The Abundance Choice (part 4) – Crafting a Water Initiative

To be fair, Assemblyman Devon Mathis (R-Porterville) didn’t come up with the idea of allocating a percentage of the state budget to accomplish a policy priority. He got that idea from the California Teachers Association, which back in 1988 convinced voters to approve an initiative constitutional amendment that required a minimum of 40 percent of California’s general fund spending to be used for K-14 education. But Mathis had the temerity to be one of the first legislators to emulate the concept, when in 2019 he introduced to the State Assembly the “Clean Water for All Act,” which would have given voters a chance to allocate another slice of the general fund to a specific purpose, in this case, funding water infrastructure.

ACA 3 died in committee, but the precedent was set. Ballot box budgeting was back in play. When I talked with Mathis about our initiative back in July 2021, it was clear that water was still a top priority for this moderate Republican from the San Joaquin Valley. And as soon as he brought up the “two percent solution,” I knew we had something we could run with.

Up to that point, we were on the right track with our focus on getting funding for projects that would increase the supply of water to Californians, but we were planning for the initiative to rely on bond financing. The problem with this approach was that the amount we estimated California needs to spend on water infrastructure starts […] Read More

The Abundance Choice (part 3) – The Mechanics of Ballot Initiatives

By the spring of 2021, it was obvious the state legislature was not going to change its inadequate approach to water policy. As the state faced another year of drought, restricting water use was the only solution being taken seriously in Sacramento. And at the same time as cities were being told to prepare to ration water, farmers faced new regulations restricting not only how much water they could divert from rivers, but also how much groundwater they could pump.

For this reason, and after talking with people all over California whose businesses and jobs depended on a reliable water supply, I decided to form a group of volunteers to promote a ballot initiative that would focus on funding projects to increase California’s supply of water. The tentative name for our campaign, which we eventually adopted, was More Water Now.

The potential for initiatives to fundamentally change the political landscape in California is well documented. The now legendary Prop. 13, approved by voters in 1978, is the classic example. Prop. 13 limited property tax reassessments to two percent per year. And thanks to Prop. 13, if you own your home long enough, eventually property taxes become a manageable burden, instead of an inevitable eviction notice. California is one of 15 U.S. states that allow citizens to gather signatures from registered voters and qualify both statutes and amendments for their state ballot. But to say this is not easy is an understatement.

In California, petitions proposing initiative statutes […] Read More

The Abundance Choice (part 2) – The Problems With Indoor Water Rationing

Perhaps the biggest example of misguided water policy in California are the escalating restrictions on indoor water consumption. As will be seen, the savings these restrictions amount to are trivial in the context of California’s total water consumption, yet are imposed at tremendous cost both in quality of life and in the required economic sacrifice. Despite alternatives that are objectively more cost-effective, California’s water policy continues to go down the path of rationing indoor water use.

In 2018 the California Legislature enacted laws to restrict residential water consumption, in the form of Senate Bill 606 and Assembly Bill 1668. For urban water districts, the laws “establish a standard of 55 gallons per person per day until January 2025, and then to 50 gallons per person per day in 2030.”

It is fair to point out that some of the more alarmist reactions to these mandates are unfounded. For example, the laws will only measure aggregate use within a water district, which means that how individual users are treated if they exceed the per person indoor water limits is left up to the local utilities. That’s hardly reassuring, but at least it leaves some wiggle room. On the other hand, it creates a powerful disincentive for water agencies to invest in developing an increased, more resilient water supply, because with aggregate maximums limiting how much water the agencies can sell, they’ll think twice before adding capacity. One of the dangerous consequences of this, yet again, is a system […] Read More

The Abundance Choice (part 1) – California’s Failing Water Policies

In October, and then again in December 2021, as the third severe drought this century was entering its third year, not one but two atmospheric rivers struck California. Dumping torrents of rain with historic intensity, from just these two storm systems over 100 million acre feet of water poured out of the skies, into the rivers, and out to sea. Almost none of it was captured by reservoirs or diverted into aquifers. Since December, not one big storm has hit the state. After a completely dry winter, a few minor storms in April and May were too little too late. California’s reservoirs are at critical lows, allocations to farmers are in many cases down to zero, and urban water districts are tapping their last reserves. In some areas of Southern California, water agencies are now penalizing residential “water wasters” by coming onto their property and installing flow restrictors.

Back in 2014, a supermajority of California voters, 67%, approved Prop. 1 to fund water storage projects. As of the spring of 2022 not one project has begun construction, eight years later. Meanwhile, in Southern California, a proposed desalination plant in Huntington Beach that could produce 60,000 acre feet per year of fresh water from the ocean has been held up by a mostly hostile bureaucracy and endless litigation for over twenty years. As you read this, the project faces another major hurdle – on May 12, the California Coastal Commission Board might defy the […] Read More

Tony Thurmond – Public Sector Union Operative

As the 21st century careens its way towards more geopolitical and economic uncertainty than most people alive today have ever known, with constant and transformative change the only constant, optimists among us still hope that some elements of California’s labor movement will begin to throw their weight behind policies and politicians that offer stability and common sense; policies designed to advance the interests of all Californians. But when it comes to the teachers union, don’t hold your breath.

The fact that the teachers union is a public sector union is bad enough. Public sector unions, unlike private sector unions, do not have to make reasonable demands on management. In the competitive private sector, union negotiators know that if they ask for too much, the cost will drive the employer out of business. Public sector unions elect their own bosses; the people who then are required to negotiate with them over work rules and compensation packages. Public sector unions also protect the bad apples within their membership, shielding them from accountability. This is particularly troubling when it makes it harder to get rid of public sector workers who abuse their authority.

There’s more. Public sector unions promote a confrontational “us vs them” mentality to their members, many of whom fully embrace this indoctrination. When “them” is the general public, and in particular, any member of the public who might, for example, make a political donation to a candidate that the union opposes, this is especially problematic. Union members operate the machinery […] Read More

Are Firefighters Hard to Recruit in California?

In response to a recent California Policy Center analysis that provided an updated calculation of the average pay and benefits for full time firefighters working for cities in California, one commenter claimed that it has become difficult to recruit firefighters. The accuracy of this claim carries significant implications. When employers can’t recruit employees, then to attract qualified applicants, they have to pay them more.

The findings of the analysis were unambiguous: The average full time firefighter working for a California City is collecting a pay and benefits package that costs taxpayers over $250,000 per year. Moreover, firefighter recruitment has not been a challenge historically. With minimal advertising, cities used to receive hundreds of applications for every firefighter opening. If that has changed, what happened?

It turns out, a lot has changed. Firefighters, like all first responder positions where hazardous conditions are part of the job, get paid a premium. Over time, that premium has risen, not necessarily because the risks of the job have increased, but because the value our society places on human life and safety has increased. This means people who risk their lives must be paid more than they were in previous decades, and, concurrently, people who save lives as part of their job must be paid more because to meet the new expectations, they have to bring more training and skill to their job.

Nonetheless, a pay and benefits package equal to a quarter million per year is a pile of money, even in California. […] Read More

Questioning the Political Priorities of the Firefighters Union

As another summer of wildfires approaches, it is in the interest of every Californian to understand that California’s firefighters’ union, the California Professional Firefighters, is one of the most politically powerful unions in the state. This union has the power to help solve the growing problem of wildfires in California, but to more effectively do so they will have to make some tough and selfless political choices.

As it is, California’s firefighters’ union is a partisan political machine that is not standing up to environmental activists that, for decades, have undermined responsible forest management. At the same time, California’s firefighters receive union negotiated pay and benefits that have exempted them from – to use a term favored by the leftists their union aligns with – the “lived experience” of most Californians.

These problems are related. If firefighters received compensation based more on market rates instead of those rates their unions “negotiated” with politicians the unions helped elect, there would be more money to hire more firefighters. There would also be more money left over to spend on programs to prevent wildfires, instead the money running out every year after spending billions to extinguish wildfires.

Before going further, it is important to establish two things: First, to criticize the agenda of public sector unions does not constitute criticism of all unions, in all circumstances. Second, to question whether current pay scales for California’s firefighters are affordable or appropriate in no way diminishes the respect and appreciation we have for their […] Read More

Sonoma County Teachers Strike Over but Underlying Issues Unresolved

On March 7, members of the union representing teachers in the Cotati-Rohnert Park Unified School District voted to strike. It began on March 10 and by March 17 it was over. What happened?

At first, prospects for a resolution to the strike were not encouraging. On March 9 they claimed the district could not possibly afford to issue the raises demanded by the union, particularly if those raises were extended beyond the credentialed teachers to all of the district’s employees in all the bargaining units. Then on March 17 they announced the strike was resolved. The compromise was to grant the cost of living increases in six month increments over the next three years, instead of granting the entire increase at the beginning of each year. This compromise saved enough money for the district to come to an agreement with the union.

But compromise or not, determining whether or not Cotati-Rohnert Park Unified School District could afford the concessions they made is not easy. Deciphering the financial statements of a public agency is nearly a fool’s errand, because they are not required to engage in accrual based double entry bookkeeping. The elegant symmetry of general ledger accounting as practiced in the private sector still allows for creative accounting, but because the balance sheet and the income statement are connected algebraically, any thorough audit of the balance sheet will turn up irregularities.

By contrast, take a look at this unaudited financial statement for Cotati-Rohnert Park Unified School District’s […] Read More

ESG Investing and Public Sector Unions

For the last few decades what used to be referred to as socially responsible investing has more recently morphed into “ESG” investing. The acronym stands for “environment, social, and governance,” and refers to how investors should evaluate the impact that every company they’re considering investing in has, positive or negative, in those three areas.

ESG investing has rapidly become a mainstream priority in the financial world. This year, the Securities and Exchange Commission is likely to mandate ESG disclosures for publicly traded U.S. companies. Reporting ESG scores is spreading as well to Europe, Canada, Australia, and elsewhere.

The implications of formalizing ESG reporting are intended to transform the global economy. Companies with low ESG scores will not only be subject to institutional divestment, which would itself constitute a serious threat to their ability to do business. They can also be denied access to lines of credit and other banking services, and they can end up unable to purchase insurance coverage.

The scope of what ESG deems objectionable is vast and inevitably subjective. It can implicate companies that may only involve a small fraction of their operations in the frowned upon activities. The allocation of low ESG scores is impacted by the corruptibility of the examiners and the criteria for ESG scoring may in many cases rest on premises that are either false or transient. With all that in mind, here some examples of activities that will draw a failing ESG […] Read More

Wind and Solar Energy Cannot Lift Humanity into Prosperity

A recent article in the New York Post nicely encapsulates the latest developments in the ongoing debate over climate and energy. In his article entitled “If the Ukraine war hasn’t scared the West straight on energy, nothing will,” author Rich Lowry reminds us “The world hasn’t embraced fossil fuels out of hatred of the planet but because they are so incredibly useful.” He goes on to accurately observe that fossil fuels are used to produce 84 percent of global energy.

If there is only an alleged consensus on the potentially catastrophic threat represented by fossil fuel, there is widespread agreement on the direct connection between energy and prosperity. With that in mind, and to make clear how critical it is to produce more energy worldwide, much more, here’s an immutable fact, courtesy of data in the 2021 edition of the BP Statistical Review of World Energy: For everyone on earth to have access to half the energy, per capita, that Americans consume, global energy production will have to double.

Meanwhile, according to BP, wind and solar power accounted for 5.0 percent of global energy production in 2020. Five percent. And yet, unless you are a climate contrarian, also derisively referred to as a “denier,” wind and solar are not merely the favored solutions to global energy challenges, they’re the only solutions. But what’s wrong with this picture? Go wind. Go solar. Why not?

To appreciate what it’s going to take to create a global economy powered by nothing […] Read More