and then was his loving caretaker for a 10-year bout with Alzheimer’s disease before he died in 2004. That was his wife and best friend, Nancy Davis Reagan, who devoted herself through all those years to furthering her husband’s interests and always called him Ronnie.

          Cannon once wrote that “Reagan knew where he wanted to go, but she had a better sense of what he needed to do to get there.”

          She was blasted by some for seeming to feed him a line during one presidential news conference. But she knew better than anyone what he thought about almost everything, because – and this is the consensus of presidential historians – no White House couple was ever closer or talked through more things.

          So the skeptics who wondered if Reagan could think for himself  -- including this one – were wrong. He could and he did. His best friend Nancy didn’t think for him; she thought with him.

          Before Mrs. Reagan died of congestive heart disease, she had also spent her last few years maintaining the Reagan image, personally hosting speeches at his presidential library in Simi Valley by almost every Republican luminary.

          But it’s safe to say that whether you liked them or not, virtually all Reagan Administration concepts, from wearing down the Soviet Union by building up American military might to levels not seen before or since, to flexibility on issues like abortion, to his refusal to bend to public sector union demands, had first been tested in conversation with Nancy.

          Which means if any presidential administration was ever two-headed in substance, if not form, it was Reagan’s. For it is now clear that all those devoted aides who pundits once speculated might think for Reagan did not. Some contributed ideas, but he did the thinking – and so did Nancy, who might just rank first in influence among all First Ladies.

         

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     Email Thomas Elias at tdelias@aol.com. Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It,” now available in an updated third edition. For more Elias columns, go to www.californiafocus.net

AIR BOARD MAY HAVE IT RIGHT ON CAP AND TRADE

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, MARCH 22, 2013, OR THEREAFTER

BY THOMAS D. ELIAS
     “AIR BOARD MAY HAVE IT RIGHT ON CAP AND TRADE”

          From the moment AB 32 and its mandate for greenhouse gas reductions passed in 2006, conservative opponents and climate change deniers have vilified it as an economic suicide pact for California.

But that may not be so, in part because of how the cap and trade system for lowering emissions of carbon dioxide (CO2) is now working.

What’s more, no one expected this to be a big state moneymaker back when current Democratic state Sen. Fran Pavley and then-Gov. Arnold Schwarzenegger were pushing it.

          But it’s turning out to be just that, in about the amounts the current state budget proposal figured on – unless the state Chamber of Commerce succeeds in a current legal challenge to the law’s fund-raising side.

          One question that lawsuit raises is just what to do with the more than $140 million raised in the first two state auctions of air pollution permits that are key to the system of gradually reducing limits (caps) on emissions. Spend it for the kind of green projects outlined in the law or set it aside in case the chamber wins? So far, Gov. Jerry Brown is coming down on the side of spending the money, but that’s not final.

          This was designed all along to let some companies keep polluting while overall statewide levels of CO2 and other greenhouse gases slowly sink to 1990 levels. Only companies that emit more than 25,000 tons of CO2 yearly are covered. So far, more than 260 are involved in the program, from oil refineries and power companies to dairies and large corporate farms.

          All those outfits last November were given 90 percent of the pollution allowances they would need to continue operating at current emission levels for the next few years. (Each allowance, or permit, lets the owner emit one metric ton of CO2). Any that reduce greenhouse gases by just 10 percent, then, will have no further expenses for years to come.

The pollution permit auctions are only about the other 10 percent that most of the big companies involved will need.

          There is strict secrecy about who’s bidding how much, too, the ARB claiming that’s so companies can freely bid on the allowances and reveal to no one but the ARB what they think it will cost them to clean up. Future planning will be based on those numbers. As in most auctions, the highest bidder wins, getting the permits it wants. The next highest bidders also get theirs, a process that continues until all available allowances are gone.

          Everyone getting allowances in the auction pays for them at the lowest winning bid level, but never less than $10 per credit. In short, these auctions minimize what the state takes in, rather than maximize it, while still giving the permits significant value. The idea, says ARB spokesman Stanley Young, is to help fight climate change by delivering the most greenhouse gas reductions at the least cost.

          Brown’s tentative 2013-14 budget forecasts the auctions will bring in about $400 million by the middle of next year.

          Testimony at three hearings staged around the state over the last few months might help Brown decide where to put the money.

          For sure, he can’t use it just to help balance the budget. AB32 requires it be spent on projects that reduce CO2. Because cars and trucks are the biggest CO2 producers in California, anything that helps take some of them off the road may qualify for funding.

So carbon permit auction money could be used, for one example, to help pay off bonds for the state’s nascent bullet train. Or to install solar panels. Or to improve energy efficiency in homes, offices and industrial plants. But probably not for education, roads or parks.

          As for cap and trade itself, no company actually has to account for its allowances until November 2014. Polluting businesses meanwhile can buy or trade for credits given to other firms last fall or bought by them since. That’s supposed to make it profitable for companies originally given pollution allowances to cut their emissions, then sell or trade some of those they got. That’s the “trade” in cap and trade.

          Only time will tell if all this will work without costing jobs and profits, especially for businesses using older equipment.

          Already, the University of California has said its spending on pollution permits may reach $28 million yearly before 2018, equivalent to the cost of educating 2,800 students at an average of $10,000. No one is saying whether that will that force some students out or cause fee increases.

          The bottom line: The first impression is that the air board probably has gotten this program right. It’s too soon to be sure whether it will work better than clumsy cap and trade systems previously tried in Europe and several Northeastern states. But the fact most businesses paid nothing for 90 percent of their pollution allowances is a real positive.

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Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

EASE THE CRUNCH BY CLOSING LOOPHOLES, ENFORCING SALES TAX

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MARCH 22, 2011, OR THEREAFTER

BY THOMAS D. ELIAS
“EASE THE CRUNCH BY CLOSING LOOPHOLES, ENFORCING SALES TAX”

Go online today and buy a book or DVD from an independent California-based seller on Barnesandnoble.com and you will pay a bit of sales tax. Buy the same book from Amazon.com and you won’t.

Similarly, buy a jacket from Landsend.com and you’ll pay sales tax. Go to eBay and buy the identical item and chances are you won’t.

This inequity not only hurts companies which dutifully collect and pay sales taxes because it’s the law and they want to be responsible citizens, but also hits hard at schools, parks, in-home services for the elderly infirm and everything else California government does.

No, these are not tax loopholes granted by politicians to companies that donate campaign dollars. We’ll get to those later. The sales tax problems stem purely from cheating by individual sellers and the corporations that protect them in the interest of boosting themselves a bit above their law-abiding competition, both on the ‘Net and in real-life stores.

This became a minor campaign issue last fall, when this column revealed that most California-based eBay sellers pay no sales tax and the company, under both Meg Whitman, the failed Republican candidate for governor, and her successors has refused to provide the state Board of Equalization with a list of its California sellers to be compared with lists of tax-paying merchants. The company said it refuses in the interests of privacy. Translation: eBay gets a cut of every sale on its site, so even the slight reduction in sales caused by collecting and paying sales tax would cost the company more than it wants to pay.

One BOE estimate was that this cost the state about $1 billion over the past 10 years. Now the BOE has provided a figure for the overall cost of such tax evasion, including eBay and every other miscreant. It comes to about $1.45 billion per year, just under one-twelfth of the current state deficit.

So if your child’s classroom becomes more crowded next fall or if teachers at public schools disappear, and if roads become more potholed or your favorite state park closes or you can't sign up for a course at a university or community college, you’ll know who some of the culprits are.

The state can’t force companies like eBay to cough up lists of their independent sellers, so any move to help the state collect its due – any merchant with a physical presence in California must pay sales taxes – would be voluntary. This would change if several bills now in the Sacramento hopper aiming to allow direct assessments of Internet sales to Californians should become law. When other states have tried to make this compulsory, it hasn’t worked: New York attempted in the last decade to force Amazon to turn over lists of its sellers in New York state; Amazon not only refused but moved warehouses out of that state. The same thing is happening now in cash-strapped Texas. This is one reason California has not gone hard after eBay’s sellers.

At the insistence of then-Gov. Arnold Schwarzenegger, this state in 2009 also gave tax breaks amounting to slightly more than its missing sales tax revenue to many out-of-state corporations with significant operations in California.

These include companies like Comcast, Time Warner, Roche pharmaceuticals and similar behemoths. When an initiative to rescind those breaks appeared on the ballot last year as Proposition 24, the companies spent heavily on the “no” campaign and defeated it. So California is deprived each year of $1.5 billion it previously took in. Did defeating Proposition 24 save jobs, as the big companies claimed it would?

No sooner had the votes been counted than Roche announced a layoff of 840 persons from its Genentech subsidiary in South San Francisco. Comcast, another donor, quickly announced plans to move at least 150 jobs from California to Utah, while laying off 212 California workers. Meanwhile, there is so far not a single job known to have been created or saved by those tax breaks.

But the tax reductions amount to about another twelfth of the deficit. Together, the recently created and ratified loopholes and the sales tax evasions amount to about one out of every six deficit dollars.

Maybe when voters see the final budget proposals and the new taxes needed to keep popular current programs going, they’ll rethink their sympathy for tax scofflaws like eBay and their approval of new tax breaks for big corporations.

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Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net