President Biden Declares California Storm Emergency Following Request From Governor

March 13, 2023 By Evan Symon Leave a Comment

President Joe Biden approved a California Emergency Declaration on Friday, giving federal assistance to both state and local response and relief efforts following large storms that caused flooding, mudslides, blizzards, and landslides in Counties across the state.

Since the beginning of March, Governor Newsom has already declared two storm-related states of emergency in California. The first was due to the San Bernardino County storm incident last week that caused over 100 inches of snow to fall in some areas of the County and has, as of  Friday, killed 13 people. Another storm system reaching California earlier this week primarily in Northern California then prompted a second state of emergency declaration from the Governor, adding another 21 Counties being put under a state of emergency in addition to the 13 declared the previous week in Southern California.

“The state is working around the clock with local partners to deploy life-saving equipment and first responders to communities across California,” said Governor Newsom on Wednesday. “With more dangerous storms on the horizon, we’ll continue to mobilize every available resource to protect Californians.”

However, with the Governor’s Office of Emergency Services (Cal OES), Caltrans, the California Highway Patrol, CAL FIRE, the California National Guard, and local services being stretched, from digging out roads in the San Bernardino Mountains to setting up flood zones in Northern California, many called for additional federal help. On Thursday, Governor Newsom requested a Presidential Emergency Declaration to authorize federal assistance to support state and local response.

“California is deploying every tool we have to protect communities from the relentless and deadly storms battering our state,” Newsom announced Thursday. “In these dangerous and challenging conditions, it is crucial that Californians remain vigilant and follow all guidance from local emergency responders.”

In less than 24 hours, President Biden agreed to send federal assistance to California. In a press release on Friday, the White House noted that  “The President’s action authorizes the Department of Homeland Security, Federal Emergency Management Agency (FEMA), to coordinate all disaster relief efforts which have the purpose of alleviating the hardship and suffering caused by the emergency on the local population, and to provide appropriate assistance for required emergency measures, authorized under Title V of the Stafford Act, to save lives and to protect property and public health and safety, and to lessen or avert the threat of a catastrophe in the counties of Amador, Butte, El Dorado, Fresno, Humboldt, Imperial, Inyo, Kern, Lake, Los Angeles, Madera, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Nevada, Placer, Plumas, Sacramento, San Bernardino, San Francisco, San Mateo, San Luis Obispo, Santa Barbara, Santa Clara, Santa Cruz, Sierra, Sonoma, Stanislaus, Tulare, Tuolumne, and Yuba.

“Specifically, FEMA is authorized to identify, mobilize, and provide at its discretion, equipment and resources necessary to alleviate the impacts of the emergency.  Emergency protective measures (Category B), limited to direct Federal assistance, under the Public Assistance program will be provided at 75 percent Federal funding.”

While more assistance is now coming, many in the affected areas, especially in San Bernardino County, have said that they believed that state and federal help came too late.

First responders respond to emergency assistance delays

“We’ve been plowing like crazy and assisting in any way that we can,” explained Matt Hanna, a first responder in San Bernardino County who has been assisting local residents for over a week, to the Globe on Friday. “But relief for us has been slow. A big part of emergency orders is that things we need are rushed to us and that government red tape is cut because lives are at risk. But it has not been happening fast enough.

“Some of the guys here have had to go out in snowshoes for help. Out in Crestline, at a food store that became sort of a focal point for assistance, the roof collapsed. There are roads out there that have taken days to get to. Part of this was that we just weren’t fully prepared for a storm of this magnitude, but again, localities can only do so much during an emergency that goes beyond our limits. We got some immediate help. I mean, the CHP guys here were helping out as fast as anyone. But we needed a lot more from the state, but we just didn’t get it in time. And now over a dozen people are dead because of it.”

State officials have countered that storms have battered the entire state with many happening at once, causing equipment and resources to not move as quickly as hoped.

“The unique and challenging part of this storm was that it hit so many parts of our state simultaneously, so you’re unable to move equipment from other parts of the state that are trying to keep their lifeline roads open,” explained Cal OES spokesman Brian Ferguson in a statement. “The storms that hit San Bernardino’s highest elevations are unprecedented and particularly challenging to respond to. It really is a street fight — street by street, neighborhood by neighborhood.”

However, despite the explanation, many first responders aren’t buying it.

“We have people here who have felt like they have been abandoned in their time of need,” added a first responder who wished to only be known as “Margo” to the Globe. “Localities, like cities, they haven’t been blaming too much because a lot of these places are generally smaller towns. Also, a lot of local residents have helped pick up the slack on plowing and have voluntarily helped clear roads here. Like the other day, this high up road was cleared, letting a family drive out for the first time in a week. The guy plowing it cleared the street and the family gave him a thermos of hot chocolate or coffee as thanks. Some are being rescued after spending a week trapped in their car. There’s these moments of humanity everywhere out there.

Click here to read the full article in the California Globe

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Jon Coupal: By All Means, Let’s Talk About ‘Junk Fees’

March 13, 2023 By Jon Coupal 1 Comment

In last month’s State of the Union address, President Joe Biden chose to spend an inordinate amount of time on matters that most Americans don’t care about. Not much was said about the important issues of border security, inflation, crime, or China’s surveillance balloon that traversed over the entire U.S. before – belatedly – our Commander in Chief decided that it should be shot down.

Among the more trivial topics that Biden focused on is so-called “junk fees.” He urged Congress to pass a new “Junk Fee Prevention Act” which would curtail extra fees on the sale of online entertainment tickets; certain airline fees; early termination fees for TV, phone, and internet service; and resort and destination fees.

To be sure, these add-on charges can be annoying, but there is a huge difference between whether such fees should be disclosed in advance (they should) or whether banning such fees is government overreach at its worst. As noted by the Wall Street Journal in a February 13, 2023, editorial (The Junk Economics of “Junk Fee” Politics), prohibitions of additional services at higher costs actually reduces consumer choice. Even worse, it “will result in higher prices or fewer services for lower income Americans.”

Not to be outdone, California’s progressive politicians quickly jumped on the Biden “junk fee” bandwagon, introducing several bills targeting what they claim are either deceptive or excessive charges imposed by private businesses. For example, SB 611 (Senator Caroline Menjivar, D – Panorama City/San Fernando Valley) would require landlords to clearly state to potential renters what their up-front and monthly payments will be, including all required fees, to rent the apartment. But, under current law, this information is already required to be disclosed by the landlord.

Another, AB 1222 (Tina McKinnor, D -Inglewood) purports to provide greater transparency by ensuring that rental car companies quote rental rates that contain the entire amount, including all applicable taxes and additional fees or charges, necessary to rent the vehicle. But, like SB 611, this bill is more posturing than substantive. As anyone who has booked a rental car knows, the amount of the charge is clearly disclosed prior to the rental.

More insidious is SB 680 (Senator Nancy Skinner, D – Berkeley) which would prohibit auto dealers from charging above the Manufacturer’s Suggested Retail Price for electric vehicles. All this bill would accomplish would be to ensure that highly popular vehicles that are in limited supply would be shipped to other states where a market-based sales price could be negotiated. If the goal was to put more EV’s on the road in California, this bill could easily have the opposite effect.

Even a cursory review of the half dozen or so bills targeting “junk fees” exposes that most are simply posing as solutions without any real impact or substance. Those that are substantive are more likely to produce unintended consequences at best or, at worse, outcomes that are the exact opposite of what they claim.

But, if the California legislature is serious about “junk fees,” we have an idea. Let’s go after all the extraneous fees, charges and assessments imposed by government that frequently do no good nor provide any benefit to taxpayers or ratepayers. The list is endless.

Fees imposed by the state include lumber “fees” imposed on all retail sales of most wood products, Electronic Waste Recycling Fee, Energy Resources Surcharges, California Tire Fee, Natural Gas Surcharges (because the price of natural gas apparently isn’t high enough), Marine Invasive Species Fee, Childhood Lead Poisoning Prevention Fee (imposed on businesses that don’t produce products containing lead), and literally hundreds of additional fees.

Local governments are notorious for imposing a myriad of miscellaneous fees usually disconnected from any benefits conferred on taxpayers. For example, some local governments are imposing “vacant lot” fees based on the theory that vacant properties need to be “inspected” periodically. These fees are imposed whether any inspections ever occur. The same is true of other “inspection fees” such as rental housing fees and fire inspection fees.

California homeowners are all too familiar with “junk fees” every year when they receive their property tax bills. On top of the regular property tax, limited to 1% thanks to Proposition 13, homeowners see a list of “below the line” items that include flood control assessments, lighting and landscaping assessments, Mello-Roos taxes (in many neighborhoods) and a litany of other miscellaneous fees, charges, taxes, and assessments.

Click here to read the full article in the OC Register

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Legislator Proposes California Law to Protect Renters from Becoming Homeless

March 12, 2023 By Linh Tat 13 Comments

Sen. Durazo’s SB 567 would boost safeguards for renters under the Tenant Protection Act of 2019

Hoping to build on California’s Tenant Protection Act of 2019, a state lawmaker from Los Angeles is working on a bill to prevent even more tenants from falling into homelessness in a state that continues to rank first in the number of unhoused people.

Sen. María Elena Durazo (D-Los Angeles) on Friday, March 10, kicked off a campaign to promote Senate Bill 567, also known as the Homelessness Prevention Act, which aims to further protect tenants from unjust evictions and excessive rent hikes.

Inflation, combined with the end of COVID-19 pandemic-related eviction protections, have put many renters at risk of not being able to pay their rent and losing their homes, backers of SB 567 say.

“This is an urgent humanitarian crisis,” Durazo said during a news conference at the Aliso-Pico Recreation Center in Boyle Heights. “As we drive around Los Angeles, we see tents under the freeways, on the sidewalks and the storefronts. It’s become part of the city.”

Details of Durazo’s proposed legislation are being finalized, so a text of the bill is not yet available.

But in an interview after the news conference, the senator said she wants to further lower the cap that landlords can raise rent by, though what that number will be is still being ironed out. Under the existing Tenant Protection Act, rent hikes are capped at either 5% plus the local inflation rate, or 10%, whichever amount is lower.

“We’re open to something that’s reasonable, but clearly 10%, in this day and age with inflation, is far too much, and it’s a principal reason why people can’t pay and they end up on the streets,” Durazo said. “Even with the jobs that they have, they cannot afford to pay these kinds of 10% increases every year.”

She also wants to extend protections to tenants who are renting mobile homes or single-family homes.

In Los Angeles, the city council recently adopted additional tenant protections, including for the renters of single-family homes.

Supporters of SB 567 cite a 2020 study by the U.S. Government Accountability Office which found that a median rent increase of $100 resulted in a 9% increase in homelessness nationwide.

California is home to more than 160,000 unhoused residents.

“This is immoral – the idea that in the richest subnational economy in the world, that we have over 160,000 people sleeping every day on the street,” said Christina Livingston, executive director of the Alliance of Californians for Community Empowerment.

Proponents of Durazo’s bill say SB 567 would close loopholes to prevent no-fault evictions, expand the pool of renters with tenant protections, limit annual rent increases, and allow for accountability and enforcement.

Joseph Tomás McKellar, executive director of PICO California, a sponsor of the bill, said one family is evicted every minute in California. In L.A. County, one person is evicted every nine minutes, he said, adding that most of them are people of color and immigrants.

Click here to read the full article in the OC Register

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Carney on ‘Kudlow’: Silicon Valley Bank’s Failure Signals the End of the ‘Cheap Money Ecosystem’ Fueling CA Tech Start-Ups

March 12, 2023 By Rebecca Mansour 2 Comments

The “cheap money ecosystem” that fed the tech start-up culture has come to an end with the Federal Reserve raising interest rates to curb inflation, and the failure of Silicon Valley Bank might be the first domino to fall among California-based financial institutions, Breitbart Economics Editor John Carney said in an interview Friday with Fox Business host Larry Kudlow.

“The sudden implosion of Silicon Valley Bank (SVB) is sending shock waves through the financial system and the technology sector,” Carney wrote in Friday’s Breitbart Business Digest. “SVB plays a central role in the start-up economy of San Francisco. According to Bloomberg, it does business with about half of venture capital backed start-up firms in the U.S.”

“One of the problems [for SVB] was when money was so freely available to all these start-ups, they didn’t borrow a lot,” Carney told Kudlow. “So, they had a ton of deposits coming in and not a lot of opportunity to make loans out to people. I mean, yeah, you can lend money so people can buy a yacht or a fancy mortgage on some tech start-up billionaire’s fancy mansion, but they really had way too much money. So, they invested it in bonds. Bank of America I think has 25 percent of its assets in bonds, but this bank had over 50 percent of its assets in bonds.”

Kudlow noted that when the yield curve inverted, these bonds incurred a negative return.

“They’re losing money,” Carney agreed. “And at the same time, all these start-ups who are depositing so much money there are now withdrawing it because they don’t have access to free money anymore. So, they’re withdrawing it just to pay their bills. So, you’re having the deposits go down. They have to sell into a market where they are actually producing real losses, not just mark to market losses.”

“That is what sparked the panic basically,” he continued. “Earlier this week, [SVB] announced something like a $2 billion loss on their assets. And people said, ‘I better get my money out quickly.’”

“Now the FDIC stepped in to avoid an old-fashioned run on the bank,” Kudlow said.

The bank went into receivership on Friday when the California Department of Financial Protection and Innovation shuttered it, and the Federal Deposit Insurance Corporation (FDIC) issued a statement guaranteeing the accounts of all insured depositors. However, as Carney told Kudlow, this will not be reassuring to the depositors of the reportedly 93 percent of SVB deposits that are uninsured.

“There are people who are at risk of losing their deposits at least on paper,” Carney said.

All of this has been exacerbated by the Federal Reserves’ rate-hiking fight against inflation, which has signaled the end of the cheap lending low interest rate monetary policy that fostered Silicon Valley start-ups, Carney explained.

“I think we’re going to see a lot of the California-based financial institutions get into trouble because they were so dependent on this very cheap money ecosystem that was feeding start-up culture and is no longer there,” he said.

“What happens to the start-up culture now that there’s no cheap money or there’s no cheap, cheap money?” Kudlow asked. “[Are] they’re going to have trouble getting loans?”

“Absolutely,” Carney said. “They’ll have trouble getting loans and have trouble raising money because if you can get five percent on a treasury bond, why are you trying to get 10 percent on a very risky start-up? You’re not going to do that. You might as well just double down on leverage and get a treasury. So, I think that they’re going to have a lot of trouble being able to continue to raise money. And we’re going to see a lot of the start-ups start to tilt over.”

Kudlow asked Carney about the risk that this bank failure will spread beyond SVB.

“I think there’s a high risk that it spreads,” he said. “People are right now looking at every other bank, not the big banks—the JP Morgans, Citigroups, Wells Fargos, they’ll be fine.”

“The banking system is extremely well capitalized,” he added. “And so, I don’t think we’re on the verge of a financial crisis. But I do think we’ll probably have a couple more bank failures ahead of us.”

Click here to read the full article at BreitbartCA

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California Housing Laws Prompt Dueling Housing Lawsuits

March 11, 2023 By Amy Taxin and Adam Beam 5 Comments

California’s attempts at forcing its wealthy coastal cities to build more affordable housing spawned two lawsuits on Thursday, showcasing tensions around solving a crisis that has contributed to a surge in the homeless population in the nation’s most populous state.

Attorney General Rob Bonta sued Huntington Beach on Thursday morning, accusing the seaside city known for its surf culture and iconic pier of ignoring state laws requiring it to approve more affordable housing and to build more than 13,000 new homes over the next eight years.

State housing officials say California needs an additional 2.5 million homes by 2030 in order to keep up with demand. But the state currently builds about 125,000 houses each year, which leaves California well short of that goal. California has about 170,000 homeless people on any given night, accounting for nearly one-third of the nation’s unsheltered population, according to federal data.

Bonta’s lawsuit, filed in Orange County Superior Court, asks a judge to order the city to comply with the law and to impose a fine.

“This is the colossal challenge that California is confronting,” Bonta said. “The message we’re sending to the city of Huntington Beach is simple: Act in good faith, follow the law and do your part to increase the housing supply. If you don’t, our office will hold you accountable.”

Hours later, defiant city officials announced their own lawsuit, asking a federal judge to block the state from forcing them to build a wave of new homes they said would transform the suburban community into an urban one.

“I am committed to defend the city and its wonderful property owners who enjoy this quiet suburban beach town,” Huntington Beach Mayor Tony Strickland said.

Huntington Beach, dubbed “Surf City USA,” has a largely suburban feel with residential neighborhoods of single-family homes flanked by busy main roads linked with strip malls and office buildings.

Last year, four new councilmembers won election with a politically conservative bent. Since taking office, the four-member council majority has taken on state housing mandates and limited the flying of flags on city property, including removing the LGBT rainbow flag that has flown in the city the past two years.

The dispute with the state centers on the Regional Housing Needs Allocation, a process that requires cities to formulate a plan every eight years on how they will meet housing demands — demand that is set by the state.

California has told Huntington Beach it must built 13,368 new homes over the next eight years. The city is supposed to come up with a plan on how they will do that, and that plan that must be approved by the state.

The state punishes cities that don’t have state-approved housing plans by letting developers come in and build affordable apartment buildings without asking for local permission — a penalty known as the “builder’s remedy.” The Huntington Beach City Council is considering an ordinance at its next meeting that would exempt the city from this penalty, an ordinance state officials say is illegal.

A state law, passed in 2019, says a state judge can impose fines starting at $10,000 per month for cities that refuse to comply. The law also says the court can appoint someone “with all the powers necessary” to force the city into compliance.

This is the second time California officials have sued Huntington Beach for not following state housing laws. The city settled the first lawsuit back in 2020.

California’s housing and homelessness issues have worsened each year despite Gov. Gavin Newsom and the Democratic-controlled state Legislature spending billions of dollars in taxpayer money on the problem. Nearly all of that money has gone to local governments, which have their own housing and homelessness policies.

State leaders have repeatedly tried to shape those local policies through state laws and regulations.

Newsom, who won reelection in November and is seen as a potential presidential candidate one day, has aggressively challenged local governments to comply with state standards. Last year, he delayed $1 billion in homelessness funding for local governments because he said their plans to spend the money weren’t good enough.

Newsom later released the money after a closed-door meeting with local officials.

Click here to read the full article in AP News

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Helping the ‘Unbanked’: California Mulls Entering Banking Business to Serve Disadvantaged Consumers

March 11, 2023 By Wendy Fry 6 Comments

Anneisha Williams figures she has paid several hundred dollars in overdraft fees over the years, so when her last bank recently refused to refund about $500 a hacker stole from her checking account, Williams decided she was done with banks. 

Williams, 38, works full-time at a Jack-in-the-box in the Los Angeles area and is an in-home care provider. She also is raising six children; she doesn’t have time to hassle with a bank she no longer trusts, she said. 

“They told me they couldn’t refund my money, basically, that it was just a loss,” she said. “It was just highway robbery.” 

Now Williams does banking online through a financial tech company. It doesn’t charge her monthly fees and offers her free overdraft protection. But state law says such companies aren’t banks and can’t call themselves that. 

Williams has joined California’s “unbanked” — some 7% of Californians who don’t have checking or savings accounts at traditional banks. 

Another 18% have bank accounts but end up using higher-fee financial services, such as payday lenders or check-cashing businesses. They are considered the  “underbanked,” according to banking experts.

In total, 1 in 4 Californians lacks full access to banks, studies say. Many are low-income and minorities who pay high fees to access their cash.

Lawmakers say they’re preparing to help. The state Legislature passed a law in 2021 creating a commission to explore a public banking option called CalAccount. Its report is due to the Legislature July 1, 2024.

CalAccount would be a state-run public bank, but the state would likely involve another bank or financial partner. It would offer such services as free checking, overdraft protection, ATM cards and savings accounts to people who are underserved by banks, state officials said.

Assemblymember Miguel Santiago, a Democrat from Los Angeles who authored the law, said it  would bring back into the economy people pushed out by high financial fees.

Financial options

“We can’t create a stable economy when financially underserved households spend an average of 10% of their take-home pay in fees and interest, just to access their own money and pay bills,” Santiago said.  “Creating a public option for banking and closing the racial wealth gap isn’t only a moral imperative, but it also creates greater financial security for all of our communities.”

CalAccounts would offer “a voluntary, zero-fee, zero-penalty, federally insured transaction account,” says the California Public Banking Option Act. People could access their accounts in person at post offices, rather than at bank branches.

California has one of the highest concentrations of unbanked families in the nation, according to the Federal Reserve. Workers earning less than $15 per hour make up 81% of unbanked individuals in the state, a study said. 

The Federal Deposit Insurance Corp., which regulates banks, says to be unbanked means no one in a household has a checking or savings account at a traditional bank or credit union. Underbanked means they have a bank account but still lack access to many financial services, such as credit cards and loans. 

Not enough cash

Critics of CalAccounts say there aren’t enough of the unbanked or underbanked to justify a state-run financial alternative. Many Californians don’t lack access to bank services, they said; they just lack cash.

“This is a critical distinction that must be made; individuals who utilize payday lenders and other high-cost loan products do so because they have inadequate cash flow, not because they lack access to banking services,” a coalition of business and banking groups wrote to legislators. 

Other experts voiced misgivings about public banking. 

James Hamilton, an economics professor at University of California San Diego, said where a public bank gets its money to lend and how transparent it is will be important. A public banking system could mask lending practices that deserve public oversight, he said.

“Expenditures of taxpayer dollars should be approved by the legislature and open to public review,” he said. “If the bank’s loans were funded entirely with legislatively approved allocations of tax revenue, I would have no problem with it. But if they are funded by borrowing, this can mask the losses and procrastinate handing the ultimate bill to taxpayers. 

“That is how the federal student loan program became a trillion-dollar public loss. California should not repeat the same mistake.” 

Banking on minorities 

Being unbanked greatly impacts people of color and low-income families. Nearly 1 in 2 Black and Latino households in California is unbanked or underbanked, state officials said.

One reason: low-income consumers are often burdened by bank fees that others with higher balances don’t have to pay. Black households are almost 2 times more likely to pay overdraft fees than white households, and Latino households are 1.4 times more likely, says a study by the Roosevelt Institute, a liberal think tank. 

In 2021, 11% of U.S. adults with bank accounts paid at least one overdraft fee, but 20% of Black and 14% of Latino account holders paid such fees, according to the Federal Reserve. 

Banks charge overdraft fees — typically around $35 — for each transaction. Some banks charge a single customer multiple times for the same error and charge them each day their account remains overdrawn, the Roosevelt Institute said. 

Frequent overdrafters generate about half of banking companies’ checking account profits, according to a 2020 study by the global consulting firm Oliver Wyman. Overdraft-related fees generated $17 billion for banks in 2019, and among the 25 largest banks, about 9% of annual pre-tax profits.

Due to public pressure, some banks in 2021 reduced fees. But by third quarter the fees were back up and banks collected $11 billion that year, the Roosevelt Institute said. 

Add that to what unbanked customers pay check cashers and payday lenders and Californians are losing hundreds of millions of dollars a year in fees, Santiago said. 

Customer service test

Julia, a 61-year-old McDonald’s employee in Richmond, Calif., said her bank takes a $12 fee from her account every month her balance is below $1,500. 

“That $12 is important,’ said Julia, who did not disclose her last name because she fears deportation as an undocumented immigrant. “For a poor person, every single dollar is important. We have to pay for lights, gas, trash service, and buy food. You have to work two or three jobs just to get by.” 

Online banking through a financial tech company, like Williams did, is an option. But those companies aren’t registered banks. They often partner with banks to offer their services. And some have attracted hundreds of complaints.

If the state operates a public bank, people could get their paychecks, public assistance benefits and tax returns directly deposited, proponents say.  

This option may be years away, however. After bank industry lobbying, lawmakers amended the public banking bill. Instead of creating a bank, the bill created a Blue Ribbon commission to conduct a market analysis to determine if it’s feasible. 

So far that commission has held few meetings. It is just beginning the process of hiring a market analysis consultant. 

Meanwhile state and federal governments should more actively regulate banking and protect consumers, wrote Emily DiVito, author of The Roosevelt Institute’s report.

To back that up, her study includes research purporting to show how staff at some California banks treat minority or low-income customers.

Researchers posed as potential customers and went to 80 bank branches, requesting information about opening accounts. Bank staff turned away minority canvassers nearly a third of the time, DeVito wrote, but turned away white canvassers once out of 23 visits.

The staff gave various reasons: customers needed to make appointments, staff was too busy or at lunch, or relevant information about bank accounts was on the bank’s website.

Click here to read the full article CalMatters

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Suspect Dead After Allegedly Shooting 3 LAPD Officers in Lincoln Heights

March 10, 2023 By Richard Winton, Christian Martinez and 4 Comments

Three Los Angeles Police Department officers were shot Wednesday night and a suspect was dead following a confrontation in the city’s Lincoln Heights neighborhood, police officials said.

The incident occurred around 6 p.m. on North Broadway at Mission Road. All three officers were expected to survive.

Officers with the Hollenbeck station were called around 3:50 p.m. to the 3800 block of Broadway on Wednesday afternoon to search for a parolee at large, LAPD Assistant Chief Al Labrada said Wednesday night at a news conference held outside L.A. County-USC Medical Center.

Officers found the suspect, who they said refused to comply with commands, and a K-9 unit was requested from the Metropolitan Division.

Officers used gas on the suspect, who still did not comply with their commands, Labrada said.

“At one point during the search,” he said, “the suspect exited and fired at the officers, wounding three … who are now listed in stable condition here just behind me.”

All of the officers who were shot were part of the Metropolitan Division’s K-9 unit.

After they were hit, other officers pulled them from the line of fire, law enforcement sources said. They were taken to the hospital by ambulances.

One officer was shot in the arm, another in the leg and a third was hit in the torso but his body armor likely deflected the round leaving him with shrapnel injuries, according to law enforcement sources.

Labrada said all three of the officers were able to speak and that their families were at the hospital.

At some point during the incident, an unknown number of officers fired at the suspect, Labrada said.

The suspect was confirmed dead Wednesday night by police officials several hours after the officers were shot. He was identified by authorities on Thursday as Jonathan Magana.

The cause and manner of his death were not disclosed.

The LAPD’s force investigation division is investigating the shooting by police, Labrada said, while the Robbery-Homicide Division is investigating the shooting that injured the officers.

“I deeply appreciate their service, and let them know that their city stands with them,” Mayor Karen Bass said at the news conference. “And I very much look forward to their recovery. My heart goes out to the officers’ families who tonight got the phone call, or the knock on the door, that they dread every day that their loved ones go on duty.”

Magana had a lengthy criminal record and in January was charged with battery on a police officer and possession of a firearm by a prohibited person in connection with an incident late last year, according to court records and law enforcement sources.

In February 2020, Magana was convicted of two felony counts of robbery connected to incidents that occurred in 2019. He was sentenced to 4 years in prison for the first count and a year in county jail for the second count. In 2014, he was convicted for selling methamphetamines.

In the aftermath of the shooting, officers, including those in full tactical gear, swarmed the Lincoln Heights site, where blockades had been erected.

A helicopter was broadcasting to residents to remain inside and lock their doors. A special weapons and tactics team with armored vehicles arrived at the scene shortly before 8 p.m.

LAPD Chief Michel Moore said on Twitter that he was monitoring the night’s events.

Sets of drones and helicopters swirled around an empty Lincoln Park Recreation Center as officers shut down parts of Valley Boulevard near the active crime scene.

A handful of joggers still ran and worked out in sweats near a children’s playground that was closed for remodeling.

One runner said she was turned around by police and told to head to the easternmost end of the park.

Click here to read the full article in the LA Times

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California to End Walgreens Contract After Abortion Dispute

March 10, 2023 By Adam Beam 6 Comments

SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom on Wednesday withdrew a $54 million contract with Walgreens after the pharmacy giant indicated it would not sell an abortion pill by mail in some conservative-led states.

Newsom on Wednesday ordered state officials to not renew a contract with Walgreens to purchase specialty pharmacy prescription drugs for California’s prison health care system, including antiviral and antifungal drugs and medication used for congestive heart failure. Walgreens has gotten about $54 million from the contract, which expires April 30.

Newsom’s office said the state will buy the drugs somewhere else.

“California will not stand by as corporations cave to extremists and cut off critical access to reproductive care and freedom,” Newsom said in a news release. “California is on track to be the fourth largest economy in the world and we will leverage our market power to defend the right to choose.”

Walgreens representative Fraser Engerman said the company was “deeply disappointed by the decision by the state of California not to renew our longstanding contract due to false and misleading information.”

“Walgreens is facing the same circumstances as all retail pharmacies, and no other pharmacies have said that they would approach this situation differently, so it’s unclear where this contract would not be moved,” Engerman said. “Our position has always been that, once we are certified by the FDA, Walgreens plans to dispense Mifepristone in any jurisdiction where it is legally permissible to do so, including the state of California.”

Mifepristone is a pill that when combined with another pill will end a pregnancy. The U.S. Food and Drug Administration approved the pill in 2000 for use in up to the 10th week of pregnancy. Today, more than half of all abortions in the U.S. are done by pills, according to the Guttmacher Institute, a research group that supports abortion rights.

After the U.S. Supreme Court last year overturned the federal right to an abortion, more than a dozen states have restricted the use of abortion pills. But those restrictions are being challenged in court.

Attorneys general in 20 states, mostly with Republican governors, have warned Walgreens and CVS they could face legal consequences if they sell abortion pills in their states. Last week, Walgreens confirmed it sent a response to each attorney general saying it would not dispense the drug in their states.

Newsom responded to that news on Monday, posting in a message on Twitter that California won’t be doing business with Walgreens “or any company that cowers to the extremists and puts women’s lives at risk.”

“We’re done,” Newsom said.

Losing the California contract will have a small impact on Walgreens’ revenues, as the company reported $132.7 billion in sales for the fiscal year that ended Aug. 31.

But for Newsom, the move is more about solidifying California’s role as a leader in what he has called “reproductive freedom.”

Click here to read the full article in AP News

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New Cost Estimate for High-Speed Rail Puts California Bullet Train $100 Billion in the Red

March 9, 2023 By Ralph Vartabedian 10 Comments

When Gov. Gavin Newsom unveiled his scaled down blueprint for the California bullet train four years ago, he proposed building a 171-mile starter segment in the Central Valley that would begin operating in 2030 and cost $22.8 billion.

Today, the blueprint is fraying — costs now exceed future funding, an official estimate of future ridership has dropped by 25%, and the schedule to start to carry people is slipping. That’s raising fresh concerns about the future of the nation’s largest infrastructure project.

New cost figures issued in an update report from the California High-Speed Rail Authority show that the plan to build the 171-mile initial segment has shot up to a high of $35 billion, exceeding secured funding by $10 billion.

The cost of that partial system is now higher than the $33 billion estimate for the entire 500-mile Los Angeles to San Francisco system when voters approved a bond in 2008.

What’s worse, that full system cost is set at up to $128 billion in the update, leaving a total funding gap of more than $100 billion for politicians to ponder.

Ethan Elkind, who watches California transportation issues as director of the climate change program at UC Berkeley’s law school, said the mounting problems cloud the project’s future.

“It is in jeopardy,” Elkind said. “It is dicey. There is no path forward for the full Los Angeles to San Francisco system. It is important that they get something done.”

The $128 billion price tag does not include cost updates for two separate segments between Palmdale and Anaheim, because the rail authority in the past has not updated costs until it completes environmental assessments. There could be additional jolts of sticker shock when those costs are added in the future.

“It is clear that additional funding will be necessary to deliver the…operational Merced to Bakersfield system for passenger service,” the report says.

The roughly $10 billion cost increase on the Merced to Bakersfield line includes $3.9 billion mostly for the decisions to have elevated stations and track realignments in Merced and Bakersfield; $2.1 billion for higher inflation; and $3.7 billion in contingency or reserves for future cost increases.

Brian Kelly, rail authority chief executive, said in an interview that the higher costs, which have affected projects all over the nation, represents a “tougher challenge.”

“There has never been an easy time for this project,” he said. “Nothing’s ever been easy here. This project has never had full funding.”

Kelly notes that the range of estimates for the Central Valley segment goes from a high of $35 billion down to $28 billion. The price tag of the project has grown since 2008, exceeding all the prior cost ranges.

Potential engineering risks

The current struggle follows a period when the project had strong support from the Biden Administration and Congress. But the Republican seizure of the House in 2022 elections could auger tougher times ahead.

Bakersfield native and now House Speaker Kevin McCarthy has long called the project, which would serve his own district, a boondoggle.

“In no way, shape, or form should the federal government allocate another dollar to California’s inept high speed rail,” McCarthy said in a statement to CalMatters. “The California High Speed Rail Authority has missed countless timelines and deceived the public about costs which are exorbitantly higher than originally estimated.”

Among nonpartisan state analysts, the reliability of the new cost estimates is likely to come under sharp scrutiny, including by the state-appointed Peer Review Group.

Bill Ibbs, a retired UC Berkeley civil engineer who serves on the group and has consulted on international high speed rail projects, said he is concerned about the lack of attention to engineering risks.

“They don’t directly address the hard core engineering issues,” Ibbs said, particularly the 38 miles of mountain tunnels that are planned for Southern California alone. “What are the major engineering challenges that lie in front of you and why aren’t you talking about them in this report?”

Population decline = ridership decline

The report also indicates that the date for operating the 171-mile system could stretch out to 2033 from 2030, which would delay the public benefits and account for cost pressures.

And possibly more worrisome is a cut to the projected future ridership by 25%, owing to the reality that the COVID-19 pandemic has fundamentally reduced the use of public transportation and California’s expected population growth has fizzled. An important justification for the bullet train since its inception was an expectation that population growth would necessitate improved passenger rail. The report nonetheless asserts the system would perform comparable to Amtrak’s Northeast Corridor passenger loads.

Those factors are beyond the rail authority’s ability to control, though it has struggled with construction problems of its own in the Central Valley over the last 10 years.

More than 1,000 change orders, originated by the rail authority or by contractors, have been approved and account for much of the cost growth. They include big ticket items, such as miscalculating the need for massive barriers to prevent freight trains on nearby tracks derailing and crashing into a bullet train. About 20 change orders for that item alone run over a half billion dollars.

Construction has been held up because of problems relocating utilities, such as underground sewers, water lines and gas pipes. Currently, about half of the 2,800 projects to relocate underground utilities have not been completed, according to a separate status report issued by the rail board’s finance and audit committee. Two dozen major structures, such as viaducts and bridges, have not even started construction.

Hoping for some federal dollars

But those problems are being solved and major disputes over change orders are in the rear view mirror, the report said. Out of 2,300 parcels of land for the rail, only 92 remain to be acquired.

Newsom adopted his plan for a starter California high-speed rail system in 2018, based on a strategy that demonstrating an operational system in the Central Valley would stoke public support for building the more expensive passages through coastal mountains to the Bay Area and Southern California.

That idea preceded significant cost growth that has outstripped funding, leaving Democrats in the Legislature increasingly skittish and Republicans calling for a full blown retreat.

“It is on life support now,” said Sen. Brian Jones, a San Diego County Republican and Senate minority leader. “The governor has not been able to deliver on any of his promises.”

At this point, Jones says the project should be stopped and potentially the existing structures in the Central Valley demolished if they can not be repurposed.

Democratic leaders have declined or did not respond to requests for interviews.

“While this news is difficult, the Administration continues to review all available options, including ongoing efforts to receive additional federal dollars,” wrote Daniel Lopez, the deputy communications director for Newsom, in a statement to CalMatters. “Federal funding will be helpful in completing the Merced to Bakersfield segment on schedule, and the Administration believes that the Authority is well-positioned to compete for significant funding through the Bipartisan Infrastructure Law, the Inflation Reduction Act, and other federal funding sources.”

Sen. Lena Gonzalez, a Long Beach Democrat who chairs the Senate Transportation Committee, issued a statement that she would hold an oversight hearing March 28 to hear from the rail authority. It is regular practice to hold a hearing after a new project update.

Kelly believes there is a reasonable path forward. The report, issued on March 1, sets a goal for the rail authority to obtain $8 billion in federal grants under the Bipartisan Instructure Law enacted by Congress last year.

The entire pool of money for rail enacted in the infrastructure law is $75 billion, so $8 billion would appear to be a reasonable share for California. But the Biden Administration and Congress were far more generous to the Amtrak system in the law, allocating roughly $24 billion to its operations while failing to set aside any guaranteed chunk of money for California. Moreover, there are other passenger rail systems in California, which may want a share of any money headed to the Golden State.

Kelly acknowledges that the $8 billion goal is “aggressive and rightly so” because California is paying for 84% of cost so far. “If the national government wants to get a national cleaner, faster electrified rail system it has to do better than 16% And so we’re going to make that case.

“I think it’s reasonable and a prudent ask,” Kelly said. The state will know by early next year whether it will get the lifeline. Without it, the funding shortfall will be breathtaking. Before then, the Senate and Assembly will hold hearings in the next month.

Will voters OK more spending?

“It is certainly a significant funding gap,” said Helen Kerstein, who covers the rail project at the nonpartisan Legislative Analyst’s Office. “Absent very significant additional federal funds, the state will need to contribute additional funding to get that segment from Merced to Bakersfield completed.”

Kerstein notes that the project failed to get a funding boost from the general fund when the state was flush with surplus tax receipts in recent years and now the state is struggling with a deficit and the likelihood of more to come. At the same time, there are other priorities.

Kerstein adds, “It’s going to be tough.”

Elkind, the UC Berkeley law professor, said ultimately the state will have to go back to voters and ask for another bond issue if there is any hope to build the complete system.

“It’s going to be harder to go back to the voters and ask for more funding, but I think that’s ultimately what’s going to be needed, which is why it’s so critical that they finish this first segment,” he said.

Click here to read the full article in CalMatters

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Will New California Law Curb Pay-To-Play in Local Governments?

March 9, 2023 By Dan Walters 1 Comment

A wave of corruption scandals has washed over California’s local governments in recent years, particularly in Southern California.

Bribery and self-dealing is so common among small cities in Los Angeles County that the speaker of the state Assembly, Anthony Rendon, has described the area he represents as a “corridor of corruption.”

Last month, Jose Huizar, a member of the Los Angeles City Council for 15 years, pleaded guilty to federal charges of racketeering and tax evasion for extorting at least $1.5 million in bribes from developers of real estate projects.

This week, another former Los Angeles councilman, Mark Ridley-Thomas, went on trial in federal court for allegedly, as a county supervisor, routing contracts to the University of Southern California in return for benefits for his son, former assemblyman Sebastian Ridley-Thomas, including a $100,000 grant to the son’s nonprofit corporation.

Out-and-out bribery violates both state and federal law and quite a few local officials, both elected and appointed, and some state legislators have been prosecuted.

Just below blatant tit-for-tat bribery, legally speaking, is another layer known colloquially as “pay-to-play.” Those seeking beneficial acts from political figures, such as trash hauling contracts or development permits, understand that they need to make campaign contributions to increase their chances of success.

In the 1980s, the Legislature enacted laws to curb campaign contributions to elected officials who sit on state boards. They were inspired by allegations that local government officials sitting on the California Coastal Commission were being showered with campaign money from property developers.

Last year, state Sen. Steve Glazer, an Orinda Democrat who once was the city’s mayor, carried a bill to expand the 1980s laws to local governments. Senate Bill 1439 was backed by political reform groups and sailed through the Legislature without a single negative vote or formal opposition.

The new law went into effect on Jan. 1, essentially prohibiting contributions of more than $250 to any local elected official from anyone seeking contracts, permits or licenses from the board or council on which the official serves. It would be retroactive, requiring the official who received such contributions in the past to give the money back.

Last month, a coalition of business groups and a few elected officials sued to overturn the law, saying it “is overbroad and violates the constitutional rights of thousands of contributors and local elected officials.”

“We have become numb to the legal corruption that has enveloped our democracy,” Glazer said this week in response. “Pay-to-play is antithetical to an honest and ethical government, and it should be rooted out and killed like a cancer that has affected the body politic.” 

While the situation Glazer seeks to address is a real one, his new law could ensnare an official who innocently accepted a campaign contribution, and perhaps spent it to get elected, only to learn months later that his vote would affect a contributor.

That said, one obvious flaw is that it applies to a very narrow set of official acts. It would not, for example, affect a local government’s contract with its workers’ union, due to specific exemption in the original 1980s laws. Yet, unions are among the most active favor-seeking interest groups.

Click here to read the full article in CalMatters

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