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July 2019, Volume 25, Number 3

California: Housing, Water

The Ranch Fire that burned over 410,000 acres in July 2019 was started by Glenn Kile, a former heavy equipment operator with a 160-acre ranch who set off sparks when pounding a metal stake into a wasp nest. A state report noted that Kile was not negligent, and emphasized that dry vegetation is akin to gasoline waiting to burn. Other wildfires have been sparked by a towed boat that lost a wheel and created sparks when it scraped the ground and a welder repairing a gate at a church camp.

The Commission on Catastrophic Wildfire Cost and Recovery in June 2019 urged the state to create a fund and take other steps to distribute the costs of fire prevention and damage payments more broadly among ratepayers, residents of fire-prone areas, insurance companies, and government agencies. Pacific Gas & Electric, whose sparking power lines caused several of the state's worst fires, has begun to turn off electricity when wind-whipped power lines threaten to spark fires.

Housing. California had 14.2 million housing units in 2019, up a net 77,000 from 2018 but down from the net addition of 85,300 in 2017 (over 10,000 homes were lost in wildfires in 2018). Governor Gavin Newsom pledged to ensure that 3.5 million new homes are built in California by 2025, a goal not expected to be met because too little land is zoned for new housing.

SB 50 aimed to overcome local not-in-my-backyard opposition to new housing by establishing a right to build multi-unit projects in "transit-rich" or "job-rich" communities with housing shortages, regardless of local zoning laws. However, opposition from local leaders delayed legislative consideration of SB 50 to 2020. Livable California and local elected officials argued that SB 50 would give too much power to developers and change the character of suburban neighborhoods.

California had almost 40 million residents January 1, 2019 after adding 187,000 in 2018. Over a quarter of the state's residents are in Los Angeles county. California has been losing people to other states and gaining immigrants from abroad. Between 2007 to 2016 some six million people moved from California to other states, while five million moved to California.

Napa's wine industry has made tourism and hospitality the leading employers in the county. The lowest rents in Napa are over $2,200 a month, forcing many workers employed in Napa to commute from lower cost areas such as Fairfield. Low-wage workers face the choice of living in often crowded housing near their jobs or commuting up to two hours each way to work.

A third of Coachella Valley homes have swimming pools, meaning there are over 54,000 pools to clean. There are 10,000 swimming pools, in Palm Springs, and over half of the homes in Indian Wells and La Quinta have pools. Some 150 swimming pool cleaning services advertise on Yelp. Many are owned by Hispanics seeking upward mobility who hire immigrants with driver's licenses. Cleaning a pool takes 10 to 40 minutes, depending on how dirty it is.

Water. Many low-income residents in agricultural areas in the San Joaquin Valley do not have access to safe drinking water from their taps. Many factors, from isolation that makes costs of water systems high on a per capita basis to fertilizers and dairy run off that taint water from wells, are blamed for the problem.

The California State Water Resources Control Board in May 2019 said that 300 water systems serving over a million California residents do not provide safe tap water; half are in the San Joaquin Valley. Residents of small places such as 500-resident East Orosi receive free bottled water because the local tap water is contaminated with nitrates. Many of the small water systems in the San Joaquin Valley with unsafe tap water are near larger systems with safe water. Larger water systems could take over smaller neighboring systems, but the cost of adding relatively few additional customers would have to be paid by current customers.

The state's 2019-20 budget of $215 billion provides $130 million for drinking water improvements, with most of the money coming from the sale of carbon credits under California's cap and trade program that requires carbon emitters to purchase emissions permits.

Heavy rainfall in 2018-19 resulted in the best salmon fishing season in decades along the California coast when the three-month season opened in May 2019. Some 400,000 Chinook salmon are expected to return to the Sacramento River in 2019, up from about 250,000 a year over the past four drought years, but down from the 1.5 million salmon returning in 2003.

Health. Governor Gavin Newsom persuaded the Legislature to cover unauthorized foreigners aged 19 to 26 under Medi-Cal; Newsom resisted the call of some Democrats to allow all low-income people to enroll in Medi-Cal regardless of their immigration status. Covering all unauthorized foreigners under Medi-Cal could cost $3.4 billion a year, compared to less than $100 million a year to cover those 19 to 26.

Medi-Cal, which provides health care to 12 million of the state's 40 million residents, already covers all children under 18 and pregnant women regardless of legal status.

The California Values Act (SB 54) prohibits state and local police from asking about the immigration status of persons they encounter and cooperating with ICE. Unauthorized Mexican Daniel Valenzuela was stopped for speeding January 31, 2029 by Corona police, turned over to CBP officers staffing a nearby checkpoint in Temecula, and deported, prompting a $1 million suit filed by the ACLU on Valenzuela's behalf in June 2019. Valenzuela, a commercial driver in Mexico, had a 10-year tourist visa that expired two weeks before he was stopped.

There are several other suits pending against California cities whose police departments cooperate with federal immigration authorities. Over 60 of California's 485 cities have announced their opposition to SB 54.

Taxes. California depends on the state's richest residents for much of its income tax revenue; the top one percent of filers paid 46 percent of the individual income tax in 2016. California is expecting a $22 billion budget surplus in 2019-20 as more tech firms go public and founders pay capital gains taxes on their grants of stock that have increased in value. Some 10 percent of the state's tax revenue in 2019-20 or $14 billion is expected to come from capital gains taxes.

Democrats hold all of the important statewide elected offices and dominate both houses of the legislature. Governor Newsom wants a safety net for young Californians from "cradle to career," and is using the state's budget surplus to tackle a wide range of issues, from building more housing to reducing homelessness. Across the US, Republicans dominate state government in 29 states and Democrats in 18; Minnesota is the only state with a legislature divided between the two parties.

Rail. The Union Pacific and Central Pacific railroads met May 10, 1869 in Promontory Summit, Utah, reducing the trip across the US from months to days and transforming California by integrating the state's economy into that of the rest of the US. Manufactured goods arrived from other states, prompting layoffs in the state's factories that were blamed on Chinese immigrants and leading to the Chinese Exclusion Act of 1882.

Builders of the Union Pacific and Central Pacific received land and loans in exchange for laying track. On flat land, up to 10 miles of track was laid in 12 hours. The Union Pacific relied on Irish workers, many of whom were Civil War veterans.

The Central Pacific line from California relied on 15,000 to 20,000 Chinese men from Guangdong who earned $1 a day to build 690 miles of track over the Sierra mountains, blasting tunnels through granite. Over 1,000 Chinese died, especially during the winter of 1868-69 in the Sierras. The Chinese were not recognized in the photo commemorating the completion of the railroad.