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Testimony: Addressing California’s Growing Flood Risk

The Assembly Water, Parks, and Wildlife Committee held its first hearing of the new legislative session yesterday. As a reminder that California is never more than one big storm away from flood problems—even when reeling from a multi-year drought—the hearing’s topic was flood management. A particular focus was the state’s role in supporting flood protection infrastructure using funds authorized by Proposition 1E, a $4.1 billion general obligation bond approved by state voters in November 2006.

I provided the committee with an introductory overview of California’s challenges in addressing growing flood risk. I began with some summary information on the extent and nature of the risk: Roughly 21 percent of California’s population lives in areas vulnerable to flooding, with 4 percent at extreme risk. This is a problem that affects all regions of the state—especially the Sacramento and San Joaquin Valleys and coastal areas. Risk is growing as the population grows, putting more people in harm’s way. A rising sea level and a changing climate—with warmer winters and more variable conditions—are also increasing California’s vulnerability to flooding.

California has a vast flood management system, overseen by federal, state, and local agencies. But this system faces significant challenges–including a large investment gap, with spending lagging far behind needs. In addition, state taxpayers face potentially high liabilities from levee failures within the Central Valley since a 2003 court ruling (the Paterno decision). And while improving flood infrastructure such as levees can reduce the frequency of floods, it doesn’t eliminate risk. If new development is allowed in places with the relatively low level of protection required by federal standards (against the “100-year flood”—a flood with a 1 percent chance of occurring in any given year), the total economic and social risk of flooding can actually increase. Flood insurance is a way to cushion against this remaining risk, but few Californians take advantage of this option.

In a recent study, PPIC took a closer look at the flood investment gap. We found that although the recent infusion of state bond funds has helped, California’s flood investments are still seriously lagging. California needs to raise an additional $800 million to $1 billion per year to undertake these investments within a reasonable time frame (25 years). Federal contributions are small (just $250 million/year in recent years), and likely to decline in the future. So the gap will need to be filled by state and local sources. In the very near-term, the state can step up with remaining bond funds. The governor’s budget proposes spending the remaining $1.1 billion in Prop 1E funds next year. Proposition 1—the new state bond approved by voters in November 2014—provides an additional $395 million for flood protection. Beyond this, the solutions lie in making it easier for local agencies to raise funds and identifying new state funding sources.

To reduce risk, the state should also consider extending reforms enacted for the Central Valley in 2007—which set higher protection standards for urban areas—to other flood-prone regions. One of the best defenses against flooding is land-use planning that keeps people out of harm’s way.

Legislators Talk Next Steps on Water Policy

Four key legislators yesterday discussed their water policy priorities for the current session, agreeing that their top one is overseeing the implementation of Proposition 1, the state water bond passed in November. At a Sacramento gathering sponsored by PPIC and focused on managing drought, the four also agreed that the bond is just a down payment in addressing a long list of water policy challenges.

Assemblymember Anthony Rendon, who represents parts of southeastern Los Angeles County, noted that the water bond’s lack of earmarks, or “pork,” helped secure the voters’ approval—and will require strong legislative oversight to make sure the money is well spent.

Echoing the theme of legislative oversight, Assemblymember Marc Levine, who represents parts of Marin and Sonoma Counties, said it is important to review past investments—such as Proposition 1E, passed in 2006 to fund flood control projects—to make sure that money is spent strategically and builds voters’ trust in government.

Asked about other policy priorities, Senator Lois Wolk, who represents much of the Sacramento–San Joaquin Delta, mentioned water infrastructure. It is wearing out, expensive to replace, and the federal government is no longer financing it. That makes funding a challenge for the state.

How can the state build drought resilience? Senator Jean Fuller, who represents parts of Kern, Tulare, and San Bernardino Counties, said ensuring a predictable water supply is critical.

“People do not know—especially the farmer—when they’re going to get their water, if they’re going to get it in August, if they’re going to get it in July, how much it’s going to cost at that point.”

By building more certainty in the system, water markets can be managed for the benefit of all, she said.

Hundreds of people attended the PPIC event Managing Drought, and hundreds more watched the online webcast. PPIC will post videos of the full event soon.

California’s Future: Optimists vs. Pessimists

Californians begin the new year divided in their view of the state. According to the December 2014 PPIC Statewide Survey, half of California adults think the state is headed in the right direction (50%) and a similar proportion (52%) expect the state to have good economic times in the next 12 months. More than a third (37%) think California will be a better place to live in 2025, and a similar proportion (37%) believe children growing up in the state will be better off financially than their parents.

While most Californians responded to these questions with a mix of optimism and pessimism, we found some interesting differences between the 14% of Californians who gave positive responses to all four questions—let’s call them the optimists—and the 13% who expressed consistently negative views—the pessimists.

Demographically speaking, the optimists tend to be younger, less educated, and have lower incomes than the pessimists. Optimists are also less likely to have been born in the United States.

Politically, optimists are more likely to be Democrats and pessimists more likely to be Republicans. Optimists are spread across the ideological spectrum, while pessimists tend to be ideologically conservative. Optimists are also far less likely to be registered voters than their pessimistic counterparts.

The differences between the state’s optimists and pessimists are particularly stark when we examine their attitudes toward government. Even though optimists are less likely to be registered to vote, they are more trusting of government than pessimists: 63% of optimists believe that state government is run for the benefit of all the people, while 93% of pessimists think it is run by a few big interests. Moreover, optimists would prefer to pay higher taxes and have a state government that provides more services (71%), while pessimists favor lower taxes and fewer services (69%). More specifically, optimists are more likely than pessimists to support extending Proposition 30 tax increases (68% of optimists favor an extension, 67% of pessimists oppose) and are more likely to say they would be willing to pay more taxes to fund higher education (61%, compared to 23% of pessimists).

Will California’s trusting optimists become more electorally involved? Or is the record-low voter turnout in last November’s election a sign of increasing disengagement? Certainly, one of the state’s key challenges is to get more voters—both optimists and pessimists—to the polls.

Drought Watch: Managing—and Learning from—Scarcity

This is part of a continuing series on the impact of the drought.

California is entering a fourth year of drought. The welcome, wet conditions that appeared earlier this winter gave way to dryness during the latter half of December. Although forecasts suggest that wet weather may return later this month, the long-term moisture deficit is unlikely to be erased, leaving the state to continue grappling with water scarcity.

As unpleasant as droughts are, they offer an opportunity to assess how well prepared California is for managing its water resources. The usual approach to learning from droughts is to conduct assessments after the drought ends. Unfortunately, once the rains come—as they certainly will—the pressure to prepare for the next drought is greatly reduced.

Recognizing the need to learn from drought while it is ongoing, PPIC will hold a half-day conference on January 12 in Sacramento. The event, supported by the California Water Foundation, will include two keynote addresses—one on current drought conditions by the state climatologist and another from a member of the Australian National Water Commission on how that country managed an unprecedented, 13-year-long drought. In addition, there will be a conversation with four members of the California State Legislature on legislative priorities for addressing droughts. Finally, panels of state and local leaders will focus on institutional responses to the current drought and proposals for policy reforms in three areas:

Managing urban and agricultural water scarcity. To date, the consequences of the latest drought have varied greatly across California’s geographical regions and economic sectors. Impacts in large urban areas have been modest, while many smaller community water systems have faced significant shortages. Agriculture has been hit particularly hard, but the intensity of the crisis has varied depending on geography and availability of groundwater. The panel will explore wide-ranging proposals to reduce the effects of future droughts on urban and agricultural sectors.

Conserving ecosystems during drought. Acute water scarcity has posed a major challenge for the state and federal agencies charged with managing ecosystems that support fish and waterfowl. Difficult decisions, including temporary reductions in environmental standards and trade-offs between species, were made “on the fly” with limited scientific information. The panel will review lessons learned during this drought and consider new approaches.

Water allocation during drought. The state’s century-old law that governs water rights played a central role in managing the drought during 2014. For the first time since 1977, the State Water Resources Control Board had to restrict surface water use by some water rights holders. In addition, the board had to make tough choices about how to manage water for the environment and how to allocate water to protect public health. The panel will examine the strengths and weaknesses of the current approach to water rights, along with alternative approaches that might reduce conflict during drought.

The conference is now fully booked, with more than 400 participants registered to attend. But you can follow the proceedings via live webcast. PPIC will also post videos of the sessions after the event.

What the Unemployment Rate Doesn’t Show Us

California’s unemployment rate is 7.2%, down from 8.4% one year ago and from California’s peak of 12.4% in 2010. California is adding jobs faster than the nation as a whole and now has more jobs than before the recession. Also, the ratio of employment to population is slowly increasing, a sign that more people are reentering the labor force. However, behind these oft-cited statistics, the picture is more complicated.

While California’s economy is improving, the recovery has not been strong or fast enough to keep up with the growth in California’s working-age population. Additionally, the recovery has been uneven across sectors and metro areas, and the unemployment rate is still higher than it was before the recession began. According to the Bureau of Labor Statistics, California has the third-highest unemployment rate in the nation—only Mississippi and the District of Columbia have higher rates. In numerical terms, 1.35 million Californians are looking for work—and more than 35% of them have been looking for at least six months.

High as it is, the unemployment rate does not account for the 7% of California adults who are underemployed—working part-time when they’d rather work full-time. Nor does it count “discouraged and marginally attached” workers—those who have stopped looking for work because, for example, they think there are no jobs available or they don’t have the skills for available jobs. When discouraged and underemployed workers are added to the ranks of unemployed, California’s rate of un- and underemployment (or labor underutilization,” the term used by the Bureau of Labor Statistics) comes to 15.4%—8.2 points higher than the official unemployment rate. In fact, California’s underutilization rate is the second highest in the country (only Nevada’s is higher). Based on underemployment rates, we know that growth is needed not just in the number of jobs but also the number of full-time jobs.

Education is the most important factor in determining who is employed—and fully employed. Workers with college degrees are less likely to be unemployed, underemployed, or to have stopped looking for work. These workers fared better during the recession, an indication that education can be a buffer against the bust cycles of our economy. And education is likely to be increasingly relevant in our future economy: more than two-thirds of new jobs over the next 10 years or so will require at least some college training.

State and federal policymakers are making some investments in training resources for California’s workforce—the California Career Pathways Trust and the federal Workforce Innovation and Opportunity Act are two good examples. The challenge is to do more to ensure that current and future workers are trained for the jobs of both today and tomorrow.

Undocumented Immigrants and Health Care

On the heels of President Obama’s recent executive actions on immigration, state senator Ricardo Lara has reintroduced legislation (SB 4) to provide access to affordable health coverage and care to all Californians, regardless of immigration status. The details of SB 4 have not been spelled out, but Senator Lara’s previous bill called for the state to offer the coverage available under the Affordable Care Act (ACA) to undocumented immigrants: Medi-Cal coverage to those below 138% of the federal poverty level (annual income of about $16,000 for a single person) and subsidies to purchase coverage to individuals earning up to 400% of the poverty level (about $46,700 annually).

As PPIC pointed out in a recent blog post, while the ACA excludes undocumented immigrants from the coverage expansions, President Obama’s executive order could pave the way for immigrants in California who are eligible for the Deferred Action for Parental Accountability program (and who meet income eligibility requirements) to get Medi-Cal coverage. Under current Medi-Cal eligibility rules, immigrants with deferred action status—meaning that their presence is known to the government and there are no plans to deport them—can receive full coverage under a benefit category known as PRUCOL (Persons Residing Under Color of Law). Some states, including California and New York, provide full Medicaid coverage for the PRUCOL group. This coverage is financed entirely by the states—the federal government funds only emergency medical treatment for undocumented immigrants.

The president’s action could also have implications for county programs that are required by state law to provide medical care to indigent residents. Currently, counties have considerable latitude in determining eligibility criteria for their indigent care programs, and many exclude undocumented immigrants. When state officials decided to expand Medi-Cal eligibility under the ACA, they reduced the funding provided to county indigent care programs because many of the people served by these programs would become eligible for Medi-Cal. The legislation (AB 85) that redirected state funds for county health programs included a provision to review this funding shift if there was federal action on immigration reform, but it’s not clear if that will happen in this case.

What is clear is that options for providing access to insurance coverage and health care for the more than 2.5 million undocumented immigrants in the state is a policy topic under consideration by policymakers at local and state levels.

Are Some Counties Bucking the Low-Turnout Trend?

A record-low 31% of Californians eligible to vote cast ballots in the November election, according to data finalized by the secretary of state Friday. (I prefer to use the share of residents eligible to register rather than the share of registered voters because it better captures the true potential electorate. But my use of this share does not affect the conclusions I draw here.)

But turnout was not so low everywhere. In fully 35 of California’s 58 counties, turnout was above the previous statewide low (36%, in 2002). And in two very small counties—Alpine and Sierra—turnout was actually higher than 50%.

The high-turnout counties were generally rural. Total turnout in the 20 smallest counties in the state was 39%, compared to just 27% in the 5 largest. Also, turnout tended to be lower in Southern California and the Central Valley. All 12 counties with turnout below the statewide average—Fresno, Imperial, Kern, Kings, Los Angeles, Merced, Riverside, San Bernardino, San Joaquin, Stanislaus, Tulare, and Yuba—are in one of those two areas.

All the same, it would be a mistake to see low turnout as a regional problem. In every single county, turnout was at least 4 and as many as 17 percentage points lower in 2014 than in 2010. In fact, since 1990, turnout in gubernatorial elections has declined in every county except those same two outliers, Alpine and Sierra.

In short, whatever has been depressing turnout in California’s gubernatorial elections seems to have a fairly broad geographic scope. Participation is better in some counties than others, but turnout has been sliding in all areas of the state.

Drought Watch: Is This the End of Our Dry Spell?

This is part of a continuing series on the impact of the drought.

This morning, the Bay Area and the Central Valley began to assess the mess created by Thursday’s big storm. And a big storm it was, with 50+ mph winds, torrential rains (more than 10 inches in some places, with blizzards in the Sierra), widespread flooding of streets, long power outages, and rivers and creeks that overtopped their banks.

This was an unusually powerful “atmospheric river” storm—California’s version of a hurricane—unmatched in intensity since January 2008. A deep low-pressure system came ashore in northern California and southern Oregon, generating violent winds throughout these regions. Spinning counterclockwise like a top, this system dragged warm, moist air into California from as far away as west of Hawaii—in satellite photos, this stream of moisture resembles a river, thus the name. All this activity led to prodigious amounts of rain in a very short period of time. And as cold air came in with the low pressure center, it produced abundant snow at higher elevations.

Beneath every headline about the intensity of the storm will be the question: Is the drought over? The answer: Not even close. It is important to remember that the state has been in severe rainfall deficit for three continuous years. One storm rarely busts a drought.

After the storm totals are added up, we will be at or slightly above average for this time of the year, and this is just the beginning of our wet season. At the same time, it has been so warm this season that total snowpack is likely to be below average, even with this big boost. The California Department of Water Resources has stated that we will need 150% of average precipitation this rainy season to recover from the drought. To have that kind of year, we need four or more additional atmospheric rivers (although not necessarily as strong as this one).

Indeed, history shows that as much as half of our annual rainfall is packed into just five to seven days of intense rainfall, highlighting the fine line between a wet year and dry one. And storms like this do little to address the problem of years of groundwater depletion. For that, we need many rainy days.

Still, despite the damage and inconvenience, this storm produced significant good. The state’s reservoirs are so depleted that there will be no trouble capturing this storm’s runoff. Small reservoirs, such as those serving Santa Cruz and other coastal communities hard hit by drought, will show dramatic improvements. The large reservoirs that rim the Central Valley—supplying water to 25 million people and more than seven million acres of farms—will get a good bump from this storm. Sometime this month, Folsom Reservoir, which does double duty by providing water and reducing Sacramento’s flood risk, is likely to encroach on the space it sets aside for flood control. (That Folsom Dam will be releasing water to protect against floods during a drought is testament to the difficulties the state faces in managing reservoirs for multiple, often conflicting needs).

This storm also was great for the environment. Native plants and animals are well-adapted to these kinds of events, and the physical changes that high flows bring to rivers and floodplains are needed to sustain habitat. One of the most important and stressed ecosystems in the state—the Sacramento–San Joaquin Delta—received a welcome flush of fresh water. During drought, the Delta becomes increasingly saline, harming habitat as well as the ability to export clean water to cities and farms. Bursts of fresh water reduce salinity and improve water quality for humans as well as the ecosystem (this is often lost on those who complain that this is water “wasted to the sea”).

In sum, this was an unusually powerful storm that caused damage, snarled traffic, and was a general nuisance for most northern Californians. Although it didn’t end the drought, this storm sure helped a lot.

California–State of Change

As leaders from government, business, and philanthropy gathered last week to discuss California’s future, we were reminded once again that these are exciting times in our state. The discussions were part of PPIC’s full-day conference, California—State of Change, and they highlighted both the advantages our state enjoys and the major challenges ahead.

Speakers noted that the recovering state economy, newly elected state leaders, a richly diverse population, and a history of innovation provide much to build on—as well as a lot of building to do. For example, California has recently enacted sweeping changes in corrections and education finance. But, as the governor’s chief aide, Nancy McFadden, emphasized in her keynote address, most of the hard work of implementing these policies lies ahead.

Among other challenges noted in the subsequent panel discussions: a state tax structure that leads to extreme revenue volatility, a need for public employee pension reform, an uneven economic recovery that has left many Californians behind, government institutions that do not provide the tools for managing in the 21st century, and an electorate that is disengaged from the political process.

But, as other speakers reminded us, Californians are living in a time of reform. A change in term limits may lead to more stability in the legislature and result in more long-term policymaking. Recent initiatives to shift many school decisions from the state to the district level and to move state corrections responsibilities to the counties could make local governments labs for innovation—but only if we have the will and the data to evaluate the results.

Our final panel demonstrated that California still knows how to dream big. The discussion focused on three projects: a historic effort to combat climate change, the construction of high-speed rail, and the advancement of stem cell research. All have been controversial, but they show that California voters and elected officials embrace innovation, as they have throughout the state’s history. 

We invite you to watch the videos of each session. We hope you find the conversations as thought-provoking as we did.

California Politics and the Future

Jim Brulte, chair of the California Republican Party, says Governor Brown is “clearly the master of Sacramento.”

Jennifer Medina, national correspondent for the New York Times, says the governor hasn’t talked much about poverty or income inequality— an issue his Republican opponent used in the election this year.

And Garry South, longtime Democratic strategist, says the governor needs to take on the tough issue of fiscal reform because this can only be done by a Democrat.

These are a sample of comments from a panel of experts speaking at a briefing hosted by PPIC in Sacramento this week. The discussion focused on the challenges and opportunities ahead for the governor and legislature. The event began with a presentation of the results of the new PPIC Statewide Survey by Dean Bonner, associate survey director. The survey included a wide range of topics, including tax reform, health care, climate change, and the approval ratings of state leaders.