California High-Speed Rail Authority CEO Brian Kelly worked over the summer to reassure anxious state lawmakers that a new management team could revive the troubled bullet-train project. He also proceeded to push out key officials overseeing contract and property decisions.

Yet the changes haven’t stopped a new wave of bad news in September for the project, which was once envisioned as a statewide network of high-speed rail but has been downsized to a 119-mile link between Bakersfield and Merced expected to cost in the range of $20 billion. 

A Los Angeles Times report outlined the huge problems still facing the rail authority’s land-acquisition efforts after seven years in the Central Valley. Not only does the agency need to buy about 300 more properties to be able to build the train, the Times reported that consultants believe at least an additional 488 parcels will need to be bought to deal with complex issues related to easements on sites with infrastructure owned by Pacific Gas & Electric and other utilities as well as AT&T, railroads and irrigation districts.

This adds new doubts about the rail authority’s projection it could finish construction of the Central Valley route by 2026.

One project manager, after warning of severe delays, told the Times that “I am going to ride this train, but I am afraid it is going to be my ashes in an urn. I told my kids to take my ashes on the bullet train.”

The Times also noted that the rail authority had been forced to buy larger lots than it needed to accommodate the rail route to such an extent that it now owns hundreds of properties – including “toxic waste sites, vacant lots and rental homes” – that it must manage. The list includes at least 466 acres of cultivated agriculture fields.

San Jose area critics push for costly elevated lanes

There was also bad news for the project from Northern California. At a rail authority board meeting held in San Jose, trustees voted unanimously to approve a route connecting the San Joaquin Valley with San Jose after the Central Valley initial segment is built. Yet testimony at the hearing showed the intensity of opposition to building any new rail route that didn’t minimize disruptions to the neighborhoods and communities it traveled through.

According to a Fresno Bee report, speakers complained to the rail board that early promises that elevated rail lines would be built had given way to plans for regular, surface rail lines. But since elevated rail costs two to four times more per mile, choosing it would make project costs explode – and Gov. Gavin Newsom has already said there’s not nearly enough funding likely to be available to complete the $78 billion statewide project advocated by his predecessor, Jerry Brown.

That argument didn’t move San Jose resident Danny Garza. According to the Bee, he said that not building elevated tracks in his neighborhood was “a bait-and-switch” given past guarantees of minimal impacts. “Please don’t use our neighborhood to balance your budget,” he told the board.

San Jose Mayor Sam Liccardo told trustees that his city could drop its support for the project if the rail authority didn’t use “best practices”  to “provide our community with the safety it deserves.”

The section of the proposed route in the San Joaquin Valley also drew complaints, according to the Bee. Rick Ortega, general manager of the Grassland Water and Resource Conservation Districts, said the staff report “contains no design detail on how the authority intends to mitigate impacts through the ecological area.” The Grassland Environmental Area is a 160,000-acre site mostly in Merced County that the U.S. Fish & Wildlife Service has repeatedly said must be preserved because of the crucial ecological importance of its wetlands.

Ortega also said elevated tracks were necessary – or that the rail authority should change its planned route.

Board members said the staff would consider the complaints, but offered no promises about the nature of possible mitigation efforts, according to the Bee.

Three months after canceling a $929 million federal grant to the troubled California bullet train project, the Trump administration has unexpectedly given its go-ahead to the state to approve environmental documents that are needed to complete planning for the long-delayed project.

In May, after the funding was canceled, the relationship between the federal and state government seemed so bumpy that bullet train officials worried that Washington would try to sabotage the project by delaying approval of necessary paperwork. Instead, on Monday, the Federal Railroad Administration fulfilled a long-standing state request and moved environmental reviews of pending plans for the project’s full Los Angeles to San Francisco route from the federal to the state level. According to the Los Angeles Times, previously the agency had only approved segments from Bakersfield to Fresno and from Fresno to Merced.

“This action is an important milestone for the high-speed program,” said Brian Kelly, chief executive of the California High-Speed Rail Authority. “We’ve lost valuable time waiting with the FRA’s disengagement, so I am very thankful for this action and I am hopeful this step is the beginning of a more collaborative and cooperative relationship prospectively.”

But while state officials were relieved by the federal decision, funding obstacles still remain. The state only has about one-quarter of the $80 billion-plus it would take to link Los Angeles and San Francisco – and that’s for a plan that doesn’t use high-speed rail for segments from San Francisco to San Jose or from Los Angeles to its northern exurbs. This downscaling has led some longtime backers of the project, such as former state Sen. Quentin Kopp, to renounce it as a betrayal of promises made to state voters in 2008 when they approved $9.95 billion in bond seed money for what was then envisioned as a $43 billion statewide train system.

The lack of funding was behind Gov. Gavin Newsom’s February decision to pull back from predecessor Jerry Brown’s commitment to building a statewide system. Instead, Newsom said all $20.5 billion in available funding should be used to build a high-speed route between Bakersfield and Merced in the Central Valley. 

Speaker wants changes to Newsom’s focus on Central Valley

But it now appears that even that scaled-back plan will face opposition from some key Democrats in the Legislature. On Thuesday, the Times reported that Democratic Assembly members from the Los Angeles and Bay areas – including Speaker Anthony Rendon – have for weeks discussed shifting the state’s rail focus. They hope to take up to $6 billion that Newsom wants to use in the Central Valley to improve rail service from Pasadena to Anaheim and commuter rail in and out of San Francisco. They believe a shorter, scaled-down version of the Central Valley route is viable with funding in the $14 billion range.

“I like the concept,” Rendon told the Times. “Any project that doesn’t have a significant amount of service to the largest areas in the state doesn’t make much sense.”

The prospect of taking state bullet train money for the Los Angeles area was first raised publicly in April by several members of board of the Los Angeles County Metropolitan Transportation Authority.

Any reduction in the scope of the Central Valley route proposed by Newsom is likely to face bitter opposition from the area’s politicians, who see the bullet train as crucial to improving the economy in one of the state’s poorest regions. They were enthusiastic about Newsom’s comments during last year’s campaign that a bullet train would be ideal to connect Silicon Valley workers with relatively inexpensive housing in the Central Valley.

New Assembly GOP Leader Brian Dahle.

Chad Mayes of Yucca Valley is out as Assembly Republican leader, replaced last week by Assemblyman Brian Dahle of Bieber. But the fallout may continue over the decision of Mayes and six other GOP Assembly members to provide Gov. Jerry Brown and Assembly Speaker Anthony Rendon, D-Lakewood, with the votes necessary to save the state’s cap-and-trade program on July 17.

Mayes touted the GOP support as helpful in rebranding the party with young voters worried about climate change and emphasized the concession he won from Brown and Rendon, which could make it possible for the Legislature to effectively scrap the state’s troubled high-speed rail project in 2024. But the votes infuriated many Republicans for betraying the party’s core anti-tax, anti-regulation beliefs and for allowing a handful of Assembly Democrats in swing seats to avoid having to vote to extend cap and trade until 2030.

Under the program, businesses buy permits for emission rights. Because of fears that courts would find the permit fees were tantamount to taxes, Brown wanted two-thirds votes in the Legislature to ensure cap and trade’s extension would be on solid legal ground under Proposition 13. Thanks to the votes of Assembly Republicans Mayes, Catharine Baker of San Ramon, Rocky Chavez of Oceanside, Jordan Cunningham of San Luis Obispo, Heath Flora of Ripon, Devin Mathis of Visalia and Marc Steinorth of Rancho Cucamonga, Brown got 55 votes for the extension, one more than he needed.

Harmeet K. Dhillon, a San Francisco lawyer who is one of the state’s members on the Republican National Committee, told the Los Angeles Times that Mayes shouldn’t be the only one held accountable for preserving cap and trade.

“Now, given the fact that six of these [Republican lawmakers] did vote for a massive tax increase, Republicans are going to be very vigilant about these issues,” she said. The state GOP voted earlier this month to ask Mayes to step down at Dhillon’s behest.

Another RNC state delegate – former state GOP chair Shawn Steel – also blasted Republicans who sided with Brown on cap-and-trade.

Mayes, Baker, Chavez, Cunningham, Flora, Mathis, Steinorth and state Sen. Tom Berryhill, R-Modesto – the only GOP Senate vote to extend cap and trade – are likely to face heat from conservatives in their re-election bids or in seeking other elective posts. Conversely, they could also attract support from moderate and independent voters, given the popularity of environmental causes among state voters.

New GOP leader wants no more cap-and-trade recriminations

But new Assembly GOP leader Dahle – a 51-year-old seed business owner and farmer and former Lassen County supervisor – wants to the put the cap-and-trade flap behind.

“There are 24 other members of this caucus and they all have different views,” he told reporters Thursday after Mayes stepped down. “There are people in our caucus who voted their conscience for their district, and I support those who did that. In my case it didn’t work in my district, so I was opposed to that.”

Mayes, 40, was first elected to the Assembly in 2014 and began as GOP leader in January 2016. While now under fire from conservatives, he could someday be remembered as the man who killed the bullet train – the state project that’s as unpopular among California Republicans as cap and trade.

As part of the cap-and-trade deal, Mayes got Democrats to agree to put a constitutional amendment he wrote before state voters in June 2018. Under the unusual measure, if voters gave the go-ahead, there would be a vote in 2024 by the Legislature on whether to continue to allow cap-and-trade revenue to fund the $68 billion project – with two-thirds support necessary to continue funding.

Brown and bullet-train backers are counting on cap-and-trade fees to increase in coming years and to keep the project viable. So far, the California High-Speed Rail Agency has been unable to attract outside investors to help pay for a statewide system, and federal funding dried up after Republicans took control of the House in 2010.

Will news about the California bullet train’s cost overruns and

These are the key questions prompted by a concession that some Republican state lawmakers gained in return for helping Gov. Jerry Brown keep alive the state’s greenhouse-gas emissions cap-and-trade program until 2030. The provision could eventually end the state’s high-speed rail project, leaving a massive white elephant in the agricultural fields of the Central Valley. Or the concession could end up yielding a second vote validating a project first approved by state voters in 2008.

The concession – secured by Assembly Republican leader Chad Mayes of Yucca Valley – places a constitutional amendment drafted by Mayes before state voters in June 2018. If passed, it would lead to a one-time up-and-down vote in the Legislature in 2024 on whether to continue allowing the use of cap-and-trade revenue to fund the project. But the threshold wouldn’t be a simple majority. A two-thirds vote would be required to allow continued use of the funds – presumably giving GOP lawmakers a prime chance to pull the plug.

So far, the funding has been substantial in one sense but marginal in the big picture of trying to pay for a $64 billion project. After the fifth year of cap-and-trade distributions, about $1 billion has gone to the California High-Speed Rail Authority, with another $500 million expected this fiscal year. But it is considered crucial because it is the only new funding source Brown has found for the project, which has been unable to gain outside investors because of rules banning public subsidies for bullet-train operations.

Rail authority chair Dan Richard says he isn’t worried about a public veto in seven years: “By 2024, we’re going to be deep into construction. We’re going to be on the verge of opening the first service. We’ll be seeing Google and others making massive investments in areas around high-speed-rail stations. The case will be there for the importance of continued funding,” he told the San Francisco Chronicle.

The authority’s 2016 business plan said the state expected to have $21 billion in hand from state bonds, federal grants and cap-and-trade funds to build a segment from San Jose heading south.

Feds expect cost overrun of 48% or more on first segment

But Mayes and other GOP lawmakers are betting that from here until 2024, the bad news about the project will never stop.

Lawyers for the Central Valley farmers and the government and civic officials they represent in lawsuits against the state government like to point out that – apart from court victories allowing the project to continue to spend public monies – there has been no substantial encouraging news about the project in years.

In January, the Los Angeles Times reported that it had obtained a confidential Federal Railroad Administration risk analysis that predicted a cost overrun of 48 percent or more on the initial 118-mile segment in the Central Valley. What the Brown administration has been saying would cost $6.4 billion is instead likely to be $9.5 billion to $10 billion, federal officials warned.

The idea that voters will be pleased with what they see in 2024 could be difficult to square with what rail authority officials told a visiting congressional delegation in August 2016: that construction is expected to stop in the middle of an almond orchard 30 miles northwest of Bakersfield when the money runs out.

This is contrary to promises made to voters in 2008 to get them to provide $9.95 billion in bond seed money for the project. They were guaranteed no construction would begin until the state could guarantee its initial segment would have financial viability without any more train tracks being laid.

Four months after then-California High Speed Rail Authority Chief Executive Jeff Morales told authority board members he was moving on and two months after Morales made his decision public, the agency overseeing the state’s $64 billion bullet train project hasn’t settled on his successor.

In 2012, four months after Chief Executive Roelof van Ark abruptly left following two stormy years, Morales already had the job. This time around, the same speedy selection process seemed likely. The RT&S transportation industry website reported after Morales’ decision was announced in April that the board was likely to have his replacement approved before Morales’ final day of June 2.

But the CHSRA board met in closed session on the succession issue on May 10 and June 14 without reaching a decision. The rail agency’s number two job – deputy chief executive – has also been vacant since Dennis Trujillo left in December.

The empty slots atop the CHSRA power structure come at a critical time.

According to a federal report prepared under the Obama administration, the state’s high-speed rail project is already seven years behind schedule and on its way to having a 50 percent cost overrun on the $6.4 billion, 118-mile first segment now being built in the Central Valley.

The project also continues to face legal challenges which argue that it violates the terms of Proposition 1A, the 2008 ballot measure providing $9.95 billion in bond seed money for the project. The rail authority has won most recent judgments. But opponents remain confident they eventually will prevail because of a 2014 state appellate court ruling that held the project still was subject to a financial “straitjacket” that would require it to show short- and long-term financial viability without public subsidies before the project could significantly proceed. The project’s struggle to attract private investment shows that at least in the private sector, there are many doubts that the bullet train could operate successfully without such subsidies.

Obama administration rules could haunt project

But the election of Donald Trump as president in November also has led to a huge new headache for CHSRA. All 14 California House Republicans have urged Transportation Secretary Elaine Chao to reverse Obama administration actions that loosened federal rules to give California access to about $3 billion in federal dollars for the project.

Rep. Jeff Dunman, R-Turlock, and his colleagues have focused their harshest fire on a 2012 decision that gave the state the go-ahead to spend about $200 million in federal funds but not have matching state spending. The decision went against longstanding Washington precedent.

Withdrawing all federal funding could also be justified by citing the Obama administration’s 2009 regulations for projects that were to be paid for or partly paid for with money from the economic stimulus bill passed a month after President Obama took office. The Federal Railroad Administration rules said projects that didn’t demonstrate “reasonableness of financial estimates” and “quality of planning process” would get no funding.

That’s the same agency which recently concluded the project was seven years behind schedule and on course for a 50 percent cost overrun on its initial segment

The California High Speed Rail Authority board’s next meeting is July 18 in Sacramento.

The chief executive of the California High-Speed Rail Authority – former Caltrans director Jeff Morales – is resigning in June from the agency after five years overseeing the state’s $64 billion bullet train project.

The announcement Friday prompted Gov. Jerry Brown and others to praise Morales for leading the authority during a contentious period in which it managed to break ground on the bullet train’s system initial 118-mile segment but struggled to find funding that would actually allow for construction of a statewide network. That’s what voters were promised in 2008 when they approved Proposition 1A, which provided $9.95 billion in bond seed money to a project then estimated to cost $43 billion.

But the timing of Morales’ departure could lead to a melancholy final two months on the job for the rail executive if House Republicans get their way. House Majority Leader Kevin McCarthy, R-Bakersfield, and the other 13 California House GOP members have launched a several-pronged front to try to get the Trump administration to prevent already-committed federal dollars from ever being spent on the project.

Their most visible effort came in February. That’s when their lobbying was seen as prompting Transportation Secretary Elaine Chow to put on hold a promise made late in the Obama administration to provide $647 million to electrify tracks in Silicon Valley leading to San Francisco – a crucial part of the governor’s plan to have a “blended” system of high-speed and regular rail.

Key Obama administration decisions could be rolled back

But California House Republicans also want to “claw back” some of the funding and procedural decisions in Washington made related to the project. This push received an unexpected boost in the final weeks of the Obama presidency when a confidential Federal Railroad Administration report was leaked to the Los Angeles Times. It predicted the first segment of the bullet train that the rail authority had long said would cost $6.4 billion could instead cost $9.5 billion to $10 billion.

Based on this evidence of dubious management and on the rail authority’s inability to attract investors – raising questions about financing – the U.S. Transportation Department appears to have grounds to rescind decisions made in 2009 and 2012 that enabled the project to end up getting about $3 billion in federal funds.

The 2009 decision was the original DOT move to make the California bullet-train project eligible for federal funding from the massive omnibus stimulus bill adopted soon after President Obama took office. The decision required an analysis concluding the project was properly funded and had responsible and thorough planning that substantiated expectations of success.

The 2012 decision was in the form of an agreement that allowed California to bypass the tradition of state and federal infrastructure projects being jointly funded on a dollar-for-dollar basis. Instead, California was allowed for at least three years to get an advance on federal dollars in return for guaranteeing eventual matching funds – totaling $200 million as of June 2015. The federal government has the authority to demand the state match what it has already spent before allowing another dollar to go California’s way.

Is new state law a tweak or a ‘material’ change?

A revocation of these bullet-train-friendly decisions isn’t the only possible twist that Morales faces in his final two months on the job.

Central Valley farmer John Tos, Kings County, the city of Atherton and several other Central Valley groups – the same coalition that previously filed, with some success, legal challenges against the state project – may have their first hearing this week on a new lawsuit in Sacramento Superior Court. (A previous hearing scheduled for last week was delayed, so another delay is possible.)

The lawsuit challenges the legality of the December vote of the California High-Speed Rail Authority to authorize the selling of $3.2 billion in state bonds for the project under the authority granted it by Assembly Bill 1889, a measure by Assemblyman Kevin Mullin, D-South San Francisco, that was enacted last year. It loosened bond-spending restrictions in Proposition 1A, the 2008 measure funding the rail project.

Mullin and other Democrats depicted the change as a routine tweak in the law. Attorneys for Tos, Kings County and Atherton will seek an injunction against any sale of the bonds on the grounds that there is no provision in Proposition 1A allowing for it to be subsequently “materially” altered by the California Legislature.

Bullet train report prompts renewed criticism, investigations

Good morning. The bullet train faces renewed scrutiny after a report surfaced suggesting massive cost overruns. 

According to the Los Angeles Times, a “confidential estimate by federal regulators that the cost of California’s bullet train project could jump significantly has prompted critics of the $64-billion Los Angeles-to-San Francisco rail effort to call for new investigations and proponents to disclaim reports that project costs are growing.”

“State officials have accused The Times of mischaracterizing its findings. In a letter to members of the Legislature, the California High-Speed Rail Authority accused The Times of incorrectly using internal deliberations to suggest cost overruns and delays that are not borne out by facts.”

“But critics of the project said the federal analysis validates their concerns that the state will be saddled with multibillion-dollar unbudgeted costs for the foreseeable future.”

CalWatchdog has more. 

In other news:

• Trump: “California’s expectations for Donald Trump’s presidency are in the cellar, with little more than a third of voters believing it will be a success, a new Hoover Institution Golden State Poll shows. But a plurality of voters holds more positive than negative views about some of Trump’s more controversial positions, including his call to restrict immigrants from certain countries, end sanctuary cities and to deport undocumented immigrants.” Politico has more. 

• ACA repeal: PolitiFact CA checks the accuracy of Senate President Pro Tempore Kevin de Leon’s claim that an ACA repeal could cost the state 200,000 jobs. Here’s a hint: You can’t measure the impact without knowing what the replacement is. In fact, CalWatchdog wrote something similar recently.

• Musical chairs: “As top California Democrats plot their future career moves, a critical piece of information is missing: Will Sen. Dianne Feinstein seek re-election? Speculation about the 83-year-old senator’s plans took on new urgency this year, as ambitious statewide politicians decide whether to run for governor with Gov. Jerry Brown termed out. News that Feinstein was fitted with a pacemaker last week reignited the parlor game, with California political circles discussing anew what the procedure might mean for the veteran lawmaker as she evaluates her options.” The Los Angeles Times has more. 

• 2018: “Peter Thiel, the Silicon Valley billionaire and outspoken Donald Trump supporter, is considering a 2018 bid for California governor, according to three Republicans familiar with his thinking.” Politico has more. 

Legislature:

• Assembly in at 1 p.m., Senate in a 2 p.m. 

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @TomSchatzCAGW

In the latest bombshell, a confidential federal report points to cost overruns of at least 50 percent on the easiest, mountain-less leg of this complex infrastructure undertaking. The Federal Railroad Administration analysis, obtained by the Los Angeles Times last week, detailed a variety of other problems within the state’s rail administration, as well.

For instance, the project already is at least seven years behind schedule in building the first segment, which connects Merced in the northern part of the San Joaquin Valley to Shafter, a small town just north of Bakersfield in the southern part of the valley. That section was supposed to be completed this year, but isn’t slated for completion until 2024.

“The federal document outlines far-reaching management problems: significant delays in environmental planning, lags in processing invoices for federal grants and continuing failures to acquire needed property,” according to the Times. Rail officials said the numbers are just projections, but the newspaper described the assessment as “a troubling critique by an agency that has been a stalwart supporter and longtime financier of the nation’s largest infrastructure project.”

There’s a two-fold problem here. The project faces increasing cost overruns – and its supporters continue to rely on funding sources that are far from secure. “In its 2012 draft business plan, the Authority identifies the federal government as by far the largest potential funding source for the program, yet the plan provides few details indicating how the authority expects to secure this money,” explained the California State Auditor in a 2012 follow-up report.

That was a problem during the rail-friendly Obama administration, but is uncertain during a Donald Trump administration. Trump has made favorable comments about bullet trains in general, but congressional Republicans generally have been opposed to California’s high-speed-rail project. This recent report has caused some of them to step up their criticism – and promise oversight hearings and audits – of what they widely view as a boondoggle.

Rail backers seem to have based their plan on the expectation of federal funding that might never be forthcoming. But that’s not the only area where their promises were unrealistic. Former judge and state Sen. Quentin Kopp, the one-time head of the California High-Speed Rail Authority and co-author of the Proposition 1A initiative that brought the project to life, came out against it. “I want to kill this iteration of it because it betrays the representations to the voters in November 2008,” he told the Times’ Patt Morrison, in a 2013 interview.

A series of lawsuits focused on the disparity between the rail authority’s latest iteration of the project and the promises made to voters in 1A in an attempt to do what Kopp suggested and derail the project. To help make a $9.95 billion project palatable to voters, the rail system’s backers offered guarantees within the wording of the initiative. The rail system would, for instance, go from L.A. to San Francisco in a nonstop trip taking 2 hours and 40 minutes. There would be no government subsidies for the operation of the system. The measure promised private investment, low fares and optimistic ridership projections. Yet the current plan is unlikely to live up to its core promises.

A Sacramento County Superior Court judge in 2013 blocked the sale of rail bonds because of those disparities, but the decision was later overruled by an appeals court. Last month, rail officials announced the sale of construction bonds to finance the project, while project opponents filed another lawsuit to stop it. That suit argued that a new rail-related law passed last year to allow bond dollars to be spent on track-electrification also violated the terms of Prop. 1A and amounts to unconstitutional initiative revision that requires another vote of the people. There are other legal fights, also.

Rail authorities have made one substantive change after another. In its draft business plan released last year, the rail agency announced the train would first be routed to the San Jose area before heading over the formidable Tehachapi Mountains and into the Los Angeles basin. “The High Speed Rail Authority is desperate and wants to lay as much track as possible so that it becomes more difficult to stop the project,” said Board of Equalization Vice President George Runner, at the time.

Meanwhile, the agency’s reaction to the Federal Railroad Administration document suggests it is going to keep forging ahead, regardless of costs, in the hopes that a funding source will materialize to complete a project estimated at $64 billion before the latest projected cost overruns. Supporters are counting on revenues from the state’s cap-and-trade auctions and state funding to help keep the project moving ahead, but it remains far shy of full funding.

But as the Times’ Ralph Vartabedian explained, “(The state) Legislature already has balked at giving the rail authority the ability to borrow against future state revenues, saying it would have to make do with existing allocations. And that was before Gov. Jerry Brown warned … that California’s projected 2017-18 budget shows a $1.6-billion deficit.”

It’s already clear based on the rail authority’s own promises that the final project will not resemble the one promised to voters, especially given that the latest plan features a blended route by which bullet trains share tracks with commuter trains in the Los Angeles and San Francisco regions. The courts thus far have approved this disparity between promises and reality, but the increasingly obvious financial disparities might be the hardest ones for rail backers to overcome.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

Issa leading bipartisan push for high-skilled visa overhaul

Good morning. Happy Martin Luther King Jr. Day! It’s a holiday, so we’ll keep it short.

With contending pieces of legislation now up for consideration in Congress, California has returned to the national spotlight on one of the most contentious immigration issues — special visas granted by the federal government to attract foreign talent.

Long critiqued by economic nationalists, including some Democrats, the H-1B visa program has been accused of undercutting qualified candidates in key industries who are U.S. citizens.

Leading a bipartisan effort to overhaul the program: Rep. Darrell Issa, R-Vista.

CalWatchdog has more. 

In other news:

• “California’s bullet train could cost taxpayers 50 percent more than estimated — as much as $3.6 billion more. And that’s just for the first 118 miles through the Central Valley, which was supposed to be the easiest part of the route between Los Angeles and San Francisco.” The Los Angeles Times has more. 

• “Education spending rises under Gov. Jerry Brown’s proposed state budget, but some California schools are bracing for cuts,” reports the Los Angeles Times. 

• California lawmakers are preparing to wage war with the Trump administration, but what exactly is at stake? The San Francisco Chronicle explains. 

• “California union dues case dies, but another rises up,” reports The Sacramento Bee. 

Legislature:

• Back tomorrow.

Gov. Brown:

• No public events announced. 

Tips: matt@cawatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @MarinKat

SoCal school district using loophole to pay board members for meetings they didn’t attend

Trustees of the El Monte Union High School District have been drawing monthly stipends even when they haven’t attended board meetings, possibly violating state and internal policies.

CalWatchdog found at least nine instances since 2015 where stipends were paid despite absences, although a loose interpretation of what constitutes a meeting provided a loophole.

While not a large sum of money, the lack of accountability over trustee stipends builds on a lawsuit and scathing news report earlier this year that the district was either not tracking millions in bond expenditures or hiding the records.

CalWatchdog has more. 

In other news: 

• “California Treasurer John Chiang hit Wells Fargo Bank with the loss of state investments and other sanctions Wednesday, punishing the mammoth bank for ‘fleecing’ customers who had credit cards and other accounts fraudulently opened in their names. Other state and local governments should follow suit, he said.” The Sacramento Bee has more. 

• “Steve Napolitano has filed a lawsuit against his rival in the 4th District race for the Los Angeles County Board of Supervisors, U.S. Rep. Janice Hahn, for allegedly failing to return more than $324,000 in illegal political campaign contributions,” reports the Daily Breeze.

• “Gov. Jerry Brown on Wednesday rebuffed lawmakers’ efforts to subject California’s $64-billion bullet train project to increased financial scrutiny, vetoing a bill that had gained bipartisan support,” writes the Los Angeles Times. 

• “Following a trend that began in the months prior to June’s statewide primary, contributions to independent committees seeking races for the Legislature have now blossomed to more than $4.8 million,” writes the Los Angeles Times.

Legislature:

• Gone ’til December. 

Gov. Brown:

• Signing a bill that will automatically enroll employees into private retirement accounts. In Sacramento, around 9:30 a.m. For more on this legislation, see our story from March. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New followers: @TinaSwarens