THE WAITING GAME
September is the month when we learn which among the many bills sent to Governor Newsom in unified form by both houses of the state legislature become law, which are directly vetoed, and which are pocket vetoed.
Governor Newsom has signed thirteen (13) bills that purport to make it easier to build housing in California, including “affordable” housing. Housing is generally tapped by residents as the state’s most critical need – a need followed in short order by retail crime, which is also the subject of Proposition 36 on November’s ballot, and water.
It’s the water that most interests California’s golf sector. While there are multiple bills in the Governor’s queue concerning various aspects of state water law and policy (e.g., AB 460, AB 2257, AB 1827, AB 1828, AB 805, AB 2454, AB 2875, SB 1304), there is one bill that the statewide golf sector identified early on as separating one side of the state’s water divide from the other – from those interests fixated on conservation as the focus of future supply and those intent on pursuing a more diversified portfolio – from those who are often accused of believing that California can conserve its way out of its aridification predicament and those who are convinced that if conservation is the only tool in the state’s water resiliency toolbox, California is doomed to be hollowed out in much the same way rust belt cities like Pittsburgh and Detroit were in the last quarter of the 20th Century. It’s a divide that some have the luxury of navigating by posturing, some are forced to navigate by the practical demands of their livelihoods, and some try to navigate by a balancing act that though once common, seems to have all but disappeared from today’s body politic.
That bill is SB 366 (Caballero; D-Merced / Bipartisan bill / Co-authors in Assembly Essalyi and Rubio) – California Water Plan: Long Term Supply Targets. In a nutshell, SB 366 would require the California Department of Water Resources (DWR) to coordinate with the California Water Commission, the State Water Resources Control Board, other state, and federal agencies as appropriate, and an expanded stakeholder advisory committee to develop a comprehensive plan for addressing the state’s water needs and meeting specified long-term water supply targets established by the bill for purposes of The California Water Plan. The bill would go beyond the current approach to water supply planning by establishing specific targets to be met by certain dates and requires a financing plan for achieving these targets. In addition, the Plan would require the state to plan to add 9 million-acre-feet to that “specific target” by 2040.
This would be the first water target enshrined in California law. To put that in context, there are 81 separate targets aimed at decarbonizing the state. Golf is cognizant of many of them as facilities switch from gas powered equipment to electric powered equipment that is often less reliable but virtually always more expensive.
With the addition of some late amendments to the bill meant to calm the fears of environmentalists that some of that additional 9 million-acre-feet of supply would come from the Sacramento Delta, we believe that Governor Newsom will sign the bill into law. Legislators have the luxury of single minded advocacy on issues they deem dear to the hearts of their political bases often on the theory that someone or something else will balance their advocacy against the advocacy of those on the other side of various divides. Chief executives have to make things work, or if you prefer a phrase that was once considered beyond the realm of American respectability – making the trains run on time. Or as Gavin Newsom’s predecessor Jerry Brown defined the role – paddling down the middle of a great river, sometimes paddling left, sometimes right, in an effort to keep the ship of state from running aground.
Nothing underscores that point while at the same time providing credence to our conclusion about Newsom signing SB 366 into law than the press release he put out last Friday exulting in the expeditious way an appellate court’s upholding of a trial court’s rejection of a CEQA challenge to the Sites Reservoir has cleared one of the last, if not the last, hurdle to the construction of a reservoir that will supply 3 million households with clean drinking water.
The Governor’s exultation was as much procedural as it was substantive. The release touted how his SB 149, which Newsom sponsored, led to a quick decision to consider all environmental challenges and in this case reject them in their entirety and move forward.
SB 149 works as follows:
▪ It allows the Governor to certify qualifying infrastructure projects for judicial streamlining under the California Environmental Quality Act (CEQA).
▪ Courts must decide CEQA challenges to certified projects within 270 days to the extent feasible – saving months or even years of litigation delays after a project has already passed environmental review, while still allowing legal challenges to be heard.
“We can’t waste any more time with frivolous lawsuits to hold up major infrastructure projects, especially building more water storage,” said Governor Newsom in the release. To which we might add, we can’t shy away from water supply targets just because we fear they may end up documenting our failure to fully achieve them, as if partial achievement doesn’t represent progress.
We might also add that if last week’s report of the California Air Resources Board (CARB) is any indication, targets do work. They do represent progress, even if more incremental than epochal. California’s emissions of carbon dioxide shrank by 9.3 million metric tons in 2022, the equivalent of removing 2.2 million gas-powered vehicles from the road for a year – a statistic made more significant by the fact that those reductions occurred during a year when the economy grew. Does that put the state on track to meet what are overly ambitious 2040 targets? No; although these things do have a way of accelerating over time to the degree to which a positive feedback loop is sometimes generated.
Would SB 366 guarantee that the state increase supply by 9 million-acre-feet notwithstanding the effects of aridification in the Sierra Nevada and Colorado Basin? No, but creating and then focusing on such a goal, any goal for that matter, holds out the hope for at least partial achievement. Aspiration stimulates innovation, and no sector more than golf understands the role innovation has played in reducing water consumption. The same applies to the production side of the equation. And it is going to take both for golf and other water consumptive sectors to continue to thrive in the arid Southwest.
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CAG suggested that the great lesson from last year’s legislative session was “to heed labor’s roar.” On so many fronts the 2023 session yielded many of labor’s long held goals – e.g., separate, and much higher minimum wages for the fast food and healthcare sectors, expansions in sick day/family leave mandates. 2023 also yielded a bill ultimately vetoed by Governor Newsom to allow striking workers to collect unemployment insurance.
As for 2024, while Assemblymember Ash Kalra (D-San Jose) was quoted in the Los Angeles Times as characterizing his own legislative record on union-friendly proposals this year as “a blood bath,” labor’s yield was not that dire. But it was a long cry from the previous few years. This year’s version of a bill to provide striking workers unemployment benefits, something the State of New York does provide on a limited basis, flamed out before it made it to the Governor’s desk. Legislation written by Assembly Appropriations Chair Buffy Wicks (D-Oakland) and strongly supported by journalist unions to require Google to pay news outlets for content was shelved in lieu of a watered-down deal. Bills to support grocery jobs over self-check-out machines, expand protections for workers who join picket lines, and limit government agencies’ use of temporary contracts to replace union jobs similarly failed to gain traction.
Don’t take the wrong lesson from this. Labor remains a dominant force in Sacramento. It’s just that a $73 billion deficit that everyone understands is more structural than temporal is also a dominant force – one that will continue to impose discipline in differentiating priorities, something golf has to take into consideration if it determines to run a truncated version of a failed 2024 bill (AB 2947) in 2025 that would have encouraged/enabled incentives for turf conversions. If it costs the state any appreciable money, it’s likely to fail in Appropriations just as AB 2947 did.
For those thinking that continued deficits might spark a reform of the state’s tax system to eliminate the volatility created by an overdependence upon income and goods-based sales taxes by putting service taxes on the table for consideration, you might want to consider just how much political risk such consideration would pose for any politician brave enough to suggest it. That subject is more likely to be broached by the same death by a thousand cuts that CEQA is being curtailed than it is to be broached by the kind of massive reform that Bob Hertzberg proposed year after year during his term in the State Senate – year after year to no more effect than stone cold silence from his colleagues. When Jerry Brown tagged CEQA reform as “God’s work,” everyone interpreted that as his assignment of the highest of priority and importance to the task. In hindsight he may have meant that only God had the stuff to tackle the environmental opposition sure to ensue.
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It’s too early to draw final conclusions about the 2024 legislative session. But it’s not too early to suggest that if we are right about Governor Newsom signing SB 366 into law, we will be able to conclude that water has joined housing as one of the priorities capable of justifying intense focus as well as increased spending in a fiscal environment disciplined by deficits.
THE LAST ORANGE GROVE IN LOS ANGELES
When the City of Los Angeles approves Borstein Enterprises’ application for the construction of 21 luxury homes in the San Fernando Valley neighborhood of Tarzana, there will be no more citrus groves in the county that was for the 1st half of the 20th Century the top agricultural county in the nation. While the application proposes to preserve much of acreage as open space, none of it will be devoted to farming. All that will remain will be two rows of citrus trees on the west side of one of the tract’s streets to remind future generations of what once was.
Should Angeles National Golf Club, located in a riverbed in a northeast corner of Los Angeles that is so remote that most don’t know it is within the city’s limits ever close, the same story could be written for daily fee golf in the nation’s second largest city. Once dotted with multiple daily fee golf
courses and driving/practice ranges, Los Angeles is down to just this one. All other golf properties are either private clubs or municipal parkland facilities.
Agriculture and golf have two things very much in common. Both require large tracts of land, and both cannot compete economically with almost all other forms of residential and/or commercial development. The difference is that citrus can be grown in plenty of places in this huge state, while golf courses need to be reasonably close to where golfers live and work.
There is a compelling case to be made for keeping them within earshot of the roughly 3 million Californians who play golf, but the “case” is not an economic one. It’s the case for recreation, school sports, charitable fund raising, green space, permeability, environmental sustainability, heat relief – all distinguished economically only in terms of being the one active recreational activity in the public sector that generates net revenues that offset the taxpayer contributions that would otherwise be necessary to support other public sector amenities.
Golf has certainly made that non-economic case effectively both statewide and locally (those two failed “public golf endangerment acts” and myriad local repurposing efforts). Golf needs to keep making it, because there is no shortage of those who make the economic case against golf. And many of them are not who or what you may think. Consider the following from a recent FORBES Online story that debunks a meme about Kamala Harris having proposed an excise tax on all golf related products, services, and activities parallel to similar excise taxes on other products/services but debunks its veracity by suggesting all the reasons why it would be an excellent idea:
“. . . golf courses also raise land use concerns. In many urban and suburban areas, courses may occupy valuable real estate that could potentially be used for other purposes that would generate more property tax revenue or benefit a broader segment of the population. The exclusivity of golf as a sport means these large green spaces in the center of town are often reserved for a relatively small and affluent subset of the population, raising social equity and use of public resource concerns. Those spaces would generate more property tax revenue if used for housing or commercial space and would be of more use to the general community if reserved for public leisure.”
When conservative business publications begin echoing the same arguments that Malcolm Gladwell and “progressive” tax/legal critics have long been raising, it means that these arguments, once provinces of a distinct side of the political aisle, are moving into the mainstream. It means more than anything else that golf needs to be vigilant and smart – vigilant in terms of paying great heed to these critics and their criticisms – smart in terms of avoiding the critical error known as making the other side’s argument for them. If golf suggests that it be judged by an economic calculus that adjudges it a lesser and lower use, it will be thus judged, and golf won’t like the verdict.