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October 2020, Volume 26, Number 4

California: Covid, Fires

Governor Gavin Newsom in summer 2020 highlighted Covid-19 cases in the eight-county San Joaquin Valley, where up to 20 percent of Covid tests are positive, compared with less than 10 percent statewide. The San Joaquin Valley emerged as the number one concern of state health officials as covid spread among essential workers who often live in crowded and multigenerational housing.

There were Covid outbreaks in May 2020 at two Ruiz Foods frozen-food plants in Tulare county and at the Central Valley Meat Company in Kings county. After these plants were closed for deep cleaning, employers reported that subsequent Covid cases linked to their workplaces arose from their employees participating in family gatherings away from work.

California was the first state to order a lockdown to prevent the spread of Covid-19 on March 19, 2020. Cases rose quickly after the lockdown was eased in June 2020, prompting the state government to order many businesses to close, including bars and indoor dining in restaurants. In July 2020, 33 of the state’s 58 counties with over 80 percent of the state’s residents were on the Covid watchlist because they had high rates of new infections per capita, high rates of positive tests, and high hospitalization rates.

Most public K-12 schools began the 2020-21 school year with remote or on-line learning. The University of California, California State University, and California community colleges offered only remote instruction in fall 2020.

Fires. Lightening aggravated a bad wildfire season in 2020. In a typical year, 310,000 acres of California are burned in wildfires. In August-September 2020, over four million acres burned, doubling the previous record two million acres burned in 2018.

The largest 2020 fire was the August complex fire started by some of the 14,000 lightning strikes over three days in August 2020. After burning over a million acres in the Mendocino National Forest, the August complex fire became the state’s first gigafire. Previously, the largest California wildfire burned less than 500,000 acres.

The fires led to 30 consecutive spare-the-air days in Northern California, the longest stretch of poor air quality on record. California emitted about 60 million tons of carbon dioxide in 2017; the 2020 fires released over 90 million tons of carbon dioxide.

The 10 largest fires since California began keeping records in 1932 have all occurred since 2000. The fuel for fires in 2020 was created by droughts between 2012 and 2017 that led to over 150 million dead trees in the Sierra mountains.

In a bid to reduce the wildfires sparked by its equipment in 2018, PG&E shut off electricity to 172,000 homes in September 2020, far fewer than in October 2019 due to the installation of more micro grids that allow more exact targeting of wildfire dangers.

A heat wave August 14-15, 2020 forced the California Independent System Operator to order the first rotating blackouts since 2001. California enacted laws that require a rising share of its electricity to come from solar and wind. When these sources produce too little power, the state must import electricity from neighboring states. The ISO underestimated the amount of electricity available, leading to the blackouts.

Housing. Housing prices reached record levels in August 2020, when the median price of a California house was $707,000, and $1.8 million in San Mateo county. Almost 30 percent of California households spend more than 50 percent of their income on rent.

The benefits of agglomeration, the gravitational pull of densely populated places, intensified as tech firms with educated workers expanded, helping home prices to double in many cities in less than a decade. Tech cities such as San Francisco drew more inventors and generated more patents, fueling a virtuous circle. Ten US cities, including San Francisco and Los Angles, have a quarter of the US population and account for a third of US economic output.

Venice, a coastal part of Los Angeles, illustrates what happens after Snap and other tech firms expanded. Median home prices were $372,000 in 2000, and $1.5 million in 2018, when almost a quarter of Venice households earned more than $200,000 a year. Homelessness rose, and many government and private sector workers moved away from Venice.

A combination of lockdowns due to Covid-19, protests over policing, and strained city budgets could slow gentrification and urbanization. Vaccines may restore confidence in densely populated areas, but cities with budget deficits may have to reduce spending on parks and other amenities. Allowing workers to work remotely could expand the pool of workers willing to be employed by firms located in major cities, perhaps at lower wages. Some of the firms that announced they would not expect employees to return to their offices until 2022 are seeing employees move out of state.

California depends on personal income taxes for two-thirds of its tax revenues, and one percent of state taxpayers pay 50 percent of the state’s income taxes. The top personal tax rate is 13.3 percent, although some legislators wait to raise the top rate to 16.3 percent to cover the drop in tax revenue associated with the Covid recession.

Governor Gavin Newsom in September 2020 announced that that new gas-powered cars could not be sold in California after 2035. The federal government must approve such a gas-powered sales ban, which would not apply to the sale of used cars. About 40 percent of California’s carbon emissions are from transportation. California has already enacted laws that require 60 percent of the state’s electricity to come from renewables by 2030, and 100 percent by 2045.

Economy. Warehouse employment is rising in the San Joaquin Valley. The Inland Empire of Southern California became a distribution hub for the 20 million residents of southern California, and Fresno could become a distribution hub for the eight million residents of the Bay Area. Some activists complain that warehouses increase truck traffic and pollution while creating minimum wage jobs that could be eliminated with automation.

The Riverside-San Bernardino metro area added 400,000 residents over the past decade, bringing the two counties’ population to 4.7 million. The expansion of the logistics industry to over 560 million square feet added jobs and residents. The world’s largest warehouse, with 40 million square feet, is under construction in the Moreno Valley.

The Imperial Irrigation District receives several million acre feet of Colorado River water annually for 500,000 acres of farm land. Drought led to a 2019 agreement to store more water at Lake Mead behind Hoover Dam. The IID sued the Metropolitan Water District of Southern California in summer 2020, arguing that reducing water flows to the IID could accelerate the drying out of the Salton Sea, which receives run off from IID-watered farms.

California's Sustainable Groundwater Management Act requires local water districts to halt the overdrafting of groundwater by 2040, which occurs when farmers pump more water from underground aquifers in summer than is recharged with winter rains. Land may have to be fallowed in the San Joaquin Valley to bring pumping and recharging into balance.

Child Care Providers United in July 2020 announced plans to organize 45,000 child care workers who receive subsidies to care for the children of low-income parents; defined as having an income of up to $42,216 in 2016 for a family of three. Many of the subsidized child care workers operate out of their own homes. The union is a collaboration of AFSCME and SEIU, which persuaded Governor Newsom to sign AB 378 in 2019 after similar bills were vetoed by earlier governors.

California reformers a century ago allowed voters to recall elected officials, to challenge laws passed by the Legislature in referendums, and to create new laws via initiatives. The November 2020 ballot included a dozen propositions. Prop 15 would create a split tax roll so that businesses but not private homes would be assessed property taxes at their current value rather than the purchase price and Prop 16 would reverse Prop 209, which banned affirmative action in 1998.

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