Governor remarks about construction failures that “shit happens”

by Brian Leubitz

The new eastern span of the Bay Bridge has been a long time in coming. It’s been due for replacement since the Loma Prieta earthquake way back in 1989, and since then there has been much discussion about visual aesthetics, “landmark” status, cost and even some chatter about just getting it done. The bridge was set to open in August, but that may get bumped because of some faulty welds. Gov. Brown was waxing philosophical about the issue.

“Don’t know if it’s a setback. I mean, look, shit happens.”

“There are very professional engineers that are looking

at this thing, and when they’re ready to give us their report, I think the public will be satisfied,” he said.

Three dozen cracked bolts — discovered by Caltrans bridge engineers in mid-March — on the new bridge’s single tower suspension span could throw a wrench into those plans. Administration officials may be forced to delay the opening of the new span of the Bay Bridge — in the works since the 1989 Loma Prieta earthquake — depending on the results of a study to be released Wednesday. (Steve Harmon / BANG)

Shit. It Does Happen. However, for the time being Brown, who had a lot to do with the planning as Mayor of Oakland, is looking forward to a big party to go along with the opening. We’ll find out more later today about whether it will go off as smoothly as he would like it.

Brown looks long-term on impending climate crisis

by Brian Leubitz

Gov. Brown, in this go-round as governor, has hardly been spending willy-nilly. Now he says that he has another reason:

“It doesn’t look like the people who are in charge are going to do what it takes to really slow down this climate change, so we’re going to have to adapt, and adapting is going to be very, very expensive,” Brown said. “That’s another reason why we have to maintain some budget discipline.”

Brown, who has urged lawmakers of his own party to resist spending despite the state’s improving revenue outlook, said weather is “becoming more intense” as a result of climate change and will “cost a lot of money and a lot of lives.”(SacBee)

Now, I actually find this pretty persuasive. Climate change will hit California particularly hard. Drought and fires will be increasingly common. Our fertile Central Valley will not be so fertile when we have no water for what is basically a semi-arid climate. Snowpacks will cease to become good water reserves as they melt too early in the season. In short, Gov. Brown was probably underselling the costs of adaptation to climate change.

That is not to say that we shouldn’t be continuing to work to slow climate change. We need to rethink our fossil fuel usage, and how we are assisting in that dependence. (Ahem…for starters: fracking and LNG pipeline) And yes, planning for budgeting long-term to address the changes inherent in catastrophic climate change should be part of the overall adaptation process. That being said, it would be interesting to see how money is being specifically directed towards that planning.

State may end April $3B ahead of schedule

by Brian Leubitz

The news that April revenues are higher than expected is unambiguous good news. However, this being budget news, there are always caveats. First, the bottom line:

California’s tax revenues began 2013 stronger than expected and will end the all-important month of April some $3.5 billion ahead of Gov. Jerry Brown’s assumptions.(John Myers / News10)

Given the past decade, you can’t help but smile upon those numbers. However, Gov. Brown has already said that he isn’t keen to spend any of the excess quite yet. First of all, much of that money will be automatically diverted to make up for funds cut out of Prop 98 K12 education guarantees. And there is still speculation that a lot of the money was one-time bonuses given out by businesses before the Prop 30 tax increases took hold.

There are sure to be debates in the Legislature about providing additional funding for some of the very worthy programs that were slashed over the last few years. However, don’t expect Gov. Brown to go along with most of that additional spending, as he has already indicated that he’d prefer to save any excess revenue.

All that being said, it is certainly refreshing to be in the situation of discussing excess revenue than our tired budget slashing debates of past years.

New PPIC poll show support for additional local control

by Brian Leubitz

The PPIC poll, besides taking the standard poll numbers for the governor and Legislature, focuses on an issue at each release. This month, they take a look at what we know of our education system, and what we can do to improve it. But first, you can see from the graph that Gov. Brown is down slightly from his 51% peak in January, but still hovering in a pretty solid position. Without any recognizable challenger on the horizon, these are numbers that should carry him to an easy re-election. However, the political types always prefer to see the approval number above 50%, but there just aren’t any California politicians that really have any numbers that are better now.

The legislature also peaked in January, when they almost reached parity with their disapproval numbers (41-42). They continue a dive back to their normal numbers, this time at 31-53. January’s highs are probably not all that surprising, given the freshly balanced budget that was emerging at the beginning of the year due to the passage of Prop 30. And then, as we tend to not trust our politicians in California, no news is bad news and numbers trend down. But without the major crises that we faced a few years back with our budget, perhaps the new normal on those numbers is higher now.

Moving on to education, we get something of a mixed bag. First of all, few Californians know just how much are schools are being starved of resources. Only 36% knew that we were near the bottom of the fifty states in per pupil spending. On the flip side, more survey respondents (47%) knew that California ranks below average for test results.

But what of those test results? How valuable are they really? Well, here is how Californians see the value of testing:

When asked how confident they are that standardized tests accurately indicate a student’s progress and abilities, about half of Californians say they are very (11%) or somewhat (42%) confident, while 44 percent are not too confident (27%) or not at all confident (17%). Californians were more confident about testing in April 2006 than they are today (63% vs. 53%). Californians are more likely to say that students in their communities get the right amount of testing in elementary and middle school schools (40%) and high school (39%) than they are to say that students get too much testing (24% elementary and middle school, 21% high school) or not enough (29% elementary and middle school, 31% high school).

To be completely honest, I’m not sure what you are supposed to make of those numbers. Apparently we do too much, but too little, but exactly the right amount of testing.

And that is not where the contradictions end. We like our local schools, but every other school isn’t so great. Perhaps that is a result of a real desire for additional local control. In fact, 78% of respondents said that they would support additional local control of the school districts.

Finally, and most importantly for the Governor, large majorities (71%) also favor his plan to increase funding more rapidly for schools with higher percentages of English language learners and low-income students, with 74% believing that system will improve the results.

Clearly there is a much larger discussion still to come about school funding over the next few months.

On Friday, federal accident investigators told California legislators that the state’s patchwork of oil industry regulations needs a serious overhaul. The Chevron fire that produced a toxic cloud and sent 15,000 people to the hospital could have been prevented, but the system was reactive and not designed to foresee and forestall problems, said the U.S. Chemical Safety Board. Duh. The board didn’t need 18 months to come to that conclusion. But Don Holstrom, lead investigator for the board, did put his finger on one problem: the need to bump up the number, skills, and authority of refinery inspectors.

Something smells when an agency purposefully cripples its own enforcement abilities. One good example is the Department of Toxic Substances Control (DTSC). The DTSC exists to protect communities like Richmond from toxic harm.  And for years, it’s done a very poor job of it.

The DTSC has broad statutory authority to sanction these giant chemical plants for toxic releases like the one that Chevron caused in its fire, but it consistently refuses. Better yet, the DTSC should play a pro-active role in preventing harm as the department is supposed to do. So, you’d think the DTSC would view having refinery inspectors on staff as a high priority-inspectors that could be given broad latitude to inspect the guts of a refinery where hazardous substances slosh around and not just its excrement. Evidently, the DTSC thinks the fewer refinery inspectors the better.

The DTSC has only two refinery inspectors for the entire state and one of them is green and in training. The DTSC used to have more. But when other inspectors from its refinery unit retired or left, the DTSC didn’t bother to replace them. Nine vacancies in the unit handing refinery inspections were the result. Two scientist positions were approved for the refinery inspection unit and then inexplicably redirected to other positions and regions.

Refinery inspections are the most complex kind and the scientists that do them sometimes take a week to complete them. These scientists know the ins and outs of dealing with refineries. The DTSC maintains that any scientist can conduct a refinery inspection, but that just isn’t true. “Anyone who says that all DTSC scientists can conduct them and are trained to do them is either lying or out of their mind,” says one DTSC career investigator.

Under the direction of Chief Deputy Director Odette Madriago positions can be cut or simply re-directed, the investigator said. On top of that, “Odette has put in place the strictest travel requirements of all CAL EPA.”  The inspectors and investigators that have to travel have to fill out a lengthy document and have to get approval from their supervisor before they can go do an inspection or investigation. “These travel restrictions have allowed polluters to go unchecked and unregulated,” the investigator said.

One explanation is budgets are tight. Another is that it isn’t in the interest of someone like Ms. Madriago to regulate an industry in which she invests. She’s invested up to $100,000 in Chevron and in BP Amoco. Why regulate these refineries and sanction them millions of dollars that could affect their stock price?

Both Ms. Madriago and DTSC Director Debbie Raphael have taken to meeting behind closed doors with refinery executives, say DTSC sources. Normally, when an issue is discussed the DTSC official most involved is invited in to participate. Not anymore. “Ever since Debbie’s been here, Odette goes with Debbie everywhere to take these tours on oil refineries,” said the investigator. “They are inseparable. Odette is always there. They meet with refinery officials without the knowledge of the regulators behind closed doors.” A visit by Ms. Raphael and Ms. Madriago to a Chevron refinery last fall irked inspectors who were never told. “We show up at a refinery and we have to hear it from the city manager or CEO that Debbie and Odette were there,” said one inspector. “We find out when we go.”

Now that manpower is tight, inspections are cursory because they are rushed-and that endangers health and safety, he said. The inspector proposed a program of cross-training between regions so scientists could perform inspections in their own regions. The proposal didn’t even get a cursory response from DTSC’s director. “You just have to put this into perspective, we aren’t robots, we’re human beings,” said the inspector. “You put a lot of stress on inspectors and things get missed. There wasn’t any thorough inspecting going on, how can there be?”

Is it any wonder that California’s refineries experienced 41 new accidents, leaks, chemical releases, fires, break-downs and other failures since the Richmond fire last August? That’s about two a week, according to a new coalition spearheaded by UC Berkeley’s Labor Occupational Health Program that did the research and is calling for a new system of regulation.

With the right resources, DTSC sources say inspectors could help make sure a refinery’s operations were safe. “In some cases, the facility might have some device that is not properly working and hazardous waste might be escaping,” said the investigator. “Corroded pipes are in that ballpark.” Inspectors need to examine an entire facility to make sure what the facility claims about the content of the hazardous waste it generates at the other end is true, he said.

But instead of emphasizing this, Ms. Raphael is dismantling a pollution source reduction program that encouraged businesses to switch out harmful chemicals and use safer technology in favor of reassigning personnel without the appropriate skills to develop rules for manufacturing greener products. “Perhaps Odette is so hell-bent on eliminating the source reduction program because the program has history targeted refineries,” said one DTSC scientist. “Refineries have not appreciated the attention and have complained that we unfairly target them.”



The last thing that is needed is another blue-ribbon commission the DTSC can hide behind like the one Governor Brown formed to study the issue of refinery regulation. The DTSC began gathering refinery profiles more than a decade ago in an initial step to regulating the industry, a tacit admission that the agency could already be doing far more than it is. Then the industry’s lobbying killed it on the grounds of national security.

No, we need a system where regulators enforce existing laws, prioritize their core responsibilities, and publicly provide information in real time on company audits, fines, and regulatory actions taken by all involved agencies in one central, easily accessed database.

And we need their managers to get out of the way. The day the Chevron fire happened, one inspector was scheduled to take vacation. “I remember saying I can cancel my vacation and my supervisor said I might as well take my vacation. It was business as usual. I didn’t think it was right.” Instead, he said the department has blinders on, slapping down inspectors who want to take a more holistic approach. “Don’t worry about the fuel system or this production unit over here,” he said. “That is what we are told.”

Shame on California-allegedly the most progressive state in the nation-for not already having a refinery strike force of inspectors across agencies working together on assessments of a refinery’s structural integrity, from corroded pipes to fugitive emissions. And shame on California for not taking some players off the existing team-players with financial conflicts of interest like Odette Madriago that may have broken the law.

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Posted by Liza Tucker, Consumer Advocate and author of Consumer Watchdog’s Golden Wasteland report on the toxic environment at DTSC. Follow Consumer Watchdog on Facebook or on Twitter.

Looks to take on popular governor

by Brian Leubitz

Abel Maldonado has had a rough go over the last few years. After getting appointed to Lt. Gov., he lost to Gavin Newsom for that job, and then lost to Lois Capps for a newly drawn Congressional seat.

Yet, he still represents something different for Republicans, which keeps people intrigued. He is a Latino and offers diversity that is otherwise absent from the GOP. But perhaps more than that, he has shown a flair for the dramatic moderate. Working with his fellow dramatic moderate, Gov. Arnold Schwarzenegger, he swooped in several times to push the budget process forward. And so despite the recent losses, he gets plenty of coverage and attention.

All that makes him an intriguing candidate for the 2014 governor’s race.  What makes it more interesting for Maldonado is that he wouldn’t have to make it through a Republican primary, a hurdle that might just be too high for a perceived moderate. The top-2 system would take care of that. Cue the whispers:

Saying he could “bring a different face” and a new Republican message to California, Maldonado told the Chronicle in an interview that he is strongly mulling the run against three term Democrat not only to strengthen the party, but also to encourage the kind of vibrant two-party political debate that makes for “a better state.”

“I’ve been encouraged publicly, and privately,” he said, to offer a challenge to Brown as the California Republican Party is in such dire straits that it appears the Democrat could easily sail to a fourth term without serious opposition.

“At this point in time, I’m seriously thinking about it,” Maldonado said. “I think I need to decide sooner rather than later.” (Carla Marinucci/SFGate)

Brown has one of the top two spots locked down, unless something seriously bizarre happens between now and next summer. The race for the second spot right now seems to be some third party candidates and Tim Donnelly, the minuteman leader and GOP Assemblyman who was recently cited for bringing a gun to an airport. In other words, the quest to the second spot is still wide open. Donnelly would surely draw some votes from the nativist set, but he really couldn’t win a statewide election.

Brown, however, is quite popular after the success of Prop 30 and its temporary moratorium on the budget crisis. Maldonado carries a lot of baggage into any race at this point, but given the current field, he might just be the GOP’s strongest candidate.

A pro-consumer candidate to the Federal Trade Commission, who had the backing of the entire public interest community, really wanted the job. But this candidate didn’t want allies to go public for fear of alienating the White House. What happened?  Today POTUS hosed us and gave the keys to the FTC to corporate attorney Edith Ramirez.

The lesson: if you want to speak for the public, you have to speak publicly.

It’s just too easy to get caught up in the quagmire of worrying about alienating powerful people. Back channels and back room are the domain of those who want to turn their back on the public, not advocates for the public.

And the lesson, which came in healthy helpings this morning, can even be lost on those of us who typically have no control of our tongues.

Consider Ron Shinkman’s remarkable report today in Payer and Providers about the pathetic record of California Department of Managed Health Care Director Brent Barnhart.  We didn’t expect much from a former Kaiser lawyer Governor Brown appointed to regulate HMOs, but perhaps a healthy tongue lashing on the front end would have up-ended this record.

As Shinkman records:

Between 2009 and 2011, the Department of Managed Health Care issued nearly 1,000 enforcement actions against health plans, fining them nearly $9 million for a variety of misdeeds and demanding they take corrective actions to protect the interests of their enrollees.

But after Aug. 11, 2011, when Gov. Jerry Brown appointed former health plan lawyer and lobbyist Brent A. Barnhart to head the agency, enforcement actions dropped almost immediately. The DMHC issued only 74 such actions during the remainder of the year, compared to 433 in the portion of 2011 prior to his appointment – although an agency official said that number should be condensed.

In 2012, the DMHC issued 90 enforcement actions, well below its historical average dating back more than a decade. The most significant action of the year was taken not against a health plan, but against the Accountable Care IPA, a medical group that had been using non-physicians to make medical coverage determinations.

Moreover, financial penalties levied against the plans dropped dramatically in 2012. Last year, $451,000 in fines were issued, or just over $5,000 per enforcement action. That’s a stark contrast to 2010, when $2.2 million in fines were issued, an average of more than $20,000 per action. In 2008, fines exceeded $18 million, which included several significant enforcement actions against insurers.

New rule, or old rule remembered: When in doubt, speak out.

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Posted by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

Corporate subsidies ignite a race to the bottom

by Brian Leubitz

It is not often that I read something on the FlashReport that I can agree with in the general substance. But, while the article was intended to be a slap at Jerry Brown, the Reason Foundation’s (a right-wing libertarian group) Adrian Moore, PhD, takes on corporate subsidies.

Proponents argue that while cases such as Solyndra are unfortunate, they are a necessary evil that must be tolerated since the benefits of governmental “investing” in certain technologies or industries will, in their view, someday outweigh the costs. I’d point out that the government rarely knows what is both certainly beneficial and inadequately funded by the market, but even worse is a lousy investor, giving to well connected companies, not those with the best business plan, and not caring if the investments pay off or not, only the newsbite when the check is written.

The Reason/Howard Jarvis study looks at specific corporation tax and sales and use tax credits, deductions and exemptions in order to evaluate whether they serve their purpose. The argument offered in support of such tax breaks is that they will improve the lives or livelihoods of certain classes of individuals, businesses or industries. But their costs are frequently ignored. While they may encourage business activity in a certain sector of the economy, this comes at an unseen cost, which is the business activity that would otherwise have taken place in other sectors of the economy. (FR)

These all fairly reasonable points here. Perhaps California does spend too much on corporate subsidies to lure jobs. Perhaps we should be asking ourselves whether the government should be subsidizing corporations at all.

But this should be part of a larger conversation that we should be having at every level of government. The most visible examples of these subsidies come in the context of sports, where teams are lured with free land, tax credits, and sometimes a brand new stadium with a pretty bow on top. But it isn’t just sports where we see this. In a great series in the New York Times, Louise Story investigates the troubling growth in tax subsidies that are going to specific corporations, and how an entire cottage industry has grown up to game the system. (She also gave a very interesting interview to Terry Gross on NPR’s Fresh Air.)

The fact of the matter is that yes, California does spend a fair chunk of change on corporate subsidies. The Times quotes a figure of $4.17 billion, or $112 per Californian. But if you look to the right, you’ll see that our $112 per capita pails in comparison to other states. Especially some very heavily Republican states. Alaska spends nearly a thousand dollars per person! And Rick Perry has spurred the people of Texas to spend over $750 per person. This turns out to be real money:

The math on the new deal angers former Amazon workers, especially those who are still unemployed. For Texas to give up more than $250 million in tax revenues in exchange for 2,500 jobs amounts to about $100,000 per job. Most distribution workers are paid $20,000 to $30,000 a year. The rest benefits the company’s bottom line, which generally increases executive bonuses and shareholder returns.(NYT)

This is the new math of corporate subsidies and job creation. And, unfortunately, California carries a special burden in this area. Film subsidies have been some of the hottest growth areas, garnering a full story in the Times. States and cities find it attractive to get a movie shot in their area, and so spread the cash around. Michigan, Louisiana, and pretty much every other state have tried to lure Hollywood away from, well, Hollywood. (Canada has also been aggressive in this area as well.)

The article is on FlashReport, so of course, it is rather unnecessarily partisan. It calls out Gov. Brown, and name checks Solyndra, and the film tax credit. Solyndra, of course, being the big cause celebre of conservatives for collapsing under the weight of cheap solar panels being dumped on US shores after having received federal loan guarantees. And this being California, conservatives like Dr. Moore get to blame the evil liberals in the legislature for all these ills.

But Dr. Moore is probably right that we shouldn’t be spending so heavily providing cash to corporations. He and I clearly disagree about what should come of that money, lowering the corporate tax rate would fall significantly behind investing in education and other priorities, but that’s a topic for another time. Unfortunately, we live in a competitive world, and our governments are competitive as well. In many ways, it is something of a mutual self-injury pact. Local governments compete against one another, and the individual citizen gets lost in the shuffle.

Clearly, we, as a nation, need to do a better job of monitoring this process. And we need to have a conversation about whether it is in our best interest for states and municipalities to compete in this manner. Dr. Moore (and the NYT’s Louise Story) do us a favor by raising this issue. It deserves serious consideration, perhaps with a touch less of the absurdly misplaced partisan rancor, about how we government goes about the task of “job creation.”