The California Highway Patrol’s overtime scandal – in which more than 100 officers from its East Los Angeles branch may have inflated their overtime while helping Caltrans workers stay safe while doing freeway maintenance work – could explode into a statewide scandal. That’s contrary to claims made when the scandal first emerged in February, when CHP officials said a survey of other commands turned up no similar false claims.

Former Los Angeles County District Attorney Steve Cooley and a team of attorneys are representing more than 30 of the accused CHP officers. According to a Los Angeles Times report, 14 accused officers are facing termination while 90 more are still being investigated. Cooley says about 40 in total are at risk of being fired.

The main allegation facing officers: That they would seek eight hours of overtime pay after only being needed by Caltrans to work half that many hours or less on protection details.

Overtime spiking called common across state

But in court documents and in comments to the Times, Cooley says he can establish several points countering the CHP’s claims about the case. The most serious: The practice of padding such overtime is common in many of the 103 CHP commands around the state, according to former CHP officers. This would mean that Caltrans was overcharged by far more than the $360,000 that CHP has already documented.

Cooley also alleged that several middle- and upper-level CHP officials, including one who helped launch the East L.A. probe, engaged in the same questionable overtime billing practice when they were lower-ranking officers from 2007 to 2009.

The CHP is so far resisting releasing related documents requested by Cooley’s team and the media, saying the information is related to the ongoing investigation of the scandal.

But the involvement of another state agency with its own reputation to protect makes it seem unlikely that CHP can keep the lid on the scandal, as it tried to do on other internal problems earlier this century.

In February, Caltrans Director Laurie Berman announced that the agency’s inspector general would do a thorough audit of the CHP-Caltrans relationship.

“Caltrans takes violations of the law very seriously and illegal activity of any kind is not tolerated within the department,” Berman said in a statement to the Times. “If it is determined there was Caltrans employee misconduct, disciplinary action will be taken.”

Caltrans has not disclosed a timetable for when the inspector general’s audit will be released.

Scandal echoes those seen in Schwarzenegger years

The scandal marks the end to a decade of relative quiet for California’s largest law-enforcement agency. Among the allegations against the CHP during the Schwarzenegger administration:

• In 2009, the Ventura County Star reported that there was strong evidence that CHP officials impeded a hate-crimes investigation of a local CHP officer involved in a racially charged incident after officers held a party at an Oxnard hotel.

• In 2006, the Sacramento Bee reported that the CHP spent nearly $50 million on helicopters and motorcycles that were not open to competitive bidding. The companies given the contracts – Eurocopters and BMW, respectively – had courted top CHP officials with gifts and meals.

• In 2004, the Bee reported on the “Chiefs’ Disease” phenomenon in which 80 percent of top CHP officials filed for medical disabilities in late career, enabling them to get much more generous pensions. Because police discipline records were then confidential, Bee reporters confirmed the scandal through worker’s compensation claims filed by the CHP executives.

A CHP attorney threatened the Bee with a lawsuit if the records were used in the Bee’s reporting, saying the records were confidential. The Bee went ahead with the story, prompting Gov. Arnold Schwarzenegger to eventually force out then-CHP Commissioner D.O. “Spike” Helmick.

Governor-elect Gavin Newsom says he hopes to amend the California tax code to lessen its dependence on income and capital gains taxes paid by the very rich. Yet the last two serious attempts at tax reform were both dead on arrival, and the political dynamics since their failure appear unchanged or even more unfavorable.

With the state overdue by historical standards for another recession, Newsom is well aware of the revenue nightmare that is looming. After the Great Recession hit a decade ago, state revenue plunged nearly 20 percent – leading to harsh budget cuts in education, public health and social services. Since income and capital gains taxes generate about two-thirds of state revenue, volatility is common.

The revenue decline a decade ago led then-Gov. Arnold Schwarzenegger to create a commission that in 2009 recommended slashing taxes on income and capital gains while imposing taxes on broad categories of services including legal work, haircuts and tickets to sports and entertainment events. The goal was a tax code rewrite that was initially revenue-neutral but that could end up creating considerable new revenue because of provisions designed to promote economic growth.

Democrats see income-tax cut as gift to rich

Yet while commission heavyweights like former Treasury Secretary George Shultz and many economists touted the wisdom of the proposal, the commission’s tax-overhaul blueprint was blasted by both parties from the moment it was released.

Democrats said the plan was a giveaway to the rich. Republicans knocked it for expanding government taxation to new areas.

The scheme – dubbed the Parsky plan because Rancho Santa Fe GOP businessman Gerald Parsky chaired the commission – never even came up for a committee hearing.

Six years later, in 2015, state Sen. Robert Hertzberg pushed a similar proposal, but with a twist. Instead of being revenue-neutral, has plan would yield $10 billion in new revenue a year. Yet Hertzberg’s plan was also DOA in the Capitol for the same reasons as Parsky’s.

Now, with the progressive wing in more complete control than ever of Democrats, their antipathy toward the idea of tax relief for the rich may never have been stronger. That was reflected in the recent Sacramento Bee story about Newsom’s interest in revamping the state tax code.

Jessica Bartholow, policy advocate at the Western Center on Law & Poverty, told the Bee that the tax code shouldn’t be changed to help the rich and big business.

“Capital gains is money earned by people who didn’t earn it,” Bartholow said. “If wealthy corporations and people are having an upswing in their interests, then why shouldn’t the poorest people?”

Republicans fear reform would prove bait-and-switch

The strongest voice in support of tax reform the Bee cited was Rob Lapsley, president of the California Business Roundtable. But the basic sentiment conservatives expressed about the Parsky and Hertzberg plans – Sacramento wants to tax even more human activities? – is at least as intense as in 2009 and 2015. There is considerable suspicion that any reform plan would end up as a Trojan horse for much higher taxes.

This is fueled by evidence that Democrats are gearing up for a huge push to hike taxes even though state revenue is at an all-time high. The most high-profile gambit is qualifying a measure for the 2020 ballot that would end Proposition 13 protections against property tax hikes of more than 2 percent a year for commercial and industrial properties.

This tax-hike fervor is already evident in local governments, including some under Republican control. As CalWatchdog reported last month, more than 150 local governments asked voters to raise taxes in the June and November elections. While most of the tax hikes were adopted after campaigns depicting them as crucial to public safety and to maintaining government services, by far the fastest-growing category of local spending is on pension costs, which are predicted to roughly double for California cities from 2015 to 2025.

A group of moderate California Republicans that wants the party to rebrand itself as both pro-business and pro-environment and show a willingness to work with Democrats on some issues is back in the news this week. Led by Assemblyman Chad Mayes (pictured), R-Yucca Valley, and supported by former Republican Gov. Arnold Schwarzenegger, the New Way California group announced the launching of a website devoted to transforming the state GOP.

“There isn’t an overnight fix,” former Assembly GOP Leader Kristin Olsen of Modesto, a New Way board member, told the Sacramento Bee. “This is a slow journey that requires us to get out into communities.”

New Way officials cited the recent news that the GOP had fallen to third in state political registration behind Democrats and decline-to-state voters as evidence of the need for a new approach.

But Mayes, Olsen and their allies may have an even more uphill challenge than they think. A prototypical “New Way California” deal that Mayes cut last year when he was Assembly GOP leader arguably hasn’t yielded any dividends. He helped Democratic Gov. Jerry Brown round up eight Republican state lawmakers so an extension of the state’s cap-and-trade program until 2030 could receive the two-thirds support it needed – in keeping with Mayes’ thesis about the party needing to alter its direction.

But Mayes’ move triggered a firestorm among Republican activists who cited a state Legislative Analyst’s Office letter from March 2017 forecasting that cap-and-trade could lead to a 63-cents-per-gallon increase in gas prices by 2021. He was deposed as Assembly GOP leader within weeks after cutting the deal with Brown.

Meanwhile, the big concession Mayes secured in return for lining up Republican votes for cap-and-trade flopped with voters. That concession: the Legislature’s vote to place what would become Proposition 70 on the June 5 primary election ballot. The complex measure could have given state GOP lawmakers a chance to kill new funding for the embattled state bullet-train project in 2024 by requiring that the use of cap-and-trade pollution emission fees be approved with two-thirds votes of both the Assembly and the Senate.

Gov. Brown joined the state Chamber of Commerce in backing the ballot measure. But after it was savaged by other Democrats as a stealth effort to protect polluters, Proposition 70 lost 65 percent to 35 percent.

Recall showed anger over approval of higher fuel taxes

Further undercutting Mayes’ push for a rebranded GOP was another June 5 development: the recall of state Sen. Josh Newman, D-Fullerton, by a 59 percent to 41 percent landslide. The recall effort was triggered by Newman’s vote last year for a 10-year, $52 billion increase in vehicle fuel taxes and fees to fund road and transit projects and improvements.

This is widely seen by political analysts as evidence that the California Republicans’ most traditional policy position – a sharp opposition to higher taxes – continues to be potent.

This is also evident in the ease with which a Republican-led effort to repeal the tax hikes gathered enough signatures to make the November ballot.

Some Democrats depict the campaign as benefitting from a coincidental rise in gasoline prices during signature gathering in the winter and spring. But Republicans point to a recent poll showing a majority of state voters are ready to scrap the tax hike and say Californians are as inclined as ever to oppose higher taxes that affect everyone – as opposed to Proposition 55, the successful 2016 ballot measure that renewed “temporary” income tax hikes on the very wealthy.

The Trump administration is on the brink of what could prove its most consequential legal battle with the state of California, with EPA chief Scott Pruitt expected this week to 

Last week saw confirmation of months of White House and EPA leaks that President Donald Trump would throw out a 2012 Obama administration edict that required average miles per gallon to nearly double to 54.5 for automakers’ fleets of new cars and trucks by 2025. Trump’s skepticism about climate change made him particularly open to the argument from General Motors, Ford and Chrysler that out-of-touch regulators under the previous president were trying to force them to sell vehicles that U.S. consumers didn’t want to buy.

But as The New York Times reported over the weekend, Trump and Pruitt went further than automakers wanted both by rolling back mileage standards more than expected and by signalling their readiness for a court fight over the deference that federal regulators have traditionally shown to the California Air Resources Board.

The Golden State’s problems with smog in the Los Angeles Basin – visible in the 1973 EPA photo shown above – led to the first state law in the U.S. targeting air pollution being adopted in 1947, among many other precedent-setting regulations. The air board continued California’s role as a pioneer in setting vehicle emission standards after it was launched in 1968 under then-Gov. Ronald Reagan. Its vehicle emission and safety rules often end up being copied by Congress and federal regulators and by nations around the world. The state’s present rules are followed by 12 other states, including New York and Pennsylvania – meaning the Golden State dictates what automakers must provide in about one-third of all new cars sold in the U.S. each year.

California’s special status may be only state carve-out in federal law

But with California’s pollution problems beginning to look more like the rest of the nation’s in recent decades, Republicans have increasingly chafed at the idea that CARB and not the EPA should have the dominant policy-making role on vehicle fuel and emissions standards.

An analysis in The Atlantic laid out how unusual the state’s status is:

“California is written into the Clean Air Act by name: At any time, it can ask the EPA administrator for a waiver to restrict tailpipe pollution more stringently than the federal government. If its proposed rules are ‘at least as protective of public health and welfare’ as the EPA’s, then the administrator must grant the waiver.

“This power is reserved alone for California, and it only covers pollution from cars. No other state can ask for a waiver. (In all of federal law, this might be the only time that a specific state is given special authority under such a major statute.)”

The administration of President George W. Bush became the first to challenge California’s special status when it rejected the state’s request to expand its definition of what substances in the atmosphere it could regulate to include non-polluting greenhouse gases. That prompted the filing of a lawsuit in January 2008 by then-Attorney General Jerry Brown that was backed by Gov. Arnold Schwarzenegger. But it became moot after Barack Obama succeeded Bush in the White House and the EPA resumed treating California’s proposals with deference.

Over the past 14 months, California Attorney General Xavier Becerra has filed 28 lawsuits against the Trump administration, according to a tally kept by the Washington Post. But even before Becerra began his litigation, Gov. Brown anticipated the upcoming CARB-EPA fight and emphasized its importance. In comments made in December 2016 – a month after Trump’s election – Brown framed the dispute as having consequences for the “survivability of our world” because of the threat posed by global warming.

At an American Geophysical Union conference in San Francisco, according to a Sacramento Bee account, the governor said, “We’ve got the scientists, we’ve got the lawyers and we’re ready to fight. We’re ready to defend. …. And, if Trump turns off the satellites, California will launch its own damn satellite. We’re going to collect that data.”

In 2011, after his seven-year run as governor, Arnold Schwarzenegger had plenty of reasons to worry about how his time in elected office might be remembered. It wasn’t just that he was widely viewed as an under-performing leader who never lived up to his early promise as a brash outsider who would tackle unaddressed state problems. An ugly scandal broke in his final days in office, triggering a political firestorm, and an even more embarrassing scandal emerged soon afterward.

On his last night as governor, Schwarzenegger commuted the prison sentence of Esteban Nuñez – the son of former Assembly Speaker Fabian Nuñez, his friend and occasional political ally – from 16 years to 7 years for his manslaughter conviction in the killing of a San Diego college student. Schwarzenegger initially characterized the sentence as extreme, given that the student died after being knifed by another man. But in an interview with Newsweek three months later, he said he commuted the sentence because “of course you help a friend.” The younger Nuñez is now a free man as a result.

In May 2011, as his celebrity marriage to Maria Shriver collapsed amid intense gossip, Schwarzenegger admitted to fathering a 13-year-old boy with Mildred Baena, long a maid at his Brentwood estate. The revelation triggered headlines around the world.

Los Angeles Times columnist Steve Lopez cited both scandals in a scathing column that saw them as evidence that Schwarzenegger “has always seemed to live in his own celebrity world by his own twisted rules of privilege and entitlement, his life an orgy of self-glory.”

Legacy play pays off in big way

But six summers later, such harsh rebukes are hard to find. Instead, Schwarzenegger’s image has been resurrected to a considerable degree. His 2006 legacy play – shepherding Assembly Bill 32 to passage to make a California a pioneer in targeting and reducing the greenhouse gases believed to help cause global warming – has paid immense dividends.

This was on display last week when Gov. Jerry Brown featured Schwarzenegger at the signing ceremony for legislation extending the state’s cap-and-trade program for emissions that was established by AB32, with the men swapping praise for being leaders on what they called the world’s most pressing issue.

Last October, on the 10th anniversary of AB32’s signing, Schwarzenegger was also featured at an event organized by the governor’s office.

This was nothing new for the Austrian-born movie star, who’s been feted around the world for his environmental leadership. The praise is usually unstinting, and doesn’t note interesting nuances about AB32’s actual record – starting with the fact that the main reason for declining emissions in California in recent years is not the landmark law but the increased use of cheap, relatively clean natural gas, a fossil fuel of the sort the law targets. In 2015, Forbes said natural gas – not renewable energy – was “easily California’s most important source of energy.”

But now Schwarzenegger finds himself winning praise for another reason: His history offers an easy way for journalists to make the point that President Donald Trump doesn’t speak for all Republicans when he either questions whether climate change is real or opposes ameliorative efforts by the government to reduce its effects. A Nexis news database search shows major publications from Los Angeles to New York to London to Singapore have regularly made this point since Trump’s inauguration.

Schwarzenegger directly sought to promote this narrative with his late June visit to Paris to meet with French President Emmanuel Macron and jointly criticize Trump for his decision to pull the U.S. out of the Paris climate accord signed by President Obama in December 2015. Schwarzenegger used social media – including the image shown above – to publicize his meeting with Macron.

“One man cannot destroy our progress,” said Schwarzenegger, who turned 70 on Sunday. “One man can’t stop our clean energy revolution. And one man can’t go back in time.” He laughed heartily at Macron’s mocking Trump for not wanting to “make the planet great again.”

His new cause: redistricting reform

Now Schwarzenegger is trying to build on another of his accomplishments while governor. He led the successful push for Proposition 11 in 2008 and Proposition 20 in 2010 to assign redistricting duties for state and congressional districts to a nonpartisan commission and intends to lobby for similar reforms in other states. His official website declares “let’s shine a light on gerrymandering,” which has been blamed for increasing partisanship and discouraging moderates of both parties by packing voters with similar views into uncompetitive districts.

Schwarzenegger “has a Terminate Gerrymandering Crowdpac that he’s pledged to match dollar-for-dollar,” Politico reported last week. “He’ll be appearing at events, meeting with lawyers, having his team jump in to rewrite incomprehensible charts of the ‘efficiency gap’ and other technicalities ahead of Gill v. Whitford, the Wisconsin gerrymandering challenge that Justice Ruth Bader Ginsburg … called ‘the most important’ case of the Supreme Court’s next term.”

Sacramento Democrats have centered attention around a shot at universal health care for all Golden State residents. 

“In a surprise move made in response to President Donald Trump’s push to repeal and replace the Affordable Care Act, two California lawmakers Friday introduced legislation to replace private medical insurance with a government health care system covering all 38 million Californians — including its undocumented residents,” the San Jose Mercury News reported. 

Joined by state Sen. Toni Atkins, D-San Diego, state Sen. Ricardo Lara, D-Long Beach, introduced the Californians for a Healthy California Act, offering “a comprehensive universal single-payer health care coverage program,” as KPCC confirmed. “Under this approach, private health insurance would be replaced with a single state-run program. Lara said his plan would guarantee coverage to all Californians and would bring down the cost of health care.” But advocates and critics hungry for specifics, the lawmaker conceded, will have to wait. “At the moment, Lara’s bill only says it is the ‘intent of the Legislature’ to establish a single-payer system. It does not say exactly how the program would work or how much it would cost.”

“It’s far from the first time this kind of system has been proposed in California. In 1994, voters rejected a ballot measure that would have established a single-payer system. The Legislature passed single-payer bills in 2006 and again in 2008, only to have Gov. Arnold Schwarzenegger veto the measures.” 

Past stumbles

Schwarzenegger’s veto was fueled by grim projections. “When the Legislature passed a single-payer bill in 2008 […] the legislative analysts found that those revenues would fall $40 billion short in the first year,” HotAir recalled. 

Although the bill has created a sensation among California Democrats looking to make a national point with a state-level effort, precedent for success is weak. “In 2011, Vermont became the first U.S. state to agree to establish a single-payer program, but the effort fizzled three years later over concerns about the cost,” KPCC noted. And in Colorado, “voters overwhelmingly rejected a similar proposal last fall amid widespread concerns about the cost,” according to the Mercury News. “Within the first decade, Colorado — a much smaller state than California — would have been $7 billion in the hole,” HotAir observed.

Cost and complexity

Any program along Lara and Atkins’ lines would need to be built from the ground up, according to rules no legislative body has had to contend with in doing so. “A single-payer system would have to overcome unique hurdles in a state where millions of dollars in federal funds are spent on health programs like Medicaid and treatment for veterans,” ABC News reported. “Other countries, like Canada, may have single-payer systems that differ slightly by state or province, he said, but the U.S. is more complicated. Nothing like this plan — a state-run single-payer system that must also comply with federal government rules — currently exists.” 

But public support among California progressives would likely remain high enough to encourage Sacramento Democrats to give a substantive bill a try. “The Legislative Analyst’s Office says the overall cost could be upwards of well over $100 billion,” Atkins recently admitted to KPBS. “But, here’s the difference, since we had those discussions a decade ago, we have implemented the Affordable Care Act in which we’ve looked at the cost and how to take advantage of the numbers. I mean California is the largest state in the country. We have large numbers to put into the risk pool. We put into place the individual mandate and we talked about businesses participating. So this is the next step to put together a financial package of how we can pay for it.”

Over staunch opposition on his right, Gov. Jerry Brown signed several new climate bills into law, aiming to keep California on the regulatory trajectory first set during former Gov. Arnold Schwarzenegger’s administration. 

That suite of laws, “in which polluters pay to offset emissions under a declining cap, is on tenuous footing amid litigation and uncertainty in the Legislature,” the Sacramento Bee noted. The idea of a new set of rules, “negotiated by Brown and legislative leaders last month, was significant to many moderate Democrats who viewed spending in their districts as critical to buttress a state climate program that has faced heavy resistance from industry,” the paper added. 

Complex divisions

Some Democrats with that stance have worried that national and statewide populist sentiment could pose an especially sharp threat to their political fortunes this election year. Complicating the ideological picture still further, “many lawmakers representing low-income communities of color made themselves a force in the state’s climate change debate after complaints that existing policies weren’t doing enough to benefit the districts they represent,” as the Los Angeles Times noted. 

But Democrats further to the left did not want to back down, or be seen as backing down, to industry interests. At the same time, however, their own interests have not shifted measurably closer to Gov. Brown’s, which have wound up at loggerheads with party members to his left over allocations to projects such as the state’s bullet train. With talks moving slowly, “Brown negotiated the spending plan with top Democratic legislative leaders Assembly Speaker Anthony Rendon of Paramount and Senate President Pro Tem Kevin de Leon of Los Angeles,” according to KPBS. “It was approved on the last day of the legislative session, Aug. 31.”

Big ticket

Environmental activists and policymakers embracing their cause had to scramble to craft the fresh scheme in a way that seemed to ensure it could survive a spirited fight during the legislative process. “The new plan, outlined in SB32, involves increasing renewable energy use, putting more electric cars on the road, improving energy efficiency, and curbing emissions from key industries,” NPR reported. “Brown signed another bill, AB197, that gives lawmakers more oversight of regulators and provides aid to low-income or minority communities located near polluting facilities such as oil refineries and factories.” All told, the package amounted to some $900 million in outlays sourced from the state’s cap-and-trade revenues. “The money represents two-thirds of the available funding from California’s carbon-emission fee,” noted KPBS.

On hand for Brown’s signing ceremony in Fresno, Republican Mayor Ashley Swearengin touted the prospect of statewide infrastructure construction associated with Brown’s environmental agenda, which would include the long-simmering high-speed rail effort. With success, “Swearengin added, the Valley will see a 40 percent reduction in greenhouse gas emissions over the next 20 years,” the Business Journal noted.

Lingering resistance

But business, energy and conservative groups, which had struggled to turn the tide against the bills, quickly vented their frustration. “Taken together, SB32 and AB197 impose severe caps on the emission of greenhouse gases in California, without requiring the regulatory agencies to give any consideration to the impacts on our economy, disruptions in everyone’s daily lives or the fact that California’s population will grow almost 50 percent between 1990 and 2030,” said Allan Zaremberg, California Chamber of Commerce president and CEO, in a statement. 

Under Zaremberg’s leadership, the organization has spearheaded litigation targeting the current cap-and-trade regime. “A state appellate court is considering a challenge by the California Chamber of Commerce, which argues the fee is a tax that needed support from two-thirds of the Assembly and Senate in order to be valid,” KPBS recalled. “Republicans have in the past said it’s irresponsible to spend money generated from a fee being challenged in court.”

Assemblyman Jim Frazier, D-Oakley, and Sen. Jim Beall, D-San Jose, propose a 17 cent per gallon tax increase to fund a $7.4 billion transportation program, with likely additional annual hikes after adoption because the rate is indexed to inflation. They also want to increase the tax on diesel fuels by 30 cents a gallon, with the same indexing provision, and to make it easier to get approvals for transportation infrastructure improvements.

Brown’s proposal — which went nowhere in a special session — was built on a 6 cent per gallon tax increase and other provisions that would have funded a $3.6 billion transportation plan.

Bitterness over 2010 gas tax swap hangs over debate

The huge problem facing any proposal to raise taxes of this sort is the need for two-thirds approval, which means Republican votes in both the Assembly and Senate are necessary. And Democrats lobbying for GOP support don’t just have to overcome traditional Republican opposition to higher taxes. There continues to be deep bitterness over the gas tax swap that GOP Gov. Arnold Schwarzenegger and Democratic lawmakers pulled off in 2010 to plug a $1.8 billion hole in the 2010-11 budget. Republicans aware of this history would struggle to believe that the tax hikes that Frazier and Beall seek for road repairs might not at some future date be used to pay for state salaries, pensions or other needs unrelated to potholes and aging bridges.

The background: Irate over previous diversions of gasoline sales taxes from road repairs to other uses, California voters twice this century passed ballot measures — Proposition 42 in 2002 and Proposition 1A in 2006 — that banned such use of gas sales tax revenue.

But gasoline excise taxes can be spent on general fund obligations. So in 2010, gas excise taxes were sharply raised and gas sales taxes sharply reduced. Because the move was revenue-neutral, Schwarzenegger and Democrats successfully argued that the maneuver only needed to pass on a simple majority vote — not the two-thirds vote needed for tax hikes.

As a result, each year, the state Board of Equalization announces whether it is raising or cutting state excise taxes on gasoline to honor the deal’s requirement that the 2010 gas tax swap be roughly revenue-neutral.

Recent coverage of the Frazier-Beall initiative has not detailed whether the 17 cent per gallon tax hike would be entirely in the gas sales tax or entirely in the gas excise tax or a combination of increases in each.  If it were in the gas sales tax, that would nominally mean the money could only be spent on road repairs and infrastructure improvement because of Propositions 42 and 1A. But another gas tax swap could enable the money to be diverted to the general fund by a simple majority of the Legislature in the future, at least if the governor was amenable.

Republican lawmakers are also likely to be wary of another part of the Democratic lawmakers’ proposal: a $165 yearly fee for owners of zero-emission vehicles to help pay for road improvements. While that’s higher than what most states with such fees charge, it’s only half of what the average U.S. car owner pays in gas taxes a year, according to data from 2013. 

The argument that zero-emission vehicles should pay more toward road maintenance is dismissed by greens who cite the environmental benefits of the vehicles. But as such vehicles become more common — and as states push gas taxes higher — owners of regular vehicles and free-market advocates are likely to cry foul.

Driven by shifting economics, demographics, and changing definitions of moderate prosperity, middle class Californians in areas once rife with new arrivals — and dominated by Democratic voters — have begun looking for the residential exits. 

Statewide struggle

Both the Bay Area and the Southland have seen a perfect storm of living costs and population density drive middle-class Californians away. “About one-third of those surveyed by the Bay Area Council say they would like to exit the nine-county region sometime soon,” the San Jose Mercury News reported. “The area’s sizzling job market and robust economy have created a domino effect: income spikes for highly trained workers, more people packing the area’s roads, red-hot demand for housing.”

“What’s more, the technology boom has unleashed a hiring spree that has intensified the desire for homes anywhere near the job hubs of Santa Clara County, the East Bay and San Francisco. The South Bay job market has hit an all-time high after a 5,800-position surge in May, fueling an overall gain of 3,400 jobs for the Bay Area, according to a state labor report released Friday. The region’s soaring housing prices are a key factor driving dissatisfied residents toward the exit door. Several people who have departed, or soon will leave, say they potentially could have hundreds of thousands of dollars left over even after buying a house in their new locations.”

Meanwhile, the sharp housing shortage in Southern California has created similar stresses. “A database of housing affordability statistics created by The Associated Press shows Southern California’s two main metropolitan regions — Los Angeles/Orange counties and the Inland Empire — consistently rank among the U.S. markets that most stretch the household budgets of both homeowners and renters,” as the San Gabriel Valley Tribune noted. “Among the 40 largest U.S. metro areas, census figures show L.A.-O.C. had the lowest homeownership rate, the most financially stressed owners and the highest percentage of middle-aged households that were renters.”

Mainstream and trendy

Politically, California has not weathered as much of a populist storm as other parts of the country — and the world — with as powerful elites. Despite the beginnings of a modest exodus, private and public sector elites have been able to exercise a relatively strong influence over the tradeoffs many middle class residents have proven willing to make on quality of life issues. 

Notable Californians have even led a push to internationalize the state’s changing conception of which foods are central to a thriving middle class. Spearheading a public relations campaign against meat, former governor Arnold Schwarzenegger “is teaming up with WildAid to produce public service ads targeted at Chinese consumers,” Southern California Public Radio reported. “The group has partnered with the Chinese Nutrition Society, a nonprofit professional organization in China. Schwarzenegger is joined in the video by filmmaker James Cameron, of Titanic fame, who makes the link between meat-eating habits and climate change.”

Jeremy Haft, author of Unmade in China: The Hidden Truth about China’s Economic Miracle, told SCPR that “[a]ll indicators point to the continued steep growth in China’s demand for meat.” According to Haft, “eating meat is now viewed as an important part of a middle class diet,” the station added. “In essence, he says, having pork on the table is a sign of social status.” In California, meanwhile, diets low on meat or abstaining from meat entirely have grown in popularity, even as they have been increasingly lampooned. 

A Democratic redoubt

Broadly, populist discontent within the Golden State has not translated into the sort of turbulence that has roiled election season across the country. While Donald Trump has been able to make inroads into middle-class constituencies that have traditionally won Democrats, for instance, his prospects in California have remained dim. “Obviously he’s looking at fantasy land if he thinks he can put places like California and Michigan into play,” Democratic pollster Mark Mellman told The Washington Post.

That’s what happened in 2006 when Arnold Schwarzenegger worked with legislative leaders to shape Assembly Bill 32, the landmark law forcing a shift to cleaner, costlier sources of energy. And it’s what happened in the last month with Jerry Brown and the bill increasing the state’s minimum wage steadily until it reaches $15 an hour in 2022, which Brown signed Monday. A provision that allows future governors to suspend an increase in bad economic times was included at Brown’s insistence:

Brown had warned a $15-an-hour wage must be done carefully, noting costs to employers and the state. But with a measure heading for the November ballot, he negotiated with unions and other advocates to include provisions that allow governors to postpone an increase if the economy falters.

 

Those provisions would allow governors to suspend annual wage increases short of $15 if officials project that the state’s budget reserves will be in the red, or if employment and sales tax revenue decline. Governors would need to decide each September whether to suspend increases coming the following January.

That’s from the Sacramento Bee.

AB32’s escape hatch was never used

But will this escape hatch ever be used? The history of AB32 suggests not. Schwarzenegger was adamant that there must be a way that the law could be suspended, as the Los Angeles Times reported in an Aug. 31, 2006, story about negotiations over the law:

For his part, Schwarzenegger won the ability for the governor to suspend the rules for as much as a year in cases of “extraordinary circumstances, catastrophic events or threat of significant economic harm.”

But in the years that followed, California had among its roughest economic stretches since the Depression. Unemployment, which averaged 4.9 percent in 2006, went to 5.3 percent in 2007, 7.2 percent in 2008, 11.3 percent in 2009 and 12.4 percent in 2010. Fewer Californians had jobs in 2010 than in 2000 — even as the state’s population went from 33.9 million to 37.3 million.

Business interests who said higher energy costs put California at a competitive disadvantage implored Schwarzenegger to suspend AB32. They eventually backed Proposition 23, a 2010 ballot measure that sought but failed to suspend the landmark law on greenhouse gases.

Not only did Schwarzenegger reject the idea that AB32 had an economic downside, he promoted the idea that it would create hundreds of thousands of jobs and touted the claim that California would inspire the world to adopt similar laws. Republican critics said he was more concerned about his legacy than Californians struggling in the recession.

If Brown invokes the clause that suspends the law steadily increasing the minimum wage in coming years, that too would muddy his legacy as the governor of the first U.S. state to have a $15 minimum wage law. If the person who succeeds him as governor in January 2019 suspends the law, that also would muddy California’s image as a bold, progressive state going places no state has gone before.