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2019 California Policy Options Edited by Daniel J.B. Mitchell California Policy Options 2019 Copyright 2019 by the UCLA Luskin School of Public Affairs All rights reserved. Except for use in any review, the reproduction or utilization of this work in whole or in part in any form by electronic, mechanical, or other means, now known or thereafter invented, including a retrieval system is forbidden without the permission of the UC Regents. Published by the UCLA Luskin School of Public Affairs UCLA Luskin School of Public Affairs, Box 951656 Los Angeles, California 90095-1656 Editor: Daniel J.B. Mitchell Cover design and photo: Stan Paul Table of Contents p. 2 Preface p. 3 Introduction p. 7 Chapter 1: The Conflict Diamonds of Adriana Gianturco Daniel J.B. Mitchell p.33 Chapter 2: LA TAP: Evaluating the Customer Experience of Tap Water in Los Angeles Virdiana Auger-Velez, Rachel LaCoe, Caleb Rabinowitz, and Bei Zhao p. 54 Chapter 3: The Promises and Challenges of Community Choice Aggregation in California JR DeShazo, Julien Gattaciecca, and Kelly Trumbull p. 83 Chapter 4: Charge It! Investing in Public Charging Infrastructure in Southern California Sarah Burtner, Gina Charusombat, Tiffany Chu, Yuharu Nagiri p. 98 Chapter 5: How Important is International Trade to Los Angeles? William Yu p. 111 Chapter 6: South Los Angeles Since the Sixties: Half a Century of Change? Paul M. Ong, Alycia Cheng, Andre Comandon and Silvia R. González p. 137 Chapter 7: Mixed Evidence of Local Neighborhood Stabilization: Lessons from the East Bay and South Los Angeles Kenya Covington, Annia Yoshizumi, Jesus “Chuy” Flores, and Allan Nguyen p. 151 Chapter 8: The Handover Budget of 2018-19: The Fiscal Legacy of Jerry Brown Daniel J.B. Mitchell p. 177 Chapter 9: California Forecast: OK for Now But Housing Costs Remain an Issue Robert A. Kleinhenz p. 185 Chapter 10: Records of Investigations vs. Bulk Data Collection: Automated License Plate Readers and the California Public Records Act Stanley M. Paul Preface California Policy Options, published since 1997, has informed researchers and journalists, as well as leaders and lawmakers, with a timely collection of research and public policy recommendations on issues and opportunities in the state. The annual publication advances research-based solutions for California’s many, multi-faceted urban and regional challenges. The chapters in this publication highlight a wide variety of statewide issues and those that affect cities, local communities and individuals. This year’s collection again looks at California’s budget situation and its leadership, regional issues such as transportation in Los Angeles and water quality, energy and other technology including infrastructure for charging stations for electric vehicles and mass electronic surveillance. UCLA Professor Daniel J.B. Mitchell has again brought together a timely collection of California- focused articles that add to a long list of important readings not only for policy and law makers but, for Luskin undergraduate students enrolled in the School’s popular California Policy Issues course which has been co-taught by Prof. Mitchell and Visiting Professor Michael Dukakis for more than 20 years. This edition, California Policy Options 2019, continues a long-established tradition of providing analysis of the state’s public policy problems from a variety of viewpoints as well as their political, economic and historic contexts. Gary Segura Dean, UCLA Luskin School of Public Affairs 2 Introduction The 2019 edition of California Policy Options deals with infrastructure, green technology, urban and regional economics, state economics and finance, and issues related to privacy and law enforcement. Chapter 1 by Daniel J.B. Mitchell ("The Conflict Diamonds of Adriana Gianturco") explains a local Los Angeles anomaly: Why there is no diamond lane (carpool lane) on the Santa Monica Freeway. The answer goes back to the 1970s before a lesson was painfully learned. Driver/commuters will strongly resist the taking away of a lane for carpool use, although they won’t resist the adding of a new lane for carpooling. Water supply has always been a contentious issue in California. But in Chapter 2 ("LA TAP: Evaluating the Customer Experience of Tap Water in Los Angeles"), Virdiana Auger-Velez, Rachel LaCoe, Caleb Rabinowitz, and Bei Zhao remind us that in the end, water is a commodity delivered for a price to customers of local agencies. Ultimately, just as in any retail transaction, sellers, they point out, should be concerned about consumer tastes and perceptions. The process of electricity supply has both traditional infrastructure properties and, increasingly, embedded “green” or environmental issues. Retail consumers may well have concerns about the sources of their power and their environmental implications as well as an obvious concern about price. In Chapter 3, JR DeShazo, Julien Gattaciecca, and Kelly Trumbull ("The Promises and Challenges of Community Choice Aggregation in California") point to a new system of retail distribution of power in California which substitutes for tradition privately-owned commercial utilities. The new system of community choice aggregation can offer green power sources and lower prices in some circumstances. But the details of the external regulatory and legal framework will be important in the development of the alternative system. Electrical supply has another potential “green” element when used to power automobiles. However, for electric cars to become attractive, infrastructure for charging the vehicles must become sufficiently ubiquitous. In Chapter 4, Sarah Burtner, Gina Charusombat, Tiffany Chu, and Yuharu Nagiri ("Charge It! Investing in Public Charging Infrastructure in Southern California") examine the availability of charging stations in LA County and suggest priorities that need to be adopted for increasing their availability. The authors find that certain areas in the county should be targeted for increased availability to make electric car travel more attractive. We tend to think of urban and regional economics as an inherently local topic. But as William Yu points out in Chapter 5 ("How Important is International Trade to Los Angeles?"), the Los Angeles area has significant infrastructure and logistical support activities connected to international trade through its port and airport facilities. Thus, the LA economy is more 1 3 sensitive to trends in international commerce than the US as a whole. LA, therefore, would be more vulnerable to economic injury should there be a trade war with China or other countries. In Chapter 6, Paul Ong, Andre Comandon, Alycia Cheng, and Sylvia González examine the economic development of South Los Angeles ("South LA Since the Sixties"), an area noted for being the location of the Watts Riot of the mid-1960s and the LA Riot of the early 1990s. The authors examine developments in employment and earnings, housing, transportation, and education and find improvements by some measures but difficulties by others. Job opportunities and affordable housing in particular show adverse trends. Although the urban riots of the 1960s and 1990s remain significant historical markers, the most recent notable economic event was the financial collapse and recession of 2008. In Chapter 7, Kenya Covington, Annia Yoshizumi, Jesus “Chuy” Flores, and Allan Nguyen (“Mixed Evidence of Local Neighborhood Stabilization: Lessons from the East Bay and South Los Angeles”) look at a federal effort to “stabilize” South LA and East Bay in the wake of the financial collapse. Defaults on mortgages and abandoned housing threatened the local economies and residents. The federal Neighborhood Stabilization effort did seem to have some positive effect on measured poverty. But other indicators of program success were more ambiguous. Further research on the effects of such policies seems to be required. One of the key determinants of the condition of the California state budget is the general state of the economy. Growth brings in more tax revenue. Recession cuts revenue, particularly because of the heavy dependence of state revenue on the fates of top income earners. In Chapter 8, Daniel J.B. Mitchell ("The Handover Budget of 2018-19: The Fiscal Legacy of Jerry Brown") notes that outgoing Governor Jerry Brown, in fashioning his final budget (for fiscal year 2018-19) leaves office with a public sense that he brought fiscal stability to the state. However, other aspects of his potential legacy, notably a high-speed rail line and a major water project, may never be completed under the next governor. Exactly what his successor, Gavin Newsom, will do about those projects and whether he will emphasize Brown’s fiscal prudence remains to be seen. As for the near-term state of the economy during the 2018-19 fiscal year and beyond, in Chapter 9 Robert Kleinhenz (“California Forecast: OK for Now But Housing Costs Remain an Issue”) finds that the California economy remains strong. But ongoing structural issues remain, notably new housing construction running at a pace insufficient to address the affordability issue. And the affordability issue in turn tends to retard labor force growth which leads to slower overall economic growth. Finally, in Chapter 10, Stan Paul (“Records of Investigations vs. Bulk Data Collection: Automatic License Plate Readers and the California Public Records Act”) explores the tension between law enforcement needs and the right to privacy in the case of a technology that makes possible the bulk scanning of vehicle license plates.