Will Gavin Newsom’s Drug Pricing Plan Save You Money?

Pills health careGov. Gavin Newson wants to deliver lower drug prices by harnessing the full weight of the state against the pharmaceutical industry, but it’s unclear whether his team can get a better deal without giving up something Californians want.

In his first act as governor, Newsom issued an executive order creating the largest single purchaser of prescription drugs in the country.

It combines negotiations for some 13 million people in government-administered plans like Medi-Cal and eventually invites other organizations to join. His argument centers on the idea that a bigger organization can extract a better price from pharmaceutical companies.

“We believe this will significantly reduce costs,” he said at a press conference last week, adding that he’d ask other governors if they want to participate. …

Click here to read the full article from the Sacramento Bee

Exporting California’s Redistricting Change

VotedIt is an old adage that California is a bellwether for the nation. Policy changes that happen here often flow eastward from tax revolts to climate strategies. Newly elected governor Gavin Newsom boldly predicted that recent California policies are the future for the rest of the country. Time will tell, but the idea that California political ideas will move the rest of the country is being tested currently, led by another of the Golden State’s governors.

Last week, former governor Arnold Schwarzenegger hosted a Terminate Gerrymandering Summit at his USC Schwarzenegger Institute. On hand were leaders of four states, Michigan, Utah, Colorado, and Missouri, that saw successful ballot propositions approved in recent elections to take the power of drawing districts from legislators and give it to independent committees.

Calling the art of Gerrymandering (the word comes from an 1812 Massachusetts state senate district drawing signed by Governor Gerry with one district shaped like a salamander) a “200-year old scam,” Schwarzenegger celebrated the electoral victories, which he said, now means that one-third of congressional districts nationally are no longer drawn by politicians.

The exuberant former governor went a bit overboard in declaring that redistricting is now “hip.” However, it’s not a stretch to understand that when people listen to arguments about politicians choosing their own voters under Gerrymandering that the fairness issue weighs heavily on the side of change.

Both political parties have practiced the art of Gerrymandering—drawing districts that would guarantee safe party seats.

There are efforts in Texas and North Carolina to undo Republican Gerrymanders and in Maryland to end a Democratic Gerrymander.

The success of the Utah proposition in a solid Republican state was built on campaign material quoting Republicans Ronald Reagan and Schwarzenegger on the undemocratic aspects of Gerrymandering.

Schwarzenegger was a principal supporter of California’s Proposition 11 in 2008 to draw electoral boundaries for state assembly and senate districts. That was followed two years later by Proposition 20, filed by Charles Munger, Jr., to add the task of redistricting congressional seats to the newly created commission’s responsibilities.

Schwarzenegger reminisced about leaders of Democratic and Republican caucuses fighting fiercely when he was governor over some policy issue only to call him later and say they were united in their opposition to his effort to support the initiative to end Gerrymandering. He said then (and now) Speaker of the House Nancy Pelosi spearheaded an effort that supplied millions of dollars to defeat the measure.

Kathay Feng of Common Cause, one of the lead organizations attempting to end Gerrymandering around the nation, recalled once receiving a call from a San Francisco legislator (unidentified but a Democrat, of course—San Francisco) demanding that no more Asian voters be put in her district.

Schwarzenegger intends to continue the effort to push his California message nationally during the 2020 elections. He set a goal that two-thirds or more of the congressional districts drawn after the 2020 census will be in the hands of independent commissioners.

This article was originally published by Fox and Hounds Daily

Gov. Newsom Pushing For New Taxes on Water and Phones

Water Drought SprinklerGov. Gavin Newsom’s has called for a first-ever water tax and an added fee on phone bills at a time when the state is enjoying what recently departed state Legislative Analyst Mac Taylor called “extraordinary” budget health. Newsom said last week that experts now forecast a $21.5 billion budget windfall in 2019-20. Until recent years, the optics of asking the public to pay more with an overflowing budget would have seemed impossible to overcome.

Specific details have not yet emerged on Newsom’s plan, but it’s expected to be similar to a rejected 2018 proposal from state Sen. Bill Monning, D-Carmel, to tax residential customers 95 cents a month to help fund water improvements in rural farming communities in the Central Valley and throughout the state.

It would raise about $110 million to get clean water to what the McClatchy News Service estimated last year to be 360,000 people without such access. Others looking at the problem see it as much worse. Newsom said 1 million residents face health risks from their own water supplies.

Newsom emphasized what a priority the water tax would be for him on Friday by taking his cabinet on a “surprise” tour of affected Central Valley communities.

The dairy industry would also face $30 million in new fees. The $140 million annually that Newsom hopes to get from his plan is dwarfed by money already available from a $7.5 billion 2014 state water bond. While the largest chunk of the bond – $2.7 billion – was reserved for water storage projects, one of its listed priorities for the remaining $4.8 billion was providing access to clean water.

Howard Jarvis Taxpayers Association President Jon Coupal saw Newsom’s water tax plan as part of a historical continuum. He told the Sacramento Bee it was only the latest example “of California’s knee-jerk reaction to default to a new tax whenever there’s a new problem.”

But Newsom depicted his 2019-20 budget as reflecting discipline, touting its emphasis on continuing to add to the state’s rainy day fund and because of commitments to prepay some of CalPERS’ and CalSTRS’ unfunded long-term liabilities. Finance officials say every $1 billion prepaid now saves more than $2 billion in the long haul.

Governor cites urgent need to upgrade 911 system

Newsom also confirmed that he wants to add a 20- to 80-cent fee on monthly cellphone and landline bills to upgrade the 911 emergency notification system. That would take a two-thirds vote of the Legislature.

A similar proposal died late in the legislative session amid fears that it was a regressive tax that could cause headaches for incumbents on the November ballot.

But Newsom depicts the fee as a vital part of upgrading a 911 system that has outdated technology and is not up to the challenge of keeping safe a state facing devastating wildfires on a yearly basis.

The 911 fee was part of a larger wildfire-response program Newsom announced last week in the aftermath of last fall’s Camp fire in Butte County that killed at least 86 people and destroyed about 14,000 homes and the Woolsey Fire in Ventura and Los Angeles Counties that caused three deaths and torched 1,500 homes.

The governor wants to add $105 million to the $200 million already earmarked for improved wildfire response efforts in fiscal 2019-20. The extra money would be used to boost forest clearing efforts, to expand emergency fire rescue crews and more.

This article was originally published by CalWatchdog.com

Gavin Newsom’s Budget Calls for More Spending, Higher Taxes

Gavin Newsom budgetTo the surprise of absolutely no one, California’s new governor has proposed a state budget with billions in increased spending and lots of tax hikes. And, as an added bonus, he is proposing new mandates on businesses and local governments as well as depriving Californians of the right to vote on certain kinds of local debt. From the perspective of taxpayers, this is not a propitious start.

Gov. Gavin Newsom’s budget envisions spending $144 billion of general fund dollars, a 4 percent increase over former Gov. Jerry Brown’s last budget, which clocked in at $138 billion. To put this in perspective, general fund spending was less than $100 billion just six years ago. In California, state government is the No. 1 growth industry.

No California spending plan would be complete without new “revenue enhancements.” And the biggest item on this list is the imposition of the “individual mandate” for health insurance. Recall that President Obama’s so-called Affordable Care Act (which was anything but affordable) imposed a burdensome tax on millions of Americans. (Indeed, it was only the fact that the ACA imposed a “tax” that saved it from a constitutional challenge).

The good news is that Congress repealed the tax at the federal level. The bad news is that Gov. Newsom wants to reimpose it at the state level in order to save Covered California from imploding. The cost to Californians for a state-imposed individual mandate with a penalty?: $700 per person, which is projected to raise $500 million in new revenue.

To read the entire column, please click here.

California’s Budget “Surplus” Ignores Crushing Debt Burden

BudgetCalifornia’s new governor, Gavin Newsom, delivered an inaugural address earlier this week that accurately reflected the mentality of his supporters. Triumphalist, defiant, and filled with grand plans. But are these plans grand, or grandiose? Will Governor Newsom try to deliver everything he promised during his campaign, and if so, can California’s state government really deliver to 40 million residents universal preschool, free community college, and single payer health care for everyone? It’s reasonable to assume that to execute all of these projects would cost hundreds – plural – of billions per year. Where will this money come from?

While California’s budget outlook currently offers a surplus in excess of $10 billion, that is an order of magnitude less than what it will cost to do what Newsom is planning. And this surplus, while genuine, is the result of an extraordinary, unsustainable surge in income tax payments by wealthy people. California’s tax revenues are highly dependent on collections from the top one-percent of earners, and over the past few years, the top one-percent has been doing very, very well. Can this go on?

To illustrate just how unusually swollen California’s current state tax revenues have gotten, compare state tax collections in FYE 6/30/2017 (our most recent available data) to seven years earlier, in 2010. Back in 2010, California was in the grip of the great recession. Total state tax revenue was $94 billion, and $44 billion of that was from personal income taxes. Skip to FYE 6/30/2017, and total state tax revenue was $148 billion, and $86 billion was from personal income taxes. This means that 80 percent of the increase in state tax revenue over the seven years through 6/30/2017 was represented by the increase is collections from individual taxpayers, which doubled.

It isn’t hard to figure out why this happened. Between 2010 and 2017 the tech heavy NASDAQ tripled in value, from 2,092 to 6,153. In that same period, Silicon Valley’s big three tech stocks all quadrupled. Adjusting for splits, Apple shares went from $35 to $144, Facebook opened in May 2012 at $38, and went up to $150, Google moved from $216 to $908.

While California’s tech industry was booming over the past decade, California real estate boomed in parallel. In June 2010 the median home price in California was $335,000; by June 2017 it had jumped to $502,000. Along the California coast, median home prices have gone much higher. Santa Clara County now has a median home price of $1.3 million, double what it was less than a decade ago.

As people sell their overpriced homes to move inland or out-of-state, and as tech workers cash out their burgeoning stock options, hundreds of billions of capital gains generate tens of billions in state tax revenue. But can homes continue to double in value every six or seven years? Can tech stocks continue to quadruple in value every six or seven years? Apparently Gavin Newsom thinks they can. Reality may beg to differ.

Just a Slowdown in Capital Gains Will Cause Tax Revenue to Crash

The problem with Gavin Newsom’s grand plans is that it won’t take a downturn in asset values to sink them. All that has to happen to throw California’s state budget into the red is for these asset values to stop going up. Just a plateauing of their value – which, by the way, we’ve been witnessing over the past six months – will wreak havoc on state and local government budgets in California.

The reasons for this are clear enough. Wealthy people, making a lot of money, pay the lion’s share of state income taxes, and state income taxes constitute the lion’s share of state revenues. Returning to the 2017 fiscal year, of the $86 billion collected in state income taxes, $28 billion was from only 70,437 filers, all of them making over $1.0 million in that year. Another $7.3 billion came from 131,120 filers who made between a half-million and one million in that year. And since making over $200,000 in income in one year is still considered doing very, very well, it’s noteworthy that another 807,000 of those filers ponied up another $15.1 billion in FYE 6/30/2017.

There is an obvious conclusion here: if people are no longer making killings in capital gains on their sales of stock and real estate, California’s tax revenues will instantly decline by $20 billion, if not much more. And it won’t even take a slump in asset prices to cause this, just a leveling off.

Debt, Unfunded Pension Liabilities, Neglected Infrastructure

When considering how weakening tax revenues in California will impact the ability of the state and local governments to cope with existing debt, it’s hard to know where to begin. To get an idea of the scope of this problem, the California Policy Center just released an analysis of California’s total state and local government debt. As shown on the table, California’s total state and local government debt as of 6/30/2017 is over $1.5 trillion. More than half of it, $846 billion, is in the form of unfunded pension liabilities.

Calculating pension liabilities is a complex process, with controversy surrounding what assumptions are valid. In basic terms, a pension liability is the amount of money that must be on hand today, in order for withdrawals on that amount – plus investment earnings on that amount as it declines – to eventually pay all future pensions earned to-date for all active and retired participants in the fund. Put another way, a pension liability is the present value of all pension benefits – earned so far – that must be paid out in the future. The amount by which the total pension liability exceeds the actual amount of assets invested in a fund is referred to as the unfunded liability.

The controversy over what is an accurate estimate of a pension liability arises due to the extreme sensitivity that number has to how much the fund managers think they can earn. Using the official projection which is typically around 7.0 percent per year, the official pension liability for all of California’s government pension funds is “only” $316 billion. But Moody’s, the credit rating agency, discounts pension liabilities with the Citigroup Pension Liability Index (CPLI), which is based on high grade corporate bond yields. In June 2017, it was 3.87 percent, and using that rate, CPC analysts estimated the unfunded liability for California’s state and local employee pension systems at $846 billion. Using the methodology offered by the prestigious Stanford Institute for Economic Policy Research, California’s unfunded pension debt is even higher, at $1.26 trillion.

Where pension liabilities move from controversial theories to decidedly non-academic real world consequences, however, is in the budget busting realm of how much California’s government agencies have to pay these funds each year. California’s public sector employers contributed an estimated $31 billion to the pension systems in 2018. Extrapolating from officially announced pension rate hikes from CalPERS, California’s largest pension system, by 2024 those payments are projected to increase to $59 billion. And these aggressive increases the pension systems are requiring are a reflection more of their crackdown on the terms of the “catch up” payments employers must make to reduce the unfunded liability than on a reduction to their expected real rate of return.

Huge unfunded pension liabilities are another reason, equally significant, as to why California’s state budget is extraordinarily vulnerable to economic downturns. If assets stop appreciating, not only will income tax revenue plummet. At the same time, expenses will go up, because pension funds will demand far higher annual contributions to make up the shortfall in investment earnings.

A cautionary overview of the economic challenges facing California’s state government would not be complete without mentioning the neglected infrastructure in the state. For decades, this vast state, with nearly 40 million residents, has been falling behind in infrastructure maintenance. The American Society of Civil Engineers assigns poor grades to California’s infrastructure. They rate over 1,300 bridges in California as “structurally deficient,” and 678 of California’s dams are “high hazard.” They estimate $44 billion needs to be spent to bring drinking water infrastructure up to modern standards, and $26 billion on wastewater infrastructure. They estimate over 50 percent of California’s roads are in “poor condition.” In every category – aviation, bridges, dams, drinking water, wastewater, hazardous waste, the energy grid, inland waterways, levees, ports, public parks, roads, rail, transit, and schools, California is behind. The fix? Literally hundreds of additional billions.

What Governor Newsom might consider is refocusing California’s state budget priorities on areas where the state already faces daunting financial challenges, rather than acquiescing to the utopian fever dreams of his constituency and his colleagues.

Gov. Newsom Recycles Bill to Limit Individual Gun Sales

GunNewly inaugurated California Gov. Gavin Newsom is pushing a bill to limit individual gun sales to one a month – a measure that even the recently departed former governor, Jerry Brown, didn’t try to push through the legislature.

But this time might be different.

“The Democrats have a supermajority in California,” Los Angeles-based firearms policy, risk, and strategy analyst Dennis Santiago told Fox News. “The bill is likely to pass.”

California Senate Bill 61, introduced by Democratic state Sen. Anthony Portantino, will ban the purchase or transfer of more than one firearm within a 30-day period. The state already has laws to prohibit an individual from buying more than one handgun a month. …

Click here to read the full article from Fox News

Gov. Newsom Wants to Expand a Dubious Universal Preschool Plan

shocked-kid-apCalifornia’s new Governor Gavin Newsom envisions a future where the state will be involved in your children’s lives from conception to adulthood. Newsom told EdSource in September, “Our role begins when babies are still in the womb and it doesn’t end until we’ve done all we can to prepare them for a quality job and successful career.

Newsom refers to his nanny-state-on-steroids plan as the “California Promise.” If his massive scheme is realized, the only certain promise is that even higher taxes are in store for a state that has already been accurately dubbed as Taxifornia. Particularly pernicious is his idea for universal preschool for 4-year-olds. And that ball is already rolling, as Sacramento Assemblyman Kevin McCarty introduced three bills in December that would expand preschool to allow more 3- and 4-year-olds to attend.

There are many problems here. First off, the failing k-12 system in the formerly Golden State is not exactly an enticement to send your kids off for yet another year of subpar education. Our latest NAEP (nation’s report card) scores are pathetic. On the 2017 test, we were near the bottom nationally, with 69 percent of 4th grade students not proficient in both math and reading.

And just what kind of track record does preschool have? A pretty bad one, in fact. Study after study has shown it is an extraordinary waste of money. The last great push for universal pre-k in California – renamed transitional kindergarten (TK) – went down to defeat in 2014. At the time, I wrote that pre-k accomplishes little more than adding unionized teaching and educational support jobs to the state’s payroll – a state that is already over a trillion dollars in debt. Oh, sure, the sales pitch sounds great. As State Senate President Pro-Tem Darrell Steinberg said, “Expanding transitional kindergarten can be accomplished with just a fraction of increased Proposition 98 funds while saving billions of dollars in the long run by reducing the extra costs of special education, grade retention and juvenile crime.”

In fact, the U.S. has a near 50-year history of funding early-childhood programs in the form of Head Start. The federal government released the last of a three-part longitudinal study of the $8 billion-a-year program in 2012, and the results offered little cause for jubilation. According to the report’s executive summary: “…there was little evidence of systematic differences in children’s elementary school experiences through 3rd grade, between children provided access to Head Start and their counterparts in the control group.” The 2012 report reinforced some disappointing findings from the study’s second phase, which showed that any gains “had faded considerably by the end of 1st grade, with Head Start children showing an edge only in learning vocabulary over their peers in the control group who had not participated in Head Start.”

Other studies purporting to show preschool’s benefits also have failed to prove that spending billions on pre-k would be money well spent. Two oft-cited studies, the famous Abecedarian and Perry Preschool projects, for example, are now nearly 50 years old and involved no more than 60 children. As American Enterprise Institute scholar Charles Murray wrote in 2013, both studies “were overseen by the same committed, well-intentioned people who conducted the demonstration projects. Evaluations of social programs are built around lots of judgment calls—from deciding how the research is designed to figuring out how to analyze the data. People with a vested interest in the results shouldn’t be put in the position of making those judgments.”

Also in 2013, the Brookings Institution’s Grover J. Whitehurst wrote, the group that went through the Tennessee Voluntary State Pre-K Program, a full day program for 4‐year‐olds from low-income families “performed somewhat less well on cognitive tasks at the end of first grade than the control group, even though [three-quarters] of the children in the control group had no experience as 4-year-olds in a center-based early childhood program.” Whitehurst concludes: “Until the field of early education becomes evidence based, it will be doomed to cycles of fad and fancy.”

Just last week, Chicago Mayor Rahm Emanuel rolled out a $175 million plan to offer pre-k to all 4-year-olds by 2021-22. Commenting on the proposal, education scholars Lance Izumi and Kerry McDonald write that its proponents “often cite the results of an earlier effort, the Chicago Child-Parent Center program for low-income children, to bolster their case for universal preschool.” But it turns out that the Chicago Child-Parent Center program “relied on extensive parent training, a feature notably absent from universal preschool proposals such as Assemblyman McCarty’s in California.”

Izumi and McDonald add, “As psychologist Dr. Michael Thompson of Children’s Hospital in New Orleans noted, if policymakers mistakenly believe that preschool results in better life outcomes, “they may mistakenly invest in these programs when the money might be better invested in parenting-skill programs or other interventions to increase parental involvement.”

Clearly voluntary parental skills programs show much more promise than Newsom’s unproven universal pre-k plan. California’s new state budget will be released soon. Have the smelling salts nearby.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

Newsom Vows ‘Sanctuary To All Who Seek It’

Sanctuary StateCalifornia’s new governor is promising the most populous state will be a “sanctuary to all who seek it” in a direct affront to President Donald Trump’s immigration policies.

Democratic Gov. Gavin Newsom challenged the Trump administration repeatedly as he was sworn in to office Monday, particularly on immigration.

The former San Francisco mayor became the state’s 40th governor, succeeding the term-limited Jerry Brown.

 

“People’s lives, freedom, security, the water we drink, the air we breathe — they all hang in the balance,” Newsom, 51, told a crowd of hundreds packed into a tent outside the state Capitol. …

Click here to read the full article from CBS Local

Brown Leaves Newsom a Managerial Mess at DMV

dmvJerry Brown’s last days as governor have been filled with laudatory media accounts of his half-century-long political career.

Many of the plaudits were deserved. Some were not, such as claims that he single-handedly rescued California from the brink of a financial meltdown. Even he acknowledges that luck – eight years of unleavened economic expansion – played a big role in balancing a budget drowning in red ink.

Missing in the positive descriptions of Brown’s career was any mention of his penchant for shunning responsibility for shortcomings in the state government he managed for 16 years.

Infamously, he replied “shit happens” when asked about huge cost overruns and construction flaws in the project to replace a third of the San Francisco Bay Bridge – and that’s been pretty much his attitude on other problems.

He’s refused, for instance, to accept responsibility for whether a huge change in school finance he proposed and shepherded through the Legislature actually has its intended effect of improving the educations of poor and English-learner students.

In public statements, and even in responses to lawsuits, Brown has taken the attitude that having provided the extra money meant to help those kids, he should not be held responsible for whether it works.

Rather, he preaches a doctrine he calls “subsidiarity,” shifting the onus for what happens to local school officials – a handy rationalization since so far, the Local Control Funding Formula has not appeared to have much positive impact.

And then there’s the Department of Motor Vehicles, the state agency that Californians love to hate – with good reason.

The DMV and its director, career bureaucrat Jean Shiomoto, came under fire in the Legislature last year after revelations of hours-long waits at field offices for even the simplest of transactions.

The Legislature was on the verge of ordering State Auditor Elaine Howle to delve into the agency’s obvious managerial shortcomings when Brown intervened and privately persuaded members of the Legislature’s audit committee to back off. A critical report from Howle would have been a black mark on Brown’s gubernatorial legacy.

But no sooner had Brown dodged that bullet than it was revealed that the DMV had made many errors in automatically registering Californians to vote when they did business with the agency – errors so grievous that Secretary of State Alex Padilla, who oversees California’s election system, demanded a managerial overhaul.

It was embarrassing to Padilla and other Democratic politicians who had touted “motor voter” as a way of expanding voting in a state that has a very low participation level.

Late last year, Shiomoto saw the handwriting on the wall and announced her retirement. But then another DMV imbroglio surfaced.

The federal government had notified DMV in November that it was using a faulty process in implementing “Real ID” driver’s licenses, meant to defeat counterfeiting that would allow terrorists to board airliners.

California had already issued more than two million licenses or identification cards and the DMV claims – or hopes – that they will be honored even though the agency didn’t fully follow federal guidelines for confirming the identity of cardholders.

Beginning this year, DMV said, it will require applicants for Real ID to provide additional proof of legitimacy. Real ID will be required to board commercial aircraft in October 2020 and the agency was already way behind schedule on implementing the program.

The Real ID problem will fuel new efforts in the Legislature for a top-to-bottom audit of the agency’s managerial mess and how incoming Gov. Gavin Newsom deals with them will be revealing.

This article was originally published by CalMatters.org

Gov. Newsom Will Face Intense Questioning on Bullet Train

High Speed RailWhen Gavin Newsom is sworn in as California governor on Jan. 7, he’s already indicated he will take criticisms of the state’s troubled $77 billion high-speed rail project seriously.

That’s in sharp contrast to outgoing Gov. Jerry Brown, who described project critics as “declinists” with no vision for what the Golden State could become. Brown only offered vague pronouncements when asked about giant cost overruns and the $50 billion or more gap between available funding and what’s needed to build the high-speed rail linking Los Angeles and San Francisco.

If Newsom lives up to his word, he’s going to need to respond to profound issues raised by project watchers in and out of the state government over the last two months.

In November, state Auditor Elaine Howle issued a harsh report on poor management practices in the California High-Speed Rail Authority, especially the billions in cost overruns due to the decision to launch construction of the project’s $10.6 billion, 119-mile first segment in the Central Valley before the authority was fully ready. Howle’s audit led Newsom to tell a Fresno audience that he might shake up the leadership of the rail authority.

Among the few specifically positive observations that Newsom has made in recent months about the project was that the first segment held promise to link Silicon Valley workers with less expensive housing in the Central Valley.

Project seen as ‘notoriously unpopular’ in Central Valley

But a Dec. 23 Sacramento Bee analysis found that even though the bullet train project was generating thousands of jobs in the agricultural region, it was “notoriously unpopular” among residents.

“They resent how construction has carved up their farms and scrambled their highways,” the Bee reported. “Completion of just a partial segment through the Valley is still years away, and residents doubt the project will ever get finished. They question the promises that high-speed rail will lift the Valley out of its economic doldrums.”

This skepticism is increasingly shared by elected Democrats both in the Central Valley and the rest of the state.

A Dec. 28 Los Angeles Times report quoted Assembly Speaker Anthony Rendon as saying problems with the bullet train are so widespread that it should “be paused for a reassessment.” Rendon said the prospect that the project would run out of money before ever reaching the Los Angeles region left voters in the area feeling deceived.

Assembly Transportation Committee Chairman Jim Frazier, D-Oakley, has made clear that he will work to have rail authority chairman Dan Richard ousted because of cost overruns and management issues.

The bullet train’s image has also deteriorated among state pundits.

When California voters approved $9.95 billion in bond seed money for the then-$45 billion project in 2008, the ballot initiative was broadly supported by newspaper editorial boards.

“Americans who visit Japan or Europe and hop a bullet train get a stunning reminder of how far behind much of the industrialized world we are in swift, clean, efficient transportation,” the San Jose Mercury-News editorial page declared on Oct. 18, 2008. “Californians can change that by approving Proposition 1A, a bond to begin construction of a high-speed rail system that would whisk passengers from Los Angeles to the Bay Area through downtown San Jose in a mere 2 1/2 hours. It will be a catalyst for the economic growth of California and this region over the next 100 years.”

An editorial printed last month in the Mercury-News showed a 180-degree swing in opinion: “The incompetence and irresponsibility at the California High-Speed Rail Authority are staggering. … It’s time to end this fiasco to stop throwing good money after bad.”

Decision on cap-and-trade funding may signal Newsom’s intentions

An early sign of Newsom’s level of enthusiasm for continuing on Brown’s path is likely in coming weeks as initial work is done on the 2019-20 state budget. The California Air Resources Board reported pulling in $813 million from its Nov. 14 auction of cap-and-trade air pollution credits – a heavy haul.

If Newsom opposes diverting 25 percent of cap-and-trade revenue to the bullet-train project – as has been done since 2015 – that will be the clearest indication yet that he is ready to back away from the troubled project.