Policy Briefing - January 5, 2007

Flood Control

New Legislation sponsored by Lois Wolk, Mike Machado, Dave Jones and Darrel Steinberg would change building standards for new developments, requiring up to 200 year flood protection for communities. Assemblymember Wolk’s bill would tie special requirements to cities who wish to receive part of the $3 billion flood control bond money. Other changes proposed would make cities partially liable for flood events – currently, the state is.

AB 5 – Wolk

“This bill would require an unspecified entity to create the Central Valley Flood Protection Plan to address flood protection in the central valley. The bill would authorize local agencies to create a local plan of flood protection meeting the requirements of the bill, and would require priority for state funds to be given to local agencies that have adopted a local plan of flood protection. The bill would create the Local Flood Protection Plan Assistance Fund to, upon appropriation by the Legislature, assist local agencies by awarding grants to those agencies to conduct necessary activities in the development of a local flood protection plan. The bill would prohibit local governments in the central valley from approving new developments within high-risk flood prone areas, unless unspecified conditions are met to ensure appropriate levels of flood protection.”

Workers Comp Insurance Rate Reductions

The Department of Insurance is recommending another 9 percent reduction in workers comp insurance rates, taking effect January 1. As a result of legislation in 2003 and 2004, the total reduction in premiums now stands at more than 59 percent.

Health Care

The Governor and legislators on both sides of the aisle are talking about how to get health care coverage for more Californians – specifically children. Many of the arguments in favor of such changes are fiscal ones – the cost of health care across the board has increased in no small part because of the number of people using emergency rooms in place of a primary care physician. In addition to increasing health care premiums, taxpayers end up footing the bill.

Governor:

Require employers to take advantage of federal tax breaks (Section 125 – employees can pay premiums with pre-tax dollars) Encourage employees to take better care of themselves

AB 8 – Nunez

Simple intent language – “Therefore, it is the intent of the Legislature that affordable, quality health care coverage be made available to all Californians.” – but light on substance as of now.

Land Use

Locally, Solano County will go through the General Plan process, without the silly restrictions proposed under Measure J. The goal is for the plan to reach voters in the November 2008 election.

Redistricting

The Governor is proposing sweeping changes in the way legislative and Congressional districts are drawn. It’s not an exciting issue, but it is arguably the most important issue California will face in the coming years. The current method – having the legislature draw their own districts is worse than the fox watching the henhouse. It has created a very polarized legislature – the most liberal of liberals and most conservative of conservatives – leading to bad governance. In this last election, not one of the 80 Assembly Districts or 20 Senate Districts up for grabs changed party hands. And only one of California’s 54 Congressional Districts changed hands.

This lack of competition creates a legislative monopoly where the only winners are the legislators themselves.

The Governor’s proposal would create an independent body to draw competitive districts.

Public Employee Pensions

The Governor created a “Public Employee Post-employment Benefits Commission.” To be comprised of 6 appointees by the Governor, 3 by the Assembly Speaker and 3 by the President Pro Tem of the Senate, the commission is charged with reporting back in one year with proposals to address the problem of higher costs for providing retiree pensions and health care.

Unfunded liabilities through CalPERS and Cal STRS = $49 billion

“The annual cost to California's state budget for pensions rose from $160 million in 2001 to $2.6 billion in 2006, reducing funds available for other purposes. A large portion of that $2.6 billion payment went toward paying off previous pension commitments that had gone unfunded.”

Minimum Wage Increase

AB 1835 (Lieber; D-Mountain View) Government-Mandated Minimum Wage Increase

As of January 1, the California minimum wage is $7.50 per hour.

As of January 1, 2008, the new minimum wage will be $8.00 per hour

The Emissions Caps Bills

AB 32 (Núñez; D-Los Angeles/Pavley; D-Agoura Hills) Halts Economic Growth — Increases costs for California businesses, makes them less competitive and discourages economic growth with little or no proven environmental benefit by adopting an arbitrary cap on carbon emissions. Chapter 488.

SB 1368 (Perata; D-Oakland) Increases the Cost of Electricity — Limits the available power sources to meet California’s energy demands while substantially increasing the price of electricity to consumers and businesses by establishing an unattainable greenhouse gas emission performance standard. Chapter 598.

AB 2618

Small Claims Courts - This new law is essentially clean-up legislation which increases the jurisdictional limit in small claims court to $7,500 on certain issues which were left unchanged when general limits increased from $5,000 to $7,500 last year. This law conforms the jurisdictional limits of a number of actions in small claims court.