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July 2016, Volume 22, Number 3

California: Water, Election

The 2015-16 water year was close to normal; the state's 154 major reservoirs held almost 22 million acre-feet of water on April 1, 2016, more than 85 percent of normal. Federal and state farm water contractors are likely to get half or more of the water that they want. Each water district contracts for a specific share of the surface water available to the federal Central Valley Project and the State Water Project, and CVP and SWP managers provide a percentage of each district's contracted water based on availability.

The California water system accumulates water as snow in northern California mountains and moves the water south via the Sacramento-San Joaquin river delta as the snow melts in summer. However, pumping water from the delta into the aqueduct that moves water south is often restricted to preserve juvenile fish that can be sucked into the pumps.

Most climate-change models project warmer winters less favorable to California's current water storage and transport system. If more precipitation falls as rain rather than snow during the winter months, the capacity of dams and reservoirs to store water for summer irrigation is reduced. Agriculture could cope by changing seeds and farming practices to use less water, but such changes could lower yields and increase labor costs. Alternatively, lower-value forage crops such as alfalfa for dairy cows could be grown outside California, freeing up water for higher-value crops.

Water has traditionally been priced by the cost of the infrastructure needed to store and deliver it, not by the value of the water to the user. The limited water sales that have occurred suggest that farmers are willing to pay $1,000 or more per acre foot of water to keep trees alive, three times what urban water agencies usually pay to obtain water for households. Wonderful Orchards (ex-Paramount Farming) in April 2016 announced that it was removing 10,000 of its 50,000 acres of almonds because of "limited water resources and market factors" in Kern county.

The San Joaquin Valley usually has double-digit unemployment; Fresno county's average annual rate peaked at almost 17 percent in 2010. However San Joaquin Valley unemployment rates then fell despite the drought, to 15 percent in 2012 in Fresno, 13 percent in 2013, 12 percent in 2014, and 10 percent in 2015. In May 2016, Fresno county's rate was 8.5 percent, the lowest rate for May since 2007. California's unemployment rate in May 2016 was 5.2 percent, and the US rate was 4.7 percent.

Election. Democrats control California's state government, holding all statewide elective offices and majorities in the Assembly and Senate. Governor Jerry Brown is credited with pursuing a centrist policy that appeals to most residents, acting as a fiscal conservative and a social moderate willing to expand rights for unauthorized foreigners.

Democrats are 44 percent of the state's 25 million registered voters and Republicans 27 percent. Most of the remaining 29 percent of registered voters are independents.

Republican presidential candidates won every election in California between 1952 and 1988 (except for 1964), but California has voted for a Democrat for president in every election since 1992. Democrats are expected to continue to sweep elections, in part because of the growth of the Hispanic population. Hispanics are now 40 percent of California residents.

Senate Bill 10 requires California to seek a waiver from the federal government to allow unauthorized foreigners to purchase health insurance on the on-line exchanges. The Affordable Care Act bars unauthorized foreigners from receiving benefits, leaving many of the 2.6 million unauthorized foreigners in the state without health insurance, since most adults work for employers who do not provide it. California has expanded Medi-Cal to all children under 19, regardless of immigration status.

San Francisco. There is not enough housing in the Bay Area; rents in San Francisco average $3,500 a month, the highest in the US. The median home price in San Francisco is $1.1 million, the same as Manhattan. Some activists are embracing basic economics, urging a relaxation of regulations so that more housing can be built. On the other side are progressives that want to require developers to make all new housing "affordable," and use vouchers and other means to allocate new units.

Two-thirds of the 750,000 San Francisco residents rent their housing, and many are protected from rent increases by rent-control laws.

In Silicon Valley, jobs are increasing faster than housing units. Between 2010 and 2015, some 386,000 jobs were added in San Mateo and Santa Clara counties, but fewer than 60,000 new housing units were built. The Census Bureau assumes that each housing unit accommodates 2.5 people, so that new housing would have been needed for 150,000 people over the past five years.

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