- State & Local
- California
This is my annual review of California governance and policies. Sadly, it wasn’t a good one. Let’s begin with infrastructure.
LA’s $1 Billion, Eight-Mile Bike Lane
Yes, $1 billion for eight miles of a bike and walking path about 16 to 20 feet wide. The city and LA Metro (the Los Angeles County Metropolitan Transportation Authority) want a continuous 51-mile path along the Los Angeles River, with the eight-mile gap between Elysian Valley and Vernon being the most expensive piece, involving new bridges, retaining walls, habitat mitigation, and right-of-way issues. This was supposed to be completed this year. However, construction hasn’t begun, and the environmental review is ongoing.
This isn’t what Angelenos planned for when they approved Measure M nine years ago, authorizing a half-cent sales tax increase for 30 years to pay for more transit.
The opportunity cost of building an 8-mile-long, 18-foot-wide path is where this gets interesting. One billion dollars potentially could fix many miles of LA roads (some of the worst in the country) or fund bus-only lanes and signal priority in the highest-ridership locations, where buses wreak havoc on traffic.
Instead, LA is spending $1 billion on an eight-mile niche project. Just how important it is it for LA to have this eight-mile bike path segment?
High Speed Rail—Decades Late and Perhaps $100 Billion Short
California’s beleaguered high-speed rail (HSR) suffered a serious blow when the federal government rescinded roughly $4 billion in funding, citing chronic delay, cost overruns, and failure to meet grant milestones. Losing that support doesn’t just damage the budget, it also signals that Washington’s leadership doesn’t believe in HSR’s projected completion schedule, ridership, cost, or revenue assumptions.
Voters approved Proposition 1A, which provided initial funding for HSR, 17 years ago, through a $9.95 billion bond. The bond was advertised as connecting San Francisco to Los Angeles by about 2020, promising it would be built for about $35 billion and would attract enough private investors and federal money to complete funding.
Seventeen years later, the cost of the system has ballooned to perhaps as much as $135 billion. The cost of the Bakersfield–Merced route currently being built could be as high as $38.5 billion. The LA to SF route now seems like a pipe dream. And there is no private investment in the project.
HSR is now deep into sunk-cost territory. Billions have been spent on viaducts, grade separations, and other infrastructure in the Central Valley, but the Bakersfield–Merced segment is a non-starter without the rest of the system. Plus, it will likely need operating subsidies, which are not permitted according to Proposition 1A’s “no subsidy” requirement.
Following the Department of Transportation’s funding cancellation, the state has doubled down on this mistaken project, with Newsom promising $1 billion per year for 20 more years, using cap-and-trade revenue. But this funding may be inadequate to finish just Bakersfield–Merced, a route that appears to violate the terms of Proposition 1A in any case.
Newsom could have frozen this project when he announced in his 2019 inaugural address, “Let’s be real: The current project, as planned, would cost too much and take too long.” But instead of freezing the project in 2019, when relatively little had been done, Newsom chose to focus on building Bakersfield–Merced, despite passenger demand on this segment depending significantly on the rest of the system being constructed.
Has the state considered the future legal and economic implications of this strategy?
Aging Water Storage and Conveyance Waits to Get Repaired
The Society of Civil Engineers gives a grade of C- to California’s dams, 70 percent of which are at least 50 years old. The state has identified 42 dams in need of repairs for safety purposes, which reduces their collective storage capacity by over 100 billion gallons. Yet the $100 million dam repair budget was cut in half last fiscal year. Surely there was a way to fully fund this high-priority investment within a roughly $300 billion overall state budget?
The last systematic review of deferred maintenance on state infrastructure identified upgrades totaling $70 billion, but that was estimated in the last year of Jerry Brown’s administration (2018–19). I am unaware of any estimates for deferred maintenance during Newsom’s two administrations.
Former Democratic Governor Edmund “Pat” Brown’s governorship (1959–67) prioritized building infrastructure, including pathbreaking, huge-scale investments like the California Water Project and the California Aqueduct, which continue to provide water today for 27 million Californians.
We don’t adequately maintain our aging infrastructure. We don’t even keep track of how much is needed to fix what we do have. It is unimaginable how our past infrastructure successes could ever be built today.
The $450 Million Fix to the Outdated 9-1-1 System Fails
Perhaps there is no higher priority within the state than fixing our antiquated 9-1-1 system. In 2019, California began replacing its decades-old legacy 9-1-1 infrastructure to create a “Next Generation 911 System.” One goal was to handle text, video, and photos as well as voice communication. Newsom stated, “The idea that it’s 2019, and we are using analog systems designed decades ago is astounding, and we need to make investments to make sure the technology aligns with the devices people are using in their daily lives.”
However, instead of creating a unified statewide network, California tried a regionalized model, which divided the state into four sectors, each to be managed by different providers. That turned out to be a significant error.
When the state began turning on the new system in a few pilot dispatch centers, several problems emerged, including dropped calls, misrouted calls (calls sent to the wrong dispatch center or jurisdiction), and multi-hour outages.
The regionalized design created unreliable interfaces between different providers. The problems were sufficiently severe that most dispatch centers never fully migrated to the new system.
Last month, the state abandoned the new system, acknowledging the rollout was unworkable. Creating another new system from the ground up will possibly require hundreds of millions more dollars. And until then, California’s 9-1-1 system will rely on 1970s-era legacy infrastructure—a prospect that seems so depressing, considering we live in the most technologically advanced state in the country.
California’s Gerrymander to Squash the Republican Minority
Last month voters passed Proposition 50, which creates a mid-decade gerrymander of our congressional map by overriding California’s independent redistricting commission and allowing the Democratic Party–controlled legislature to draw new maps. This may result in hyperpartisan control by Democrats of 48 of California’s 52 seats in the House of Representatives. It also violates the spirit of “one person, one vote” in a state where 38 percent voted for Trump last year.
While it was the voters who approved this ballot proposition, it is important to note that it was marketed to Californians as responding defensively to Texas’s mid-decade map redrawing, which would favor Republicans.
California originally advertised that it would only redistrict if Texas does. But that “trigger” language was omitted from the proposition’s text. Texas’s redistricting is now under Supreme Court review, and California’s is now the subject of lawsuits.
The cost of Proposition 50 may be as high as $280 million, which could have been used to benefit Californians. Whether courts ultimate permit California to gerrymander, Proposition 50 flies in the face of good governance and is shortsighted in terms of how it will impact the already poor relations between the state and Trump and his administration.
Will Refinery Closures Lead to $8 per Gallon Gasoline?
California gas prices are about 50 percent higher than the national average. An important reason is because California uses specially formulated gasolines that produce fewer carbon emissions. Nearly all this higher-cost gasoline is refined in California, but the state has lost roughly 35 percent of its refining capacity since the early 1980s. This loss has reduced supply and raised gasoline prices during a time when vehicle registration has risen from about 15 million in 1980 to 30 million today. Another cost driver is gasoline taxes, as California has the highest excise gas tax in the country.
This year more refineries have announced permanent closures, which could reduce refinery capacity by another 17 percent. A study out of USC predicts that California gas prices could rise to as much as $8 per gallon over the next three years.
Newsom has claimed that price gouging is the reason why California gas prices are so high: “They continue to lie, and they continue to manipulate. They have been raking in unprecedented profits because they can.”
Newsom created a Division of Petroleum Market Oversight to investigate high gas prices. Its first report was published in October and found no convincing evidence of price gouging. Moreover, the report acknowledged that some refiners are only marginally profitable, because of the high cost of doing business in California. And a key reason why refineries have been closing over time is because of high operating costs, including regulatory costs, and because of the incentives offered by the state to produce biofuels instead of refine oil.
With California gas prices poised to rise further, Newsom has recently done an about-face from castigating oil refiners to trying to put together a last-minute deal to keep those refineries open.
California continues to mismanage its energy policies while pursuing a green energy agenda that is producing not only the highest gas prices in the country but also the second-highest-priced electricity, which is about 75 percent higher than the national average.
The Palisades Fire: A Tragedy That May Easily Have Been Prevented
The January 7 Palisades Fire killed 12 people, destroyed or damaged over 7,000 structures, burned over 20,000 acres, and caused approximately $25 billion in damages.
Federal investigators have concluded that the Palisades Fire resulted from the reignition of a small brush fire, the Lachman Fire, which was set by an arsonist about a week before. This raises the fundamental question of why the Los Angeles Fire Department (LAFD) failed to fully extinguish the earlier fire.
Infrared (IR) technology, which is commonly used to detect hot spots, wasn’t used. But IR technology wasn’t even needed to determine that the Lachman Fire was not extinguished. Fire crews at the site on January 2 allegedly sent text messages to their battalion chief saying the ground was still hot to the touch and smoldering.
Despite these messages, the battalion chief allegedly ordered the crew to leave the site of the Lachman Fire. Just a few days later, strong winds turned that still-smoldering fire into the Palisades Fire.
A video taken by a hiker on January 2 at the Lachman Fire burn scar apparently shows that it was still smoldering. In addition, LA City Council member Traci Park noted that Palisades residents had reported to her office smoke from the Lachman Fire burn area before the breakout of the Palisades Fire.
This suggests that the Palisades Fire may have been prevented had standard safety measures been followed to ensure that its apparent predecessor—the Lachman Fire—was extinguished.
When the fire did reignite, the city wasn’t prepared. Mayor Karen Bass was in Ghana, despite forecasts of strong winds and high fire risk. Perhaps reflecting budgetary considerations, there were no additional fire engines in the Palisades, and hundreds of firefighters were at home. The 117-million-gallon Santa Ynez Reservoir, which was built to protect the Palisades from fires, and which is very close to the site of the Lachman Fire, had been empty for 11 months, awaiting a repair to its cover. Fire hydrants lacked adequate pressure. There was poor communication between the LAFD and the LA Police Department, resulting in badly managed evacuations that left resident cars abandoned in streets, and which in turn impeded emergency personnel.
Rebuilding is proceeding, but at a pace that is much too slow. Presently, I am unaware of any completed fire rebuilds in the Palisades or in the Malibu community of Sunset Mesa, adjacent to the Palisades.
More than 7,000 structures were destroyed or damaged in the Palisades Fire, several hundred of them in Malibu. In the Palisades, 1,143 rebuilding permits have been issued, and in Malibu, only 17.
I recently visited my former home in the Sunset Mesa neighborhood. Nothing remains other than the driveway. It is the same for nearly every other home on the block. All one sees is devastation, and if there is anything to hear, it is only the ghosts of the remarkably peaceful and joyful community that once existed here.
Will California governance and policies improve in the future? They can, but only if new leadership is chosen in next November’s general election. For far too long, California voters have been electing political leaders that have not delivered. And it should be obvious by now to voters that they need to choose very differently if they wish to see better governance and policies.
