banner
Business

California Editorial Roundup

Posted April 12

April 7

The Press-Enterprise on potential losses for Silicon Valley:

A Silicon Valley slowdown is coming, and Sacramento isn't ready. Although some insiders even let the dreaded "B'' word — bubble — pass their lips, it doesn't take a crash of the app economy for California's fragile fortunes to be shaken to their foundations.

The warning signs suggest that the Golden State may already have hit peak productivity from the digital tech it relies on to fill coffers, fuel markets, drive investment and justify largesse and inefficiency in policymaking. It's time for a wake-up call.

Venture capital dropped 20 percent for startups in 2016, even though investment funds have more than $800 billion in uninvested funds. Some 3,200 Silicon Valley jobs have been shed since August. Sky-high rents are sinking, but the dip, from an average of $4,400 a month to $4,200, won't relieve the region's acute housing shortage.

True, these figures could suggest a healthy and relatively smooth correction. No boom can last forever, and a gentle shift toward a new equilibrium can help ensure that big, sudden gains aren't shed just as abruptly.

But California's disproportionate reliance on the world of bits suggests that policymakers are loathing to interpret the downturn prudently. After all, they lack any comparable way to sustain the big budgets and utopian sensibility surrounding deep-blue politics.

Gov. Jerry Brown has labored year in and year out to correct for such errors in thinking and spending, well aware that the last time a tech and housing bubble hit, the state was plunged deep into the red. He has ensured that California can boast a multibillion-dollar rainy day fund.

Yet, with Proposition 55, voters, egged on by tax-and-spend politicians, doubled down on an even higher take from tech wealth. As the share of income tax collection drawn from the top 1 percent of earners has risen to around 50 percent in recent years, income tax collections this year have already fallen well short of projections.

Meanwhile, more than three-quarters of state income comes from taxes — a third from the top 1.5 percent of earners. California even risks losing tech income if IPOs dry up, since it takes a cut whenever companies go public. Sacramento has embraced a risky policy of counting the tech goose's golden eggs well before they hatch.

Negative trends in the rest of the state might worsen the pain that could be on the way. Since 2004, California has experienced net outmigration of more than 1 million residents, totaling dozens of billions in yearly income. Since 2008, about 10,000 businesses have been lost, with a $15-an-hour minimum wage poised to eat away even more.

Yet, Sacramento continues to spend 8 out of 10 dollars on entitlements, social programs and interest on debt, with more than a third of its budget reliant on federal funds.

Divisions in tech are deepening over whether Silicon Valley can innovate its way out of the state's risky mess. Some are now focusing on lobbying Washington to keep federal supports in place for the state's imbalanced ideology. Others are eyeing San Francisco's exits — and warning that even a little turbulence could turn Sacramento's utopian dreams into a California nightmare.

___

April 7

The San Diego Union-Tribune on a tax plan to improve California's roads:

The Legislature's rapid approval of gas and fee hikes last week to fund a $52 billion, 10-year program to fix roads, highways and bridges was a welcome sign that Sacramento is capable of decisive action, at least when Democrats have supermajorities of both the Assembly and Senate. California's roads and highways are in poor shape — a problem that isn't just a hassle for individual drivers but a dire drag on the state's economy. That's why the California Chamber of Commerce worked closely with Gov. Jerry Brown and Democratic legislative leaders in pushing the plan, confident in its provisions guaranteeing that the new revenue can't be diverted to other needs.

Yes, there are reasons to grouse about the deal. One of the reasons for the scope of the state's problem is the dirty trick pulled by Gov. Arnold Schwarzenegger and the Legislature in 2011 when they used a scheme to divert nearly $2 billion in gas taxes away from road maintenance, beginning that year and on an ongoing basis ever since — defying the intent of voters who passed two state ballot measures to try to block such diversions. The speed with which the legislation was rushed through is also far from ideal, given the Legislature's history of making disastrous decisions on electricity deregulation and retroactive pension increases without sweating the details.

But perhaps it was rushed through for another reason: because the measure upon further scrutiny could have been seen as an act of heresy by powerful environmentalists. It amounts to an explicit long-term commitment to conventional modes of transportation powered far more often than not by fossil-fuel-emitting cars and trucks. Just $7 billion of the $52 billion will go to mass transit projects — less than 15 percent.

It's instructive to compare Brown's proposal with Measure A, the November ballot proposition sponsored by the San Diego Association of Governments that would have added a half-cent to sales taxes countywide to pay for $18.2 billion worth of transportation and infrastructure projects. According to a Voice of San Diego analysis, about 42 percent of the funding would have been used for public transit projects — triple the amount to be set aside for highway improvements. Yet Measure A was broadly condemned by local environmentalists for having too little for transit and too much for highways. The San Diego County Democrats for Environmental Action wrote that SANDAG's transit commitment was "regrettably inadequate."

Measure A got 58 percent of the vote, but it needed two-thirds support to pass. Brown's gas-tax plan got the two-thirds support it needed — even though it would be seen as an abomination under the standard greens used to judge Measure A.

The San Diego Union-Tribune Editorial Board supports ambitious local and state efforts to reduce the carbon emissions that contribute to global warming. But environmentalists' hostility to cars sometimes carries over to an irrational animus toward roads and freeways — even though there is no way to conceive of California functioning without them. This is why Brown's artful shepherding of the gas tax to passage in our green Golden State could prove one of his finest achievements as governor.

___

April 11

The Fresno Bee on the use of cancer-causing chemicals:

Glyphosate may not be a household word, but it surely is one of the nation's most ubiquitous household products. Americans spray it on lawns and flower beds, coat parks and soccer fields with it, douse it by the ton on acres of cotton, soybeans and corn.

In California, few suburban homeowners or Central Valley farmers have failed to make its acquaintance; more than 10 million pounds of it are applied to more than 5 million acres statewide every year.

Now, glyphosate — better known as the key active ingredient in the Monsanto weed-killer Roundup — has turned up on another kind of roster. California's environmental health agency has added it to the Proposition 65 list of chemicals "known to the state to cause cancer."

The warning should be taken in context, something Proposition 65 hasn't always been good at providing. So many common products carry the labels that the warnings have questionable impact. Monsanto has furiously fought the designation, suing to block the listing of its flagship product.

But the giant company has its own credibility problems. In the 1990s, it had to pull false and misleading ads claiming that Roundup was "biodegradable" and "practically nontoxic." And the regulators at California's Office of Environmental Health Hazard Assessment are serious scientists who have warned Californians away from scores of chemicals in the absence of federal action.

So from a consumer standpoint, more information is better, and a little more caution among farmers and gardeners is overdue.

Developed in 1974, glyphosate boomed after Monsanto began genetically modifying commodity crops to resist it, so that farmers could easily use it to kill weeds without killing their crops as well.

The herbicide dramatically improved yields and simplified farming, and for many years displaced other, more toxic weed killers. But the relative safety has encouraged farmers, municipalities and homeowners to use it far too liberally, with too few safeguards.

Now overuse of Roundup has created a generation of Roundup-resistant superweeds; that, in turn, has prompted many growers to return to old, more toxic weed killers or, worse, mixtures of herbicides with unknown health risks.

Two years ago, amid concerns about links to non-Hodgkin's lymphoma, a respected scientific arm of the World Health Organization reviewed decades of research on glyphosate and determined that, on a scale of possible to definite, it "probably" is carcinogenic.

Since then, Monsanto has been beset by cancer lawsuits, at least one of which yielded evidence that the company may have paid academics to sign off on research ghostwritten by Monsanto. Internal correspondence also suggested that a now-retired employee within the U.S. Environmental Protection Agency was working on the company's behalf, trying to quash reviews of glyphosate.

If anything, the situation cries out for more independent investigation. Life, of course, is risky. But California is right to let consumers know that gardening gloves and appropriate gear around chemicals may be in order, along with maybe tackling some of those weeds the old-fashioned way — by pulling them.

___

April 11

Mercury News on how to spend tobacco tax revenue:

While Californians wait for President Trump and Republicans in Congress to decide what, if anything, to do about the future of health care in the United States, a battle is brewing in California: How the money generated by the state's $2-a-pack increase in the tobacco tax will be spent.

The extra $1.2 billion from last fall's Proposition 56 represents California's largest injection of new health care funding in years. It's desperately needed to help cover the costs of a state whose Medi-Cal system covers 14 million residents, about one-third of the state's population.

Rather than putting it all toward boosting Medi-Cal's overall budget, as Gov. Jerry Brown's budget proposes, California should spread the money where it can get the highest return on its investment. The top three priorities should be:

-Improve the abysmal reimbursement rates for doctors who treat Medi-Cal patients. California's provider rates are among the worst in the nation. It won't do the state any good to enroll Californians in the Medi-Cal system if there aren't enough doctors to accept and treat the new patients.

The tobacco tax won't provide enough for the sort of across-the-board increase the California Medical Association favors. But it is enough to boost the payments for doctors hurting from some of the worst reimbursement rates, namely dentists, for starters.

-Restore vision, dental, podiatry and other Medi-Cal benefits that were victims of 2009 budget cuts. These are essential for keeping low-income Californians healthy and capable of being productive workers.

Podiatry may seem unimportant, but foot care is one of the most overlooked aspects of diabetes management. More than 10 percent of hospital patients in the state have diabetes, and California spends an extra $1.6 billion a year on expensive, diabetes-related chronic care often related to foot complications.

-Expand anti-smoking campaigns to further reduce the number of smokers. California spends about $9 billion a year on tobacco-related medical care. Every smoker who quits because of the higher tax or anti-smoking education efforts will reduce state taxpayers' health care bill.

Gov. Jerry Brown's budget calls for using the bulk of the tobacco tax to boost the general, overall spending of the Medi-Cal program. Roughly 80 percent of Medi-Cal members are enrolled in managed care programs that make more efficient use of state dollars and have better reimbursement rates than doctors who go it alone and, in some cases, lose money for treating Medi-Cal patients. California should continue to push Medi-Cal patients toward managed care program. But the state also has an obligation to give those doctors not in managed care programs fair payment for their services.

The backers of Proposition 56 made a point of not determining how every dollar of funds generated would be spent, leaving California the flexibility to make the best use possible of the revenues.

Choices that will produce measurable improvements in health, productivity and cost control are the way to go.

___

April 7

San Francisco Chronicle on guidelines for how law enforcement should handle illegal immigration:

California's dug-in opposition to the Trump administration is headed toward one of its most defiant showdowns. It's a test of this state's humane resolve to protect immigrants living in the country without legal permission and the White House's shrill attack on a powerless community.

There are reasons for concern, but on balance a state bill, SB54, is on the right track in setting standards for a sanctuary state. California's grassroots politics have generated a welter of local protections, while Trump has denounced the idea, giving Sacramento a role to clarify the rules as a wholesale White House crackdown takes shape.

The confusion and rhetoric underline the need for statewide guidelines that better serve law enforcement and immigrants. It's a supercharged atmosphere with San Francisco a poster-child example of this hostile war, one that both President Trump and Attorney General Jeff Sessions bring up repeatedly.

Kathryn Steinle was killed allegedly by an immigrant with a felony record and history of repeated deportations yet who was released from jail in San Francisco without officials notifying federal authorities. He was later arrested for shooting Steinle on the waterfront. The purposeful miscommunication should never have happened, and the city has taken steps to make sure it won't again.

The proposed law, authored by state Senate President Pro Tem Kevin de Leon, a Los Angeles Democrat, would prevent a recurrence along with setting more general standards. It directs local law enforcement to refrain from cooperating with federal authorities in most cases but with a Steinle-linked proviso. If a judge issues a warrant, border agents would be told when a prisoner linked to a serious crime is being released, making the individual a candidate for deserved deportation.

The workings of the bill are one matter, and public perception is another. A UC Berkeley poll last week showed California residents are uneasy on the topic. Notifying the feds of the immigration status of each person who comes in contact with law enforcement was unpopular by a narrow margin. But refusing to tell border authorities when a suspect is due for release was opposed by a 53-to-47 percent edge. Cooperating with federal authorities has its place, even in immigrant-friendly California.

That's the dilemma the state bill is designed to answer. It passed the state Senate largely along party lines with Democrats in the majority. It goes next to the Assembly and eventually to Gov. Jerry Brown, who hasn't taken a stand yet. Opponents include law-enforcement leaders worried that dangerous offenders might be released, a concern that the proposed law must take seriously.

Along with balancing California's mixed views, the bill also faces the Trump team's ultra-hard-line positions in another divisive area. Construction bids for the border wall poured in last week. The White House continues to appeal its court losses on a policy barring immigration from a blacklist of foreign countries. Trump policymakers, including Sessions, insist that federal law rules the lives of roughly 11 million people living here without papers.

There's a legal dimension that's starting up. Just as the Steinle case drew attention, so has San Francisco's response in the furor over a Trump-backed crackdown on sanctuary laws. City Attorney Dennis Herrera filed suit to stop cuts that Republicans have threatened if the immigrant protections aren't dropped. State Attorney General Xavier Becerra joined the suit.

California, which has the largest share of immigrants living in the country illegally, can apply the brakes, but it needs to find a way that is fair and supportable by state residents. The pending bill contains the ingredients to do just this by protecting both law-abiding immigrants from fear of deportation and the general public from dangerous offenders.

From opposing health care and climate change policies backed by Trump, California is plotting its own course, one that answers local reality. That's the measure of responsibility and human concern that a sanctuary state law should provide.

Comments

Please with your WRAL.com account to comment on this story. You also will need a Facebook account to comment.

Oldest First
View all