MOORLACH UPDATE — School Districts of San Diego County — November 16, 2018

The San Diego Union-Tribune provides my editorial submission on the public school districts in San Diego County.

For Orange County, see MOORLACH UPDATE — Get Mad, Get Motivated — October 19, 2018.

For Riverside County, see MOORLACH UPDATE — Riverside County School Districts — October 31, 2018.

For San Bernardino County, see MOORLACH UPDATE — San Bernardino County School Districts — November 5, 2018.

For a sneak peak at San Diego County, see MOORLACH UPDATE — San Diego County School Districts — November 7, 2018.

For a complete overview, see MOORLACH UPDATE — Public Schools Financial Crisis — November 3, 2018.

With the Legislative Analyst’s Office projecting another year of surplus revenues this week, and a new Governor come January, it will be interesting to see what Sacramento will do to financially assist its strapped school districts.

Commentary

Why school districts must focus on financial plans

JOHN M.W. MOORLACH

https://www.sandiegouniontribune.com/opinion/commentary/sd-oe-moorlach-school-budgets-utak-20181115-story.html

Only one of 42 public school districts in San Diego County enjoys a positive balance sheet, Spencer Valley Elementary in Santa Ysibel. The balance sheets of the other 41 districts are dipped in red ink, some substantially.

The scoring comes from my recent report, “Financial Soundness Rankings for California’s Public School Districts, Colleges & Universities.” It reviewed the financial soundness of all 944 California public school districts.

The rankings derive from each district’s latest Comprehensive Annual Financial Report, which you should be able to find on their respective websites. In each CAFR, look for the “Basic Financial Statements,” starting with the page titled “Statement of Net Position.”

Look at the top row for “Government Activities.” Then look down the column to where it says, first “Net Position,” then “Unrestricted.”

That’s the number you want: the Unrestricted Net Position, or UNP.

The number will either be positive or, with parentheses around it, negative.

I also divide the UNP by the district’s population to get a per-capita UNP. If negative, that’s the amount each person in the district is in hock for, whether or not your children attend school. Citizens should be concerned about the trajectory of these negative balances, commonly attributed to unfunded pension liabilities.

If the negative number runs too high too long, it will mean cuts in teachers, equipment, band and sports, and ultimately calls for parcel taxes and more statewide tax increases like Proposition 30. In the worst cases, takeover by the state is not out of the question.

Spencer Valley ran up a positive UNP per capita of $8,007, the 11th best in California. Great.

Unfortunately, after that every district ran negative UNPs per capita. The second “best” in San Diego County was Julian Union Elementary at -$147, 153rd best in the state. Following were San Marcos Unified, in third place in the county at -$150, and 156th best in the state; and Warner Unified, in fourth place in the county at -$201, ranking 172ndbest in the state.

Half of San Diego County’s districts scored in the top half of the state’s 944 districts. That at least is a better performance than for districts in the nearby counties of Orange, Los Angeles, San Bernardino and Riverside.

What’s of greatest concern is the bottom of the list. In 42nd and last place for the county was Cardiff Elementary, at -$2,139, 912th among the 944 state districts. In 41st place for the county was Valley Center-Pauma Unified, in Valley Center, at -$1,756, ranking 894th in the state.

Of special concern is the most populous district: San Diego Unified’s UNP per capita is -$1,381, fifth-worst in the county. But here’s the sticker shock: The UNP itself is -$1.5 billion. The only district even deeper in the red in California is Los Angeles Unified, at -$10.9 billion.

I also have scored the balance sheets of the state’s 58 counties and 482 cities. San Diego city bleeds -$1.6 billion in red ink, -$1,122 per capita. The county bleeds -$1.2 billion in red ink, -$347 per capita.

Add up SDUSD, the city and the county, and the geyser of red ink amounts to $4.3 billion, or -$2,850 per capita. For a family of four, that’s -$11,400!

The per capita UNPs for the 10 best districts, the best on top:

Spencer Valley Elementary           $8,007

Julian Union Elementary                 -$147

San Marcos Unified                           -$150

Warner Unified                                   -$201

South Bay Union                                 -$247

San Dieguito Union High                   -$312

Solana Beach Elementary                  -$361

San Ysidro Elementary                       -$370

Lemon Grove SD                                  -$385

Rancho Santa Fe Elementary             -$401

The per capita UNPs for the 10 worst districts, the worst on top:

42. Cardiff Elementary                      -$2,139

41. Valley Center-Pauma Unified    -$1,756

40. Jamul-Dulzura Union Elem       -$1,659

39. Mountain Empire Unified          -$1,652

38. San Diego Unified                         -$1,381

37. Oceanside Unified                        -$1,290

36. Vista Unified                                  -$1,215

35. Poway Unified                               -$1,090

34. Bonsall Unified                              -$1,006

33. San Pasqual Union Elem                 -$969

Next year, the Governmental Accounting Standards Board for the first time will require that balance sheets include unfunded retiree medical care liabilities, which will show even more city and school districts in critical condition.

It’s time for school district leaders to develop 10-year strategic financial plans that are well communicated to their constituents. You need to know how your district plans to move up its position in the objective ranking.

Moorlach, R-Costa Mesa, represents the 37th District in the state Senate. A CPA, he was Orange County’s treasurer-tax collector.

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MOORLACH UPDATE — Dubious Budget Trailer Bill — September 17, 2018

The LA Times and SD U-T find the world famous columnist, George Skelton, delving into the Legislative Democrats’ vote on AB 1829, interpreting the National Mortgage Settlement Fund. It is a budget trailer bill, a technique for many an abuse.

I argued against this bill in the Senate Budget and Fiscal Review Committee. I mentioned that it reminded me of the diversion by the state of the National Tobacco Settlement some 16 years ago. The joys of being older and having personal history with these arcane historical events (see MOORLACH UPDATE — Daily Pilot — April 1, 2012). I also voted against the bill on the Senate Floor.

We’ll be seeing a number of articles on bills that were approved during the last few days of this year’s Session. They couldn’t be covered by the media at the time, as the volume was too great. But, while digesting what occurred, it is nice to see this bill evaluated by a liberal columnist who concurs with not only my vote, but my historical context, in the piece below.

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Taking money meant for financially pressed homeowners and using it to balance California’s budget is plain wrong

George Skelton

George Skelton
Contact Reporter Capitol Journal

http://www.sandiegouniontribune.com/news/us-politics/la-pol-sac-skelton-california-mortgage-settlement-money-20180917-story.html

http://www.latimes.com/politics/la-pol-sac-skelton-california-mortgage-settlement-money-20180917-story.html

Gov. Jerry Brown and the Legislature just showed why many voters don’t trust Sacramento politicians with money — and why last year’s gas tax increase could be repealed on election day.

Ruling Democrats never quite get it. They become caught up in crafty, hurry-up maneuvering in the dark and forget that what they’re concocting often looks ugly when the light shines, which it inevitably does.

Here’s the story briefly: In 2012, Brown and the Legislature took $410 million that was supposed to assist victims of abusive mortgage lending and used it to help balance the state budget. Homeowner groups sued. Two courts ruled against the state and ordered it to replace $331 million.

Just before the current Legislature adjourned Aug. 31, lawmakers passed a bill essentially telling the courts to go pound sand. The measure “confirmed” that Brown spent the money “consistent with the direction given” him by the 2012 Legislature. So there! The governor signed the bill last week.

“The Legislature and the governor said, ‘In your face, judge, we’re going to do what we want to do regardless of how you rule,’” says state Sen. John Moorlach (R-Costa Mesa), a former Orange County treasurer-tax collector.

Brown is appealing the case to the state Supreme Court, which hasn’t decided whether to take it.

But regardless of what the court does and whether what the governor and Legislature did was legal or illegal, it was plain wrong. You don’t take money meant for financially pressed homeowners — or former owners who were improperly foreclosed on — and spend it on convenient budget balancing.

“We were facing a difficult budget crisis in 2012,” says H.D. Palmer, spokesman for Brown’s finance department.

Yes, the state was. But it isn’t today. It’s rolling in money, on its way to amassing a $13.5-billion cash reserve.

That disputed $331 million should be spent belatedly to help victims of bad mortgages, or at least on some housing program.

The money came from a 2012 settlement reached by the nation’s five largest mortgage servicers — Bank of America, Wells Fargo, Citigroup, JPMorgan Chase and GMAC — in a suit filed by the federal government and every state except Oklahoma. Lenders were accused of deception and improper foreclosures.

The banks paid $20 billion directly to foreclosed homeowners. In addition, it sent $2.5 billion to the states, with California getting the biggest pot, $410 million.

“Each state attorney general shall designate the uses of the funds,” the agreement decreed. “To the extent practical,” it continued, the money should be spent to assist foreclosure victims and to avoid future mortgage abuses.

Then-state Atty. Gen. Kamala Harris — now a U.S. senator — helped negotiate the settlement and, as required by the agreement, designated several housing-related uses for the money. Brown and the Legislature virtually ignored her list.

What they mostly did with the money was use $316 million to make payments on $5 billion in housing bonds approved by voters in 2002 and 2006.

So, wait a minute: The settlement money was supposed to help current mortgage victims and prevent future calamities — not to be used for making payments on old bonds.

That’s essentially what trial and appellate courts ruled. And it’s certainly what Harris thought. In a rarity, there was dissension in the highest Democratic ranks, with Harris objecting to Brown’s use of the money.

In a 2012 written statement, she said: “These funds should be used to help Californians stay in their homes. I plan to work with the governor and Legislature toward a balanced budget that honors our obligations to California’s homeowners.”

The work didn’t pay off. And when the state was sued, Harris opted not to defend it. Brown was forced to hire private attorneys.

In its appeal to the California Supreme Court, the Brown administration is making the state attorney general a separation-of-powers issue. Wearing an odd-looking hat, the state’s chief executive is taking the Legislature’s side.

“Does the Legislature or the attorney general have final authority to decide how to spend money paid to the state?” Brown asks in a petition to the court. The lower courts’ rulings, he asserted, are “squarely at odds with the fundamental principle that the Legislature holds the power of the purse.”

The legislation telling the courts to take a hike passed on party-line votes in each house — Democrats for, Republicans against.

“The bill doesn’t make any difference for two reasons” says Neil Barofsky, a lawyer for the National Asian American Coalition and other groups suing the state. “What one legislature says six years later about what a previous legislature did doesn’t matter.

“And even if the court didn’t see it that way, it wouldn’t matter. The governor is bound to follow the federal consent order” — the mortgage settlement. “That’s his obligation.”

Sacramento politicians have long had a reputation for raiding pots of money set aside for one purpose and using it for another. Some of the reputation is deserved, some not.

In 2003, Gov. Gray Davis and the Legislature grabbed California’s share of a $206-billion national settlement with tobacco companies and used it for budget-balancing. It should have been spent on smoking prevention and treating health problems caused by tobacco.

Currently, opponents of the gas tax hike that’s raising money to repair dilapidated roads accuse the state of pilfering past highway funds for other purposes. It’s basic baloney, but an effective pitch to voters.

Regardless of what the state Supreme Court does, Sacramento Democrats already have lost by snatching the mortgage money.

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This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District. If you no longer wish to subscribe, just let me know by responding with a request to do so.

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MOORLACH UPDATE — SB 1004 and CIRM — September 10, 2018

The LA Times and the San Diego Union-Tribune jointly opined on their websites in favor of SB 1004, which I joint-authored with the good Senator from San Francisco, Scott Weiner, and encourage the Governor to sign it.

How’s that for working with those on the other side of the aisle? I have an established history with addressing how to better direct Mental Health Services Act funding. With that focus, Sen. Weiner requested my collaboration on his bill (see MOORLACH UPDATE — Joint Author Details — July 7, 2018). The lead editorial is the first piece below.

The second piece is more than a year in the making. I was interviewed by the San Francisco Chronicle last year. They have done some very exhaustive analysis over this time period on CIRM, the California Institute for Regenerative Medicine (see MOORLACH UPDATE — I Told You So! — August 26, 2017 ).

The bonds that funded this dubious venture cost the General Fund $313 million in the current fiscal year and will cost $309 million in the next! Your taxes are paying for what I believe is the most egregious ballot measure abuse in recent state history.

I’m not against stem cell research. But, if there is progress and money to be made in this area, the private sector and institutional investors will make it happen. But, in 2004, when Proposition 71 was up for a vote, I was one of the three signatories in opposition to this measure because it was self-serving, unaccountable, and would be a fiscal bust (as the major patents had already been secured by the University of Wisconsin).

I recently did try to address my concerns about CIRM through the legislative process (MOORLACH UPDATE — Millstones and SCA 7 — March 30, 2017) and through messaging (see MOORLACH UPDATE — Showmanship Let Down — October 7, 2017).

Now the Chronicle provides a review of where the money went. Although thorough, it is silent on the administrative costs. That may provide information on high salaries and, therefore, high pensions, for well situated individuals who served in cushy positions. The piece also begs the question as to facilities. You can do research in a rented commercial building. But, I’ll save the rest for your reading pleasure with the second piece below.

California is sitting on hundreds of millions of dollars for mental health programs. Let’s put it to use

https://www.msn.com/en-us/news/msn/editorial-california-is-sitting-on-hundreds-of-millions-of-dollars-for-mental-health-programs-lets-put-it-to-use/ar-BBN8fdG

http://www.sandiegouniontribune.com/la-ed-mental-health-funding-20180910-story.html

Like much of the rest of the nation, California went only halfway toward keeping its promise to improve mental health care. It closed psychiatric hospitals, some of which were really just costly warehouses for the sick rather than modern medical facilities offering effective treatment. But the state didn’t follow through on its commitment to provide better alternatives, like community-based clinics that deliver the treatment and services needed to integrate patients into society, working and living independently where possible.

We can see the result of those half-measures every day. About a third of homeless people in Los Angeles and across the country are on the street because of untreated mental illnesses that prevent them from staying housed or holding down a job.

We’ve begun to make amends, at least of a sort. Fourteen years ago, voters passed Proposition 63, known informally as the millionaires’ tax and more properly as the Mental Health Services Act. It raises billions of dollars for services.

The ranks of mentally ill homeless Californians are constantly being replenished.

More recently, Los Angeles voters adopted tax measures to raise money for supportive housing – units that will give homeless people, including those with serious mental health challenges, the opportunity for dignified and independent living while receiving the medical care and services they need to hold their illnesses at bay and stay off the streets.

These are fine programs, but if they’re all we’ve got they will be futile. The ranks of mentally ill homeless Californians are constantly being replenished. As fast as we can lead the sick and suffering into homes, they are replaced on the street by new generations of people whose mental illnesses were left undiagnosed or untreated at an early stage, when they still could have been held in check. If only California also had funding for that – for prevention, diagnosis, intervention and treatment early enough that patients’ illnesses do not progress to the point where they lose the ability to lead independent lives.

Actually, we do have the funding. The tragedy is that we haven’t spent it wisely, or in many cases haven’t spent it at all.

Twenty percent of Proposition 63 funding allocated to counties is supposed to be spent on prevention and early intervention programs and treatment. Yet a recent state audit found that counties hadn’t spent most of that money, despite statutory deadlines meant to deter hoarding. Hundreds of millions of dollars just sit in county accounts, still waiting to be put to use.

Why? There is too little guidance on how to effectively spend those tax dollars. A state Mental Health Services Oversight and Accountability Commission is supposed to direct counties to best practices, but that loose system has led us to where we are: unmet needs and unspent funds. There is little strategic vision. Programs aren’t measured for their effectiveness. Counties aren’t held accountable for results.

The law should be tightened to ensure data are gathered, outcomes are measured and the commission offers more exacting spending guidance that prioritizes treatment for young patients.

After all, researchers have found that signs and symptoms of mental illness – hallucinations, delusions and other evidence of psychotic episodes – first present themselves in the patients’ early teen years and into their mid-20s. Treatment at or just after the onset of these symptoms can prevent, or at least allow patients to manage, serious mental illness that worsens over time. Failure to respond quickly makes effective treatment later in life much more difficult – and feeds the pipeline that sends sick adults to the street.

A bipartisan proposal from state Sens. Scott Wiener (D-San Francisco) and John Moorlach (R-Costa Mesa) would provide the appropriate spending guidelines and promote some uniformity in treatment around the state while leaving counties the flexibility to spend on different priorities if they can make a persuasive case for them. The measure (Senate Bill 1004) cleared the Legislature and is now on Gov. Jerry Brown’s desk.

Brown’s Department of Finance opposes it, arguing that the commission can do everything the bill can simply by changing the appropriate regulations. Perhaps it could – but the point is that it hasn’t.

Some critics object to the move to increase the focus on the young. Yet that’s where the greatest need is for prevention and intervention services, and where funding can provide the greatest value. Besides, the bill would also direct funding to programs that address the particular mental health challenges of older people as well. The bill is a targeted solution to an exasperating problem. It deserves the governor’s signature.

Taking stock of California’s $3 billion bet on stem cell science

Erin Allday and Joaquin Palomino

https://www.sfchronicle.com/news/article/Taking-stock-of-California-s-3-billion-bet-on-13215312.php

It was an extraordinary political proposal: Approve a $3 billion bond measure to fund the cutting-edge science of stem cell therapy, and soon some of the world’s cruelest diseases and most disabling injuries could be eradicated.

The 2004 measure was Proposition 71, the California Stem Cell Research and Cures Initiative. The campaign to pass it was led by a Palo Alto real estate developer whose son suffered from an incurable illness that he believed stem cells, the keystones of human biology, could heal. Other supporters included preeminent scientists, Hollywood celebrities, business leaders and elite investors.

The need was urgent, they said. Federal restrictions had recently been imposed on funding research involving human embryonic stem cells, then the most auspicious field of study.

Among the campaign’s promises: Nearly half of all families in California could benefit from stem cell treatments Prop. 71 would help create. One study it commissioned found that new, life-changing therapies could emerge in just a few years. And Prop. 71 would pay off financially, the campaign claimed, creating thousands of jobs and potentially returning the state’s investment more than seven times over.

“How many chances in a lifetime do you have to impact human suffering in a really fundamental way, including possibly even in your own family?” Robert Klein, the campaign leader, would say shortly after the vote.

In November 2004, Prop. 71 passed with nearly 60 percent approval. It created the California Institute for Regenerative Medicine, or CIRM, an agency tasked with administering the $3 billion and making the campaign’s lofty visions a reality.

Fourteen years later, the money voters approved is nearly gone, and supporters of CIRM and the research it funds are preparing to ask the public for another $5 billion in 2020. This time, taxpayers will want to know: Has California’s initial bet on stem cell science paid off?

Over the past several months, The Chronicle conducted an extensive analysis of CIRM’s spending, reviewing the nearly 1,000 grants the agency has made, tracking how the money has been spent, and gauging whether the promises have been realized.

It’s not a question that can be answered simply. Science often can’t be measured in quantifiable outcomes. Failures aren’t just common, they’re necessary — it’s impossible to expect every dollar invested in research to lead down a traceable path toward success.

CIRM can take credit for some notable progress.

It has helped make California a global leader in the field that’s come to be known as regenerative medicine. Anywhere significant stem cell research is taking place in the state, it almost surely has received support from CIRM.

At UCLA, doctors are using stem cells to cure a rare immune deficiency disease that kills children. At Stanford, early studies show that stem cells deposited deep into the brain could restore movement and speech to people devastated by stroke. At UCSF, a team is beginning human trials for a fatal genetic blood disease that involves transplanting stem cells into a fetus still in the uterus.

But as thrilling as such advances are, they fall far short of what Prop. 71’s promoters promised.

Not a single federally approved therapy has resulted from CIRM-funded science. The predicted financial windfall has not materialized. The bulk of CIRM grants have gone to basic research, training programs and building new laboratories, not to clinical trials testing the kinds of potential cures and therapies the billions of dollars were supposed to deliver.

Over that same time, many people suffering from incurable diseases have become impatient waiting for scientists to produce the miracle treatments the Prop. 71 campaign said were within reach.

Instead, a thriving, for-profit industry of clinics offering dubious stem cell therapies based on half-baked science has sprung up, defying attempts at government regulation and requests from scientists to proceed cautiously.

Now, as CIRM supporters prepare to approach voters again, some say its achievements shouldn’t be measured only against the claims made by the campaign that created it.

“What was promised was not deliverable,” said longtime CIRM board member Jeff Sheehy, a former San Francisco supervisor. “However, I would distinguish the promises from the impact and value. We have developed a regenerative medicine juggernaut.”

Klein, though, is unapologetic about the campaign he led. Indeed, as he lines up advocates and testimonials for the coming campaign, his message is familiar: Fund this research and we will save lives. Slow it down and the consequences will be grave.

“Do you want your son to die? Are you going to wait?” Klein asked recently. “Is that the price you are prepared to pay?”

In his airy, sunlit lab at San Francisco’s Gladstone Institutes, cardiologist Deepak Srivastava has used skin cells to produce heart cells. As they pulse in a petri dish, their steady, calming beat feels familiar, even viewed through the lens of a microscope.

Someday, he hopes, the work of his team at Gladstone’s Roddenberry Stem Cell Center will lead to a therapy that can reverse the effects of a heart attack.

“We got this far purely because of CIRM,” said Srivastava, the center’s director.

The dream of exploiting the human body’s remarkable ability to heal itself — to grow skin and bone, to replace muscle lost to wasting or disease, to undo systemic damage caused by infection — has long captivated medical scientists. In the late 1800s, they began to suspect that specific cells in the body were responsible for this repair and regeneration work.

A century later, in 1981, UCSF scientist Gail Martin gave the most powerful of these cells a name: embryonic stem cells.

It wasn’t until 1998 that the first human embryonic stem cells were isolated and replicated in a lab. These cells are uniquely potent, responsible for building every part of a human body. As an embryo matures, it rapidly replicates, transforming into bone cells and muscle cells, brain cells and heart cells.

Some doctors believed if they could harness stem cells, they could use them to treat all but the most disastrous threats to the body, perhaps even reverse the natural effects of aging.

The process of isolating them, though, involved destroying days-old embryos. Religious and antiabortion groups decried the science as unethical. In 2001, President George W. Bush instituted far-reaching limitations on federal grants for embryonic stem cell research.

In California, advocates for regenerative medicine sought a way around the funding restrictions. Their solution: Prop. 71, which would generate $3 billion in general obligation bonds, the type more often used for infrastructure projects like highways or dams. Including principal and interest, the total cost to taxpayers would be roughly $6 billion.

State-funded scientific research on that scale had never been attempted and, despite the campaign’s pitch, there was no guaranteed payoff. The state Legislative Analyst’s Office offered a cautious assessment: The potential financial benefits were unknown.

Klein, then a major Silicon Valley developer, helped conceive, bankroll and write Prop. 71. For him, the effort was personal. His son, Jordan, had recently been diagnosed with Type 1 diabetes, and Klein had become a ferocious advocate for people with brutal conditions and little hope.

More than 20 Nobel Prize laureates backed the proposal. So did Hollywood celebrities such as Michael J. Fox and Brad Pitt. Million-dollar donations came from the founders of eBay and the owner of the Cleveland Cavaliers basketball team.

Radio and television ads featured gut-wrenching appeals from people with incurable diseases. Patient advocate Joan Samuelson, later appointed to CIRM’s board, said in one ad that Prop. 71 “will rescue me, and a million people with Parkinson’s disease.”

In another, “Superman” actor Christopher Reeve, paralyzed from the neck down after a horseback-riding accident, said “stem cells have already cured paralysis of animals,” and called them the “future of medicine.” Dependent on a ventilator attached to his trachea, he struggled to breathe and to speak in the ad. He died before the spot aired.

Almost immediately, critics filed lawsuits. CIRM, the new stem cell institute, lacked public accountability, they said. While technically it was a state agency, the measure gave the Legislature little direct oversight of it. The legal challenges eventually were dismissed, but they slowed funding for nearly two years.

Meanwhile, the confident claims of the campaign were being tempered with more modest expectations. A year after moving into its San Francisco headquarters, CIRM would unveil a 10-year plan dramatically scaling back the pledges made by Prop. 71.

The field of embryonic stem cell research was still young, the report warned. The road to marketing new therapies would be long and expensive. Most research never reaches human clinical trials, it explained, and most of those trials fail. Potential treatments for just a handful of diseases might be tested, and it was doubtful that a single approved therapy would be developed from the state’s investment.

“The whole tenor of the campaign, what was said on television ads that flooded the state and by Bob Klein and his lobbying group, was that if California would fund this work, there would be cures,” said Marcy Darnovsky, executive director of the Center for Genetics and Society in Berkeley. “People that were saying that must have known you can’t schedule medical breakthroughs. Those hopes were just that, hopes, and completely speculative.”

But as CIRM ramped up, The Chronicle’s review shows, it began doling out grants at a furious pace, averaging more than $7 million a week in 2008, its first year of full-fledged operation. To date, CIRM has spent or committed more than 90 percent of its $3 billion allowance.

The grants can be broadly divided into four categories: basic science and training; infrastructure; translational and preclinical, which is the work that goes toward moving laboratory science into human studies; and clinical trials.

The Chronicle reviewed CIRM grants through May 2018, tracking who received money and how it was spent.

Bay Area institutions have been especially well-funded, with more than one-fifth of the bond money funneled to Stanford, UCSF, UC Berkeley and the Gladstone Institutes. Stanford, the biggest beneficiary, has received $360 million in grants. CIRM’s funding of Stanford, a private institution supported by a hefty endowment, has at times been sharply criticized.

Nearly 40 percent of the total bond money, more than $1.1 billion, has gone into training programs and basic research — work largely aimed at improving scientists’ understanding of stem cells and how they might be best used in medicine.

These basic biology studies have helped scientists develop techniques that could prevent immune rejection from an organ transplant. They discovered weak points in cancer stem cells that might become new targets for drug therapies. In addition to Srivastava’s beating heart cells, scientists have used stem cells to build mini-organs, including “brains” in petri dishes for testing drug therapies and learning more about diseases like Alzheimer’s.

CIRM’s focus, meanwhile, has expanded beyond embryonic stem cells. It has funded research involving adult stem cells, which exist in pockets throughout the body and are cheaper and less controversial than embryonic stem cells. It’s also invested in induced-pluripotent stem cells, first developed in 2006. Produced from other types of cells, they look and act like embryonic stem cells.

CIRM-funded researchers have published more than 330 scholarly articles in four of the most respected stem cell and academic journals. Each represents a new discovery in the field and has enabled the work California has funded to reach scientists around the world.

CIRM’s investments in infrastructure have amounted to $482 million — 16 percent of the bond money. Most of that went toward building a dozen stem cell research centers.

UCSF received a $35 million grant to help raise a glass-and-metal structure on the hillside overlooking its Parnassus campus. The independent Buck Institute for Research on Aging received $20 million toward a sleek white building on its Novato grounds. Stanford University won the largest single grant: $43.6 million toward a four-story structure at the edge of its medical school campus built around a glass-walled atrium.

About $388 million has gone toward preclinical and translational research: studies that take science out of the lab and try to apply it to humans. This phase of research, seldom backed by the federal government, can be particularly challenging. A therapy that looks promising when tested on a cluster of cells in a laboratory-controlled environment often fails when given to more complex organisms.

The preclinical studies funded so far reflect the immense possibilities stem cells offer: Scientists have examined a gene-modifying technique to try to treat HIV. They’re studying small molecule drugs that could destroy leukemia stem cells. They’re developing a gel derived from pig muscles that could stave off amputations among people with a disease that weakens blood circulation.

The research has helped CIRM-backed scientists license 107 invention disclosures. Some of the studies have paved the way for clinical trials, while others have hit dead ends.

CIRM funding helped push UC Irvine scientist Henry Klassen’s work from lab studies to clinical trials testing a stem cell therapy for a rare form of blindness. His research, which has shown success, has largely been carried out in a building at UC Irvine partly underwritten by CIRM.

“The whole reason I’m here in California is because of CIRM,” said Klassen, who had been working in Singapore and took a job at Irvine shortly after Prop. 71 passed. “This consistent source of funding has been critical as we go from the bench to the bedside.”

Still, critics and supporters alike say those who pushed Prop. 71 significantly oversold the short-term medical and financial prospects of stem cells.

No federally approved treatments have been produced. And without marketable therapies, the public is still far from reaping the up to $91 billion in health care savings by 2040 the campaign predicted.

CIRM has funded nearly 50 clinical trials, but just four have been completed, meaning scientists enrolled all the patients they said they would and finished compiling data. One of those trials was an observational study that tested no new therapy. The others involved treatments that are still years, at best, from reaching the market.

The state, once told to expect as much as $1.1 billion in royalties from CIRM-backed discoveries within 35 years, so far has received just a tiny fraction of that amount: a single payment of $190,000 from the City of Hope medical research center in Los Angeles County.

Other economic benefits, such as tax revenue and new jobs, have been measured only a handful of times. The most recent study, which CIRM commissioned using public funds and published in 2012, showed the state investment had helped create tens of thousands of jobs and generate hundreds of millions in tax revenue.

The aim of the report, however, was to aggressively support the goals and initiatives of CIRM, according to the California Stem Cell Report, a blog that has diligently tracked the institute.

CIRM and its 29-person governing board, meanwhile, have been a frequent target of attack.

State lawmakers have introduced multiple bills aimed at making the institute more accountable to the public and at ensuring that all taxpayers, not just biotech companies and universities, would benefit from the public investments.

Almost every effort has failed, in part due to the unusually restrictive language of Prop. 71: Any change in CIRM’s structure needs a voter initiative or a 70 percent vote in both houses of the Legislature and the governor’s approval.

The proposition also specified the precise makeup of the agency’s governing board, placing representatives of many of the institutions that CIRM funds to oversee its grants. Having such built-in conflicts of interest without the oversight expected of a public agency has undermined CIRM’s legitimacy, critics say. They have likened it to an insiders’ club that enriches its own members.

“These guys got away with an incredible amount of personal enrichment,” said state Sen. John Moorlach, R-Irvine, a longtime critic of CIRM. “And all they gave us was debt.”

CIRM leaders say they have strong protections to ensure that personal interests don’t influence funding decisions: Board members don’t discuss or vote on proposals they have a financial stake in, and an out-of-state review panel has a major say in which projects are funded.

Multiple audits, however, have found the sheer volume of recusals troubling.

Records obtained by The Chronicle showed that board members abstained from voting on grants roughly 1,770 times since 2006 due to reported financial conflicts. Tens of thousands of additional recusals were triggered by a CIRM policy that bars certain members from weighing in on any application.

In some cases, nearly half of the board was unable to vote on major and controversial proposals due to conflicts of interest.

One board member, UC Regent Sherry Lansing, a former film studio executive, has recused herself from more than 400 grant discussions because of a tangle of conflicts, most related to the universities she oversees. Lansing’s role is to advocate for cancer patients.

A pivotal Institute of Medicine review in 2012 found that such widespread conflicts had caused some to “question the integrity and independence” of CIRM, and it recommended sweeping reforms. Many of the suggestions were not enacted, although CIRM did make some significant changes shortly after the report published.

Klein, CIRM’s board chairman during its first seven years, has been a divisive figure. Despite his role at CIRM, he continued to run a patient advocacy group that regularly dismissed concerns about the agency and attacked many people, including legislators, who challenged it. A 2009 Little Hoover Commission report called him “a lightning rod for calls for more accountability.” There were multiple demands for his resignation.

“There’s a reason you have checks and balances, transparency and accountability when you use that much in public funds, and unfortunately none of that was in place,” said former state Sen. Deborah Ortiz, who strongly supported Prop. 71, then became a CIRM critic. “You can’t go to the voters and say, ‘Let’s use $3 billion in state funds,’ then say, ‘We don’t want the terrible government to bother us.’ ”

Even some of CIRM’s most ardent supporters — patients and patient advocates who stand to benefit most directly from stem cell therapies — have become critical. Their chief complaint: The science is taking too long, and they’re running out of time.

At the Gladstone Institutes’ Mission Bay campus last fall, CIRM held a public meeting to update patients about the research going on throughout California.

CIRM representatives and scientists told the story of a mother who had her vision partially restored after enrolling in Klassen’s trial at UC Irvine. They talked about an East Bay teenager, paralyzed the day before graduating high school, who regained some movement after receiving a stem cell transplant.

The $3 billion bond, they said, had made these achievements possible.

“What you will see over the next decade,” Srivastava of the Gladstone Institutes told the crowd, “are a series of breakthroughs for many diseases based on that investment.”

Not everyone shared his enthusiasm.

“I’ve met hundreds, thousands of people with spinal cord injuries,” Franklin Elieh, a quadriplegic man and patient advocate, said at the same meeting. “Millions are suffering needlessly and endlessly. Billions (of dollars) are being spent needlessly and endlessly. What can be done to really accelerate this?”

Elieh, like many people living with incurable diseases or conditions, is disillusioned with the dearth of clinical trials CIRM has backed.

Clinical trials are the goal of laboratory medical science. They are the moment that a possible treatment, studied only in a test tube or a dish or an animal, finally is tested on a human subject.

The first two trial phases primarily test safety: Does this treatment, when given to a human being at an effective dose, cause intolerable side effects? Phase 3 trials are typically the first to tell scientists how well a therapy works in large groups of patients, if it works at all. They are often the last step before scientists — usually working with a for-profit company that has financed the increasingly expensive research — seek FDA approval.

About 900 patients have been involved in the 49 clinical trials CIRM has backed so far, The Chronicle’s review shows. Nearly a fifth of CIRM’s funds, about $530 million, has gone to support the trials. Most of those grants were awarded in the past three years, part of a deliberate effort by the agency to direct more money toward testing treatments.

“Every single project we have is spectacular, and just a couple of years ago may have been considered science fiction,” CIRM President Maria Millan told a state legislative committee in August as she outlined many of the clinical trials the agency has funded.

Only six of the clinical trials, though, have been phase 3 studies. Of those, two were terminated or suspended, three are still recruiting patients, and one — for a bioengineered blood vessel that can be used in dialysis — is under way.

Meanwhile, the National Institutes of Health, the primary federal funding agency for medical research, has far outpaced CIRM in supporting clinical trials in stem cell research. A 2017 analysis by STAT, a science and health news publication, found that, dollar for dollar, the NIH funded 3½ times as many clinical trials as CIRM from 2006 to 2016.

In 2009, President Barack Obama lifted most of the restrictions on federal funding of embryonic stem cell research, but for both agencies, trials using those cells remain rare.

“When we voted for Prop. 71 we wanted clinical trials, we didn’t want basic research,” said Judy Roberson, a longtime CIRM supporter who has lost five family members, including her husband, to Huntington’s disease. Roberson has 17 other relatives who are also at high risk of developing the hereditary neurological disorder, which slowly erodes a person’s ability to walk and talk.

“Our loved ones are going to die. They’re sitting on time bombs,” she said. “You could do basic research for 100 years, but you’re never going to learn everything. So just get in there and try something.”

But accelerating the push of basic science toward human trials is not without its critics. The International Society for Stem Cell Research — the largest body of scientists looking at policy and politics in regenerative medicine — has cautioned against that approach. Many scientists say that, in general, it’s too early to be experimenting on people, particularly with embryonic and induced-pluripotent stem cells, which may cause tumors.

Gene therapy, a field related to stem cells, underwent more than 30 years of grueling research and repeated setbacks before establishing its first commercial successes in 2017: two cancer treatments approved by the FDA.

Embryonic stem cells were isolated for the first time just two decades ago. Induced-pluripotent stem cells were made only 12 years ago. Adult stem cells — the cells responsible for regular repair and upkeep — have been used in bone marrow transplants for more than 50 years, but their application beyond that started to be deeply studied only in the 1980s.

The science simply isn’t there yet, said Arnold Kriegstein, head of UCSF’s stem cell center, who has received $2.5 million from CIRM for basic research.

“CIRM touts 50 or so projects moving toward the clinic, and many of them will likely fail,” Kriegstein said. “It might be more prudent to spend dollars solving basic research problems, where a relatively modest investment can have a huge impact.”

Some suggest that CIRM’s recent aggressive support for clinical trials is directly tied to its plan to return to voters for more funding. The fact that its work is supported by taxpayers increases the urgency to produce results, said Timothy Caulfield, a Canadian law professor at the University of Alberta who closely follows CIRM.

“That creates a lot of pressure to frame the work in terms of near-future miracles, and that will almost always fail,” Caulfield said. “True medical breakthroughs with broad application are incredibly rare.”

To patients desperate for cures, CIRM leaders say stay hopeful. The work may be taking longer than promised, but it will pay off in the end. And the state has too much invested now to give up. Such hope, though, isn’t easy to come by for those beginning to realize that any therapies to help them probably will arrive too late.

“We see how slow progress is, and we know a lot of people are never going to be candidates for a treatment,” said Elieh, who is co-founder of the Northern California Spinal Cord Injury Foundation, a nonprofit patient support group.

Elieh, 54, was injured in a diving accident in 1989, shattering his vertebrae and damaging his spinal cord so badly that he lost movement in his legs and upper body. In the years afterward, he enrolled in clinical trials and costly rehab programs, but none helped.

During the Prop. 71 campaign, Elieh watched celebrities talk about the miraculous ability of stem cells to regenerate tissue. He saw videos of paralyzed rats that could walk again after receiving an injection of stem cells. Clinical trials, scientists said, were just years away.

“Everyone you talked with thought, ‘Wow, we’re going to put $3 billion into this,’ ” Elieh said. “It was really creating hope. And, unfortunately for me, false hope.”

Over the past decade CIRM has funded two clinical trials testing the same treatment for spinal cord injuries. The therapy, though, applies only to people newly injured, not the hundreds of thousands of men and women like Elieh who have been paralyzed for years.

So far, the therapy has proved safe. A handful of patients in the second trial regained some movement, though it’s too soon to say whether stem cells are the reason. While CIRM supporters are keen to hold up that trial as an example of the stunning potential of stem cell therapies, Elieh and many of his peers are more cautious.

“We’ve still barely taken the first step, and we have no idea when the second step will land,” Elieh said. “We all had a lot of hope back then, and we’ve just kept hoping.”

Seated on a stage before 50 people in a town hall-style meeting in Mill Valley, Art Torres had one word to describe the results of the CIRM-funded trial for spinal cord injuries: “Miraculous.”

Torres, former state senator and longtime member of the CIRM board, was enthusiastic in a way that would have made the more cautious scientists running the trial cringe. But CIRM needs a home run.

The looming end of its funding — and the need to ask voters for billions more — presents an existential moment.

Since 2004, the political and scientific climate has changed significantly. Federal funding for embryonic stem cell research is no longer tied up, and many voters are savvier about the limitations of regenerative medicine. The scientists backed by CIRM, meanwhile, face unconventional competition from an unexpected source: a vibrant consumer-clinic industry that’s marketing unproven therapies to those tired of waiting for cures.

Prop. 71’s most tangible achievements — cutting-edge academic buildings, discoveries in petri dishes, advances in lab rats, pioneering trials in human subjects — aren’t necessarily going to resonate with voters. What will are visible triumphs in real people. Those successes are what CIRM’s most ardent supporters are rallying around.

On the cover of the agency’s 2017 annual report was Ronnie, a wide-eyed infant who was cured of an immune deficiency disease called SCID, or “bubble-baby disease.” Children who have the condition typically live in isolation to protect them from fatal infections.

CIRM has helped fund four trials, all at different institutions, testing stem cell therapies for SCID. Ronnie was treated at UCSF using a treatment developed at St. Jude Children’s Research Hospital in Tennessee. A therapy out of UCLA, which has been in clinical trials since 1993, could win FDA approval — a first for CIRM-backed research — in a year or two, say the scientists who developed the treatment. In all, 40 babies have been treated with the UCLA therapy.

And there’s Rosie Barrero.

In a video posted on CIRM’s website, Barrero sits in a sunny room at the agency’s headquarters, now in Oakland, Lake Merritt glittering behind her. She’s earnest as she talks about retinitis pigmentosa, the disease that has slowly blinded her.

Barrero was treated in 2016 in Henry Klassen’s trial for patients with RP. Within months, she could pick out colors and shapes she hadn’t been able to see for years. She could tell her daughters apart. She has regained about “a pinhole” of sight, but that she’s had any improvement at all, she said, is amazing: It means that the therapy works.

“We’re definitely hoping that this work continues to get funded,” Barrero said in an interview. “It’s incredibly important, to all of us.”

If a new bond isn’t approved in 2020, said CIRM President Millan, it could devastate stem cell research in California. Private industry is still reluctant to back research that has yet to produce a treatment, let alone show it can be profitable.

And so, CIRM proponents are turning again to Klein, who plans to lead the 2020 campaign for more research dollars.

In Klein’s downtown Palo Alto office, a series of photos — colorful, fantastical close-ups of stem cells studied by CIRM scientists — hangs above his desk. Once they’d hung in CIRM’s offices. Today they reflect the deep connection he’s retained with the agency, despite not having an official role since stepping down as board chairman seven years ago amid a flurry of criticism.

Late last year, Klein addressed the CIRM board at a meeting about the fate of the agency. According to polls he had paid for — the full results of which he declined to share — 70 percent of voters would support another stem cell funding proposition. No other options for future financing — not private fundraising, not legislative efforts — would work, he said.

It was his son Jordan’s battle with Type 1 diabetes that drove Klein into patient advocacy and stem cell research. But the therapies that Klein believed were imminent did not arrive in time to save Jordan. Two years ago, at age 26, he died from complications related to the disease.

The loss seems to have cemented Klein’s resolve.

“We couldn’t get there fast enough for Jordan,” Klein said. “We have to get there for everyone else.”

Klein rejects the notion that expectations for CIRM were overhyped or voters misled in the 2004 campaign. If cures aren’t yet at hand, they’re surely years closer than they would be without CIRM, he said, and people already are benefiting from research paid for by Prop. 71.

During an interview in his office, Klein played a brief video of a young man who is part of the spinal cord injury trial CIRM has helped fund. Made quadriplegic after a devastating car accident, the man is shown in the video lifting weights.

“After the stem cell surgery, I’m able to live my life again,’ the man says in a quiet, halting voice. “Thank you for giving me my life back.”

Klein turned off the video, his eyes bright.

“I wish all the voters could see this,” he said. Christopher Reeve, whom he considered a friend, “would have been absolutely ecstatic” to have seen such a video, he added.

“In 2004 we had a vision of the future and data on animals,” Klein said. “In 2020, we will have patients who were paralyzed, patients who were blind, patients with cancer who will tell their story. The public will decide.”

Erin Allday and Joaquin Palomino are San Francisco Chronicle staff writers. eallday, jpalomino Twitter: @erinallday, @JoaquinPalomino

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MOORLACH CAMPAIGN UPDATE — Proposition 6 — August 11, 2018

Campaign season has started and November 6th is not that far off. One of the ballot measures you will be voting on is Proposition 6, which would repeal the gas and auto tax increase voted in by the Democratic supermajority and one Republican last year with Senate Bill 1.

The battle over Prop. 6 will be between taxpayers and tax-eaters. The “tax-eaters” are the cities, counties and state that will be fixing the roads. It is also the companies that will be retained to assist in this effort. So, the private sector industries benefiting from the taxpayers will be opposing this ballot measure in order to protect their potential profits. As they say, “when money talks, the truth is silent.” So you will hear plenty of reasons to oppose Prop. 6 by this well funded, and selfishly motivated constituency.

The sad story is that if this collaboration of tax-eaters could just convince Caltrans to be one of the better managed Departments of Transportation, we could have avoided this debate. Governor Brown failed in improving this department.

The “taxpayers” are you and your neighbors who are feeling the stress of being overtaxed. Last month, in the 29th Senate District, the voters showed their dissatisfaction with the gas tax increase by recalling their Senator, who had voted for it. The natives are definitely restless and this will be a fierce fall campaign battle.

The titular leader of the Proposition weighs in with two similar editorial pieces. The first is from the San Diego Union-Tribune and the second is from the San Francisco Chronicle. Carl DeMaio has been the energy bunny on this issue and continues to lead the charge. If you’ve been reading my UPDATEs since my election to the State Senate, you’ll see my research in both pieces.

Why Californians should repeal gas tax

By Carl DeMaio

http://www.sandiegouniontribune.com/opinion/commentary/sd-utbg-prop6-gas-tax-repeal-20180803-story.html

Californians are struggling as the cost of living skyrockets higher. Unfortunately, state politicians are simply adding to the financial strain on working families with massive increases in our gas and car taxes.

That’s why it is important to vote Yes on Proposition 6 to repeal these regressive and unfair tax hikes that will increase the cost of living for the typical family of four by up to $800 more per year.

It gets worse! If we don’t pass Proposition 6, the car and gas tax hikes are slated to increase every year automatically — without a vote of the people.

This year Californians will pay nearly $1 more per gallon because of taxes, fees and other government mandates. By 2021, many Californians will be paying close to $2 more a gallon extra because of taxes, fees and other government mandates — that’s up to $40 extra each time you fill up your car.

Everyone agrees we need to fix our roads, but state politicians and special interests are lying to voters when they claim the gas and car tax hikes will be used to fix our crumbling roads.

As we have seen in the past, the gas tax money is largely diverted away from roads and what little funding that is provided to roads is riddled with waste, fraud and abuse.

State Sen. John Moorlach, R-Costa Mesa, released an independent analysis of CalTrans’ budget showing that only 20 percent of the gas tax funds were spent anywhere near roads.

Where do the politicians divert the gas tax money to? The funding has been diverted to cover budget deficits so politicians can continue to spend in other areas like higher salaries and pensions for state workers. For example, bus drivers in the Bay Area are earning six figures annually — with one bus driver earning $227,516 in pay and benefits last year alone!

Of the funds actually spent on infrastructure, the majority of funds get diverted from roads to transit buses, light rail projects, bike lanes (to replace roads), and even park land acquisition.

Our existing transportation agencies are riddled with waste and inefficiency. A recent study by the Reason Foundation shows for every $1 spent on average nationally to maintain or repair a mile of roadway, California spends $4.7 dollars for the same mile — a waste inflation factor of 470 percent.

Politicians will try to mislead you by bringing up the recently approved Proposition 69. Written entirely by politicians themselves, it is not the “lock box” they claim it is.

First, Proposition 69 did not cover all of the gas tax and transportation taxes we have to pay. Second, Proposition 69 contained zero accountability on where the gas funds will be spent — transit, bike lanes, parks, rail projects, etc. could receive all the funds instead of roads. Finally, the gas tax measure is specifically written to allow the governor to transfer the funds to cover General Fund shortfalls without a vote of the legislature or the people.

By voting Yes on Proposition 6 you can back a better solution to fix our roads without tax hikes.

Consider this simple fact: Before the latest gas and car tax hikes, Californians already paid one of the highest gas tax rates in the nation. That provides more than enough funding to have great roads, but only if the money is properly spent.

The Proposition 6 coalition not only seeks the repeal of the gas and car tax hikes, but we propose all of the previous gas tax be spent entirely on roads. We also propose earmarking the sales tax on cars to regional, inter-modal transportation projects. Finally we would impose significant accountability, efficiency and transparency reforms to make sure our funds are effectively spent.

A Yes vote on Proposition 6 will provide immediate tax relief to working families to help them with their cost of living. A Yes vote on Proposition 6 sends a message to out-of-touch politicians that we must make California more affordable, not less affordable. And a Yes vote on Proposition 6 puts us on the path to fixing our roads without a tax hike.

Nearly 1 million Californians signed the petition to get Proposition 6 on the ballot — Democrats, independents and Republicans all see our cost of living as unsustainable. Get more information on the Yes on Prop 6 campaign and join our grassroots effort by going to www.GasTaxRepeal.org.

DeMaio, a former San Diego City Councilmember, is Chairman of Reform California – Yes on Prop 6.

 

OPINION

Repeal California’s gas tax increase and require road repairs

By Carl DeMaio
https://www.sfchronicle.com/opinion/article/Repeal-California-s-gas-tax-increase-and-13145858.php

In this era of divisive politics, here’s something everyone can agree on: The cost of living in California is way too high. And the recently imposed increases in the state gasoline taxes and vehicle fees will hit working families hard by increasing the cost of living for the typical family of four by roughly $800 per year.

These tax increases are unfair, regressive and simply too much. That’s why nearly 1 million Californians from all walks of life signed the petition to get Proposition 6, the “Voter Approval for Future Gas and Vehicle Taxes and 2017 Tax Repeal Initiative,” on the ballot. Democrats, independents and Republicans all see our cost of living as unsustainable.

In addition to providing immediate tax relief to working families by repealing the gas tax and vehicle fee increases, a “yes” vote on Prop. 6 sends a message to out-of-touch politicians that we must make California more, not less, affordable.

If we don’t pass Prop. 6, a gas tax is slated to increase every year automatically — without a vote of the people.

This year, Californians will pay nearly $1 more per gallon because of increased taxes, vehicle registration and commercial weight fees and other government mandates such as the cap-and-trade assessment on fuels. By 2021, many Californians will be paying close to $2 more a gallon extra because of taxes, fees and other government mandates.

In addition to fighting the higher costs, a “yes” Prop. 6 will end this fraud being perpetrated by Sacramento: That the state spends the money to fix our roads. Want proof? Prior to these gas and car tax increases, California drivers were already paying some of the highest gas taxes in the country, and yet we still have the fourth-worst roads, according to Business Insider.

State Sen. John Moorlach, R-Costa Mesa (Orange County), a certified public accountant, has called out a California Legislative Analyst Office’s analysis of state highway and road programs funding and spending that shows only 20 percent of the gas tax funds were spent on roads.

The politicians will claim that Proposition 69, the “Transportation Taxes and Fees Lockbox” initiative approved by 81 percent of the electorate in June, provides a guarantee for road spending, but that is a flat lie.

Prop. 69 fails to cover all the transportation taxes we pay. It fails to guarantee even a single penny for roads. Instead, Prop. 69 allows the money to be diverted to a wide range of programs, including bike lanes, parkland acquisition, transit programs, light rail, and the state’s debt-ridden government pension program. Finally, the law gives the governor the ability to transfer all gas tax funds to cover General Fund shortfalls without even a vote of the Legislature or the people!

Bottom line: There is no guarantee for roads in these more recent gas and vehicle tax increases.

What little money that does make it to the roads is riddled with waste, fraud and abuse. The Reason Foundation’s Annual Highway Report reveals that California spends 2.6 times per mile more than the national average on state-controlled highways.

In 2014, California state auditors slammed Caltrans for “weak cost controls” that “create opportunities for fraud, waste and abuse.” Those same auditors also found Caltrans is overstaffed by 3,500 employees at a cost of a half billion dollars a year. One Caltrans engineer even golfed for 55 days while on the clock!

There is a better plan to fix our roads and transportation systems without a tax increase that will hurt working families.

The Prop. 6 coalition not only seeks the repeal of the gas tax and vehicle fee increases imposed by the Legislature this year, but we propose that 100 percent of gas tax revenues be spent on roads. We also propose earmarking the sales tax on autos for regional inter-modal transportation projects approved by voters in the region served. Finally, we would impose significant accountability, efficiency and transparency reforms to make sure our tax funds are effectively spent.

A “yes” vote on Prop. 6:

•Puts us on the path to fixing our roads without a gas tax increase.

•Gives struggling working families a break when they need it the most.

Carl DeMaio, a former San Diego city council member, is the chairman of Reform California — Yes on Prop 6. For more information, go to www.GasTaxRepeal.org To comment, submit your letter to the editor at SFChronicle.com/letters.

 

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MOORLACH UPDATE — Gov. Brown’s Final Budget — June 15, 2018

The 2018-19 Budget votes occurred on the Senate Floor exactly after the bills had been in print for 72 hours. I do not mean to be the poop in the proverbial punch bowl, but anticipating a bumper crop and not reducing unfunded liabilities or sharing the wealth with struggling cities and counties, is very troubling.

I served on the Budget Conference Committee and it not only wipes out your calendar and life for a couple of weeks, it seems as if the Committee was irrelevant (see MOORLACH UPDATE — Conference Committee Cram Down — June 8, 2018). Or, as I put it in my Floor speech, a “nothingburger” (see https://vimeo.com/275169442).

The disappointing point in this process for me, after leaving the Capitol last Saturday morning at 1:30 a.m., was that my flight a few hours later was cancelled. So, former California First Lady Gloria Deukmejian, I apologize for missing George’s Memorial Service.

A quick observation is that the Democrats still own it. A small rainy day fund will not hold back a recession and you can expect even more tax increases in the future, should you decide to continue living in California.

Here is a rundown of the various pieces covering yesterday’s legislative session.

The Associated Press covered it, which was picked up by numerous newspapers, including the OC Register. The first piece below is from, appropriately, The Press Democrat.

The Sacramento Bee covers the Capitol, of course, and its sister publication, The Modesto Bee, provides the second piece below.

The LA Times has a Sacramento correspondent, and it recently acquired the San Diego Union-Tribune, bringing us the third piece below.

Fox & Hounds weighs in on the process in the fourth piece below.

On to a different subject, every year I get to nominate a nonprofit organization to be recognized in Sacramento. Two years ago it was the Orange County Rescue Mission, where I was sworn in as Senator. Last year it was HomeAid (see MOORLACH UPDATE — First SB 2-Zone Victory in the OC — August 6, 2017).

This year the honor goes to Mercy House, which recently participated in a glorious facility in Newport Beach (see http://www.latimes.com/socal/daily-pilot/news/tn-dpt-me-cove-opening-20180326-story.html). Congratulations to Larry Haynes and staff! The Daily Pilot and the Orange County Breeze cover the recognition in pieces five and six. Next week we honor the small business of the year.

What? You still want tax and budget news? Well, you’re in luck, as The Bond Buyer satisfies this need in pieces seven and eight below. It addresses the gas tax repeal efforts and the budget, respectively. But, beware, the strategy of “marketing all of the proposed wonderful projects that will be stopped” is being used in full force.

For even more on the gas tax, check out my Bonus directly below. Or, I should say “we interrupt this broadcast with a brief commercial announcement” of a political nature. If you do RSVP to attend, let them know that it was in response to this UPDATE.

BONUS:

You’re Invited…

Fundraiser to Repeal the Gas Tax

June 21, 2018 – 6-7:30pm

SAN CLEMENTE OUTLETS

VIP Lounge

101 Avenida Vista Hermosa, Suite 190

2nd Floor above Customer Service

San Clemente, CA 92672

Featuring Our “Gas Tax Repeal Heroes”

Hon. Pat Bates, State Senate Republican Leader

Hon. Bill Brough, State Assemblymember

&
Hon. Carl DeMaio – Gas Tax Repeal Chairman

The Car and Gas Tax Hikes will cost the typical family of four more than $770 more per year! Don’t sit on the sidelines – be part of the taxpayer revolt that will shake up Sacramento. If we all work together, anything is possible!! Please attend this important event – and make a contribution today to the Gas Tax Repeal campaign to help roll back these tax hikes! Personal or corporate contributions welcome in any amount.

RSVP and Secure Contribution Link: https://fs2.formsite.com/therightcompanies/form76/index.html

California lawmakers pass budget expanding help for poor

AP Photo/Rich Pedroncelli

JONATHAN J. COOPER
ASSOCIATED PRESS

http://www.pressdemocrat.com/news/8437614-181/california-lawmakers-pass-budget-expanding?artslide=3

State lawmakers approved a $139 billion budget Thursday that uses California’s massive surplus to boost funding for homeless programs, welfare, child care and universities while also socking some money into savings.

The budget, which boosts spending 9 percent for the fiscal year beginning July 1, was approved with support mainly from Democrats.

“We’ve done something pretty great for people in California,” said Sen. Connie Leyva, a Democrat from Chino in the Inland Empire.

The spending plan was negotiated by Democrats Gov. Jerry Brown, Senate President Pro Tem Toni Atkins of San Diego, and Assembly Speaker Anthony Rendon of Lakewood.

California is riding a wave of economic growth that has produced the largest surplus since at least 2000. Even the most conservative forecast pegs the surplus at nearly $9 billion.

Lawmakers and Brown are using that windfall to fill the rainy day fund to the maximum allowed under the state constitution and boost other savings, producing $16 billion in total reserves. Nearly $14 billion of that will be in the rainy day fund, which can only be spent during a budget emergency caused by a natural disaster or decline in revenue.

Republicans praised the focus on savings but said the budget doesn’t do enough to pay down debt and irresponsibly increases long-term commitments that will hamstring the state in the future. Sen. John Moorlach, a Republican from Costa Mesa in Orange County, said the state isn’t doing enough to address growing obligations for pensions and retiree health care.

“In a year when one enjoys a bumper crop, one must set aside cash and pay down the credit card balance,” Moorlach said. “We’ve got to get ahead of this mess.”

The budget will boost assistance for people living in poverty, including more than 13,000 new slots for subsidized child care. People on CalWorks, the state welfare program, will see monthly grants rise by 10 percent in April, the start of a multiyear effort to lift the income of the poorest Californians to 50 percent of the federal poverty level. Advocates said the boost would ensure children aren’t living in deep poverty, which harms their brain development and hinders future performance in school and work.

It includes $500 million for emergency grants to help cities and counties reduce homelessness. The grants can be used on a range of programs, including housing vouchers and shelter construction to help address California’s rapidly rising costs and growing homeless population.

The budget also boosts university funding, forestalling tuition increases at both California State University and University of California, and creates an online community college to offer credentials to working adults unable to attend classes in person. Brown’s administration announced that the first program will offer a credential in medical billing and coding.

The deal left out an expansion of Medi-Cal health care coverage to young immigrants living in the country illegally and financial assistance for people who buy their own insurance in the individual market.

California’s nearly $200 billion total budget includes $138.6 billion in general fund spending, $57.1 billion in special funds that must be spent for specific purposes and $3.9 billion in money from bonds.

As part of the budget negotiations, Brown and lawmakers agreed to allow victims of a notorious California serial killer to get a renewed chance to seek compensation for their emotional trauma or financial losses. Normally, victims have just three years to file with the California Victim Compensation Board for crimes, but the legislation would open a new window for victims to file claims after 72-year-old former police officer Joseph DeAngelo was charged in the Golden State Killer case.

$200 billion California budget sent to Gov. Jerry Brown

BY ADAM ASHTON

aashton

http://www.modbee.com/news/state/article213218474.html

California lawmakers approved and sent Gov. Jerry Brown a $200 billion state budget on Thursday, using revenue from a rosy economy to build $16 billion in reserves and steer hundreds of millions of dollars in new funding to universities and programs for the homeless.

The budget agreement passed both houses easily despite some Republican opposition. Democratic majorities highlighted a projected $9 billion surplus as a sign of the state’s recovery since the recession a decade ago.

“This is the best position we’ve been in in years,” said Senate President Pro Tem Toni Atkins, D-San Diego.

The budget hewed fairly closely to the plan Brown presented in May, boosting reserves by billions of dollars rather than committing money to proposals that would have expanded health care and offered tax breaks to undocumented residents.

The budget includes a $138.6 billion general fund. That’s about $70 billion more than the general fund in the state’s 2011-12 budget.

The new budget provides $78 billion for K-12 education, which is about $30 billion more than the state’s recession budget seven years ago.

The budget also frees up $500 million in grants that cities can use to address homelessness. It increases the value of welfare grants through the CalWORKS program, raising spending there by $360 million.

It boosts ongoing funding for the California State University system by $105 million, and provides of hundreds of millions of dollars more for it and the University of California in one-time allocations.

“We have historic investments in K-12 education, historic investments in our higher education. We now have a budget reserve that is larger than the general funds of 33 states,” said Assembly Speaker Anthony Rendon, D-Lakewood. “It’s an investment in our future with respect to early childhood education. It’s also really helps to protect a lot of what we really love about the state, with respect to the environment and our great public schools.”

Republicans warned that the budget did not make a serious dent in the state’s unfunded pension commitments, and that those debts could trigger a financial reckoning in the near future.

“We look like passengers on the Titanic,” Sen. John Moorlach, R-Costa Mesa, said.

But Democrats countered that they’ve carefully accumulated reserves to help the state navigate the next financial downturn.

The budget aims to “fill” the so-called Rainy Day Fund, which by law can hold a sum equivalent to 10 percent of general fund revenue. It sets aside another $2 billion for uncommitted reserves, and opens a new “safety net” reserve for social services with an initial $200 million.

“This is what we’re doing to prepare ourselves for the future because a recession is an inevitability,” said Assemblyman Ian Calderon, D-Whittier.

Some Republicans argued the money would be spent as a rebate to taxpayers. The savings, they asserted, help to lock in high spending that they consider to be irresponsible. “You want a blank check for the future? That’s what this is,” said Assemblyman Jim Patterson, R-Fresno.

California lawmakers meet deadline, sending nearly $200-billion state budget blueprint to Gov. Jerry Brown

By John Myers

http://www.sandiegouniontribune.com/news/us-politics/la-pol-ca-budget-california-legislature-20180614-story.html

Both houses of the California Legislature took final action Thursday on an overarching framework and a few key details of a new state budget, sending the package to Gov. Jerry Brown one day before their legal deadline to take action.

Twenty-five separate pieces of legislation comprise the budget for the state government’s fiscal year that begins next month. Fourteen of the bills were sent to Brown on Thursday, while action is expected early next week on the remaining details.

The $199.6-billion spending plan hews to Brown’s suggestion that a sizable portion of the state’s massive tax windfall be funneled into cash reserves as similar funds were last year, while increasing spending on K-12 education, healthcare and social services. It also provides more than $600 million for new efforts to help California’s homeless, a key component to the deal struck last week by the governor and Democratic legislative leaders.

“This is a solid budget,” Senate President Pro Tem Toni Atkins (D-San Diego) said. “And it builds upon what we’ve already done.”

Republicans provided only a few votes for the overall budget framework in the Assembly and Senate. Other GOP members insisted that the state continues to ignore long-term problems, including looming debt in the years to come.

“We’ve got to get ahead of this mess,” Sen. John Moorlach (R-Costa Mesa) said.

Democrats, however, insisted that the budget offers a reasonable approach to addressing the state’s needs. As is the case in most years, the lion’s share of spending is contained in three categories: education, health and human services, and corrections and rehabilitation.

“We continue our efforts to strengthen the state’s commitment to a human infrastructure,” said Sen. Holly Mitchell (D-Los Angeles), chairwoman of the Senate’s budget committee.

Under state constitutional mandates, K-12 schools and community colleges receive the single largest portion of general fund tax dollars. The new budget puts K-12 funding at $11,639 per student, up slightly from the current year. It includes a phase-in of an effort promoted by Brown to divvy up community college dollars with a new emphasis on student performance outcomes. It also provides $100 million in start-up funds for online community college courses and instruction.

Both the University of California and California State University systems receive funding increases under the budget agreement, though most of the education bills won’t be voted on until next week. The plan offers a combined $344-million one-time boost to the school systems, as well as new ongoing funding that’s expected to expand enrollment on UC and Cal State campuses while allowing university leaders to keep tuition at current levels.

Significant dollars will be spent, too, on health and human services. According to figures provided by the Assembly, almost 1 in 3 state dollars spent under the new budget will go to these programs. Much of it is earmarked for services provided by Medi-Cal, California’s version of Medicaid providing healthcare for its poorest citizens. Some care — including access to physicians, hospitals and child-screening services — is mandated by the federal government, while California adds additional benefits. The governor’s revised budget last month pegged Medi-Cal spending at about $35 billion in the coming fiscal year.

Democratic lawmakers pushed for more spending in one key social services program, persuading Brown to accept a small boost in monthly cash grants to the working poor enrolled in CalWORKS, the state’s welfare assistance program. Those monthly grants have remained unchanged for years, even as inflation pressures have reduced the purchasing power for low-income families. The budget adds $90 million to the grants beginning next spring, as well as a method to more fully fund annual cost-of-living increases in the future.

Subsidies for child care based on income and additional slots in preschool programs are also included in the budget framework. And both Brown and legislative leaders advocated for expanding access to California’s earned income tax credit to an additional 700,000 households. The tax credit, which provides cash to those with very low incomes, will be modified to account for increases in the state’s minimum wage, and it will be made available to workers between the ages of 18 and 24, and those over 65.

While spending increases under the plan, the budget reflects the continued insistence by Brown and lawmakers to stash funds for future economic downturns. Legislative staffers project that the budget passed Thursday will lead to a $15.9-billion cash reserve by next summer, larger than the general fund of 33 U.S. states.

The bulk of that money — $13.8 billion — will be in the “rainy-day fund” established by voters in 2014. Much of what’s left will be in the state’s regular cash reserves, while $200 million is being set aside in the event future budget deficits trigger cuts to CalWORKS.

Those dollars are the result of multibillion-dollar tax revenue windfalls, which have become surprisingly common in recent years. Lawmakers are taking steps in the new budget to change the process of how those dollars are set aside for future needs.

But the mechanics are complicated. The plan to be signed into law by Brown includes a new and unusual “budget deficit savings account,” which will serve as an initial way station for surplus cash. Most of the money will ultimately be sent to the voter-approved reserve fund, but the accounting maneuver could offer new options for other excess dollars.

Some Republicans asked whether the proposal is a move to avoid triggering a 1979 state spending limit — one rarely breached since its inception and the focus of months of debate about how to properly calculate that limit. The provisions of that constitutional limit could require tax refunds.

“It’s been rigged so that no refund can ever be given to the taxpayers,” Assemblywoman Melissa Melendez (R-Lake Elsinore) said. “And that’s disgraceful.”

Others wondered whether a different plan involving tax windfalls — injected late into budget talks by Brown — would actually subsidize the state’s beleaguered high-speed rail project.

“We’ve set in motion a chain of events that this bill compounds,” Sen. Steve Glazer (D-Orinda) said.

Lawmakers were under the gun to pass key portions of the state budget by Friday or lose a portion of their salary under a 2010 law enacted by voters. That law also lowered the threshold for legislative passage to a simple majority in each house. Those two changes have helped create on-time California budgets for six straight years.

john.myers

The Good Old Days of the Big 5 Budgets?

Joel Fox

By Joel FoxEditor and Co-Publisher of Fox and Hounds Daily

http://www.foxandhoundsdaily.com/2018/06/good-old-days-big-5-budgets/

The state budget passed on time but does anyone long for the good old days of the dragged out budget debates? Remember the deal making to get some Republicans to join majority Democrats to reach the required two-thirds vote? OK, you don’t miss those days because no one enjoyed those drawn-out affairs with IOUs issued to state workers and public services delayed. Yet, by reducing the decision making from the Big 5 (governor, majority and minority leaders of both houses) to the one-party Big 3 (Governor, Assembly Speaker and Senate Pro-tem) something important has been lost in missing hearings and debates over budget priorities.

Listen to Republicans left out of the budget process. Senate Budget Committee Vice-chairman Jim Nielsen complained about cancelled public hearings. “This is a manipulation of the budget process whereby the public and their representatives are completely shut out.” “This year’s mismanagement of the committee hearings is done by design – to keep the public in the dark.”

Senator John Moorlach reacted to Gov. Brown’s announcement that he had reached an agreement on the budget with the speaker and the pro tem with a fair question: “Would somebody explain why I am even here and why am I voting tonight on this “behind closed doors” agreement?”

There are good things in the budget, but that is not the point. The $200 billion state budget seemed to be crafted by three individuals directing their staffs. This was not the way state government was taught in school—or are the workings of state government even taught in school anymore?

Sure, under the Big 5 system came wheeling and dealing, which was also not mentioned in school overviews of the legislative process. But at least under the Big 5 system sections of the budget, the more controversial parts, got an airing before the public and the press. And, we didn’t have to deal with the sneaky and often underhanded process of budget trailer bills that include items that should be part of budget debates.

The Big 5 era was not exactly the Good Old Days but the current budget gamesmanship is not a good-government replacement.

State Sen. Moorlach picks Mercy House as Nonprofit of the Year

http://www.latimes.com/socal/daily-pilot/news/tn-dpt-me-around-town-20180613-story.html

State Sen. John Moorlach (R-Costa Mesa) named Mercy House — a Santa Ana-based homeless services provider — as his Nonprofit of the Year.

In a resolution last week, Moorlach praised the organization “for providing invaluable services to the people of the local area” and applauded its “long history of community support.”

Moorlach represents the 37th Senate District, which includes Costa Mesa, Huntington Beach, Laguna Beach and Newport Beach.

http://www.oc-breeze.com/2018/06/12/122654_senator-john-moorlach-selects-mercy-house-as-2018-nonprofit-of-the-year/

Screen Shot 2018-06-15 at 8.11.09 PM

On June 6, Sen. John Moorlach, R-Costa Mesa, took great pleasure in issuing a resolution selecting Mercy House of Santa Ana as the 37th Senatorial District’s 2018 Nonprofit of the Year.

A California gas tax repeal would halt thousands of projects

By
Keeley Webster
https://www.bondbuyer.com/news/californias-gas-tax-repeal-would-halt-thousands-of-projects

Thousands of road projects funded by a recently enacted California gas tax are in jeopardy if voters repeal it.

A Republican-led effort to repeal the gas tax has qualified for November’s ballot and has signs of momentum.

A May 21 USC Dornsife/Los Angeles Times poll found that 51% of California voters favored repealing the law while 38% want to keep it. A poll by the Public Policy Institute of California in February had voters evenly divided with 47% favoring repeal and 48% opposing it.

Democratic state Sen. Josh Newman was recalled by voters in his primarily Orange County district June 5 after conservative talk-show host Carl DeMaio launched a recall effort after Newman voted for Senate Bill 1. DeMaio is also a leading figure in the effort to repeal the gas tax.

SB 1, the gas tax increase approved by the majority Democratic Legislature last year that is expected to raise $5.4 billion annually for 10 years, has fast-tracked projects, but that could stall if the repeal effort succeeds.

“The money collected since last November would still be available for projects since the repeal effort is not retroactive, but the 5,000 projects underway — or those slated to begin soon — would be halted in their tracks,” said Roger Dickinson, executive director of Transportation California, a transportation advocacy organization that supported the gas tax.

“If they could not be paid for with existing funding, they would be dead — and that would apply to the vast majority of projects,” Dickinson said.

“There are smaller ones that could be completed in a year, but many jurisdictions are planning on multi-year funding, and they would not be able to finish the projects they had programmed,” he said.

The tax raised $367 million last year for local streets and road repairs, which was a partial fiscal year for the program, and is expected to bring in $1.1 billion in fiscal 2018-19, said Mitch Weiss, chief deputy director for the California Transportation Commission, the state agency responsible for allocating funds for the state’s transportation construction projects.

The law increased the gasoline tax by 12 cents a gallon, the diesel excise tax by 20 cents a gallon and the diesel sales tax to 5.75% from 1.75%. It also raised annual vehicle registration fees by up to $175. And it created a $100 annual fee, starting in 2020 for zero-emission vehicles that don’t pay gas taxes.

The CTC in May approved $2.7 billion in funding for 61 projects in three programs funded by the gas tax.

Those allocations represent four years of funding for three of the 10 SB 1 programs: the Local Partnership Program, the Solutions for Congested Corridors Program and the Trade Corridor Enhancement Program, according to the state Department of Finance.

Weiss estimates that half of the 4,000 local streets and road projects are solely funded by SB 1 money and would have to be cut. It would then be up to local leaders to figure out how to fund the projects or call them off, he said.

“The bottom line is that projects that are only funded by the SB 1 gas tax are going to be stopped, because they would only receive a year’s worth of funding,” he said.

Santa Barbara and Sonoma counties received $132.8 million and $84.7 million, respectively, for projects that include adding carpool lanes on 15 miles of U.S. 101 through Santa Barbara and on 6.6 miles of the freeway through Marin and Sonoma counties. The San Mateo County Transportation Authority would receive $20 million toward the $540 million cost of a 22-mile carpool lane in both directions on Route 101 between San Francisco International Airport and the city. Other freeways throughout the state received funding for similar projects.

Many smaller cities received awards for everything from road reconstruction to bike lane projects. SB 1 funds also supplement a pre-existing California Department of Transportation program that distributes grants for transit projects.

Gov. Jerry Brown, who promised in his January 25 State of the State speech to do “anything in his power to defeat the repeal,” spent the last weeks of May attending groundbreakings of southern California projects funded by the gas tax.

Brown proposed $4.6 billion in spending from the gas tax in his 2018-19 budget proposal.

Planned projects to construct or rebuild highways, bridges, culverts, local streets and roads, and mass transit already programmed with SB 1 funding “would have to be rescheduled/reprioritized/reprogrammed by the state or local sponsors and moved out to future years to be funded over a longer period with the lower, existing, non-SB funding sources,” California Department of Finance spokesman H.D. Palmer said.

The state’s existing transportation programs are funded using federal and state gas tax revenues, and others receive funding through greenhouse gas cap and trade and diesel sales tax funding, Palmer said.

But new programs created through SB 1 including local partnerships, commuter rail and intercity rail, local planning grants, congested corridors and trade corridors would likely be halted, even on projects that have started, until funding alternatives are identified, Palmer said. Most of the programs received funding following a vigorous series of public meetings to develop program guidelines, he said.

If the gas tax is repealed, Palmer said the suite of projects selected to receive the $400 million estimated to be collected between passage and possible repeal may need to be reevaluated.

“If SB1 revenues are no longer collected, then there would be nothing against which to bond, and there are no plans at this point to pursue GO bonds to fund transportation infrastructure,” Palmer said.

Lodi Mayor Pro Tem JoAnne Mounce, former president of the League of California Cities and a Republican, fervently supports the gas tax.

“It took us almost 10 years to get legislators to come together to create SB1 – and there is nothing to replace it,” Mounce said. “In the meantime, the average citizen is spending $739 dollars annually on vehicle repairs due to the condition of our roads.”

The poor condition of the state’s roads and highways has resulted in highway deaths as well, Mounce said.

“As you know, with the rising cost of pensions, cities have less and less money to do anything else,” Mounce said. “Even in good times, there is not enough money for transportation, that is why the League has been tracking the condition of the state’s roads and bridges.

“We have been saying for the last 10 years they are in deplorable condition – and they are continuing to get worse,” she said.

California state Sen. John Moorlach, R-Cosa Mesa, in a hallway at the State Capitol in Sacramento.

State Sen. John Moorlach, R-Costa Mesa, supports repealing the gas tax.

Sen. John Moorlach, R-Costa Mesa, who supports the repeal, said there are alternatives and he has proposed them in the Legislature.

He advocates for reforms at the California Department of Transportation to better use the $13 billion the agency spends annually, rather than increase the budget to $18 billion.

“I believe there is money there. We just have to get an effective CEO to run Caltrans,” Moorlach said. “We have to have a completely different mindset in our budgeting. California just seems to spend everything every year – rather than setting money aside – and then wakes up and says, ‘Our roads are bad.’ ”

The state senator said he studied Caltrans in comparison to other state agencies and discovered it is among the least efficient in the country.

“We need to have a modification in the budget that if you build something you need to set aside money to repair or replace it,” Moorlach said. “California needs to be more disciplined in how it manages its finances in terms of addressing whatever it needs to maintain.”

He proposed a bill that would stair-step Caltrans up to outsourcing 25% of its work, but it failed – and the brunt of the opposition came from the Caltrans engineers’ union, not its leadership, he said.

SB1 does require Caltrans to produce efficiencies that result in $100 million in savings, but Moorlach said no metrics have been created to track that goal.

What he believes should happen is first reforms should be made so that the state agency spends the money it already has well – and then if more money is needed, voters should be asked to approve a tax increase. Of every $1 that Caltrans spends, he said, only 20 cents makes it to road improvements.

The state’s failure to keep up with housing demand has forced state residents to commute long distances, he said, which puts more pressure on roads.

A significant percentage of his constituents are struggling financially and the senator said he does not want to make it harder for them to make ends meet.

He pointed to Newman’s recall.

“If you look at who voted to recall him, that wasn’t a Republican vote, it’s an across-the-board vote,” Moorlach said. “People get upset when you start messing with their finances.”

The June election provided a favorable sign for gas tax supporters as a lockbox on gas taxes produced through Senate Bill 1 received 80.8% of the vote to pass. The measure amends the state constitution to ensure that the anticipated revenues from the gas tax are dedicated to transportation spending.

“Transportation funding has not necessarily gone to what it’s earmarked for,” Mounce said. “Several years ago, money for roads and bridges was reallocated for high-speed rail and to projects mandated by Assembly Bill 32’s greenhouse gas reductions.”

Funding for transportation projects has just been spread too thin, she said.

The last state gas increase was approved in 1994 and it wasn’t pegged to the consumer price index, Weiss said.

“I am confident that when people start looking at the list of projects happening in their areas, they will see the benefit of those projects to them and why it is important to keep SB 1,” Weiss said. “No one likes paying taxes, but the bottom line is we need a transportation system that can move people and goods.”

Brown’s final California budget approved without drama

By

California lawmakers broke their tradition of going down to the wire on budget passage by reaching an agreement on a $199.6 billion spending plan Thursday evening.

A rosy economy and an estimated $9 billion surplus by the most conservative estimates resulted in swift passage of the budget through both houses despite some opposition from the Republican minorities.

A constitutional change that allowed budget passage by simple majority, rather than the previous two-thirds supermajority, has enabled the state to pass a budget on time the past six years.

Typically that has meant a budget has passed near midnight on the July 15 deadline, but even that represented a vast improvement over prior years.

Gov. Jerry Brown, who has made efforts to prepare for volatility in state revenues a rallying cry during his nearly eight years in office, convinced lawmakers to set aside $15.9 billion in total reserves, the maximum allowed under the state constitution. All but $2 billion of that goes into the rainy-day fund, which can only be spent during a budget emergency caused by a natural disaster or shrinking revenues. The total also includes $200 million to create a new safety net reserve for CalWorks, the state’s public assistance program.

“This budget strikes an appropriate balance that strengthens our state’s fiscal stability with an unprecedented level of reserves, while prioritizing investments that will address the pressing needs of this state,” said Senator Holly J. Mitchell, D-Los Angeles.

Democrats wanted a significant chunk of the surplus to go for homeless shelters and to build housing for very poor people – and they got that.

The budget agreement included an additional $250 million in one-time emergency aid to local governments to reduce homelessness for $500 million total. It also provides $109 million in ongoing funds for homelessness and $300 million per year for three years beginning in 2019-20 for affordable-housing construction.

“This budget fully funds K-12 and provides $3.6 billion for the neediest schools to provide more resources for their students,” said Sen. Jim Beall, D-San Jose. “We have expanded childcare for the working poor, increased funding for mental health services, and made available a half-billion dollars for local governments to combat homelessness.”

K-14 school funding grew to $78.4 billion in Proposition 98 funding – a 66% increase since 2011-2012. Lawmakers also approved a $3.6 billion increase in the Local Control Funding Formula, which is more than $1 billion above the Jan. 10 proposed budget, and $300 million in one-time money for low-performing students. California State Universities received an additional $260 million while the University of California system got a $210 million increase to prevent tuition increases.

Lawmakers also approved spending $5 billion in Senate Bill 1 transportation funds – money being challenged by an initiative to repeal last year’s gas tax legislation. The budget also included $300 million to tackle deferred maintenance for levees, courthouses, and the two university systems.

“For the first time in years, the state and cities are making progress in maintaining and repairing our aging roads, tunnels and bridges, thanks to Senate Bill 1,” said Beall, the legislation’s author.

They also approved $700 million to rebuild the state Capitol annex. A proposal to expand Medi-Cal health care coverage for immigrants was scrapped.

The Senate Republican caucus decried the 9% increase in spending over last year’s budget.

“While we applaud the governor and the Senate President pro Tem for increasing the rainy day fund, we should also be wary of future economic downturns and pay down more of the massive pension and health debts,” said a joint statement by Senate Republican Leader Patricia Bates, R-Laguna Niguel; Sen. Jim Nielsen, R-Tehama, vice chair of the Senate Budget and Fiscal Review Committee and budget conferee; and Senator John Moorlach, R-Costa Mesa, member of the Senate Budget and Fiscal Review Committee.

In testimony following budget passage, Moorlach called the budget half-baked, saying it will create a fiscal reckoning for future lawmakers.

“When you have a bumper crop you need to set aside money and pay down the credit card balances,” Moorlach said.

Brown has until July 1 to sign the budget.

This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District. If you no longer wish to subscribe, just let me know by responding with a request to do so.

MOORLACH CAMPAIGN UPDATE — Vote No on Proposition 68 — May 5, 2018

The June Primary is on the horizon, only a month away. This period of time is affectionately referred to as “silly season.” Consequently, even though I am not on the ballot this year, I am still pulled into various races and, this year, ballot measures. Therefore, I note my e-mails as “MOORLACH CAMPAIGN UPDATE” for you to know that the content for those with this label are politically oriented.

Many ask me for my ballot recommendations every cycle. For the June Primary it can be found at MOORLACH CAMPAIGN UPDATE — June Primary Antics — April 28, 2018.

For the U.S. Senate race, the pundits believe the two names that will appear on the November ballot are that of the incumbent, U.S. Senator Dianne Feinstein and State Senator Kevin de Leon. The San Diego Union-Tribune Editorial Board engaged Senator de Leon in a lengthy interview where he mentions me. It can be read and/or listened to at http://www.sandiegouniontribune.com/opinion/commentary/sd-utbg-kevin-de-leon-interview-20180504-story.html. As the segment where I am mentioned discusses SB 1206, I may provide that snippet in a future UPDATE (see MOORLACH UPDATE — OC Housing Trust — May 1, 2018).

Proposition 68 is another bond measure and today’s subject. It was Senator Kevin de Leon who asked me to write the ballot argument in opposition (see MOORLACH CAMPAIGN UPDATE — Proposition 68 — March 23, 2018).

I decided to provide the largest unrestricted net deficits for the states, based on the information I had at the time. I also provided the updated per capita unrestricted net positions recently (see MOORLACH UPDATE — 2017 State Per Capita UNPs — April 2, 2018).

But, to make things more visual, here is the history of California’s unrestricted net position over the past nearly two decades:

Governor Wilson left a nice “surplus,” the last real “surplus” this state has seen. The state jumped into the red in 2002, under Gov. Gray Davis, who was recalled in 2003, largely for mismanaging the state’s finances through the energy crisis and pension spiking. Then the unrestricted net position kept getting worse under Gov. Arnold Schwarzenegger, as he endured the Great Recession with little success. He also abandoned pension reform efforts. Yet today he tediously keeps lecturing other Republicans about “moderation,” even as we try to clean up the mess he left behind.

With the requirement that unfunded pension liabilities be added to municipality balance sheets, California experienced another big jump in 2015. With the unfunded retiree medical, which will be added to municipality balance sheets next year, California is upside down by a quarter trillion dollars!

The last thing the Golden State needs is another debt. It should be focused on reducing its liabilities, not increasing them.

Our state is number one in another wrong category: unrestricted net position. How does it compare? Here are the 50 states in numerical order, from worst to best audited balance sheets:

Rank State UNP (Thousands) Year of CAFR
1 California $(169,499,683) 2017
2 Illinois $(161,239,415) 2017
3 New Jersey $(148,863,714) 2017
4 Massachusetts $ (63,992,915) 2017
5 Connecticut $ (52,826,131) 2017
6 New York $ (45,599,000) 2017
7 Kentucky $ (40,157,358) 2017
8 Maryland $ (27,010,946) 2017
9 Texas $ (25,170,339) 2017
10 Pennsylvania $ (21,275,848) 2017
11 Florida $ (12,401,193) 2017
12 Louisiana $ (11,949,852) 2017
13 Ohio $ (10,571,925) 2017
14 Michigan $ (9,848,197) 2017
15 Wisconsin $ (8,361,432) 2017
16 Colorado $ (8,359,538) 2017
17 Hawaii $ (7,996,567) 2017
18 Alabama $ (7,578,278) 2016
19 Mississippi $ (6,058,425) 2017
20 Missouri $ (5,787,207) 2017
21 Virginia $ (5,344,284) 2017
22 Arizona $ (5,341,848) 2017
23 Indiana $ (5,319,406) 2017
24 Georgia $ (5,210,957) 2017
25 Minnesota $ (5,029,153) 2017
26 Rhose Island $ (4,581,514) 2017
27 West Virginia $ (4,455,964) 2017
28 Delaware $ (3,622,572) 2017
29 South Carolina $ (3,497,642) 2017
30 Washington $ (3,376,575) 2017
31 Kansas $ (3,205,914) 2017
32 Oregon $ (2,482,259) 2017
33 Vermont $ (2,263,168) 2017
34 Arkansas $ (2,160,882) 2017
35 Maine $ (1,885,023) 2017
36 New Hampshire $ (1,683,141) 2017
37 Nevada $ (1,580,030) 2017
38 Iowa $ (999,603) 2017
39 Montana $ (971,795) 2017
40 New Mexico $ (326,978) 2016
41 South Dakota $ 267,296 2017
42 Nebraska $ 550,525 2017
43 Utah $ 819,880 2017
44 Idaho $ 1,146,468 2017
45 Oklahoma $ 1,484,206 2017
46 North Carolina $ 1,822,821 2017
47 Tennessee $ 2,736,079 2017
48 Wyoming $ 4,518,976 2017
49 North Dakota $ 5,989,501 2017
50 Alaska $ 14,558,125 2017

You know I’m singing off the right song sheet when the LA Times Editorial Board has a support position for Proposition 68.

The Associated Press has published an article on this subject and it is the first piece below, found in The Seattle Times and The Modesto Bee.

The publisher of the Orange County Breeze provides her endorsement for a “no” vote on this measure in the second piece below.

I am fully aware that bond measures pass nearly 90 percent of the time in this state. The majority of voters live with a credit card mentality. I also understand that California’s population continues to grow, so future residents can share in the repayment efforts.

But, the truth be told, internal growth is slowing down and this state is experiencing a net out migration of its residents to other states. If growth is stabilizing, then Sacramento is making a huge mistake with the issuance of more debt. Bondholders are never stiffed, so currently budgeted programs will be contracted and/or taxes will be raised should the economy level out or decline.

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Ballot measure aims to preserve Salton Sea, help air quality

By SOPHIA BOLLAG

The Associated Press

https://www.seattletimes.com/nation-world/ballot-measure-aims-to-preserve-salton-sea-help-air-quality/

SACRAMENTO, Calif. (AP) — A project to protect Californians who live near the Salton Sea from deteriorating air quality could sink or swim based on the outcome of a June ballot measure.

Proposition 68 would allow the state to borrow $4 billion through bonds to fund parks and environmental protection projects, including $200 million for a plan to preserve the rapidly shrinking Salton Sea.

California’s largest lake has been evaporating since San Diego’s regional water agency stopped sending it water this year. Falling water levels increase the lake’s salinity and expose thousands of acres of dusty lakebed, which wind sweeps into nearby farming communities. The dust worsens air quality in the Imperial Valley, where childhood asthma rates are already among the highest in the state.

“It is an environmental time bomb that is ticking,” said state Sen. Kevin de Leon, who authored the bill to place the measure on the ballot. “This is a down payment to begin the process of restoring and revitalizing the Salton Sea.”

The measure would also fund parks in underserved parts of the state and projects to protect against flooding and to clean up water supplies. There are four other propositions on the June 5 primary ballot, including state constitutional amendments about how to spend money from the state’s recent gas tax increase and cap-and-trade fees.

Flooding created the Salton Sea after the Colorado breached a dike in 1905. It sits about 150 miles (240 kilometers) southeast of Los Angeles. It is home to hundreds of bird species including pelicans and cormorants, but rising salinity and pollution have depleted populations of fish and the birds that eat them.

The conservation project would build ponds and channels or pipelines around the edges of the lake to control dust and create bird habitats. The project’s first phase has $80 million of the roughly $410 million needed.

The $200 million from the bond measure “would be a healthy additional dose of funding to build these projects and the benefits could be quite large,” said Pacific Institute researcher Michael Cohen, who studies the Salton Sea.

Proposition 68 would authorize general obligation bonds, which must be repaid with interest over time.

State Sen. John Moorlach said the state shouldn’t add more bond debt.

“There is already too much debt on the books in California,” said Moorlach, a Costa Mesa Republican. “A bond means that a tax is coming.”

The state currently spends a little less than 5 percent of its general operating budget on debt. The Legislative Analyst’s Office predicts that if Proposition 68 passes, annual spending on debt could remain below 5 percent through 2025.

Proponents argue the state isn’t overly burdened with debt and that Proposition 68 would fund vital projects.

The ballot measure would also provide $725 million to build parks in underserved neighborhoods. A similar bond measure in 2006 also promised to build parks, but more than a decade later about a fifth of those parks still aren’t finished.

Twenty-eight neighborhood park projects funded by the 2006 measure remain in progress, two of which are still in the planning phase, according to data from the California Natural Resources Agency.

De Leon, a Los Angeles Democrat, said he hopes the lessons learned from implementing the 2006 bond measure will ensure parks are built more efficiently if Proposition 68 passes.

“We want to make sure that the dollars go out the door sooner rather than later because our children can’t wait longer to have access to Mother Nature, nor should they,” de Leon said. “I have great confidence that that will happen.”

June 5, 2018 primary election: Proposition 68

Shelley Henderson SHELLEY HENDERSON

http://www.oc-breeze.com/2018/04/29/120587_june-5-2018-primary-election-proposition-68/

Proposition 68 was put on the ballot by the California State Legislature — meaning that the State Legislators didn’t feel like doing their job, or were scared to do their job. That’s a black mark against it.

It began its life as SB 5, sponsored by Kevin De León. He represents the 24th State Senate District and served as the State Senate President pro tempore from Oct. 15, 2014, to Mar. 21, 2018. He is currently running to unseat Dianne Feinstein as one of two Congressional Senators. Feinstein is currently California’s senior United States Senator. Our junior senator is Kamala Harris, who refused to defend Proposition 8 at the Supreme Court when she was California’s Attorney General.

Proposition 68’s official summary:

Authorizes $4 billion in general obligation bonds for: parks, natural resources protection, climate adaptation, water quality and supply, and flood protection. Fiscal Impact: Increased state bond repayment costs averaging $200 million annually over 40 years. Local government savings for natural resources-related projects, likely averaging several tens of millions of dollars annually over the next few decades.

All you need to know about general obligation bonds is that they represent another form of taxation — a prolonged and exquisite torture over forty years to repay them!

If Californians want to spend money on parks, natural resources protection, climate adaptation, water quality and supply, and flood protection — all fine common goods to spend the common treasury on — the spending should appear as current expenses in the budget that the governor and legislature cooperatively craft each year.

I see that I have good company in opposing Proposition 68. California State Senator John Moorlach continues to be a solitary voice, crying in the wilderness, against spending what ya ain’t got. Go, Big John! (Senator Moorlach is about two feet taller than I am.)

I will vote no on this.

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MOORLACH UPDATE — Homelessness Pace — March 24, 2018

The pace still continues. My UPDATE for March 18th was picked up by the Daily Pilot and can be seen at http://www.latimes.com/socal/daily-pilot/opinion/tn-dpt-me-me-commentary-20180319-story.html and MOORLACH UPDATE — Funding OC’s Homelessness — March 18, 2018.
Let’s talk about pace. I have been working for more than two decades on the homeless population concerns in the Santa Ana Civic Center. I will tell you that I believe the City Council of Santa Ana failed in properly addressing this situation. I even addressed my thoughts on its lack of leadership in my podcast, originally slated for release on Monday. However, I moved the release up to yesterday afternoon (CLICK HERE to listen).

The frustration that I addressed in the podcast is that of SB 2 zones, sites that are required by state law to be zoned for a homeless shelter location. Laguna Beach has done a great job. Santa Ana botched it. Irvine is realizing that they approved an SB 2 zone and is now choking on it, as the County is proposing to use it for its intended purpose. But, the process of selecting and implementing an SB 2 zone takes time.

Along comes Judge David Carter, who one community leader referred to as “Rambo” at last Saturday’s Court Hearing (see the link mentioned in the opening paragraph).

Judge Carter wants to change the pace. Instead of a lengthy and methodical approach to establishing viable locations, he’s demanding immediate selections and implementations. A Federal Judge has that kind of clout.

The Board of Supervisors, at an emergency Board meeting this past Monday morning, found three sites. It was awkward and abrupt, but it was in response to an highly expedited pace. The reaction in the County was immediate. Now at the least, it should demonstrate to Judge Carter how difficult the endeavor of addressing the homeless crisis has been for elected leaders.

To assist, I’ve been working in the Capitol to see what can be done with the Fairview Developmental Center during its current transition towards closing its facilities.

One of my first reporter calls after my arrival to the Capitol was from the Daily Pilot about the Fairview Developmental Center (see MOORLACH UPDATE — Day Two — March 26, 2015).

The Daily Pilot covered it again more than a year ago (see MOORLACH UPDATE — Fairview Developmental Center — February 11, 2017). And the Daily Pilot has done an admirable job on monitoring this subject (see MOORLACH UPDATE — Crushing Blow — July 21, 2017).

With the County reacting to Judge Carter’s threatened edict, Supervisor Shawn Nelson inquired earlier this week about leasing some space on this 114-acre complex for a temporary housing solution. On Thursday, before flying back to the District, I had a few meetings with key Democratic Senators on this matter and with a lobbyist who could also assist.

Supervisor Nelson issued a press release yesterday afternoon. It is provided by New Santa Ana in the first piece below. The Daily Pilot, staying on theme, called and their perspectives are provided in the second piece below. It is also in the San Diego Union-Tribune, which is pertinent, as this area is also dealing with this crisis.

The views on homelessness go from stating that it “is a self-created situation and these individuals should figure out how to mainstream” to “these are mentally ill sons and daughters of longtime Orange County residents that need an extension of public services to stabilize.” And there are varied opinions in between.

Do we ignore it and hope that it will go away? That hasn’t worked. Visit skid row in Los Angeles sometime for a reality check.

Do we become a magnet for homeless people around the country because we provide top cabin accommodations that encourage individuals to stay on the streets and enjoy our incredible climate? I don’t believe any municipality is there.

But, how we treat the least, the last, and the lost speaks volumes about us as a community. We need to find solutions. Orange County has done a great job, but the volume has exceeded capacity. So, it’s is time to build not only capacity, but to provide a viable road back for these individuals to becoming self-sustaining and productive members of society.

With that said, although I am overloaded with Senate Committee assignments, this past week I requested Sen. Jim Beall, the Chairman of the Select Committee on Mental Health, to add me to this committee. He also Chairs the Mental Health Committee, of which I am a member. Consequently, I’m increasing my pace.

I want to look for solutions. And that will require multiple locations around the county to address the mental health and homeless epidemic facing our community. With clearing the Santa Ana River of the homeless population, the entire nation now knows our plight. And, most of our residents want to address this family secret, so to speak, in some form or fashion.

Therefore, I am willing to: risk recommending locations; work with other elected leaders; listen to advocates; and find appropriate and viable opportunities to improve the County as a whole. It will take multiple locations and a focused community. The city of San Antonio, Texas, was able to build a successful multiple service center (see MOORLACH UPDATE — Becerra Conflict of Interest — January 20, 2018 ). We can, too. We just need to set a proper pace.

O.C. Supervisor Nelson aims to put the homeless at the Fairview Developmental Center

http://newsantaana.com/2018/03/23/o-c-supervisor-nelson-aims-to-put-the-homeless-at-the-fairview-developmental-center/

Orange County Supervisor Shawn Nelson Joins California State Senator John Moorlach In Call to Open Fairview Developmental Center For Emergency Homeless Shelter

SANTA ANA, CA— In response to Federal Judge David O. Carter’s demand to immediately identify a plan for emergency homeless shelters in Orange County, Orange County Supervisor Shawn Nelson is working with California State Senator John Moorlach to request he ask the State of California to take emergency action to open Fairview Developmental Center as an emergency homeless shelter.

The Fairview Developmental Center (FDC) occupies 114 acres of state-owned land and is centrally located in Costa Mesa. The facility opened in 1959 and was originally designed to serve individuals with developmental and intellectual disabilities. Utilizing infrastructure already in place will help expedite the transition of homeless from area motels to an improved triage center while satisfying the judge’s order to present a swift, realistic plan.

“Partnering with State Senator Moorlach provides an additional boost and momentum to establish another temporary transitional homeless shelter for the County’s homeless population,” said Supervisor Shawn Nelson. “Fairview will provide additional relief from the lack of emergency beds throughout the county.”

Centralizing temporary housing and basic services for the homeless at this venue will also provide law enforcement and cities another alternative rather than risk litigation stemming from the enforcement of anti-loitering or anti-camping ordinances.

Following the unsuccessful proposals at some of the County’s limited sites, Supervisor Nelson has partnered with Senator Moorlach to suggest this location as another viable alternative.

 

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Orange County leaders want to use mental health facility in Costa Mesa to shelter homeless

 

By LUKE MONEY

http://www.latimes.com/local/lanow/la-me-oc-homeless-20180324-story.html

http://www.sandiegouniontribune.com/news/california/la-me-oc-homeless-20180324-story.html

Faced with the need to find additional space to house Orange County’s homeless population, there is a new push for Fairview Developmental Center in Costa Mesa to be used as an emergency shelter.

The proposal comes at a critical moment. Faced with a federal lawsuit, the county Board of Supervisors voted this week to consider putting emergency shelters in Huntington Beach, Irvine and Laguna Niguel.

But those cities vowed to sue to block the move. Hundreds of Irvine residents protested this week, and the Board of Supervisors is now considering withdrawing the plan.

Orange County Supervisor Shawn Nelson and state Sen. John Moorlach (R-Costa Mesa) said the 114-acre, state-owned property at 2501 Harbor Blvd. is an attractive option given its central location and the fact that existing infrastructure could be used to accommodate and provide services to the homeless.

“If we can find a campus to address a significant need in this county that we can rally around, then this is one of those opportunities that we just don’t want to let pass by,” Moorlach said.

In a statement Friday afternoon, Nelson said the plan “provides an additional boost and momentum to establish another temporary transitional homeless shelter for the county’s homeless population.”

“Fairview will provide additional relief from the lack of emergency beds throughout the county,” he added.

Denis Bilodeau, Nelson’s chief of staff, said Friday that Fairview is “just one of many sites we’re considering.”

The emergence of Fairview as a potential emergency shelter is the latest wrinkle in the county’s strategy to house hundreds of people who recently were evicted from encampments along the Santa Ana River.

The move to clear the camps prompted a federal lawsuit by homeless advocates.

Earlier this week, county supervisors approved a plan to eventually move those formerly living along the riverbed — many of whom are currently housed in motels — to temporary shelters in Huntington Beach, Irvine and Laguna Niguel.

However, the plan was met with immediate backlash from city residents and officials. Leaders in Irvine and Laguna Niguel voted to sue the county to block the shelter plan, and Huntington Beach officials pushed to drop the location there, as well.

The Board of Supervisors plans to take up the shelter issue again Tuesday.

Hanging over everything is what U.S. District Judge David Carter might do if the county can’t find sufficient shelter space.

For weeks, Carter has been trying to broker a plan and has warned officials that he doesn’t want the homeless people displaced by the riverbed sweeps to end up at the Santa Ana Civic Center, which already is overwhelmed with homeless camps.

It’s unclear exactly what would need to be done to use a portion of the Fairview Development Center property as a shelter. The center opened in 1959 and currently provides services and housing to people with intellectual and developmental disabilities. As of Feb. 28, it had 133 residents, according to the California Department of Developmental Services. At its peak population in 1967, it housed 2,700.

Fairview — like other such facilities around the state — is slated to close in coming years as part of an effort to transition people out of institutional-style centers and into smaller accommodations that are more integrated into communities.

The state said last year that Fairview is scheduled to transition its remaining residents to other living options by 2019.

In Moorlach’s mind, that presents a rare opportunity. He has long been looking for ways to ensure that the property “doesn’t slip away” and that local leaders have a say in determining its future after it closes.

A benefit of the site, he said Friday, “is that it could be easily secured and controlled with appropriate security personnel and with appropriate gates or other fencing options so that it would not be a burden on the neighbors.”

“Here’s an alternative that would, maybe, be helpful to our business community and our residents,” he said.

Money writes for Times Community News.

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MOORLACH UPDATE — Conflagration Legacy — October 12, 2017

I sponsored about a dozen bills while I was the Orange County Treasurer-Tax Collector. All of them were carried by Republican Legislators and all of them were signed by the various Governors in office during those 12 years.

This year I had five bills go to the Governor’s desk and he signed them all (see MOORLACH UPDATE — Iceberg Dead Ahead — September 28, 2017).

Last year I had three bills go to the Governor’s desk and he vetoed one of them, SB 1463 (see MOORLACH UPDATE — Rejection/Disappointment — September 27, 2016MOORLACH UPDATE — First Veto — September 24, 2016 and MOORLACH UPDATE — SB 1463 — March 25, 2016).

Senate Bill 1463 was one of my District bills. Councilman Bob Whalen of Laguna Beach did not want a repeat of the 1993 conflagration that wiped out his city and I agreed (see https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160SB1463). We both worked this bill and he flew up for the Committee hearings and testified.

It first went to the Senate Energy, Utilities and Communications Committee where it passed 9-0. It was double-referred and went next to the Senate Natural Resources and Water Committee, where it was approved 9-0. Then it went to the Senate Appropriations Committee, where it had high costs attached to it. CalFire wanted to hire two firefighters to work two years to update the maps, at a cost of $500,000 per year (so stating that this effort was already in process is not remotely close to how CalFire saw this task). After being voted out of Approps 7-0, it went to the Senate Floor and passed 38-0.

We next repeated the drill in the Assembly, appearing first before the Assembly Utilities and Commerce Committee, where it passed 15-0. Assembly Natural Resources Committee next approved it 19-0 and Assembly Appropriations sent it on with a 15-0 vote. On the Assembly Floor it garnered 75 votes and 5 abstentions.

It went back to the Senate for concurrence, as amendments were accepted from the Assembly and it passed 39-0 (as Sen. Sharon Runner had passed away).

Along the way Senator Jerry Hill and Assemblymen Matt Harper and Mike Gatto joined in as coauthors of the bill. All of them understood the challenges that the Public Utilities Commission were facing in trying to complete these maps, hoping that our efforts would bring an urgency to the process.

Not one vote in opposition and it was vetoed!! And his veto letter read:

“This bill requires the Public Utilities Commission to prioritize areas that have increased fire hazard associated with overhead utility facilities. Since May of last year, the Commission and CalFire have been doing just that through the existing proceeding on fire-threat maps and fire-safety regulations. This deliberative process should continue and the issues this bill seeks to address should be raised in that forum.”

It’s true that there was a process going on–it had been going on for 8 years–with little progress. And it wasn’t clear that local input, from the people who know their communities and landscape the best, were given a large enough role in constructing these maps.

Governor Brown was either being a tad vindictive with this new State Senator or the utility companies appealed to him and convinced him to oppose it. Speculation arose that maybe he was lobbied by his sister, Kathleen Brown, a former State Treasurer who is now enjoying a board of director opportunity at Sempra Energy. Nothing else makes sense. So I dared bring it up when I was interviewed yesterday.

There was no reason to veto SB 1463. And now the major cause of the devastating and tragic fires in Sonoma and Napa Counties may be due to the winds impacting electric power lines. The very concern my bill addressed.

What a heartbreak. I tried. The San Jose Mercury News broke the story and it also appears in the Chico Enterprise Report in the first piece below.

The repeal of the gas tax is still moving forward and the San Diego Union Tribune provides an editorial submission on this critical effort in the second piece below. (You may even recognize many of the facts I’ve been sharing in my UPDATEs since taking office in Sacramento.)

 

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vetoed 2016 bill aimed at power

line, wildfire safety

Fallen electrical lines on Parker Hill Road in Santa Rosa, Calif. on Tuesday, Oct. 10, 2017. (Nhat V. Meyer/Bay Area News Group)
Fallen electrical lines on Parker Hill Road in Santa Rosa on Tuesday. (Nhat V. Meyer/Bay Area News Group)By mgafni and EMILY DERUY |
ederuy | Bay Area News Group
PUBLISHED: October 11, 2017 at 5:54 pm | UPDATED: October 12, 2017 at 4:46 am

http://www.mercurynews.com/2017/10/11/wine-country-fires-gov-brown-vetoed-2016-bill-aimed-at-power-line-wildfire-safety/

http://www.chicoer.com/article/NA/20171011/NEWS/171019943

A year ago, a bipartisan bill aimed at reducing the risk of wildfires from overhead electrical lines went to Gov. Jerry Brown’s desk.

It was vetoed.

The author of the measure — passed unanimously by both houses of the Legislature — now says the governor missed out on a chance to tackle one of his state’s longstanding vulnerabilities: massive wildfires endangering residential communities. But the governor’s office and the California Public Utilities Commission say the bill duplicated efforts already underway among the CPUC, Cal Fire and utilities like PG&E.

Now, as a series of deadly fires rages in Wine Country, serious questions are once again being asked about the safety of overhead electrical wires in a state prone to drought and fierce winds.

On Wednesday, Cal Fire said that investigators have started looking into whether toppled power wires and exploding transformers Sunday night may have ignited the simultaneous string of blazes.

The acknowledgment followed publication of a review by the Bay Area News Group of Sonoma County firefighters’ radio transmissions in the fires’ infancy that found that there were numerous downed and arcing wires. In the first 90 minutes Sunday night, firefighters were sent to 10 different spots where problems had been reported with the area’s electrical infrastructure. The crews reported seeing sparking lines and transformers.

During that same time period, radio transmissions indicate 28 blazes — both vegetation and structure fires — breaking out, mostly in Sonoma County. Firefighters were sent to eight fallen tree calls, with many reports of blocked roadways.

“Those were witnessed,” Cal Fire spokeswoman Lynne Tolmachoff said Wednesday, regarding the blown transformers and downed wires. “However, you have to go and look to see if it was a cause of the fire or as a result of the fire.”

The state’s fire agency has said it has ruled out lightning, but said the investigation continues for an official cause of the blazes, which as of late Wednesday had killed 23 people and destroyed more than 3,500 structures in Sonoma, Napa and other Northern California counties.

PG&E acknowledges there were troubles with its equipment Sunday night, but says blaming the utility’s electrical system for the fires at this point would be “highly speculative.” It has labeled the conditions in the first hours of the fires a “historic wind event.”

But meterologist Jan Null, owner of Golden Gate Weather Services in Saratoga, said that Sunday night’s winds, while strong, were not “hurricane force” and had been surpassed in previous storms. Atlas Peak had gusts of 32 miles per hour at 9 p.m. on Sunday night, Null said. By comparison, the peak had gusts of 66 mph in last February.

SB 1463 had been introduced in last year’s legislative session by Sen. John Moorlach, R-Costa Mesa. The bill would have required the state to identify the places most at risk for wildfires and would have required the CPUC to beef up plans to prevent fires sparked by power lines — including moving lines underground if necessary.

But Brown said the bill was unnecessary. “Since May of last year, the Commission and CalFire have been doing just that through the existing proceeding on fire-threat maps and fire-safety regulations,” he said in his veto message. “This deliberative process should continue and the issues this bill seeks to address should be raised in that forum.”

But the senator isn’t buying it.

“Up until my bill those guys were doing nothing,” Moorlach said Wednesday. “I think you got some false information.”

He said his bill would’ve sped up what had become a cumbersome process and given local communities more of a voice by clarifying how fire risk is defined.

Had the governor signed his bill into law, he added, “I think it would have changed things. … I think it would’ve given Cal Fire a whole different set of priorities.”

Brown’s sister Kathleen, he pointed out, served on the board of the energy services holding company, Sempra. Power and utility companies, Moorlach said, “didn’t want to spend the money” making things safer by moving lines underground.

That’s “so outrageous it doesn’t merit a response,” Evan Westrup, a spokesman for the governor’s office, said of the notion that the governor didn’t sign the bill to somehow help out Sempra. “It’s unfortunate this particular individual is trying to score political points by peddling inaccurate, self-serving claims at a time like this.”

CPUC spokeswoman Terrie Prosper said the years-long CPUC and Cal Fire effort has already reached key goals.

Phase One was completed in 2015 and Phase Two is nearly done as well, which will implement new fire safety regulations in high priority areas of the state.

PG&E has paid millions of dollars in fines and settlements over the years for its failure to properly maintain vegetation clearance around its electrical lines when it led to massive fires.

In April, the state Public Utilities Commission fined PG&E $8.3 million for failing to maintain a power line that sparked the Butte fire in Amador County in September 2015. That fire burned for 22 days, killing two people, destroying 549 homes and charring 70,868 acres.

In the months before this week’s deadly conflagrations, PG&E has been active in Sonoma County.

Just last month, responding to what it called California’s “tree mortality crisis” caused by the five-year drought, PG&E began flying helicopters over Sonoma County to identify dead trees “that could pose a wildfire or other public safety risk,” according to a Sept. 20 news release by the utility.

The utility said in that statement that it patrols and inspects its overhead lines annually. Since the drought and spike in tree deaths, the energy company said it’s now inspecting trees twice a year. Last year, PG&E conducted secondary checks on 68,000 miles of electrical lines. Almost 11,000 of those inspections are done by helicopter, the utility said.

The September helicopter inspections flew directly over Santa Rosa and other heavily impacted fire zones, according to the release.

In March, PG&E launched a program to inspect Sonoma County’s 90,000 wooden power poles. It was expected to last through early next year, according to a March 13 news release. The utility started along Highway 101 in Santa Rosa, in the heart of what would be torched months later.

Staff writers Paul Rogers, Lisa M. Krieger and George Avalos contributed to this report.

 

Commentary |

Gas tax hike has Californians paying more for less

By Carl DeMaio

http://www.sandiegouniontribune.com/opinion/commentary/sd-utbg-california-gas-tax-repeal-20171011-story.html

We’ve heard it all before. Every time state politicians want more money from you with a tax hike, they promise they will use the money to address something you really want. Unfortunately, just as Lucy always snatches the ball from Charlie Brown, the politicians always end up taking your money and breaking their promises.

You pay more and get less. That’s the story of California’s failing state government.

The latest bait-and-switch comes in the form of the car and gas tax hikes.

Years ago politicians raised the gas tax, took out billions in bonds and promised they’d fix our roads. Instead, they raided the gas tax funds and diverted our money — time and time again.

The net result: California drivers have been paying some of the highest gas taxes in the country, and yet we still have the fourth worst roads!

Where does the money go?

First, it gets diverted. State Sen. John Moorlach, R-Costa Mesa, recently released figures showing only 20 percent of gas tax funds are actually spent on roads!

California politicians have been clear about their distaste for cars because they are fanatics on the issue of climate change. Billions of gas tax dollars get diverted from roads to transit programs as politicians reveal zero interest in expanding roads or dealing with traffic congestion.

While politicians claim they won’t divert the money this time, their so-called lockbox is pure snake oil and simply a PR stunt. Read the fine print and discover the politicians retain the right to divert the money!

Just weeks after politicians raised the gas tax in April, they were caught diverting much of it to other purposes including transit, parks, universities, workforce and even farm programs!

Second, the little gas tax money that is spent on roads is largely wasted.

California state government is already known for paying bloated salaries and pensions to its government workers, but it gets worse with Caltrans, the state’s lead agency for managing roads.

In 2016, California state auditors slammed Caltrans for “weak cost controls” that “create opportunities for fraud, waste and abuse.” Those same auditors also found Caltrans is overstaffed by 3,500 employees at a cost of half a billion dollars a year. One Caltrans employee even golfed for 55 days while on the clock and bragged about it!

The few dollars that actually make it out the door of Caltrans’ bloated bureaucracy for road projects are also wasted. For example, individual road projects must pay mandated union-scale wages, do not allow fair and open competition for projects, and waste funds on convoluted CEQA environmental reviews.

All of this waste adds up quickly. The Reason Foundation’s Annual Highway Report reveals that California spends 4.7 times more per mile of state-controlled highway than the national average. This is despite the fact that many other states have much more icy and wet weather to contend with.

There is a larger issue at stake here. The fight against the car and gas tax hikes is not just about the pain at the pump, it is about the heavy burden every working family is increasingly feeling as California’s cost of living reaches unbearable levels with new taxes, fees and mandates from out-of-touch politicians.

Under this latest hike, the gas tax goes up by 12 cents a gallon and new tax assessment changes will make it a 19.5 cent per gallon hike by 2019! On top of that you will pay a much higher vehicle license fee. That’s an extra $300-$400 per driver per year!

That’s not all. New cap-and-trade mandates will raise the cost of gas as much as 63 cents a gallon. Add it all up and state politicians are now forcing you to pay an extra $1 or more per gallon in taxes, fees and mandates. If you gas up once a week for a car with a 20-gallon tank, you pay $1,250 more per year. A family with two drivers shells out $2,500 a year.

We can stop this madness by starting with the repeal of the gas and car tax hikes. That’s why I joined a coalition of reformers in filing a state constitutional amendment to roll back the taxes and strip state politicians of their power to raise car and gas taxes in the future without a vote of the people.

You can join the grass-roots movement at www.stopthecartax.org and help us collect the more than 584,000 signatures to force this issue on the ballot in November 2018.

It’s time we pay less and get more!

DeMaio, a former San Diego councilman, is chairman of Reform California — the campaign against the car and tax hikes.

This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District. If you no longer wish to subscribe, just let me know by responding with a request to do so.

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