California Watch After Jerry Brown: Onward Toward Utopia!

As progressives control of every level of California government, here are some big stories to watch as we head into the new year.

After California Republicans were obliterated in the November midterm elections, I’ve heard from a number of conservative-minded compatriots who are understandably worried about what the Democrats’ new super-duper legislative majorities will mean for the state. They’re not alone. In a recent interview with National Public Radio, outgoing Democratic Gov. Jerry Brown expressed his own concerns about where the state government might be headed.

“We’ve had a majority party, but I’ve been the governor who knows how to say no,” Brown said. “I think it’s difficult to say no. The next four years, it’s going to become even more difficult, because the weakness of the Republican Party has let the Democratic Party, I think, get further out than I think the majority of people want.” That’s something given that Brown — despite his willingness to occasionally nix new spending — has been somewhat “out there” himself, on policies ranging from tax increases to the construction of a $100 billion bullet train.

As the new legislative session approaches, here’s a list of a few issues to watch out for — and predictions about what lawmakers will do. ’Tis the season to be merry, but Californians need to temper their merriment with some reality checks.

Public servants remain our masters. The California Public Employees’ Retirement System (CalPERS) remains mired in debt thanks to years of retroactive pension increases for the state’s public employees. Despite years of boisterous returns (although the fund currently is in negative territory for the fiscal year), CalPERS is funded at around 67 percent, meaning that it only has a little more than two-thirds of the funds needed to make good on all its pension promises.

A recent Los Angeles Times article explains why California has been unable to do anything about these unfunded liabilities — and why public services here continue to decline. For instance, the article reports that Los Angeles offers “such generous retirement pay that they exceed pension fund limits set by the Internal Revenue Service, saddling taxpayers with additional costs… using money that could otherwise be tapped to fix sidewalks, fight homelessness or hire more cops.” Brown modestly reformed the pension system and has argued, in a crucial case before the state Supreme Court, that pension benefits can be trimmed going forward for public employees. But one of incoming Gov. Gavin Newsom’s top advisers comes out of the California Labor Federation.

Prediction: The new administration and union-dominated state Legislature will ignore the pension-funding crisis, local governments will continue to cut back services, and taxpayers will face an unending sea of tax hikes (dressed up as public-safety or community services taxes) to make up for the shortfalls. Things will have to get dire before public employees take a haircut.

Business as usual as businesses flee. An extensive new study from business relocation coach Joe Vranich, who fled Southern California for Pennsylvania, finds that “1,800 relocation or ‘disinvestment events’ occurred in 2016 (the most recent year available), setting a record yearly high going back to 2008 — and that about 13,000 companies left the state during that nine-year period.” The main reason wasn’t even the state’s punitive tax climate but a “legal climate (that) has become so difficult that companies should consider locating in jurisdictions where they will be treated fairly.”

Speaking of that bad climate, the California Supreme Court in April, in Dynamex Operations West, Inc. v. Superior Court, imposed a stringent new test on California companies that increasingly rely on independent contractors as regulations and mandates for full-time workers become so costly. Unless the new governor and Legislature address that issue, we’ll see the cost of employment here go up by approximately a third and unemployment to increase. The business community has implored lawmakers for relief. There are plenty of simple market-based fixes that would make it easier for contractors to more cost-effectively buy healthcare and other benefits.

Prediction: Given that the case threatens the state’s tech economy, the Legislature might do something, but it will have a tough fight to do anything meaningful as organized labor already has introduced a bill to codify the new Dynamex standards.

Redevelopment rises from the grave. In the midst of a budget crisis in 2011, Gov. Brown and the Legislature ended the state’s noxious system of “redevelopment.” Think of it as a locally controlled version of those 1960s-era urban-renewal schemes that destroyed so many neighborhoods. City councils would declare an area to be blighted, float bonds, pump subsidies into the area, use eminent domain to clear away properties on behalf of private developers — and then collect the new “tax increment” and sales taxes that would come from the new developments. It became a scheme to divert tax dollars from traditional public services into projects favored by city planners.

The Brown administration didn’t shutter the agencies because of any apparent concern about crony capitalism, but because it faced a massive budget shortfall. These agencies were siphoning off 12 percent of the general-fund budget. Since then, redevelopment has crept back in limited fashion. This year, Assembly Bill 11 would bring it back in close to its full, er, glory. It’s another example of how surpluses — the state has nearly $15 billion in excess — are the source of some of the state’s worst policy making. Only in bad economic times are lawmakers forced to make tough decisions. This session, the return of redevelopment will be championed as a means to fix a state housing crisis that’s the result of too many land-use regulations and fees.

Prediction: Redevelopment ultimately will come back and will once again become a scourge to taxpayers and property owners. State lawmakers are unlikely to address absurdly high housing prices by rolling back excessive building rules, but instead will focus on subsidies and these types of gimmicks.

Tax, ban, regulate and subsidize. The Legislature always brings to mind one of my favorite Ronald Reagan quotations: “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Despite that budget surplus, it’s wise to expect more pushes for all of the above, especially tax increases. The first trial balloon, from the Public Utilities Commission, would have been to tax text messages. The commission halted the vote after the Federal Communications Commission rebuked the plan. But that’s just pennies.

Liberal activists already qualified a ballot initiative for 2020 that would remove Proposition 13’s tax limitations from commercial properties. Furthermore, the new governor has championed the single-payer health care idea, which has become a litmus test for progressive legislators. The Legislature last year considered a bill that would have consumed nearly the entire state budget. On the banning side, we’re already seeing plans for the statewide halt on sales of flavored tobacco (including most vaping products, even though such products help smokers quit), and expect more gun control.

Prediction: As Brown suggested, the state Republican Party is too weak to stop even the most “out there” proposals. Sadly, the chances of the California GOP getting its act together anytime soon is somewhere in the ballpark of zero. There’s no sense worrying, though. Just enjoy the holidays. There will be plenty of time to fret once the Legislature returns.

https://spectator.org/after-jerry-brown-onward-toward-utopia/

The Fires This Time

Three decades of neglect caught up with the West this year.

In August, 1910, a huge fire burned three million acres (destroying whole towns and taking 87 lives) in Washington state, Idaho, Montana, and adjacent Canada. This has come down to us as “The Big Burn,” the title of a 2009 book by Timothy Egan, which chronicled the disaster. At the time, the United States Forest Service (USFS) was in its infancy and its first director, Gifford Pinchot, was appalled. Consequently, it became the policy of the USFS that all fires were to be extinguished as soon as possible. Over the decades this has left us with today’s conundrum, a century of fire suppression that has in turn given us catastrophic blazes costing life, property, and treasure.

In pre-Columbian North America fires started by lightning or by resource-minded natives kept forests and grasslands in a healthy state. For instance, on the Great Plains grasslands were burned so new growth would attract bison. In the forests, the ground and understory were kept clear for the benefit of wildlife and better hunting opportunities. Lodgepole pine actually needs heat from fires to open up closed pine cones, thus releasing seeds that aid reforestation.

While I was a college student in the late 1970s, I had a summer job performing trail maintenance and cleaning campgrounds in the Plumas National Forest in California. I participated in the “mopping up” operations of two small wildfires that summer “on the Plumas,” the same national forest that was the origin of the recent Camp Fire, the 153,000 acres blaze that incinerated much of the town of Paradise, California, killing 88 people and destroying 18,800 homes and businesses, or in the nomenclature “structures.” According to the Wall Street Journal, “Seven of California’s 20 most destructive fires and five of its deadliest have occurred in just the last thirteen months.” During that time the Tubbs Fire in Sonoma and Napa counties (which killed 22) and the Carr Fire near Redding held the most destructive honors until the Camp Fire superseded them with its near total destruction of Paradise, a town of 26,000 people. So what has changed in forty years?

Back then a forest fire was more of a nuisance than a tragedy. They were relatively small, sometimes just a few hundred acres, and they rarely involved the loss of structures, other than burning through the occasional closed campground or primitive squatter’s cabin on an old mining claim (common domiciles found in the historic gold country of the Sierra Nevada at the time). The aforementioned post-Big Burn policy dictated that fires were put out ASAP, even if letting them burn in certain areas was beneficial. This, along with the decline of commercial logging, has left us with brush-choked forests that will eventually burn. The Property and Environmental Research Center (PERC), a public lands think tank in Bozeman, Montana, posits that 70% of USFS lands in the West are in need of “restoration work.” This amounts to 151 million acres, 60 million of which are at risk for “catastrophic wildfire.” Sixty million acres is the size of the state of Oregon.

As for the fires themselves, in 2000 16% of the USFS annual share of the Department of Agriculture’s budget went towards fire suppression. Today, that figure is roughly 50%, or about $2 billion of a $4 billion budget. Needless to say, other agency programs suffer in a bad fire year, as resources are directed away from them. Add to this the vast expenditures spent by individual states to assist the battling of blazes in their own jurisdictions. A recent article in Fortune tells us that as of September Cal-Fire had depleted its fiscal 2018 budget of $442 million and needed a $234 million bailout from the California State legislature. And this was two months before the notorious Camp Fire.

I’ve heard the 1960s and ’70s described as the “go-go” decades for logging on the western national forests, especially those in the Pacific Northwest and Northern California, home to vast tracts of Ponderosa Pine and Douglas Fir, big trees in terms of “board feet” yields of lumber. The timber industry (including hundreds of now-defunct lumber mills with their attendant jobs) was the main contributor to the economies of hundreds of small towns in the region, federal timber contracts keeping loggers in the woods, and mill workers and log truck drivers busy with well-paying jobs. “School section” (a section of public land set apart in a surveyed township by the U.S. government for the maintenance of public schools) payments eased local municipal tax burdens.

Commercial logging on federal public land hardly exists nowadays. Forest service timber sales get stuck in what is commonly called “analysis paralysis,” sometimes for years when the National Environmental Policy Act (NEPA) process allows them to be approved at all. Environmental groups routinely file lawsuits to further stall the process. The Northern Spotted Owl controversy of three decades ago is illustrative of that. According to the Oregon Encyclopedia, timber companies harvested 2 billion board feet from USFS sales in the state in 1990; in 2015 the figure was 55 million. Even “salvage sales” in previously burned areas are contested to the point where the trees lose their market value because they begin to rot after a couple of years. Consequently, most timber harvesting occurs on private land. For instance, Sierra-Pacific Industries (SPI) is the largest private landowner in California.

The result of three decades of this neglect is vast areas of the western national forests that are choked with undergrowth and deadfall (downed trees lying on the forest floor). In California alone, roughly 130 million trees are dead due to bark beetle infestations (though this plague is noted throughout the mountain west), leaving swaths of fire-prone brown on otherwise green mountainsides. Periodic drought that afflicts the West adds to the likelihood of bad fire seasons because beetle-infested trees are simply dead fuel. Whatever one’s view of climate change is, all this is nothing new. Drought has always been a factor related to the health of western forests.

Another is the sheer number of people now living near the aptly named “wildland- urban interface.” Residential construction has boomed in more scenic locales in the last few decades. As previously noted, the forest fires of four decades ago rarely involved structures. In just the last couple of years, California fires have taken 24,000 homes. According to the Wall Street Journal, the recent Camp Fire in Paradise alone accounted for nearly 14,000. Last year’s Tubb Fire in Sonoma and Napa counties, 5,300.

President Trump’s recent tweets blasting the “gross mismanagement of the forests” sound generalized and may reflect his understandable ignorance of detailed western forest management, but in his own simple way he is right on the mark. There are two ways to accomplish the president’s calls to action.

“Prescribed” burns are done in the winter months. In the Sierra foothills, for example, there is little or no snow cover, yet in a normal year the soil is wet from regular rainfall. Temperatures are also cooler, humidity is higher, and wind usually absent. These fires are set and monitored for days and weeks as they slowly burn away brush on the ground over a specific area.

“Thinning” projects are commercial endeavors that harvest smaller trees from around mature ones, opening up the forest floor and removing a source of fuel that would produce a “ladder effect” in the event of a forest fire. This causes those smaller trees to send a fire up into the forest “canopy,” thus producing “crown” fires that destroy the entire forest. Thinning allows a future fire to move through a forest merely singeing the thick bark near the ground of mature trees, but not killing them.

These are the fires this time. Policy changes in the modus operandi of the public lands agencies emanating from the Trump administration might improve what is now an intolerable situation.

https://spectator.org/the-fires-this-time/