PG&E Pays the Price – California Doesn’t

San Bruno ExplosionEveryone who’s read Crazifornia knows it starts in San Bruno:

Near San Francisco, there’s a California neighborhood in a California town that’s named after an 11th Century monk who was known for the clarity of his teaching.  That’s fitting, because we can learn a lot about how the once-golden state of California became a permanent state of dysfunction called Crazifornia if we look at what happened in that town, San Bruno, on September 9, 2010.

What happened in San Bruno, of course, was a massive explosion of a PG&E pipeline:

It was late afternoon, and the big Orange California sun was dropping toward Sweeney Ridge just east of the blue-collar neighborhood. Families were preparing dinner and catching up on the day’s activities when, at 6:11 p.m., a section of pipe in a 30-inch-diameter intrastate natural gas pipeline owned by Pacific Gas & Electric ruptured near the corner of Glenview Drive and Earl Avenue, at the entry to the neighborhood.

A half-million cubic feet of natural gas gushed out of the pipeline in the first minute after the rupture, and for every one of the 94 additional minutes that passed before PG&E finally was able to shut down the flow of natural gas.  Almost instantly after the first molecules of the highly explosive gas escaped the pipeline’s confines, something ignited it – quite possibly a gas stove heating up dinner in one of the nearby homes.

The resulting explosion and inferno obliterated that home and 37 others and killed eight people.  It created a crater, now filled in, that was big enough to swallow any of the houses destroyed in the explosion.  The twisted remains of the ruptured section of pipe, weighing 3,000 pounds and about as long as three elephants lined up nose-to-tail, lay smoking where the explosion hurled it, 100 feet away.

Now, almost three years later, staffers at the California Public Utilities Commission have proposed a punishment for PG&E, as reported in the LA Times:

California regulators have proposed that Pacific Gas & Electric Co. pay a record $2.25-billion penalty for its role in causing a fatal 2010 natural gas explosion in San Bruno, a San Francisco suburb.

The total includes a $300-million fine to be paid to the California treasury and $1.95 billion for safety upgrades to the company’s gas distribution system. About $1.5 billion would be paid by shareholders and the balance would be returned as a credit to PG&E for already completed distribution system repairs and safeguards.

The five appointed – not elected – board members of the Public Utilities Commission will decide on the staff proposal this Fall, about the time the explosion’s third anniversary rolls around.

Missing from the discussion is the huge penalty the State of California itself ought to pay, for its own actions are indeed the root cause of the catastrophe, as I wrote in Crazifornia:

The pipeline accident report of the National Transportation Safety Board (NTSB),[i] which regulates pipelines and investigates their explosions, found 28 contributing factors to the explosion, but two stand out.  The first is that the section of pipe that ruptured had defects so pronounced they should have been visible to the PG&E work crews and state inspectors when the pipe was installed in 1954.  The second is that the California Public Utilities Commission (PUC) decided against all logic in 1961 that its newly adopted pipeline inspection standards would not be applied to pipelines that were in place prior to that year. The pre-1961 pipelines would be grandfathered, not subject to the new standards.

If not for the PUC’s decision, the pipeline would have undergone hydrostatic pressure tests that very likely would have revealed the defect under San Bruno.  “There is no safety justification for the grandfather clause exempting pre-1970 pipelines from the requirement for post-construction hydrostatic pressure testing,” the NTSB report found.

California has let itself off the hook – just as it always lets itself off the hook for all the mistakes, missteps and crazily expensive and utterly useless regulatory crusades it routinely subjects its citizens to.
What a shame.


[i] “Pipeline Accident Report: San Bruno, CA, Natural Gas Pipeline Explosion and Fire, September 9, 2010,” National Transportation Safety Board, http://www.ntsb.gov/news/events/2011/san_bruno_ca/index.html

 

 

Small Respect for Small Business

Cagle - Fleeing California

Assemblyman Travis Allen (R-Huntington Beach) recently tried and failed to get the California Assembly to pass a resolution in support of small business. Democrats in the Assembly Committee on Jobs, Economic Development and the Economy killed the resolution on on orders from Assembly leader John Perez (D-Los Angeles) and replaced it with a new resolution.

The new resolution transformed the specific pro-small-business recommendations Allen had included in his resolution into platitudes that included no hint that state taxes, laws and regulations might actually hinder small businesses.  Undeterred, Allen offered an amendment which would have added this language:

California’s policymakers can act to relieve the uncertainty of doing business in this state by keeping taxes low, fair, stable and predictable, by reducing the regulatory and litigation costs of operating a business, by investing in public and private works that provide the backbone for economic growth, and by ensuring the availability of high-quality skilled employees.

What a good bunch of ideas! That’s why, as Katy Grimes reports at Fox & Hounds, “Democrats, led by Majority Floor Leader Toni Atkins, D-San Diego, killed Allen’s amendments in a hostile parliamentary move and vote.”

Heaven forbid that California should do anything to support small businesses – the employers of 52 percent of the state’s workforce.

 

That Filthy Privately-Hauled Trash!

Fresno trashIf you track California regulation like we do, you’ve heard of CEQA reform – that’s the California Environmental Quality Act, and it’s regularly used by NIMBY and environmental groups to slow down projects that have fully complied with the law.

These groups can make even the most ridiculous arguments, allege a CEQA violation, and the whole matter gets tossed into the over-crowded California courts, pretty much guaranteeing a delay of a year or more in the start of the project. Even though most of the cases ultimately are thrown out, legal fees, delays and (sometimes) settlements that impact the project all drive up costs for the project proponent. That makes California more expensive and less business friendly.

Here’s a case in point: FRESCA, a days-old Fresno group, just sued the city, claiming a full-blown Environmental Impact Report should be prepared for the transfer of trash pick-up services from the city to a private company. The city wants to do this because the trash franchise fees will help to close an abyss-deep budget gap. I’m guessing FRESCA is a front group for city unions, so we know what they want.

Fine. Try to protect cushy union jobs. But how does privatizing trash collection impact the environment? Is privately hauled trash dirtier than publicly hauled trash?

Of course not! The lawsuit is ridiculous on its face, but that doesn’t stop FRESCA from delaying fiscal relief for a city much in need of fiscal relief – all so union employees can pad their retirement pensions a bit more before being tossed into the real world.

And that, my friends, is why CEQA reform is necessary.

The Twelve Days of Crazifornia

“On the twelfth day of Crazifornia,
Gov. Moonbeam gave to me twelve months of craziness,
Eleven propositions
Ten UC tuition hikes,
Nine “high-speed rail links,”
Eight states’ worth of takers,
Seven-ty percent underfunded pensions,
Six billion in debt
Five fleeing comp’nies,
Four bankrupt cities,
Three falling bridges,
Two super-majorities
And a tax hike on millionaires.”

California was even crazier than this in 2012.

It looks like Guv Moonbeam re-gifted us this year. After all, we got twelve months of craziness last year, and the year before that, and the year before that, and the year ….

I am one day late posting the twelfth of the twelve days because my wife and I are in Arizona visiting our oldest daughter, who fled California because of one of its major crazy features: unaffordable housing. In California, the cost of over-regulation adds 30 percent or more to the cost of housing, which explains why all ten of the nation’s top ten cities for regulations’ burden on housing costs are in California.

Legislators are well aware of the impact their regulations are having on the housing industry, and they know how important new home sales are to the state’s economy.  As recently as 2007, new home sales – not resale homes, just new ones – generated more dollars in sales than any other industry in the state, even more sales than all the retail sales combined.

If they would dial back the regulations, it would help they state. The Democrats in Sacramento know this. So what did they do in this crazy year? They increased the energy efficiency standards for new homes, which will add at least $1,500 to the cost of even the most modest home  – and even more in the most hard-hit parts of the state.

Crazily, California already has the nation’s most demanding home energy efficiency standards. We’re doing a great job. We can rest on our laurels and still be the best in the nation. But no, recession or not, the Legislature ratcheted up what the state demands of homebuilders.

Why? To save the world from global warming of course. Will a small incremental gain in the energy efficiency of homes in a state where new homes already are extremely energy-efficient cause global temperatures to drop? No, of course not. It will do nothing but make the state less attractive.

Here’s some more California craziness from 2012:

One-third of the nanny-state laws passed in the nation were passed by California legislators, including most famously one that would make it illegal to try to turn around gender confusion issues in children.

California became the #! Judicial Hellhole in the nation, the #1 state for outrageous pay to state workers, topped by a state psychiatrists’ “earnings” of $822,000, and the #1 state for the number of people in poverty.

During the year, school districts all over the state started obligating themselves to expensive bonds to meet their outrageous pension obligations. Schools in Poway (San Diego County), for example, took on bond debt that will cost $1 billion in order to meet pension obligations of $100 million. A school district having pension obligations of $100 million? That’s almost as crazy!

Speaking of San Diego County, San Diego sued itself over a bridge that cost twice its estimated cost.

The year also saw the state’s first carbon credits auction under its first-in-the-nation state carbon cap-and-trade program. (Less crazy states aren’t considering such a program, or have delayed them because of the recession.)  Moonbeam wanted $1 billion  from the auction but only got $289 million. Do you sense the whole campaign against carbon is more about raising state revenue than saving planets?

On and on it goes. Obviously, the craziest thing that happened all year occurred in November, when voters sized up the Democrats who are so responsible for much of the state’s crazinesses and decided to award them with a legislative super-majority.

Expect things to be even crazier in 2013.

 

Three Crappy Regulatory Battles

A funny thing happened yesterday – from three different directions, three different stories reached me, all having something to do with the regulation of poop in California. CalWatchdog ran the resulting column this morning, “Crazifornia: Three Crappy Regulatory Battles.”

Here’s the column’s conclusion:

San Diego’s Regional Water Quality Control Board — which I fought unsuccessfully when it decreed that rainwater becomes toxic the moment it hits the ground — is the cause of the third poop battle … .

Because it succeeded in defining fallen rain as toxic, the board now exerts its authority beyond the prior limits of its purview, the gutter, and reaches into people’s yards. This change is reflected in proposed new regulations that would subject homeowners to six years in prison and fines of $100,000 a day if they repeatedly let dog poop sit unpicked up in their own backyards.

Similar punishments would be meted out to those who repeatedly allow their sprinklers to hit the pavement and those who wash their car in their driveway.

The board’s goal is to cut the amount of bacteria in runoff that reaches the ocean. That reminded me of a study conducted some years ago — in Morro Bay, interestingly enough. Scientists collected samples of ocean water and isolated the DNA from fecal coliform found in it to trace its source. They found it to be overwhelmingly not pet or human in origin, but the DNA of coyotes, rabbits, deer, seals, sea birds and fish.

What will California’s regulators come up with next? Diapers for dolphins?

If you want to find out about the first two poop battles, go to CalWatchdog.

It’s Time for Moneyball in Sacramento

Jerry Brown is no Billy Beane.

Coaching a bottom-dwelling state – at the bottom of the education, business-friendliness and government efficiency rankings, at the top of taxation, regulation and fleeing residents rankings – Brown is continuing to dole out big money for policies that are past their prime and failing to perform.

Beane, whose Oakland A’s are once again in the Major League playoffs, realized in 2002 he didn’t have enough money to put a team together the old fashioned way, so, as recounted in Michael Lewis’ best-seller, Moneyball, he signed undervalued players other teams overlooked. Each was smartly chosen for on-base percentage, scoring runs, or less measurable qualities like stepping up when the chips are down. Other managers thought Beane was either desperate or insane, or both, but the rag-tag team of forgotten players he assembled became winners.

Beane’s had the ability to see in baseball’s raft of statistics what other managers didn’t. Brown is surrounded by statistics on how California’s various players – agriculture, business, local government, state bureaucracies, pension funds – are performing compared to other states, but he can’t seem to read them. Instead of pursuing government policies that are the parallel of Beane’s brilliant recruiting, he’s doing the governmental counterpart of the Yankees shelling out $18.7 million (prorated down from a contracted $28 million) to get pitcher Roger Clemens back from the Houston Astros in 2007. Clemens made $1 million a start that year, and came to define “worst trade ever” to many baseball buffs by turning in a lackluster 6-6 season.

Proposition 30 is Brown’s Clemens, a high-cost, past-its-prime approach to government that he hopes will lift California out of the cellar. Like Clemens, it costs a lot, with sales and income tax increases of as much as $50 billion over the next seven years. Like Clemens, it too has a strong arm, in this case strong-arming Californians with its threat that if they don’t pay up, the teacher dies. And just like Clemens showed the Yankees, there’s no guarantee it will work as promised.

Moneyball for California

Should Prop 30 fail in November, Brown will have a chance to start playing Moneyball. Here are some ideas for the manager of the major league Sacramento Spenders.

Schools – Schools are the state’s single biggest expense, receiving 43 percent of the General Fund. Half of this largess goes to administrative overhead, because it takes a lot of administrators and $400 million a year to fulfill all the mandates, reports and busy work imposed on school districts by Sacramento. In contrast, just 20 percent of Connecticut’s education budget goes to administrative overhead. California ranks #46 in the most recent “best-educated state” rankings, while Connecticut comes in second.

Then there’s the problem that our teachers are the highest paid in the nation, despite California’s tragically poor education outcomes. The California Teachers Association, which gave almost $50,000 to Brown’s 2010 gubernatorial campaign and has paid out $6.3 million to support Prop 30, does all it can to keep salaries high and performance-based pay a nonstarter.

Moneyball in education would see the elimination of most of state-imposed mandates on public schools, so we could stop paying for thousands of high-priced school administrators. Then, Brown could support a ballot initiative requiring performance-based pay for teachers, and rail against the devious CTA advertising that would attack it. Brown would never do this, of course, but a Governor Billy Beane would.

Pensions – The real reason Brown needs Proposition 30 is to shovel money into the $250 billion to $500 billion hole of unfunded state employee pension liabilities. Brown needs to start managing this problem Moneyball-style. He will get nowhere as long as he dodges dealing with the contracts of existing employees, like he has to date. That’s where the real liability is, so he has to force the rewriting of those contracts, especially when retroactive increases were given, or unions won increases that were completely out of the norm of private sector increases. Costly add-ons, like life-time health insurance for agency directors, need to be prohibited retroactively.

This won’t be easy, but in Crazifornia, I make the case that many public employee contracts can be voided because management negotiators were city administrative employees who would benefit from rank-and-file salary and benefit increases when their own contracts were renewed. Brown should seek to have thousands of these sorts of contracts across the state declared null and void by claiming they are the fruit of criminal racketeering under the federal Racketeer Influenced and Corruption Act (RICO). Brown would never do this, of course, but a Governor Billy Beane would.

Taxes – William Voegeli of Claremont University found that California’s per-capita outlays increased 21.7 percent from the early 1990s to the mid-2000s, compared to an 18.2 percent average increase for the other 49 states. Just cutting back to average, which can hardly be categorized as heartless conservatism, would save California $10.6 billion a year, or enough to close most of the current budget gap – without new taxes. If California’s spending over those years had increased only with inflation and population growth, Voegeli writes in Failed State, “the resulting levels of per-capita government outlays … would have equaled neither Somalia’s nor Mississippi’s, but … Oregon’s, which is rarely considered a hellish paradigm of Social Darwinism.”

Brown would never attack spending in this way, nor would he do many other smart Moneyball approaches to fixing our lumbering disaster of a state, which is why his governorship will ultimately fail.

 

Crazifornia in CalWatchdog: Crazifornia Exodus

CalWatchdog just posted my latest column, Crazifornia Exodus: People Leaving Dense Cities, Regulations. Go ahead and replace the comma in the headline with “and” – because they’re leaving high-density cities and even more dense regulations.

The column, drawn from a new demographic analysis by the Manhattan Institute, shows how all three of the causes identified for the exodus are self-inflicted wounds.

We all get that jobs and job-seekers fleeing California is a wound inflicted on California by its Progressive leadership and policies, as is the second cause, the deteriorating fiscal condition of the state and its municipalities. But is the third reason, increasing density, also a self-inflicted wound?  You bet. Here’s an excerpt:

In The Great California Exodus: A Closer Look, the Manhattan Institute has chronicled California’s fall from “the state with more jobs, more space, more sunlight, and more opportunity” to, well, the state with more sunlight. …

As California’s expensive coastal counties started getting uncomfortably crowded in the 1990s, many moved one or two counties to the east to get more room for less. Of course, those are the very areas that were the hardest hit by the housing and job market collapse. So now they are the California counties losing the most people to other states.

What is progressive California doing about this? It should come as a surprise to no one that it’s doing exactly what it shouldn’t be doing: Crusading Sacramento bureaucrats are forcing higher density on everyone.

The tool of this latest round of madness is 2008’s California Sustainable Communities and Climate Protection Act, or SB 375, authored by Darrell Steinberg, D-Sacramento, now the Senate president pro-tem. SB 375 stepped up California’s regulatory game from just controlling every aspect of how houses are built to dictating where they can be built.

The law mandates regional sustainable growth plans, and definitely doesn’t include suburbia in the “sustainable” column. The Brown administration is using it like a hammer in its Quixotic campaign to single-handedly free the world of global warming. For example, Attorney General Kamala Harris recently sued San Diego under SB 375 because its long-range plan did too much for highways, the transportation system that supports suburbia, and not enough for mass transit.

Read the rest of the column here.

by the Manhattan Institute, shows how the exodus is a self-inflicted wound.  Yes, it’s a self-inflicted wound that’s causing jobs and people chasing jobs to leave the state. And the same is true of the collapse of state and municipal finances, another reason behind the exodus.

But can California lawmakers also be blamed for the third culprit identified by the Manhattan Institute, density? You bet. Here’s an excerpt:

 

Chronicles of the Unnecessary – BBS

Chronicles of the Unnecessary looks at branches of the California bureaucratic tree that should be pruned.

The Bureau of Behavioral Sciences (BBS), a part of the California Department of Consumer Affairs, regulates several professional designations:  Marriage and Family Therapists, Licensed Clinical Social Workers, Licensed Educational Psychologists, Licensed Professional Clinical Counselors, MFT Interns, Associate Clinical Social Workers and Professional Clinical Counselor Interns.  It does it ostensibly to protect consumers.

I’m not so sure.  If the BBS is out to protect the consumer, why is it going about suspending the license of any of these professionals if they fail to pay their state taxes?  Yep. That threat is the big news on the home page of the BBS website.  If the BBS were protecting consumers, they wouldn’t be brown shirts for the tax collectors, they’d be champions of consumers who just might die if they are denied access to their tax-dodging marriage counselor or educational psychologist.

Which brings me to the larger point. If this agency weren’t here and some clinical counselor or associate clinical social worker went off the reservation and told their client to ignore his or her inner voice instead of listening to it, or they said “And how does that make you smell?” instead of “And how does that make you feel?” would anyone die?

Of course not. So why do we need the state licensing these people? Let the good ones advance and the bad ones fail based on the recommendations of their supervisors or the sharp judgments of the free market. Or, if the profession really feels a need to certify its members, let their professional association handle it, without taxpayer support.

Of course, cutting BBS wouldn’t do much to remedy California’s $20 billion budgetary nightmare. It received a paltry $7,775,000 in the 2011-2012 state budget. But indicative of Gov. Brown’s inability to put a fiscal lap band on Sacramento, he’s recommended $8,153,000 go to the BBS in the 2012-2013 budget, a five percent increase.

The increase is particularly suspect because BBS is supposed to be merged into Brown’s new mega-anti-business agency, the Business and Consumer Service Agency, which is supposed to make government more efficient. Since when is needing five percent more to run a place a sign of greater efficiency? Oh, that’s right. This is government. It defines efficiency a bit differently.

Here’s what I wrote about Brown’s new Business and Consumers Service Agency in Crazifornia:

A new motivation for companies to leave California lies about as well hidden as a body in a very shallow grave in Gov. Brown’s 2012-13 budget proposal.  It is the governor’s latest reaction to California’s business exodus:  a new mega-agency, the Business and Consumer Services Agency.  Brown hyped it as an effort to downsize government through consolidation, but it’s really something much more sinister:  a consolidation of anti-business attitudes into a new mega-agency.  One look at its structure and it’s evident the Business and Consumer Services Agency will “service” businesses in the way male farm animals “service” female ones.

The agency will combine habitually anti-business state departments handling consumer affairs, “fair” employment practices and various business licensing and inspection functions, creating a concentration of the state bureaucracies that are most inclined to make things harder for business owners.  Into this fetid anti-business environment Brown plans to drop, quoting from his budget summary, “the newly restructured Department of Business Oversight.” Restructured from what? The department doesn’t currently exist, so it appears that Brown is creating an entirely new arm of government, surrounding it with anti-business zealots and charging it with increasing the amount of oversight directed at California businesses that are already suffering from acute oversight poisoning.

So, let’s cut the BBS BS and make California a teeny bit more efficient.  How does that make you feel?

Brown Wants New Anti-Business Super-Agency

Governor Brown’s proposed 2012-2013 budget – rushed out yesterday after a staffer inadvertently published it – includes what we’d expect from a liberal democrat governor … and more.

Sure, it’s got more spending (7 to 9 percent more, depending on who’s crunching) and class warfare (higher taxes on the “wealthy,” defined as $250,000 and up).  But its real surprise is buried deep down:  a new super-agency charged with making life even more miserable for California businesses … if such a thing can be fathomed.

The Daily Caller picked up my column on the budget and the new super-agency this a.m.  It’s worth reading the whole thing – and I hope you do, because they count clicks! – but here’s the relevant material on the new super-agency:

Brown is calling for the creation of the Business and Consumer Services Agency, a new mega-agency that apparently will “service” businesses in the way male farm animals “service” female ones. The agency will combine habitually anti-business departments handling consumer affairs, “fair” employment and various business licensing and inspection functions, and into this fetid anti-business environment drop “the newly restructured Department of Business Oversight.”

Restructured from what? The department doesn’t currently exist, so it appears that Brown is creating an entirely new arm of government, surrounding it with anti-business zealots and charging it with increasing the amount of oversight of California businesses that are already suffering from too much oversight.

What lunacy is this? The five and a half companies a week that are leaving California are sending the clearest possible signal that California is death to business, but Brown still proposes to make things worse.  Meanwhile, his budget barely tweaks public employee pensions and keeps the California High Speed Boondoggle Rail Commission alive and spending.

Oh … I’d better explain that picture of Brer Fox and Brer Rabbit.  It’s about this, the column’s conclusion:

In reality, though, the governor’s proposed budget means virtually nothing. Even as Brown was announcing it, a judge ruled unconstitutional the health care cuts the governor had proposed in his budget last year. Then the Democratic Senate leader lined up against it, pledging to fight proposed cuts to social services. And of course, the state employee unions and their armies of lawyers and lobbyists are busy today planning their campaigns to force Brown into more spending and more taxes — which is sort of like forcing Brer Rabbit into the briar patch, where he’s right at home.

Regulating the Rocket’s Red Glare

The Daily Caller picked up my latest opinion piece, Regulating the Rocket’s Red Glare, about California’s war against fireworks shows. I’ve written a lot about this phenomenon, and it’s recently taken a turn for the worse with a decision in San Diego that could have statewide ramifications.  Here’s the lead:

It should come as no surprise that the leftist legislators and authoritarian bureaucrats who run California are vehemently opposed to fireworks shows. After all, the shows are always fun and usually patriotic.

And against them they are. The California Coastal Commission has led the charge with a multi-year assault on the Sea World theme park in San Diego, which blasts fireworks over Mission Bay every night. That effort shipwrecked on the rocks of Sea World’s considerable political clout and even more considerable legal budget, so the Commission looked for a more vulnerable, less wealthy target.

It found that in the Fourth of July fireworks show put on by local business owners in the tiny, picturesque hamlet of Gualala on the northern California coast.

Please click through to read the entire piece here.