May 2015 – Public Policy Institute of California

Are Enough Californians Attending UC?

At the recent UC Board of Regents meeting, the regents approved a plan by Governor Brown and UC President Janet Napolitano—among other things, it freezes in-state tuition, reforms the pension system, and increases transfer student enrollment in exchange for extra funding from the state. However, it does not fund any additional California resident enrollment, suggesting that without legislative action for more funding, campuses may not increase enrollment for in-state students.

Enrollment growth for California residents at UC has slowed since the recession, while at the same time the proportion of out-of-state students has grown to an all-time high. UC officials acknowledge that out-of-state enrollment has grown as a result of statewide budget cuts. They contend that the extra tuition paid by out-of-state students enables UC to admit more California residents than it could otherwise. And even with the fast growth of out-of-state students in the UC system, California residents still make up over 80% of UC freshmen. But are enough Californians attending the UCs?

One way to answer that question is to see if UC is meeting the requirements of California’s Master Plan for Higher Education. The plan indicates that the UCs should choose from among the top 12.5% of students in the state. If we examine the proportion of California high school graduates admitted to the UC system, we find that UC admits more than 12.5% of California high school graduates. This percentage declined between 2007 and 2010 during the recession (also during the increase in out-of-state students), but it never dipped below 13%.

Let’s also consider the number of students receiving a UC education. Only 7.4 % of California’s high school graduates enroll at a UC as freshmen—far short of the 13.7 % admitted. Some students choose to attend other competitive schools, others decline to enroll at UC after being rejected from their first-choice campus, and still others may prefer a cheaper or closer-to-home option such as starting at a community college or attending a CSU. Lastly, let’s look at the number of students who are ready and eligible for UC. As the percentage of high school graduates admitted to a UC has declined, the percentage of public high school students who complete the UC eligibility requirements has grown. This comes at a time when the state needs to be producing more college graduates to meet the demands of the state’s future economy.

So, are there enough Californians in the UC system? Even with the influx of out-of-state students, the UC system is currently meeting the expectations of the Master Plan for admission. However, the combination of a growing number of UC-ready students and a low yield rate for admits suggests that a shrinking share of students who could benefit from a UC education are getting a UC education—especially if California resident enrollment does not continue to grow.

PPIC and others have suggested that the state review and revise the Master Plan. In the context of today’s debates over enrollment at the state’s universities and colleges, California’s leaders should update the goals of California’s higher education systems and work out how to meet and appropriately fund them.

Notes: (TOP CHART) University of California Office of the President. (BOTTOM FIGURE): Author’s calculations from data from the California Department of Education and University of California Office of the President.

Drought: 10 Ways the Federal Government Can Help

For more than a year, Congress has been discussing actions that the federal government can take to help with California’s drought emergency. Federal agencies, using their existing authorities, have been providing modest amounts of help, including funding water conservation efforts, livestock disaster assistance, and supporting rural communities facing job losses from crop fallowing and drinking-water shortages. To date, however, no substantive federal legislation has been passed that addresses the drought.

Granted, the federal government cannot make it rain. But there are other things it can do to help California get through this drought and better prepare for future droughts. Along with a group of colleagues in our research network, we have compiled a list of 10 ways the feds can help. Some of these can be accomplished under existing executive authority, and some require new legislation. Here is the short list; more details can be found on the UC Davis Center for Watershed Sciences website.

Near-term opportunities for federal drought support include:

Amend the Safe Drinking Water Act to allow its Revolving Funds to be used for small, local water systems that serve fewer than 15 connections (many of which are facing dry wells with the drought).
Allow Central Valley Project contractors to carry over water in federal reservoirs as a hedge against future drought conditions, and to discourage potentially wasteful “use it or lose it” behavior, which can result in lower reservoir levels. During droughts, the U.S. Bureau of Reclamation should allow carry-over storage. And require the Army Corps of Engineers to use real-time forecasts of storms to reduce the risks of emptying reservoirs during the winter.
Make it easier to trade water during drought emergencies.
Facilitate distribution of federal cost-shares for local development of non-traditional sources of water and other drought-resiliency projects, by allowing agency federal department heads to give funds directly to states.
Collaborate with California to develop a drought biodiversity management plan modeled after successful approaches used by Australia during its Millennium Drought.
Expand the Central Valley Project’s ecosystem restoration fund by increasing per acre-foot fees on project water during drought and establishing a surcharge on water trades that use federal infrastructure.
Speed the listing of species threatened with extinction during drought emergencies and implement recovery actions.
Increase federal agency support for improved water information systems, and increase technical support, notably from the US Geological Survey and National Weather Service.
Longer term: Create an Independent System Operator (ISO)—similar to the ISO that currently manages California’s electrical grid—that would merge state and federal water projects into a single, public utility.
Longer term: Through legislation similar to the Coastal Zone Management Act, promote coordinated and integrated water management that addresses related issues of supply, quality, drought, flood and ecosystem challenges at a regional scale.

These 10 federal actions would help California better manage its current drought and help us prepare for inevitable future droughts.

A Dry Run for a Dry Future

During times of extreme water scarcity it is hard to find the silver lining. Yet the severity of this drought, including its record warm temperatures, is benefiting us in one way: it is a window into what droughts may look like in the future and gives us something to plan for—a target, if you will.

The state’s system of water rights laws and water supply infrastructure is built around managing periodic droughts. The design of this system reflects the climate conditions of the late 19th and early 20th centuries, as well as a much smaller population than we have today. Climate models and current observations indicate that we are facing an increasingly different future, one where warm droughts like our current one are no longer the rare exception.

It is crucial that we study our dry years closely. Like past cases, this drought has seen strong rainfall deficits. For four consecutive years (so far), the state has been dry to critically dry, with the driest calendar year on record in 2013. But recent studies have shown that while it has been unusually dry, the precipitation numbers of this drought fall within the realm of natural variability.

What is most unusual about this drought is its exceptional warmth. Statewide, three of the past four winters have been substantially warmer than the long-term average. The past two winters set records that were 4-5 degrees F above average. With this exceptional warmth, California experienced record low snowpack, since much precipitation fell as rain rather than snow and the lean snowpack melted rapidly.

The causes of this drought are being studied and debated by climatologists and oceanographers. Emerging research suggests that this drought may be linked, partially, to very warm waters in the far western tropical Pacific. Heat and moisture pumped into the atmosphere from these waters influence winds and storm tracks in the North Pacific, altering climate patterns in our region.

These teleconnections appear to have created the Ridiculously Resilient Ridge, an anomalous high pressure feature that camped over the waters off the West Coast and pushed North Pacific storms far to the north. This ridge, with its associated weak winds and unusual weather across the eastern Pacific, created The Blob: an area of very warm water stretching from the Bering Sea to Baja California. This blob has disrupted our marine ecosystems, harming fish, sea birds and marine mammals.

Onshore from all of this activity, winter storms that made it off the Pacific Ocean and into California were much fewer than normal. And those that did make it tended to be warm, reflecting conditions in the eastern Pacific, leaving us with rain instead of snow.

To date, there has been no definitive link that implicates this drought as a symptom of climate change. However, the consecutive years of dryness coupled with high temperatures strongly resemble the kind of droughts that are projected under the warmer climate during the latter half of this century. While the origins of future droughts may not be precisely the same, the on-the-ground results are likely to be.

Difficult as it is to endure, this drought provides important lessons. It is a useful and instructive test of how we manage water now—and how we will be forced to manage water in the future. As it unfolds, it tests the resiliency of California’s water infrastructure—made up of dams, aqueducts, and groundwater basins—along with our management systems and institutions. The drought is providing a preview of the warmer conditions during dry spells that will inevitably occur in future decades. As such, it is unveiling future challenges in managing the environment, including conserving our declining native biodiversity.

In short, this drought has revealed what a warmer climate future looks like. We should learn from it and plan accordingly.

Video: Realignment and Crime

Since 2011, when California shifted responsibility for tens of thousands of lower-level felons from the state to the local level, there is evidence that property crime remains higher than it would have been without the realignment policy. But there has been no observable impact on violent crime.

The findings of the report, Realignment, Incarceration and Crime Trends in California, were presented in Sacramento last week by the authors, Magnus Lofstrom, PPIC senior research fellow, and Steve Raphael, PPIC adjunct fellow. Among the issues that emerged in discussion with the audience, were the causes of the property crime increase and additional research that indicates higher staffing for police departments is an effective deterrent for crime.

“Water 101” Podcast Covers Challenges, Solutions

What do Californians need to know about our water system to be able to grasp the big management challenges we face—both in times of drought and for the longer term? Jeffrey Mount reveals all in a conversation with Joint Venture Silicon Valley CEO Russell Hancock. The wide-ranging conversation, now a free podcast, is a 45-minute entertaining crash course in the workings of watersheds, state water policy, and why we need an “all of the above” strategy to solving our water crisis.

The interview walks us through a number of key topics, but goes in-depth on one: groundwater.

“This will be the year of groundwater,” Mount said. “We’ve been treating groundwater like a non-renewable resource, like oil . . . Now as a state we’re trying to grapple with the fact that we’ve overtaxed that resource.”

By podcast’s end, you’ll be able to talk intelligently about the pores between soils (and why we need them), the costs of desalination plants, the potential for information technology solutions to help us manage our water better, and the long-distance origins of our current drought.

When asked what lasting change he would like to see as a response to the current drought, Mount said: “Droughts are pivot points: they lead to changes in technology, and they lead to changes in practice. We saw that in Australia; after the drought was over, people’s behavior changed. That is going to happen in this drought. People are using less water on a per-capita basis, and that will be the lasting part of the drought.”

We hope you’ll listen in.

Governor’s May Revision Continues Cautious Approach

Governor Brown released his revised 2015–16 budget last week. It includes $8 billion more in new spending than his January proposal but continues his cautious approach to taking on new spending commitments. The new funding proposals are the result of setting modest expectations for future revenue growth. Because actual growth from the improving state economy has far exceeded forecasts, the administration has significant additional funds available.

Only about two-thirds of the $8 billion increase comes from the General Fund. The other third stems from increased special funds and revenues from bonds.

General Fund. General Fund revenues are estimated to increase by about $6.3 billion—$4 billion to reflect the major influx of tax receipts collected since January 2015 and $2.3 billion next year. Almost all of that—$5.8 billion—must be spent on K–12 education and community colleges. This leaves little room for spending in other areas.
Cap-and-Trade Funds. The May Revision proposes to more than double spending of cap-and-trade revenues, going from $1 billion in the January budget to $2.2 billion today. Under the state’s greenhouse gas reduction program, businesses pay fees for the right to emit carbon into the atmosphere. In 2015, producers of transportation fuels joined the program, significantly boosting revenues. As a consequence, revenues are expected to jump $1.2 billion above the level proposed in January. The additional funds would be spent for transportation, housing, energy, and natural resources programs—consistent with the long-term expenditure plan approved by the legislature in 2014.
Proposition 1 Bond Funds. The May Revision also significantly increases spending for water quality and conservation projects. Proposition 1, approved by voters in 2014, includes $7.5 billion in bond funds for a variety of water quality, flood protection, and storage programs. The budget proposes to dedicate $1.8 billion in bond funds over the next three years. This increase builds on $1.9 billion in spending (from a variety of funding sources) approved by the legislature in the spring of 2015.

The $8 billion growth in revenues and expenditures represents a 4.8% increase from January, and an 8.1% increase from the 2014–15 budget passed by the legislature last June. So how can this be considered cautious? The answer is that the administration uses modest assumptions about future growth in revenues—until there is solid evidence of additional available resources.

The pattern of projected revenues for 2014–15 reveals how this strategy works. The following chart illustrates how recent budget projections have grown as revenues have increased.

In January 2014, the administration estimated revenues of $106 billion—up 6% from 2013–14 anticipated revenues. The 2014 May Revision boosted that figure to $107 billion. Actual revenue collection was up significantly in the fall of 2014, which led to a January 2015 estimate increase to $109.7 billion. From January to April 2015, revenues exceeded expectations by $3.2 billion, bringing the most recent estimate of General Fund revenues to $112.9 billion. This is truly exceptional revenue growth. Compared to 6% growth projected in January 2014, the May Revision figure for 2014–15 translates into General Fund revenue gains of 12.8%.

Despite the projected gains for this year, the current May Revision continues to take a cautious approach to revenue estimates for the coming year. The administration’s initial revenue estimates for 2015–16 are quite modest—the May Revision anticipates 4.1% growth in General Fund revenues. This low growth estimate limits the amount of new spending that can be added to the base budget. At the same time, the large increase in current-year revenues gives the governor flexibility to boost support for education and other critical areas. In this way, Governor Brown can significantly increase spending today while maintaining a cautious approach to the future.

Chart Source: California Department of Finance, 2015-16 May Revision.

“The Central Valley Needs a New Narrative”

Dan Dooley’s expertise on the nexus between water and agriculture runs deep: fifth-generation Tulare County rancher, water lawyer, former deputy director of the California Department of Food and Agriculture, former chair of the state Water Commission, and former member of the National Academy of Sciences’ board on agriculture. So when he says the Valley needs a new narrative on water, we’d be wise to pay attention.

I’ve had the privilege of working with Dooley during one of his most recent gigs, as head of external affairs for the University of California, and we are fortunate to have him as an inaugural member of the PPIC Water Policy Center’s Advisory Council. Recently, I held a conversation with him following his recent lecture on the future of agriculture in the Central Valley, an event hosted by the Water Education Foundation.

Dooley began by describing key drivers of change that are already affecting farming in the Central Valley—and the San Joaquin Valley, in particular—from declining groundwater and less-reliable surface water, to a fast-growing population. Add to that the various water stressors that climate change is expected to bring, and it’s clear that change is inevitable. The billion-dollar question is how best to manage these changes well.

Especially during the drought, good management has not always carried the day. He emphasized that long-term over-drafting of groundwater can’t be sustained and regretted that farmers missed their opportunity to be more involved in last year’s legislation to regulate groundwater. “The new state law on groundwater could result in a 15-20 percent contraction in agricultural water use in the Southern San Joaquin valley,” he said.

At the same time, Dooley notes, water demand has “hardened” because of conversion of row crops (which can be fallowed in dry years) to perennial crops. The growth in dairies has also had a big impact on groundwater.

Despite these major challenges, Dooley emphasized that the Valley is an incredibly productive place, teeming with innovation and able to adapt to scarce water. His main point—that the Central Valley needs a new narrative—is a positive one.

As we talked about potential solutions, a few beacons of hope stood out. First, these myriad challenges are likely to force change in some of the state’s outdated policy and regulatory approaches to water. New policies will be needed to incentivize more efficient water use, and to improve the marketing of conserved water to others with unmet demand. Second, better integration of surface and groundwater—critical to sustainable management—is inevitable in light of tight supplies and the new groundwater law. Third, the culture of innovation that has made the Valley an agricultural powerhouse can serve the region well as it adapts to water scarcity, population growth, and a changing climate.

His big-picture advice to both his fellow farmers and water-law colleagues: Get more involved in groundwater management and manage it for the long-term. Stop scapegoating the environment. Stop the skirmishing, keep your eyes on where you want to be 10 years from now, and implement practical solutions.

Learn more about the annual Anna J. Schneider lecture series and its focus on water law.

Testimony: Improvements Needed in Water Information

How is the state government handling the drought? And what more could be done? A hearing convened by the Senate Natural Resources and Water subcommittee earlier this week delved into the topic, with updates by leaders from the administration on the implementation of drought actions in the urban and rural sectors and in the state’s diverse ecosystems. In a second panel, I joined several other non-governmental experts to describe additional ways forward to solve our short- and long-term water challenges.

My testimony focused on a number of policy priorities that we highlighted in a recent report on drought management. In particular, I emphasized the need for better information as a basis for better water management.

Compared to most other western states and other dry places like Australia, California’s water monitoring and accounting systems are primitive, with significant gaps in information. Without a better understanding of how much water is available in our rivers and groundwater basins, as well as who’s using what, we’re saddled with inefficiencies, inadequate transparency, and greater potential for conflict. This especially matters during droughts, when every drop counts.

On the plus side, the state has recently made some progress in improving water information. Legislation enacted in 2009 requires all surface-water users to report the volumes of water they divert and also requires local agencies to report groundwater levels. Since the drought emergency was declared in January 2014, the State Water Resources Control Board has progressively amped up water-use reporting requirements.

But more should be done to fill the gaps. This includes gathering information on groundwater use—an important component of overall water use, especially during droughts. We also need to account for the volumes of water that cities and farms discharge back into streams as treated wastewater or irrigation runoff; these discharges make up a large share of water supplies in some of our rivers and streams.

Because information is only really useful if it is well organized, the state needs to pay particular attention to developing a coherent water information management system. Currently, agencies and offices that oversee different pieces of the puzzle have different tracking systems and accounting standards, which makes it very hard to get an overall picture of what’s happening in anything close to real time. The last official estimates of water supply and water use for California date back to 2010.

Funds from the state water bond could help pay for this work. In devising our system, we should draw lessons from other states and countries that are further along in this area. And given that California is a global center for the information economy, it may make sense to tap into local “big data” expertise to help build data solutions.

There’s a saying that “You can’t manage what you don’t measure.” The drought is making it ever more important to manage our scarce water supplies for the benefit of our economy, society, and the environment. So we’d better get better at measuring it.

Watch the hearing on Cal Channel.

Video: Alternatives to Incarceration

Under continuing pressure to reduce its prison and jail populations, California is expanding alternatives that hold offenders accountable, are cost-effective, and do not harm public safety. At a Sacramento event last week, PPIC researcher Brandon Martin summarized a new PPIC report about the potential impact of this expansion. His presentation was followed by panel discussion in which state and local corrections officials talked about their own experience and provided examples of success.

Jeremy Verinsky, undersheriff of Santa Cruz County, said his department has long had a work release program— having offenders clean up graffiti in county parks, for example. The county has increasingly paired work release with home detention and electronic monitoring since corrections realignment began in 2011. Offenders in Santa Cruz are required to be involved in programs based on their needs and risk factors, Verinksy said.

“We aren’t putting people out on a monitor so they can stay home and play Xbox all day,” he said.

Carol Paris of the Sacramento County Probation Department says her department has expanded its use of adult day reporting centers, which provide resources for offenders. Asked how her department handles probation violations, she said the strategy is to engage early. Intake officers visit prisons to meet with inmates before their release to talk about specific needs and housing issues. Offenders are also transported directly from custody to the probation office for assessment—an effort “to counteract those days of the person being released at one o’clock in the morning,” she said.

Robin Harrington, chief deputy warden of the Female Offenders Programs and Services/Special Housing Mission at the California Department of Corrections and Rehabilitation, described the department’s alternative custody programs. Eligible offenders can apply to serve their sentences—supervised and electronically monitored—at home, in a private alternative custody program, or in a training and employment program.

New Strategy, New Challenges for the Delta

Last week, Governor Brown announced a new approach to managing the Sacramento-San Joaquin Delta. For the past eight years the state’s focus has been on the highly controversial Bay Delta Conservation Plan (BDCP). That plan was intended to be a “big fix,” simultaneously improving the health of the troubled Delta ecosystem and the reliability of water supplies for the cities and farms in the Bay Area, Southern California, and the San Joaquin Valley that depend on water exported from the Delta.

The BDCP was intended to meet the 2009 Delta Reform Act’s requirement to manage the Delta for co-equal goals of water supply reliability and ecosystem health. To achieve these goals, the BDCP aimed to restore more than 100,000 acres of habitat and build tunnels underneath the Delta to ship water that now goes through the Delta’s channels to the giant pumps at the Delta’s southern edge. The tunnels would improve the quality of water exports and, importantly, make exports less susceptible to disruption from levee failures. By taking a comprehensive approach to ecosystem restoration, BDCP hoped to receive a 50-year permit for water exports.

But in the end, uncertainty over the benefits of the restoration—particularly in light of a changing climate—made a 50-year permit unacceptable to federal and state regulators.

The governor’s new strategy is to disentangle ecosystem restoration from water supply infrastructure improvement. Under a new program, entitled California Water Fix, the state would proceed as planned with the tunnel project, and with restoration of 2,000 acres of habitat to mitigate the impact of construction. As before, the tunnels would be funded by the water users who use Delta exports.

To improve the health of the Delta, the state will implement California EcoRestore, a scaled-down effort that focuses on completing or improving projects already required by federal regulators to reduce the environmental impacts of water exports. This effort would begin restoring 30,000 acres of high-value habitat in the next three years—an ambitious timeline. The funding for this work is already available—largely from the same water users. (It is worth noting that funding for ecosystem restoration under BDCP had yet to be identified.)

Both Water Fix and EcoRestore face daunting challenges. For Water Fix, financing may become an issue. Under BDCP, the 50-year permits would have provided greater regulatory certainty and thus greater water supply reliability for those who depend on water exports. Reverting to the regulatory status quo—and associated uncertainties—reduces the overall value of the project and may make some water suppliers reluctant to invest.

For EcoRestore, the key challenge lies in meeting the ambitious three-year time frame for initiating restoration projects. Our recent assessment of environmental stressors affecting the Delta found that institutional fragmentation is a major obstacle to improving ecosystem health.

For example, one of the proposed projects that has been in the works for years—restoration of McCormack-Williamson Tract, an island in the northern Delta—will require the acquisition of 10 permits, consultations on 10 statutes, and demonstration of consistency with nine programs under 18 state, federal and local agencies. (An overview of the numerous agencies that need to provide regulatory approval and oversight for Delta projects can be found in Stress Relief: Prescriptions for a Healthier Delta Ecosystem, see Table 4, page 19).) The current timetable for EcoRestore has this project beginning early next year—a tight timeline indeed.

As we’ve described elsewhere, the BDCP’s original habitat restoration goals were likely too ambitious—conditions in the Delta limit the availability of lands likely to have a major impact on ecosystem health. So it is reasonable to scale back from the original plan. But to successfully improve habitat in anywhere near the timeframe proposed, EcoRestore must be accompanied by significant reforms that integrate and streamline management, most notably the permitting process (see our recommendations).

Presumably, these and many other issues will be addressed in the environmental documentation that will be released in June. However, as commonly occurs in management of the Delta, changing course is never easy, and always brings new challenges.