Gov. Newsom Pushing For New Taxes on Water and Phones

Water Drought SprinklerGov. Gavin Newsom’s has called for a first-ever water tax and an added fee on phone bills at a time when the state is enjoying what recently departed state Legislative Analyst Mac Taylor called “extraordinary” budget health. Newsom said last week that experts now forecast a $21.5 billion budget windfall in 2019-20. Until recent years, the optics of asking the public to pay more with an overflowing budget would have seemed impossible to overcome.

Specific details have not yet emerged on Newsom’s plan, but it’s expected to be similar to a rejected 2018 proposal from state Sen. Bill Monning, D-Carmel, to tax residential customers 95 cents a month to help fund water improvements in rural farming communities in the Central Valley and throughout the state.

It would raise about $110 million to get clean water to what the McClatchy News Service estimated last year to be 360,000 people without such access. Others looking at the problem see it as much worse. Newsom said 1 million residents face health risks from their own water supplies.

Newsom emphasized what a priority the water tax would be for him on Friday by taking his cabinet on a “surprise” tour of affected Central Valley communities.

The dairy industry would also face $30 million in new fees. The $140 million annually that Newsom hopes to get from his plan is dwarfed by money already available from a $7.5 billion 2014 state water bond. While the largest chunk of the bond – $2.7 billion – was reserved for water storage projects, one of its listed priorities for the remaining $4.8 billion was providing access to clean water.

Howard Jarvis Taxpayers Association President Jon Coupal saw Newsom’s water tax plan as part of a historical continuum. He told the Sacramento Bee it was only the latest example “of California’s knee-jerk reaction to default to a new tax whenever there’s a new problem.”

But Newsom depicted his 2019-20 budget as reflecting discipline, touting its emphasis on continuing to add to the state’s rainy day fund and because of commitments to prepay some of CalPERS’ and CalSTRS’ unfunded long-term liabilities. Finance officials say every $1 billion prepaid now saves more than $2 billion in the long haul.

Governor cites urgent need to upgrade 911 system

Newsom also confirmed that he wants to add a 20- to 80-cent fee on monthly cellphone and landline bills to upgrade the 911 emergency notification system. That would take a two-thirds vote of the Legislature.

A similar proposal died late in the legislative session amid fears that it was a regressive tax that could cause headaches for incumbents on the November ballot.

But Newsom depicts the fee as a vital part of upgrading a 911 system that has outdated technology and is not up to the challenge of keeping safe a state facing devastating wildfires on a yearly basis.

The 911 fee was part of a larger wildfire-response program Newsom announced last week in the aftermath of last fall’s Camp fire in Butte County that killed at least 86 people and destroyed about 14,000 homes and the Woolsey Fire in Ventura and Los Angeles Counties that caused three deaths and torched 1,500 homes.

The governor wants to add $105 million to the $200 million already earmarked for improved wildfire response efforts in fiscal 2019-20. The extra money would be used to boost forest clearing efforts, to expand emergency fire rescue crews and more.

This article was originally published by CalWatchdog.com

Out with soda, juice and chocolate milk – California could become first state to restrict kids’ meals

Kids mealAs the food court at a Sacramento mall buzzed with families on a recent summer day, Emily Wickelgren and her daughter Thea were enjoying lunch at Subway. The 7-year-old opted for water with her sandwich instead of soda or juice.

“I do have unusual kids in that neither one of them likes soda and they don’t really like juice,” said Wickelgren, the mom of two daughters.

This is what many legislators hope will be the new norm for more California families. Under a bill advancing in the Capitol, restaurants could offer only water or milk with meals marketed for children. Not soda. Not juice. Not chocolate milk.

Those sugary drinks would still be available, at no extra cost, but only upon request. They couldn’t be advertised alongside kids’ meals or offered as a default option. If the bill becomes law, cashiers would ask customers ordering a Happy Meal at McDonald’s, for instance, if they want water, milk or a non-dairy substitute like almond milk. California would become the first state in the nation with such a requirement.

It’s the Legislature’s latest attempt to combat obesity and diabetes by limiting how much soda Californians drink. To illustrate the point at a Tuesday hearing,  Democratic Assemblyman Kevin McCarty of Sacramento held up a jar containing 9.5 teaspoons of sugar—the same amount found in a 12 ounce can of soda.

Research shows that kids often get extra calories in their diet from sugary drinks like soda. The extra sugar puts them at a higher risk for tooth decay, type two diabetes and obesity, according to Public Health Advocates, a sponsor of the bill. Some health experts think changing the drinks offered with kids meals will cause a long-term behavioral shift, leading other kids to become more like Thea and prefer water over pop.

“It’s a thoughtful approach to giving families choice, making sure the choice is a healthful one but not taking away the right if they want to order the sugar-sweetened beverage,” said Sen. Bill Monning, a Carmel Democrat who has been fighting the soda industry for years.

His past legislation — including bills to tax sugary drinks and slap warning labels on them — died under strong opposition from the beverage industry. But his latest bill to regulate the drinks offered with kids meals has faced surprisingly little push-back, other than criticism that it empowers the government to make decisions that should be made by parents. It passed the Senate with bipartisan support and cleared the Assembly Health Committee this week without opposition.

The California Restaurant Association has not taken a position on the bill, and the American Beverage Association is neutral, writing in a letter to Monning that it “is committed to increasing access to beverages with less sugar and smaller portions in stores and restaurants.”

The group has already embraced guidelines that say elementary schools should offer only water, milk and 100 percent juice, which may explain why it’s not fighting the proposal to get soda out of kids meals at restaurants.

Some fast food chains are voluntarily taking similar steps. McDonald’s stopped advertising Happy Meals with soda in 2013 and in February removed chocolate milk as a default option, though it’s still available upon request. The meals are now advertised with plain low-fat milk or an apple juice drink that has half the sugar of 100 percent apple juice.

At the local level, cities have started to tackle the issue too. Berkeley passed an ordinance last year with the same requirements as Monning’s bill. Other cities—including Stockton, Daly City and Long Beach—have passed similar ordinances.

Nonetheless, the bill still raises debate about how much government is too much.

“I trust parents and I thought parents can make those decisions,” said Sen. Joel Anderson, a Republican from Alpine who voted against the bill.

Jennifer Nevarez, a Sacramento mother of four, echoed the same sentiment when told about the proposal at the mall’s food court.

“That’s not going to work,” she said. “I feel like it should be the parents’ choice.”

Nevarez said she only buys water and apple juice for her children at home, so the soda is typically a treat when the family eats out.

Still, some experts worry that drinking sugary drinks at a young age can cause problems later on.

“What we know is that the eating habits we establish when we’re young, often carry with us as we get older,” said Flojaune Cofer, director of state policy and research for Public Health Advocates. “If we consume more sugar, we tend to crave more sugary things when we get older.”

This article was originally published by CalMatters.org

CA lawmakers advance bill to decriminalize prostitution for minors

As reported by the Los Angeles Times:

A controversial bill that would decriminalize prostitution for minors squeezed out of the California Assembly on Thursday and is now headed back to the Senate for a final vote.

SB 1322, authored by Sen. Holly Mitchell (D-Los Angeles), would make the crimes of solicitation and loitering with intent to commit prostitution misdemeanors inapplicable to children younger than 18. It also would allow law enforcement to take sexually exploited children into temporary custody if leaving them unattended would pose an immediate threat to their health or safety.

The measure passed Thursday with a 42-29 vote. It was one of two bills heard Thursday seeking to decriminalize prostitution.

SB 1129, authored by Bill Monning (D-Carmel), would repeal mandatory minimum sentences for specified prostitution offenses. It moved out of Assembly with a 42-26 vote and is also headed back to the Senate for a final vote.  …

Click here to read the full story

Why Don’t California Lawmakers Want Residents to Buy Earthquake Insurance?

“California Rocks.” That’s the clever slogan for a new advertising campaign by the California Earthquake Authority (CEA), the state’s privately funded, publicly managed earthquake insurance fund. The message is both an allusion to the Golden State’s culture of musical cool and a literal statement of fact: California is earthquake country. The state experiences hundreds of tiny temblors every day that most people never notice. But it’s only a matter of time before a destructive quake rocks the Golden State. The Southern California Earthquake Center estimates that the state has a 99.7 percent chance of experiencing an earthquake of magnitude 6.7 or greater within the next 23 years. Yet, thanks to shortsighted public policy, only about one in ten Californian residents holds an earthquake-insurance policy.

Until recently, California’s insurers struggled to align their premiums with the actual peril that earthquakes represent. Insurance companies discovered after the 1994 Northridge earthquake that their estimates had been much too low. That magnitude 6.7 temblor killed more than 60 people, injured 9,000, damaged and destroyed thousands of buildings, and left parts of Los Angeles’s freeways in ruins. The losses suffered by insurers—$12.5 billion in all—were greater than the sum of earthquake insurance premiums they’d collected over the previous 25 years.

Politicians have always recognized that earthquakes pose a long-term problem, but their solutions have tended to be ad hoc and counterproductive. Two developments in particular made earthquake insurance less attractive to California homeowners. First, in 1985, the state took the unusual step of mandating that insurers offer earthquake insurance anytime they sell a residential insurance policy. At the time, an estimated 5 to 7 percent of homeowners had earthquake insurance. Publicly, legislators maintained that the goal of linking residential policies with earthquake policies was to raise awareness of earthquake insurance and encourage more people to purchase private coverage. But the underlying reason for the mandate was a state court decision that dramatically expanded insurer’s civil liability for damages not covered under existing policies.

The legislature had at least two choices in responding to the court’s ruling: take a free-market approach while limiting liability, or link the earthquake insurance to residential policies. Lawmakers went with the second, with the encouragement—later regretted—of some in the insurance industry. Insurers believed that most customers would turn down an offer of earthquake insurance, seeing it as an expensive option to hedge against a remote risk; meanwhile, the insurers would have insulated themselves from liability. In fact, the problem worsened: after Northridge, spooked insurers scrambled to limit their exposure to future quakes by refusing to sell residential policies. As a result, the real estate market ground to a halt.

In 1996, looking for a way to get insurers to issue policies again, legislators established the state earthquake authority, which offers earthquake insurance to satisfy the 1985 law. Participating insurers fund the CEA by pooling premiums in the state fund. The CEA’s earthquake insurance is better than what came before, but it’s still expensive, with high deductibles and limited coverage. So it’s unsurprising that only 10 percent of homeowners today are willing to pay for it.

The best way to control costs related to earthquake damage is to restrict development in earthquake-prone areas, but that opportunity passed long ago; the most dangerous areas in California are among the most densely populated. The most realistic and effective way to control earthquake exposure is to distribute the risk privately. Privately financed insurance policies aren’t susceptible to the political whims of state officials and regulators. They have the added virtues of scale, speed, and sensitivity to individual claims.

State senator Bill Monning, a Democrat from Carmel, has taken the lead on reforming the CEA and seeking ways to encourage more homeowners to buy insurance. But he’s found little support from his fellow Democrats. The best Monning could manage last session was a resolution encouraging Congress to pass the Earthquake Insurance Affordability Act, a taxpayer-funded insurance backstop. If lawmakers really wanted to see the public covered, they would liberalize the state’s insurance market and compel companies to innovate and compete. If they considered earthquake peril a statewide risk worthy of universal sacrifice, they might even make buying earthquake coverage a requirement for obtaining a mortgage, not unlike the mandate to purchase flood insurance in flood-prone areas. But until such changes come into effect, homeowners and taxpayers will wind up paying a steep price when California rocks again.

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