Ostensibly, the tax break will help the automaker build more cars and help create jobs in California. Business groups (that like tax breaks) and environmentalists (who like electric cars) have both praised the move. But a larger question remains, and it’s about the tax that Tesla was able to avoid.

California is one of the few states that enforces a tax on the purchase of manufacturing equipment. While most taxes affect companies’ abilities to expand and grow, few do so as directly as the manufacturing equipment tax does.

Whenever a company wants to expand its manufacturing operations, it has to automatically add a 4.1875 percent tax to the cost of equipment. In the case of Tesla, the company was more easily able to afford purchasing hundreds of millions of dollars in new equipment because it got a $34.7 million tax break.

The manufacturing tax has had demonstrably negative effects on California’s economy. After massive shrinkage during the recession, manufacturing began to regrow as an industry. Nationally, according to the U.S. Bureau of Labor Statistics, the number of manufacturing jobs has increased 4.59 percent since bottoming out in 2010. But in California, that number is around half a percent. Many pointed to the manufacturing equipment tax as a reason for that anemic rebound.

Californians may be used to hearing stories like this without any action to resolve the problem. But Assembly Bill 93 —which passed both houses of the state Legislature in June — created tax exemptions for many businesses beginning in July 2014. The bill’s sponsor was the Assembly Budget Committee.

Although the legislation included tax exemptions, it also included changes to various economic development areas in the state. This led most Republicans to reject the bill. Republicans also pointed out that AB93 was presented to them “only hours before a hearing,” according to the Sacramento Bee.

“It is the intent of the Legislature to exempt manufacturing equipment from state sales and use taxes in order to make California more competitive in attracting new businesses to the state,” the bill reads, continuing, “and to bring California in line with the 48 other states that exempt manufacturing equipment from sales and use tax.”

Application

So how can a business apply for this manufacturing tax exemption? The business simply needs to belong to someone engaging in manufacturing or research and development in biotech, engineering and biological or physical sciences. And companies can qualify for up to $200 million in exemptions for machinery and equipment, the equipment used to operate that machinery or equipment, and special purpose buildings needed for manufacturing.

And, according to the state, the property must be used for “manufacturing, processing, refining, fabricating, or recycling of tangible personal property,” or research and development.

Dorothy Rothrock of the California Manufacturers and Technology Association told Bloomberg Businessweek the law “should help California be a little more nimble and responsive when companies come and say: ‘Hey, we’d be here except for this problem or that problem.’”

She added, “It’s not a bad idea for state leaders to have some flexibility to make a deal with people.”

“California’s Uninsured: By the Numbers” contains several data points that cast doubt on the Golden State’s image as a progressive utopia.

According to the report, California’s working population is less insured than its overall population. While around 20 percent of the state’s residents are uninsured, about one in four of those that work don’t have health insurance.

This may be a result of declining employer coverage. In 2012, some 54 percent of California residents got coverage through their employer (the most common way to get health coverage in the United States). But that number is smaller than it was in 1988, when 63 percent of California’s got health insurance from their employer.

“Employees in businesses of all sizes are more likely to be uninsured in California than in the United States,” the report stated. “In businesses with fewer than 10 employees, 40 [percent] of workers are likely to have no insurance.”

And 62 percent of the children without health insurance had a parent in their household who worked full time. Almost a third of the uninsured population had a household family income of $50,000 or more.

Latino uninsured

Almost 60 percent of California’s uninsured population is Latino. Covered California has been struggling to get Latinos to trust and use the system, as CalWatchdog.com has previously reported.

But perhaps the most startling statistic deals with how many people will remain uninsured.  Although the Affordable Care Act, also known as Obamacare, is often described as a “universal health care law,” that isn’t quite right.

In 2015, approximately 5.6 million Californians still won’t have health insurance. But among those 5.6 million, the report estimated that 2.6 million will eventually take up coverage.

However, more than 3 million Californians will remain uninsured in 2015. Of course, those are simply estimates: it is entirely possible that more than 3 million will choose not to pursue health care.

The report starkly acknowledges that “with the implementation of the Patient Protection and Affordable Care Act of 2010 (ACA), the numbers of uninsured residents in California will be reduced, although a significant number will be left behind.”

The report was released ahead of the first deadline for health care signups on Dec. 23. Covered California — which has performed better than the federal exchange but continues to fall behind its own self-imposed goals — is clamoring in the final days of the year.

Tens of thousands of applicants signed up for health insurance each day last week. However, the enrollment pool is composed of a disproportionate number of older Americans, which could prove problematic as they generally require more care than younger people. And the state continues to struggle with signing up older Americans.

Problems persist, but the law isn’t going away anytime soon. Nor are millions of uninsured, who will stay that way despite the legislation’s enactment.

But the state’s great economic and geographic diversity has also created some divisions. Northern and Southern California often act as two separate states, only bound together by their shared statewide officials. Blue collar workers in the Inland Empire likely have little in common—politically, economically, or socially—with tech entrepreneurs in Silicon Valley.

These divisions, in part, have inspired Silicon Valley investor Tim Draper to submit his “Six Californias” ballot proposition to state Attorney General Kamala Harris. The five-page proposal would divide California into six separate states.

Starting at the bottom, the new state of South California would be composed of Imperial, Orange, Riverside, San Bernardino, and San Diego counties.

Next to South California would be West California. The state would contain Los Angeles, San Luis Obispo, Santa Barbara, and Ventura counties.

Central California would encompass Alpine, Calaveras, Fresno, Inyo, Kern and Kings County, along with Madera, Mariposa, Merced, Mono, San Joaquin, Stanislaus, Tulare and Tuolumne counties. Central California would be the only newly created state without a coast.

Silicon Valley—where the proposition’s author hails from—would have Alameda, Contra Costa, Moterey, San Benito, San Francisco, San Mateo, Santa Clara, and Santa Cruz counties.

The final, most northern part of California, would be divided into two states. Just north of Central California and Silicon Valley would be Northern California. The state would be composed of several countries, including: Amador, El Dorado, Marin, Napa, Nevada, Placer, Sacramento, Sierra, Solano, Sonoma, Sutter, Yolo, and Yuba.

And the final, most northern state, would be Jefferson. The theoretical state would be made up of Butte, Colusa, Del Norte, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Plumas, Siskiyou, Shasta, Tehama, and Trinity counties.

Reasons

So why go through the trouble of dividing up California into six states?

As the initiative measure points out, California is about six times the size of the average state in the United States. And the state is also twice as large in square miles as the average of all 50 states. According to the proposition, these factors have left the state virtually ungovernable.

“The citizens of the whole state would be better served by six smaller state governments while preserving the historical boundaries of various counties, cities, and towns,” the report concludes.

And Draper, being an entrepreneur, thinks that this system could force the six different states into competition with each other. Current residents could move to another California, choosing between the states based on quality of life, tax rates and regulations. Those in the conservative Inland Empire, for example, would no longer be subject to the taxes imposed on them from Sacramento.

On its face, the legislation seems far-fetched. But if a majority of Californians embrace the idea, it’s entirely possible that the state could become six. But with wealthy backers–and a state more divided than ever–it’s very possible that the idea could game steam. But having popular support isn’t the only challenge it faces.

Even if Californians ultimately decided it was best to split up the state, the legal challenges that accompany it are myriad. The proposition notes that “legal processes for the division of the State will take time.”

Then conservative groups attacked the bipartisan budget agreement between Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., which the full Congress just passed. It cuts benefits for veterans and raises fees related to air travel. And Boehner lost his patience with the more conservative wing.

Boehner lashed out at the groups over the course of two days. Boehner said he thought outside conservative groups “have lost all credibility” and that he does not care what they do.

He later explained his outburst against the groups, saying, “Yesterday, when the criticism was coming, frankly I thought it was my job and my obligation to stand up for conservatives here in the Congress who want more deficit reduction, to stand up for the work that Chairman Ryan did.”

Boehner’s outburst wasn’t impotent. Despite opposition from outside conservative groups, the two-year budget deal passed the House 332 to 94. A majority of the Republican conference voted yes. It was a significant test of Boehner’s resolve against the more ideologically pure elements of his party. But the bet paid off.

Control

No political win, however, exists in a vacuum.  Liberal activists — and even conservative moderates — immediately begin to suggest that Boehner’s move against the conservative elements of his party was the preface to Boehner reasserting establishment control over the legislative agenda.  Many have predicted that Boehner’s move was a signal that he was now willing to move immigration reform.

A California-based immigration reform activist, who spoke to CalWatchdog.com on the condition of anonymity to be more candid, said that Boehner’s recent behavior was “heart-warming” and seemed “honest.”

The activist, who has been involved in lobbying California Congressmen to push for reform, added, “It makes you think, ‘OK, maybe [Boehner will] play ball.’”

But he cautioned that, while activists are optimistic, they’re not blindly so. He expects that major immigration reform won’t be able to pass until 2015, at the earliest. It’s difficult to pass major legislation in an election year, he explained, and it makes more strategic sense (from the Republican point of view) to wait.

Republicans, who are at a politically advantageous position because of the trouble associated with the rollout of Obamacare, reasonably expect to pick up seats in the midterms. They could feasibly control the Senate — though that will be no easy task — by January 2015. So why would they pass immigration reform when they’re almost certain to pick up seats and enter a stronger bargaining position? The answer is simple: They wouldn’t.

So, yes, Speaker Boehner has changed his tune. But that doesn’t mean he’ll change his strategy just yet.

Despite the persistent political predictions, energy independence hasn’t fully come to the United States. But advances in technology, particularly the newfound proliferation of the decades-old practice of hydraulic fracturing (or fracking), have made total energy independence a possibility. The International Energy Agency said in its 2013 World Energy Outlook that the United States is moving “steadily towards meeting all of its energy needs from domestic resources by 2035.”

And advancements in fracking are the primary cause of this huge change. Millions of gallons of water, sand and chemicals are pumped underground in the fracking process. The high-pressure mixture travels through horizontally drilled wells and breaks apart rock to enable drillers access to shale oil and natural gas.

California State University, Bakersfield geology professor Janice Gillespie told CalWatchdog.com that the greatest danger with fracking comes from “poorly constructed and abandoned wellbores.”

“If the cement job is poorly done, the frack fluid could use the poorly constructed or abandoned wells as a conduit to the overlying fresh water aquifer,” she said.

California, a state perhaps best known for its luck with natural resources, has been lucky. The Monterey Shale, located in Central California, holds two-thirds of the United States’ accessible shale oil. In other words, California could be at the center of the United States’ most recent energy revolution — if the state embraces fracking.

Regulations

California, which is routinely identified as one of the most regulation-prone states in the country, issued a new set of regulations for oil drillers using the hydraulic fracking technique. They will take effect on Jan. 1, and a new set of similar regulations will be enacted a year later. Although the regulations are among some of the strictest in the country, drilling is expected to continue. And while environmental groups are unhappy that the state government hasn’t issued an outright ban, industry insiders publicly accept the rules.

So what are the drillers compelled to do? They have to alert nearby property-owners that they will be using fracking techniques a month before they begin fracking. And they are also required to conduct groundwater monitoring, test their wells, and make known which chemicals are being used in the mix.

Western States Petroleum Association president Catherine Reheis-Boyd told the New York Times that the new set of rules “covers every possible area that one could think of.” She also said that the industry “accepts” the new regulations, according to the Times.

Gillespie said that regulations likely wouldn’t affect the amount of fracking in the state, explaining, “If the money is there they will frack.”

But she warned that it might be too soon to dismiss any impact that the regulations could have on the industry, because the current regulations were still being debated (and may be expanded).

“It may be a bit preliminary to jump to conclusions on this,” she warned.

“We are reorganizing and realigning our research-and-technology operations to better meet the needs of our Commercial Airplanes and Defense, Space & Security business units, as well as our government R&D customers,” Greg Hyslop, general manager of Boeing Research & Technology, said in a press release. “With these changes, we are enhancing our ability to provide effective, efficient and innovative technology solutions.”

This will also be a relatively permanent change. According to the press release, “The new research centers will consolidate technology development of strategic importance to Boeing over the long-term — up to 30 years into the future.”

While it may appear to be good news that California will have a new research and development site for decades to come, the true impact of the restructuring is less heartening.

Missouri, Alabama and South Carolina are expected to gain between 300 and 400 jobs from the realignment. Washington state will lose between 800 and 1,200, and California will see somewhere between 200 and 300 research and development jobs leave. This follows news from September that Boeing planned to shutter a manufacturing plant in Long Beach and lay off some 2,000 workers.

The trend is clear: Boeing is moving jobs away from the old epicenters of manufacturing and design in Washington and California. Now, more and more jobs are moving toward states throughout the South. The closure of the manufacturing plant, and the more recent loss of hundreds of white collar jobs, display California’s vulnerabilities with retaining talent in both high- and low-paying fields.

Positive sign

However, in a positive sign for Californians who would like to see more manufacturing jobs brought back to the state, Gov. Jerry Brown and local politicians in Long Beach are currently lobbying Boeing to build a manufacturing plant for its 777x jetliner in Southern California. Bringing the new manufacturing plant to Southern California would be huge for the local economy. Boeing will need to create more than 4 million square feet of manufacturing space, and thousands of workers will be needed.

However, it is unclear whether or not California will end up being chosen as the site (or if the Golden State even has a chance). California hasn’t disclosed what it is offering Boeing, but at least two states have disclosed their incentives.

Washington state originally offered a $9 billion tax incentive package to Boeing, but a machinist union shot down the proposal and Boeing moved on to evaluate other offers. The Missouri state legislature offered its own $1.7 billion tax incentive package.

Given California’s pro-union climate and its less-than-friendly business climate, it’s unlikely that the state could win the contract when competing against the likes of Missouri, Alabama, Utah, Texas and other states with laws not as friendly to labor unions.

However, California’s major advantage is its workforce. People have been making airplanes for decades in Southern California, and the institutional knowledge is considered valuable. Whether or not California can lean on some of its natural advantages, in the face of impediments to business development, remains to be seen. But if it succeeds, it could be a turning point for a state that has shed thousands of manufacturing jobs in recent years.

One of the last — and perhaps most effective — ways for conservatives and Republicans to influence state politics is through the ballot initiative system. Currently, four ballot initiatives have already earned their place on the November 2014 general election ballot:

California Rainy Day Budget Stabilization Fund Act: Put on the ballot by the Legislature, if passed the initiative would force the Legislature to put 3 percent of revenue into the rainy day fund.

There’s one major exception: If revenues fall — i.e., if taxes fall or the economy takes a hit — then the state doesn’t have to save money for the rainy day fund. It’s difficult to say definitively whether or not the bill will work, because it’s hard to predict future revenues. However, the bill limits spending by requiring unexpected revenue to be put in the rainy day fund. 

Without a clear mandate, typically the Legislature keeps little or nothing in reserve. This year, lawmakers set aside $1.1 billion for a rainy day fund as part of a deal with Gov. Jerry Brown, who urged the Democratic Legislature to show some level of fiscal restraint. If this initiative had been in effect, the Legislature would have had to set aside about three times that amount.

California Water Bond: This is another proposition referred by the state Legislature. It was supposed to appear on the June 2012 ballot, but it was postponed by the Legislature to the November 2014 ballot. It allows the state government to borrow more than $11 billion to refurbish the state’s water system. While not a “hot-button” issue like pot legalization, the bill will have a huge impact on the state’s finances, as the state already has a total bond debt of almost $90 billion.

California Insurance Companies Required to Justify Their Rates to the Public Initiative: In short, the proposition would let the state regulate health insurance companies as it already does car and homeowner insurance companies. The state insurance commissioner would have to approve rate changes, among other new regulations of insurance companies.

California Referendum to Overturn Indian Gaming Compacts: The initiative concerns Assembly Bill 277, a compact between California and the Wiyot Tribe and the North Fork Rancheria of Mono Indians. The compact allows for Native Americans to build a large new casino off Highway 99. A yes vote allows them to; a no vote overturns the compact and prevents the new casino complex from being built.

Circulating

While only four initiatives have been approved for the ballot, 19 have been approved for circulation (to seek the signatures they’ll need for approval). Among those, several touch on hot-button issues, such as:

Public assistance benefits reform: The law creates several new requirements for people seeking public assistance — from presenting identification to requiring certain people to seek employment for three months before accessing assistance. The Legislative Analyst estimated that the initiative could save the state a net hundreds of millions of dollars per year.

Parental notification for abortion: It would require a medical professional who is performing an abortion to notify a minor’s parents at least 48 hours before the procedure (in writing). Three similar initiatives appeared on the ballot in the past and failed. The last measure, in 2008, failed by 52-48.

Additionally, two other initiatives would roll back laws passed by the Legislature that expanded the availability of abortion by allowing less qualified medical professionals to perform abortions and changing the standards for abortion providers.

Drug tests of doctors: The proposition would require doctors in California to undergo drug tests (and have the results of those tests forwarded to the California Medical Board). Doctors also would be required to inform authorities of other doctors whom they believe may be using drugs.

Legalizing marijuana: The perennial effort to decriminalize marijuana use is back. And this time, it may actually have a shot at passing, as both Washington state and Colorado have legalized the drug since California’s Proposition 19 failed 54-46 in 2010. Medical marijuana has been legal in California since 1996, when voters approved Proposition 215.

It’s too early to tell which propositions will pass — or how much money supporters of each will be able to raise. But for voters who feel underrepresented statewide, it’s a good place to try feeling heard.

In California, where unions have long wielded more influence than in most states, the protests took an interesting turn. That is, Los Angeles teachers mostly just focused on themselves — not students.

Los Angeles teachers, who are relatively powerful, drew light to a very specific issue, one they are facing heat for (even from Democratic legislators). The Los Angeles Times reported that United Teachers Los Angeles members protested “against the conditions under which the L.A. Unified School District handles teachers who are facing allegations of misconduct.”

L.A. Unified teachers are represented by both the CFT and the larger California Teachers Association.

The union members held “vigils” for teachers who were spending time in Los Angeles Unified School District offices because of their impending misconduct cases. The union focused on defending teachers plausibly accused of wrongdoing — from sexual misconduct to aggressive behavior against students.

One teacher, explaining the protest, asked the Times, “What kind of school district removes a teacher from the classroom if a 13-year-old said so?”

The protests are a response to a crackdown on misbehaving teachers. After the district was forced to pay Miramonte Elementary teacher Mark Berndt — who sexually molested countless children and photographed them ingesting his bodily fluids — $40,000 to settle his case, the district opened up hundreds of cases against teachers. Those protesting said that the district had gone too far and was no longer defending students, but attacking teachers.

Context

In order to understand why Los Angeles teachers would focus on such a specific issue, particularly on a day meant to focus on broader educational problems, one should understand the context of just how powerful teachers unions are in California.

A report from the Thomas B. Fordham Institute ranked teachers unions in California as the sixth strongest in the United States.

The report noted several interesting facts about the influence of California teachers unions in politics. Teachers unions gave 4.3 percent of all money received by political parties in California.  And more than 12 percent of all members of the California delegations to Democratic and Republican national conventions were members of teachers unions.

Sherry Bebitch Jeffe, a senior fellow at the University of Southern California School of Policy, Planning and Development, told CalWatchdog.com that teachers unions, which typically align with the Democratic Party, “basically own the Legislature.”

Further, California teachers unions have the strongest bargaining power of any state in the entire country.

“California has the most union-friendly bargaining laws in the nation,” the report noted, making Monday’s protest all the more perplexing.

The report concluded:

The Golden State’s teacher unions are quite powerful; in a state that does not spend much on K-12 education, they’ve gathered considerable internal resources (and do not shy away from dedicating those resources to state politics — with apparent success, given their present reputation for influence). Although charter and employment policies are not well aligned with traditional union interests, California is exceptionally permissive when it comes to teacher bargaining rights.

Jeffe added that, while teachers unions are already very powerful in California, they will likely see their clout increase even more in the coming years.

“The power of the teachers unions may only increase, because the power of Republicans in the Legislature has already begun to decrease,” she said. “The Republican Party in this state is losing registration and losing clout.”

One of the most disconcerting, and persistent, worries about each website is security. The federal website, which has become more usable since its widely mocked launch, has made little progress in improving security. TrustedSec CEO David Kennedy, an internet security expert, told the Washington Free Beacon that it “doesn’t appear that any security fixes were done at all.”

He went on:

“There are a number of security concerns already with the website, and that’s without even actually hacking the site, that’s just a purely passive analysis of [it],” he said. “We found a number of critical exposures that were around sensitive information, the ability to hack into the site, things like that. We reported those issues and none of those appear to have been addressed at all. …

“They said they implemented over 400 bug fixes,” he said. “When you recode the application to fix these 400 bugs — they were rushing this out of the door to get the site at least so it can work a little bit — you’re introducing more security flaws as you go along with it because you don’t even check that code.”

While the federal website’s security issues may be disconcerting — after all, it collects data such as Social Security numbers and some medical information — there is a whole other problem in California.

Covered California’s primary privacy problem isn’t hacking. It’s that Covered California is knowingly giving away some private information — information that users explicitly requested not be shared.

The Los Angeles Times reported on Friday night that Covered California gave insurance agents the names and contact information of tens of thousands of people who requested that their information remain private. Officials justified their action by saying it was necessary to help people sign up so Covered California could meet its deadline. Fortunately, consumers’ Social Security numbers and medical records were safe; the insurance agents only received names, addresses, e-mail addresses and phone numbers.

Peter Lee, the executive director of Covered California, told the Times, “I can imagine some people may be upset. … But I can see a lot of people will be comforted and relieved at getting the help they need to navigate a confusing process.” Of course, it is unclear why people being contacted (after explicitly asking not to be) would be relieved.

‘Worrisome’

Lee said Covered California’s lawyers approved the decision. But Mari Frank, an attorney and certified information privacy professional, told CalWatchdog.com that the choice to ignore consumers’ requests and share the information was “worrisome.”

“I think it was poorly decided — there is so little trust as it is — and consumers are already fearful of ID theft and fraud,” she said.

She added that, while government agencies sharing information with law enforcement and other government agencies is fairly common, sharing personal information with private companies was a new concern.

Ultimately, though, the decision about whether or not to share this kind of information should be a simple one. Frank said, “The government should not share information without prior consent.”

California’s high-speed rail project has been problematic for some time. The project has gone well over its original budget, and costs continue to pile up, often without ways to pay for them. The California rail — which has been characterized by mismanagement, passed deadlines, and broken promises — also faces significant legal hurdles. But beyond the challenges that CalWatchdog.com has already been covering, there’s another simple question: Just how safe are trains?

A good measurement for safety is “deaths per billion passenger miles.” A recent report in the journal Research in Transportation Economics, titled “Comparing the fatality risks in United States transportation across modes and over time,” explained the different levels of danger.

Cars and light trucks see about 7.28 fatalities per billion passenger miles. Commuter and long-haul trains, on the other hand, experience a fraction of that, just 0.43. However, buses and airplanes are significantly safer than the other two, with just 0.11 and 0.07 deaths per billion passenger miles, respectively.

While trains are significantly safer than cars — and notably more dangerous than buses and planes — there has been a recent uptick in the number of train accidents, according to the National Association of Railroad Safety Consultants and Investigators’ Robert Halstead.

Halstead, who did not respond to a request for comment from CalWatchdog.com, told National Geographic, “Train derailments have trended up over the last couple of years. Human factors are frequently found to be a contributing part, sometimes a causal part. This includes improper train handling and fatigue. You can also have technical failure regarding the signal system, the track, or other equipment.”

Improvement

Railways are relatively safe. However, there are still ways that they can improve, according to Halstead. Simple measures like adding seatbelts could prevent deaths. The four killed last Sunday were ejected from the train. But there is more sophisticated technology available, known as the positive control system.

A positive control system essentially functions as an autopilot for train engineers. If an engineer nods off at a curve, for instance, the positive control system would reduce speed entering the curve. The futuristic technology will make trains even safer. And it’s mandated to be implemented on train systems throughout the country by the end of 2015 (though the deadline may be extended to 2020).

There’s just one problem: It’s extremely expensive. It will cost billions to implement it throughout the country. For Los Angeles’ Metrolink, it will cost more than $200 million to implement positive control systems on about 500 miles of rail.

It seems like a similar theme: Rail might someday be the best way to get around; it just costs a lot more than most people would hope for.