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October 2012, Volume 18, Number 4
California: Environment, Jobs, Housing
Environment. The Great Valley Center released a report on the air, land and water in the San Joaquin Valley in July 2012 that emphasized the need to further improve air quality, preserve and enlarge water resources, and adopt green technologies to support sustainable San Joaquin Valley growth. San Joaquin Valley air quality is improving, but the "easy" or less costly reductions in emissions have already been made.
The report analyzed grant programs that subsidized the replacement of older cars and tractors with newer ones, but did not analyze whether subsidized replacement programs were the best way to use limited tax monies to improve San Joaquin Valley air quality.
San Joaquin Valley agriculture relies on water transferred from northern California via the Sacramento-San Joaquin river delta and on local groundwater. Both water sources are problematic. Periodic droughts reduce the amount of water that can be transferred, and pumping water kills fish. More groundwater is withdrawn during drought, and less is replenished. Groundwater contamination, often from nitrate runoff, is a growing problem in the San Joaquin Valley.
California's Central Valley covers 60,000 square miles, about 40 percent of the state's land area, and has 20 percent of the state's residents. The northern San Joaquin Valley has been converting prime farm land into housing at the fastest rate, primarily because the Stockton area offers low-cost housing to commuters who work in the Bay Area.
Plans to restore the San Joaquin River may generate jobs in the San Joaquin Valley. Much of the river's water is stored behind the Friant Dam so that it can be released in summer for irrigation. Restoring the San Joaquin River to year-round water flows at a cost of $2 billion is expected to create temporary construction jobs and permanent jobs in tourism and related sectors. Farmers complain that removing dams to create a free-flowing river will eliminate far more agricultural jobs than are created in recreation.
Imperial county in southeastern California stands out in many ways. It has the highest share of Hispanic residents, an economy anchored by government and agriculture, and the state's highest unemployment rate. It also has the highest rate of asthma as measured by hospitalizations per 10,000 residents, over 16 in 2010, compared with nine per 10,000 statewide.
High rates of asthma in Imperial are due in part to farm land dust that is spread by strong winds. Many families who lack health insurance, and the parents of some children covered by Medi-Cal, use the hospital emergency room as their doctor. Two-thirds of hospitalizations for asthma in Imperial county are covered by Medicare and Medi-Cal at an average cost of $16,600.
California's cap-and-trade system to reduce greenhouse gas emissions begins January 1, 2013, when emission permits that can be traded will be issued. Emitting firms can use the permits that they receive from the state government, buy permits, or buy offsets for their emissions from projects that remove carbon dioxide or other greenhouse gases from the atmosphere.
AB 32 aims to reduce California's emissions to 1990 levels by 2020, a reduction of about 30 percent. President Obama in 2009 proposed a national cap-and-trade program to cut greenhouse gas emissions, but it was dropped in Congress when cap-and-trade was attacked as cap-and-tax.
There are fears of fraud in the buy-offset program, under which emitters purchase credits for their emissions from projects that store carbon that would otherwise go into the atmosphere. These projects, many out of state, allow farmers who reduce methane emissions from livestock waste and plant trees in urban areas to receive payments from emitters. The European Union's eight-year-old carbon trading market has had emitters paying for projects that did not reduce emissions, as environmental consulting firms created projects that did not reduce emissions.
The first auction of carbon offset credits in November 2012 is expected to set a price of about $10 per metric ton of emissions.
Jobs. California added 12,000 jobs in August 2012. The unemployment rate fell to 10.6 percent as some people left the labor force, but California's unemployment rate was third highest among states. In the past 12 months, California added about 300,000 jobs, up 2.1 percent and faster than the 1.4 percent job growth rate of the US economy. About 45 percent of the two million jobless Californians have been unemployed more than 27 weeks in summer 2012.
Bakersfield, known for agriculture, country music and oil, is growing. Kern county employment has almost returned to the September 2007 peak of 240,000, as high energy prices stimulate oil production and construction. Kern county's population is 840,000, and a labor force that is less than 30 percent of the county's population suggests a low labor force participation rate. Fewer than 10 percent of Kern county's adults have bachelor's degrees.
The Delano Regional Medical Center paid $975,000 million in September 2012 to settle an Equal Employment Opportunity Commission complaint that the hospital unlawfully ordered Filipino nurses to speak only in English.
There are many warehouses near the junction of Interstate 5 and state Highway 99, including those operated by Caterpillar, Dollar General, Ikea and Target. Many San Joaquin Valley cities aim to attract warehouses to create entry level jobs in logistics. The Moreno Valley, an hour east of Los Angeles, is one of the largest logistics centers in the US, with 400 million square feet of warehouses and distribution centers that employ over 200,000 workers.
The New York Times on July 23, 2012 reported that many of the warehouses turn to temp or staffing agencies to obtain workers rather than hire workers directly. Some agencies tell workers to report each morning, and only then determine whether there will be work that day. A suit filed in October 2011 alleges that some of the temp agencies effectively operate a day labor market at the doors of the warehouses each day.
Housing. California in July 2012 denied a request by Riverside county to use $12.1 million in redevelopment funds to buy mobile homes in Mountain View Estates for 1,500 farm workers and their families now living in Duroville, a mobile home park on Indian land that has been condemned as unfit for habitation. However, the county appealed, and in October 2012 won $9.9 million to move residents out of Duroville.
California abolished redevelopment agencies in 2011, and local governments faced a December 31, 2011 deadline to spend redevelopment funds. Riverside county, which spent $6 million on 45 mobile homes, needs additional funds for more mobile homes.
Valle Naranjal, a new 66-unit low-income housing development for farm workers and their families, replaced the Piru Citrus Association Labor Camp in October 2012. The camp was built in 1950 to house 250 Braceros, and was closed between 1973 and 1988.
Napa, which attracts millions of tourists each year, has high-cost housing. Some 30,000 workers commute into Napa county every day. There are three farm worker centers that provide housing for up to 180 workers in two- and three- bed rooms and three meals a day for $12 per day. The actual cost is $24 a day, and the $12-a-day deficit is covered in part by a $10 per-planted-acre assessment from Napa County vineyard owners. There are 80 private farm labor camps in Napa county, including seven with permits that allow them to accommodate up to 130 people.
Indians. California has 104 federally recognized tribes, including 61 with casinos. Gambling on Indian land was legalized in 1988, and some tribes have gotten very rich, including the 400-member United Auburn tribe that owns Thunder Valley casino near Sacramento. The 60-member Yocha Dehe Wintun Nation is using profits from its Cache Creek casino to buy land and diversify into agriculture.
Several tribes want to open casinos away from their reservations, generating opposition from local residents and other tribes. The Maidu Indians in 2002 applied to build a casino 35 miles south of their reservation near Lake Oroville, prompting opposition from the United Auburn tribe, which fears competition from another Indian casino. Over the past two decades, five casinos have received permission to open casinos away from their reservations.
Budget. California has a $91 billion general fund budget for 2012-13, and spends another $39 billion from special funds for a total of $130 billion. Total spending was $138 billion in 2007-08, and would rise to $142 billion if Proposition 30 is approved by voters in November 2012.
Proposition 30 is an initiative that would raise $8 billion by increasing the state sales tax from 7.5 to 7.75 percent and impose an income tax surcharge on Californians earning $250,000 or more. By shifting more state spending to special funds, the state is able to send less money to schools, which are required to receive about 42 percent of general fund monies under Proposition 98, approved by voters in 1988.
If Proposition 30 fails, there will be mid-year cuts to universities and other state services. Some services have already been reduced. The Fresno county Superior Court closed its seven branches after suffering a 20 percent budget cut. Critics noted that the courts may save money, but local cities will pay more as their officers must drive to downtown Fresno to present evidence in cases.
California voters face 11 propositions in November 2012, most financed by wealthy individuals. Proposition 38, financed largely by the daughter of Warren Buffet?s partner, would raise taxes on wealthy residents for schools in competition with Proposition 30.
Some 14.6 million tax returns were filed in California in 2009, including 5.2 million with no state income tax liability. California has a progressive tax system. The 3.9 percent of California tax filers who each had income of $200,000 or more paid 55 percent of state income taxes, while the 64.5 percent who each had incomes of less than $50,000 paid 4.7 percent of state income taxes.
Part of California's budget "realignment" involves shifting criminals from state to county jails. Before the realignment mandated by federal court order to reduce overcrowding in state prisons, those sentenced to a year or more in prison went to state prisons, and county jails held those awaiting trial (two-thirds of county jail inmates) and those sentenced to less than a year (one-third). California, which currently has 120,000 prisoners in 33 state prisons, must reduce that number to 110,000 by June 2013. There were 160,000 state prisoners when a federal judge ordered the state to improve conditions or release prisoners.
The 290,000-resident city of Stockton became the largest US city to seek Chapter 9 bankruptcy protection in June 2012. The city went on a spending spree soon after 2000 amidst rising home prices. During the good times, Stockton made promises to its employees and borrowed money for redevelopment. When housing prices fell by over 50 percent and pension and other bills came due, Stockton stopped paying some creditors, cut employee pay and benefits, and laid off employees.
San Bernardino and Mammoth Lakes also sought bankruptcy protection, prompting unions representing public employees to urge enactment of a bill (AB 1692) that would make it harder for cities to declare bankruptcy and negate union contracts. A 2011 law requires California cities to use mediation with public employee unions for at least 60 days before declaring bankruptcy unless they declare a fiscal emergency, as San Bernardino did.
Vallejo, with 115,000 residents, filed for bankruptcy protection in 2008 after failing to re-negotiate contracts with its employees. Vallejo's median home price fell from $440,000 in 2006 to $140,000 in 2012.
Anaheim, a city of 350,000 mostly Latino residents, erupted in protests after police killed two men in July 2012. The mayor and many city leaders live in Anaheim Hills to the east, while most residents live in the flatlands to the west, where incomes are on average half the level of Anaheim Hills. Disneyland, Anaheim's largest property tax payer and employer, supports candidates in citywide elections who favor tax breaks for theme park-related businesses.
Latinos protesting against police abuses demanded that Anaheim change its voting system. Currently, city council members are elected in city-wide elections. Latinos want the voting system to change to so that council members are elected by district, which they believe would make it easier to elect Latinos. The Anaheim city council in August 2012 agreed to study a switch from city-wide to district voting.
The US Treasury Department in October 2012 named Mara Salvatrucha MS-13, the Latin American gang developed in Los Angeles, as a "transnational criminal organization," which prohibits financial institutions from engaging in any transactions with members of the group. MS-13 began among Salvadoran refugees in the 1980s, and today has an estimated 30,000 members, including 8,000 in the US.