2009 Scorecard: Year in Review

Last year’s Scorecard noted that the legislative session was dominated by one issue: the state budget. This year, in an economic game of piling on, the state’s chronic budget deficits continued and were compounded by a historically weak economy that produced a California jobless rate above 12 percent. This fiscal and economic one-two punch, combined with erratic leadership from Governor Arnold Schwarzenegger and a deeply polarized legislature, has brought the state to a breaking point.

In the only state that requires a two-thirds vote both to pass a budget and to raise taxes, budgetary sleight-of-hand and “robbing Peter to pay Paul” tactics have become cynical but accepted tools of the budget-writing trade. But at some point the tricks get all used up, the smoke clears and all that’s left is the mirror. California reached that point in 2009. The economic crisis added a genuine fear factor, which cast a pall over the entire 2009 legislative session.

Economic fear is never good for environmental protection. The false dichotomy of “jobs versus the environment” gets severely tested, and that was certainly true in 2009. The year began with the governor using the state budget to insist on exemptions to the California Environmental Quality Act (CEQA) for highway projects and ended with the legislature and the governor enacting a CEQA exemption for a billionaire developer of a new football stadium in Los Angeles. In between, they also granted CEQA exemptions for new power plants and came perilously close to allowing new oil drilling off the California coast. In every case the stated motivations were jobs and increased revenues to the state.

The Scorecard will show that 2009 was a meager year for new environmental legislation, but the same is true across the legislative landscape. The legislature and governor retrenched and hunkered down, focusing their energy on weathering the economic storm and getting the state through the year. One could argue that simply doing that in such an inhospitable environment is an achievement that deserves grudging praise, but no one is stepping forward to offer it. Instead Californians are asking: “Can’t the state do anything right?” Amid calls for a constitutional convention and an overhaul of the state’s tax system, the credibility of California’s governance structure is being challenged as never before.

And the legislature and Governor Schwarzenegger know it. As the year ended, and after months of behind-the-scenes negotiating, they enacted a historic set of bills designed to reform an essential part of the state’s infrastructure that has itself reached a breaking point: the Sacramento-San Joaquin Delta. By enacting policies to restore the delta’s ecosystem and provide a more reliable water supply, the legislative leaders and the governor seemed bound and determined to prove they could act decisively on a big, complicated issue, and there is no issue in California more complicated than water. Their almost desperate effort to get a deal on water bespoke a need not only to fix a broken water supply system, but also to heal a broken system of governance and to prove to voters that, even though pushed to the breaking point, California will make it through.

The Endless Budget Cycle

The California Constitution says the state has an annual budget cycle. One of the commonly proposed governance reforms is to move to a two-year budget cycle, to allow longer-term planning and to flatten out the normal dips and swells in revenues. Instead, California is now in an almost endless budget cycle.

In 2008 the budget, due in July, was signed in late September after a record-long holdout by Republicans to put up the needed votes to achieve two-thirds passage. By November 2008 the bottom had fallen out of the state and national economies, and the remainder of the 2008–2009 budget faced an $11 billion shortfall. Worse yet, between November 2008 and February 2009 the projected deficit in the 2009–2010 budget year ballooned from $13 billion to $30 billion. In February the legislature and governor finally reached a tortured agreement on an 18-month spending plan that included deep spending cuts and new revenues as well as a package of budgetary and spending changes that required voter approval on the May 2009 ballot.

Alas, the voters rejected the package of ballot measures; meanwhile the economy continued to decline. In July the governor and legislature reached agreement on the state’s third budget in a ten-month period, with an additional $16 billion in spending cuts and $8 billion in various new revenues, fund shifts and various other gambits.

With the distance of a little time, this saga may seem merely unfortunate. In fact, it represents the most sustained and destructive challenge to the ability of the state to meet its obligations since the Great Depression. And the emotions of the involved elected officials were rubbed raw. This is the setting in which the California League of Conservation Voters and its environmental colleagues and legislative allies fought to protect and advance environmental progress in 2009.

Playing Defense

In this perfect storm of economic and budget meltdown, environmentalists played defense more than offense in 2009.

CEQA exemptions for highway projects: In December 2008 the governor demanded that ten road and highway projects, including two major projects that were the subject of ongoing litigation, be exempted from CEQA review as a way to create jobs in a rapidly declining economy. Environmentalists, led by CLCV, convinced Senate President pro Tempore Darrell Steinberg to delay a vote and force Caltrans and the other parties to the table to try to settle the lawsuits. The strategy was successful and the cases were settled, removing a dangerous precedent of legislative interference in court cases. The legislature did, however, approve CEQA exemptions for the minor projects in AB 8 x2 (Nestande).

Rollback of environmental rules: The trucking and oil industries also seized the opportunity to use the budget as leverage to weaken environmental rules, even though they had nothing to do with reducing the state’s budget deficit. Although environmental groups and legislative allies derailed some of the worst proposals, AB 8 x2 also weakened and delayed implementation of several hard-fought rules to reduce diesel emissions from off-road vehicles and heavy equipment.

State parks closure: The threat to close state parks has been bandied about in recent years as a high-visibility action designed more to illustrate the dire budget situation than to save money. In May the governor played the state parks card, proposing to close all 279 state parks in 2009–2010. Parks advocates responded with a plan to sustain funding with an annual parks access pass paid through the vehicle license fee, but Republicans predictably opposed the parks fee, preventing the needed two-thirds support. Instead the legislature cobbled together loans from other state funds, which must be repaid in future years, thereby passing on current costs to future generations. Even with the borrowing, hours and maintenance at many state parks will be severely reduced in 2010.

New offshore oil drilling: Proposing new oil drilling in Santa Barbara is like offering Ralph Nader a sweet deal on a Corvair. Yet that’s what the governor did this summer in final budget negotiations. Back in January 2009, the State Lands Commission considered an oil company proposal to allow new slant oil drilling from platforms in federal waters off the Santa Barbara coast into state lands within three miles of shore. In exchange, the oil company promised to remove four platforms by 2022, years earlier than required under their federal lease, and to transfer 4,000 acres of land to protected open space on the Santa Barbara coast. When the commission rejected the proposal on a 2–1 vote, Governor Schwarzenegger went directly to the legislature, promising $100 million in new revenues to the General Fund from the deal.

After weeks of battle, the Senate approved the bill. Fortunately it was defeated in the Assembly, led by the hard work of Santa Barbara Assemblyman Pedro Nava and other allies such as Assemblymembers John Pérez and Hector De La Torre. Unfortunately the plan is far from dead. With the special election of Lt. Governor John Garamendi to represent the 10th Congressional District, the governor will be able to appoint a replacement, who will wield the critical vote at the State Lands Commission.

CEQA exemptions for power plants: In 2007 the courts found that the South Coast air district, responsible for protecting air quality in southern California, violated CEQA when it allowed power plants to use air pollution offset credits that were designed only for small businesses and essential public services. Rather than comply with CEQA, the district decided to sponsor legislation, SB 827 (Wright), to abrogate the court’s decision. Even worse, the final version of the bill creates “paper” credits that run the risk of air pollution actually increasing, rather than declining. The legislature also approved AB 1318 (V.M. Pérez), which waives the court’s CEQA finding to allow a power plant to be built near Palm Springs. Both bills were signed by the governor.

CEQA exemptions for football stadium: If CEQA exemptions for highway projects were one bookend of the 2009 session, AB 81 x3 (Hall) was the other. Introduced only 48 hours before the final day of the session, the bill exempts a proposed 75,000-person football stadium in the City of Industry from any further environmental review and from the two pending lawsuits filed under CEQA. Promises of new construction jobs and a new NFL football team trumped respect for the rule of law, and the bill passed the Assembly. As he did with the highway projects in January, Senator Steinberg first refused to hear the bill, and gave the parties to the lawsuits thirty days to settle their differences. The city of Walnut settled, but the other plaintiff, a group of eight citizens, did not, forcing Steinberg to follow through on his commitment to the Senate to hear the bill. It passed with the minimum number of votes needed and was ceremoniously signed by Governor Schwarzenegger.

Modest Results...

Not surprisingly, the Scorecard can only report modest results for 2009. Of the fifteen priority environmental bills that made it to the governor, he signed only five, including:

• AB 94 (Evans) — Re-establishes the successful Natural Heritage Preservation Tax Credit program to reduce the state’s cost of buying recreation and habitat lands by 45% while using federal tax credits to fully compensate the land seller.
• AB 920 (Huffman) — Allows owners of netmetered wind and solar systems to sell their excess electricity to the utility at the end of the year.
• SB 670 (Wiggins) — Prohibits the destructive practice of suction dredging stream beds in search of gold.

But most of the priority environmental bills scored this year were either vetoed by Governor Schwarzenegger or defeated or held by the legislature, including:

• SB 14 (Simitian) & AB 64 (Krekorian) — Would have increased the state’s supply of renewable electricity (known as Renewable Portfolio Standard) from 20% in 2010 to 33% in 2020 and made numerous adjustments to improve the law. Despite strong support from environmentalists, labor and renewable energy providers, the governor vetoed the bills and instead issued an Executive Order directing the Air Resources Board to adopt RPS regulations. (Vetoed.)
• SB 372 (Kehoe) and SB 679 (Wolk) — Would have prohibited state park lands from being used for non-park purposes without approval of the State Park and Recreation Commission and the legislature or from being disposed of without being replaced by other lands with equal park value. (Vetoed.)
• SB 402 (Wolk) — Would have expanded the types of containers included in the state’s Bottle Bill, increased the redemption value for large containers and reduced the program’s insolvency caused by borrowing from the fund to help balance the state budget. (Vetoed.)
• AB 1404 (de León) — Would have capped the use of out-of-state greenhouse gas emission reductions in order to encourage pollution reduction and green jobs in California. (Vetoed.)
• SB 797 (Pavley) — Would have prohibited the use of bisphenol-A, a cancer-causing chemical, in infant bottles and cups after 2011, unless the chemical is regulated under the state’s Green Chemistry program. (Defeated on Assembly Floor.)
• AB 226 (Ruskin) — Would have given the Coastal Commission limited administrative penalty authority to reduce enforcement costs and court backlogs. (Held on Senate Floor.)
• SB 772 (Leno) — Would have eliminated the requirement that infant strollers and other infant products found not to pose a fire hazard be treated with cancer-causing flame retardant, provided that was included on the product label. (Defeated in Assembly Appropriations Committee.)

This year’s Scorecard also includes three bills—SB 827 (Wright), AB 8 x2 (Nestande), and AB 81 x3 (Hall)—that were passed and signed into law despite the opposition of the environmental community, as described above in “Playing Defense.”

...And Lower Scores

In his first five years, Governor Schwarzenegger’s Scorecard record ranged from 50% to 63%—hardly an environmental superstar, but far better than his Republican legislative counterparts. In 2009, however, Schwarzenegger vetoed ten of the fifteen priority environmental bills that reached his desk. Combining that abysmal record on good bills with the three bad bills he signed, his score plummeted to 28 percent.

In the legislature, scores also declined, though not as dramatically. Senators Lou Correa and Rod Wright earned historically low scores for Democrats of 29% and 38% respectively. Two first-year Democrats, Alison Huber and V.M. Pérez, who won very close elections in swing districts in 2008, scored 48% and 52% respectively, joined by perennial low-scoring Democrat Cathleen Galgiani at 48 percent. Though the core membership of the Democratic “Mod Caucus” in the Assembly seemed to decline in 2009, job losses tied to the bad economy created a much larger pool of unreliable votes for the environment in the Assembly. But legislative Republicans provided the greatest contrast, as they continued their reflexive opposition to almost all proposals to protect the environment. The average Republican score in this year’s Scorecard hovers around 10 percent.

Legislature Enacts Historic Eleventh Hour Water Package

Almost two months after the regular session adjourned and just as the Scorecard went to press, the legislature voted to enact the most far-reaching overhaul of state water policy in decades. After years of seemingly endless stakeholder processes such as Cal-Fed, the Bay Delta Conservation Plan and Delta Vision, and driven politically by a multi-year drought and court-ordered restrictions on water supplies, the legislature produced a package of bills that strengthen environmental standards in the Sacramento-San Joaquin Delta, increase urban and agricultural water conservation, require monitoring of groundwater use and beef up the State Water Resources Control Board’s water rights enforcement capabilities. It also passed a controversial $11.1 billion bond measure, which if approved on the November 2010 ballot, will help fund water storage, water conservation and delta environmental improvements.

Unlike in 1982, when the peripheral canal ballot proposal was strongly opposed by environmental groups, this policy reform package had environmental supporters as well as opponents. In the end, after weighing the many factors at play in the complicated proposal, CLCV threw its support behind the policy package. We believe that, taken together, the significant new environmental criteria for delta protection and the advancements in water conservation and groundwater management create a new model for water management and will help reverse the steep decline of the delta ecosystem that has resulted from the status quo.

Like almost all environmental organizations, CLCV did not support the bond measure. Although it will provide funding for water conservation and delta habitat restoration, it also includes the opportunity for funding of expensive and inefficient new dams and reservoirs, which CLCV does not support.

Looking Forward to 2010

We look forward, with trepidation, to 2010, if for no other reason than to close the book and move on. But the challenges remain. The state budget will face more deficits in 2010 and the legislature will probably remain in an endless budget cycle. The deficit will be reduced, but not eliminated, if the economy improves in 2010, which is hardly assured. We expect a frontal assault on CEQA and continued efforts to limit or suspend implementation of California’s landmark climate change law, AB 32. And a spate of governmental reform initiatives aimed at the legislature and its governance will likely be on the ballot in 2010, which will preoccupy legislators even more than in the normal election year.

But 2010 is also a gubernatorial election year. Environmentalists have an opportunity to help elect a greener governor who will support a new generation of environmental leadership in California and reject the urge to reverse course (as at least one candidate has already suggested, in calling for the suspension of AB 32). To that end, CLCV has launched a new online campaign for Californians to “Build a Greener Governor” at www.GreenGov2010.org. We also have an obligation to re-establish the essential importance of CEQA as a tool for sustainable economic growth and to make green jobs a tool for economic recovery, by enacting and implementing policies that will enhance environmental and economic progress. We’ll have our work cut out for us.