Senator Hertzberg Assesses Just Concluded CA Legislative Session

With the 2018 legislative session now concluded—Governor Brown’s last—share your assessment of its notable public accomplishments for the state of California and your Los Angeles Senate District.

Bob Hertzberg: Taking a historic view, there were a number of factors that created great opportunities in the Legislature this year.

First, California had another year of unprecedented economic growth, giving us a budget of over $200 billion. As a result, Governor Brown was able to put a lot of money into the rainy day fund without taking money from other things, like schools, fire protection, and housing. A lot of our progress is thanks to a budget surplus, which we had because the rich part of our economy did so well—even as there continues to be a real divide between the rich and the poor that we cannot ignore.

Our progress also stands on the shoulders of many people who did very important things. The idea of getting to 100 percent renewable energy, for example, was an important step forward on a path that was built by Fran Pavley, Byron Sher, and others. Bail reform, which was a gigantic achievement from my point of view, was first attempted by Howard Berman in 1981.

Governor Schwarzenegger created the rainy day fund in 2004, which I was involved in. Since then, Governor Brown has withstood a lot of pressure in order to fill it and even create a second reserve for social services, so that we now have almost $20 billion in reserve.

As another example, Steinberg and I worked for a year and a half on the initiative process—which was very important because it enabled us to remove bad measures on lead paint and privacy from the ballot. Many of these reforms came out of recommendations from the Speakers’ Commission on the Initiative Process 20 years earlier.

We still have huge deficits, but we made some big moves forward this year. The issue of fire protection, and of fundamentally understanding the “new normal” of climate change, was huge. We made major progress on water efficiency and conservation. And I give Jim Beall extraordinary credit for his unbelievable determination in financing transportation. 

You stated that California’s budget surplus is a function of the state’s reliance on personal wealth to fund state government, which makes any economic downturn very threatening to the state’s budget. Speak to the tax reforms you’ve long advocated to alleviate the state’s reliance on personal income taxes.

When I came into office, there were many thorny problems I wanted to work on—social justice, the judicial branch, and the like. Tax reform was not one of them.

But for any student of California history, it is abundantly clear that our tax system has contributed to our economic volatility for decades. And it’s always people with lesser means—those who rely on government services—who are most hurt by economic volatility.

Quite frankly, while the economy is booming, there’s not a lot of interest in tax reform. But everybody knows it’s the right thing to do. It’s not about taxing the rich or the poor; it’s not about regressive or progressive taxes. It’s about creating a system that stops this volatility.

Now, my office has been working on this for eight years. We’ve done our homework. We’ve worked with the Berggruen Institute’s Think Long Committee—a bipartisan group that includes Willie Brown, Gray Davis, George Schultz, Condoleezza Rice, Eli Broad, and others—and talked to former finance directors and chief economists of California. And we’ve found that there are only two kinds of taxes that work in a globalized economy: a property tax and a service tax. A service tax is not regressive as long as it applies to businesses.

Will tax reform be difficult? Yes, I suspect it will be a little tougher than bail reform—which was the hardest thing I’ve ever done. But I’m not giving up on it. I’m going to keep working on it as long as I can breathe, because it’s the right thing to do. 

Pivoting to climate change: You participated this past month in the Global Climate Action Summit in San Francisco, where California’s accomplishments and global leadership were hailed by the 4,000 attendees present. What energy legislation of note is now law?

There were a number of thoughtful bills on energy this year. Senator Lara passed a package of bills dealing with “superpollutants.” And of course, we had SB 100 by Kevin de León, aspiring to 100 percent clean energy by 2045. These kinds of aspirational goals are important because California has such a strong leadership role globally, especially now that the federal government is not able to get things done.

With SB 237, we tried to create markets. As someone who was here during the energy crisis, traveled the world, worked in renewable and clean tech, and came back to the Legislature, I’ve seen that great ideas are one thing, but you’ve got to create realistic markets. The bill says that, if you’re a big company with an aggressive sustainability goal and sophisticated operations, you can contract for your own power directly. This will create a market that let’s businesses find the specialized services and energy requirements that they need—say customized demand response or energy efficiency products, 100% renewable energy or storage—with no additional costs to other customers on the grid. Doing so will save business money and help them get away from the ‘one-size-fits-all’ utility model of energy services.

Climate action is important both for the environment and for our quality of life, and it also helps create a tremendous amount of local jobs—or, as I like to say, “domesticates jobs” instead of importing them.

If you look back, Governor Schwarzenegger wasn’t interested in climate change when he started; he wasn’t certain he would sign AB 32, which created our climate program. He’s now become one of its biggest advocates. Climate change wasn’t always on Governor Brown’s radar, either. Now he’s given some of the most passionate testimonies on the topic I’ve ever seen.

I’m happy to say that I’m seeing an increasingly deep and sophisticated approach to energy and clean tech markets in the Legislature. I think we’re going to continue to see significant moves forward, particularly if Gavin Newsom is elected.

As chair of the State Senate Committee of Natural Resources and Water, share what this session accomplished on water—and address Los Angeles County’s efforts to capture stormwater through the Measure W parcel tax on the November ballot.

This year’s natural resources bills were very important. Unfortunately, lately we’ve had to play defense with respect to the Trump administration. We’ve been concerned that some announcements by the federal government could adversely affect the environment here, and we are trying to throw up as many appropriate roadblocks as we can.

For example, Senator Allen passed a bill severely restricting the sale of our parklands, and Senator Jackson passed a bill banning oil from offshore drilling from being sold in California. SB 901 by Senator Dodd is the greatest advancement in forestry policy and fuel management in decades, and I’m pleased to say that my staffer Bill Craven was instrumental in crafting it.

In the water world, Assemblymember Laura Friedman and I passed forward-thinking conservation and efficiency standards that will fundamentally change the game. It was also very important to me to try to capture stormwater. We can’t stay in a position where we take water from the Colorado River and the north that adversely affects the environment and the farmers. Just like we’re doing in the energy space, we need to be much more sustainable.

One way to do that is with recycled water. Right now, California sends more water to the ocean per year than the entire city of Los Angeles uses per year. We pay to clean it up and then we send it right back into the ocean. That’s dumber than a box of rocks. Why don’t we bring that water back to recharge our groundwater basins? We could certainly use it.

Stormwater capture is an unbelievably important opportunity to recharge our groundwater basins. And there is a real need to capture stormwater, because it gets dirty as it runs off the roads and it pollutes the ocean. If we cleaned it up and reused it, we would have a free source of water. Rather than spending $1,100 per acre-foot of water that we pump into the region from outside, we could use that money to build infrastructure and recharge our groundwater basins.

What frustrates me about Los Angeles County’s Measure W is that it isn’t a sustainable approach. It’s not sustainable because Measure W is about water quality, not water supply. Although these two are inextricably linked, I can’t understand why capture isn’t the principal aim. When you look at the details of the infrastructure portion of this proposal, water supply benefits are a secondary – and not mandatory – requirement. I’m not against increasing water quality in-and-of itself, nor am I opposed to clean creeks, rivers, and beaches. But if we’re going to develop infrastructure for the next century, it has to focus first on water supply.

I haven’t finalized my position on it; I’m still doing my homework. But I think there are opportunities to create a much more sustainable policy that’s consistent the governor’s climate goals and our approach to other issues of wind, sun, and water.

The San Fernando Valley, which you represent in the State Senate, is home to two large groundwater storage basins—both polluted. What role should the state play in ensuring that in the near future those basins become clean reservoirs for stormwater? 

LA’s alluvial fan consists of shale on top of bedrock. It would be a perfect bathtub to hold our water, except that we’ve polluted it so badly. And the city of Los Angeles, in my judgment, has done a horrible job of remediating it.

The San Gabriel Valley is brilliant at capturing and recycling water. There are years when they don’t import any water whatsoever; it’s unbelievable. Orange County, too, is the platinum standard for recycled water. We in the San Fernando Valley, on the other hand, are behind the times. We’re yesterday.

It’s frustrating: The city has been talking about it for as long as I’ve been in government, and they’re still talking about it. That’s enough—it’s time to roll. If it were up to me, I’d shut off every nickel coming to them until they fixed it, and I’d supplement their efforts to do so. 

You’ve addressed, with leadership’s support, policy issues that don’t offer great rewards in terms of enhancing your reelection—namely, privacy and bail reform. Start first with privacy.

My bill on privacy was a response to an urgent problem. What happened was that a decent gentleman from Silicon Valley put up $3.5 million of his own money to put a measure on privacy on the ballot. That measure had a good chance of passing purely because people are so frustrated about the issue of privacy. But the measure itself was like cheese; it was full of holes. It didn’t cover a lot of important issues—the rights of kids, for example.

Moreover, it said that the Legislature would need a supermajority—a 70 percent vote—in order to make any future change in privacy law. That would have killed our ability to make changes—and that would have been a big problem. Privacy is one of the most dynamic areas of our time, and we are going to see changes in that field every single year.

Who would have thought, just 20 years ago, that we would have so many different ways of capturing information? When I was Speaker of the Assembly, Google didn’t even exist. Now it captures every kind of information there is. This is a fast-moving issue, and we need the Legislature and an executive branch to be able to continually keep eyes on it in order to protect consumers.

To preempt this measure, we undertook three months of round-the-clock negotiations. It was murderously difficult work, and frankly, neither the interest groups nor even many of my colleagues thought we had a chance. But we came up with an alternative.

I know that the bill isn’t perfect, but my focus wasn’t on making the perfect bill. My focus was on getting a potentially disastrous measure off the ballot. In other words, I stopped the nuclear bomb but I didn’t stop the war or negotiate peace between consumers and businesses. I tried to mitigate the arms race between the two sides by creating a middle ground in AB 375 by delaying implementation for of the bill for one year in order to continue to work on fixing the problems in it.

And your bail reform legislation?

The bail industry has created a false impression that they protect public safety. That is just not the case. Anybody who’s out of jail and commits a crime only got out in the first place because they wrote a check to a bail agency, not because they are necessarily safe to release back into the community. On the other hand, too many folks are locked up who pose no risk simply because they’re poor.

The bail industry also claims they save government money by ensuring defendants show up in court. That’s not true, either. They only collect 1-2 percent of the people that they let out on bail the rest of bail skips are picked up by cops. And no matter what happens, the bail company always gets paid. In fact, one company bragged that they didn’t pay out a claim in 17 years. It’s like a fire insurance company insuring concrete houses: There’s no risk but tremendous impact on people’s lives.

So, the bail industry is ineffective—and yet it ruins people’s lives. The average cost of bail in California is $50,000. You’d pay 10 percent—an average of $5,000—to a bail agent. Yet the Federal Reserve reports that 46 percent of people in America couldn’t come up with just $400 without borrowing it or selling something they own.

This underscores our disparate economy in California, where there are a lot of rich people and a lot of poor people. Until now, we have had pretrial detention system only for poor people. It was called bail. If you didn’t have money, you didn’t get out. And that meant you couldn’t pay your rent, you couldn’t take your kids to school, you couldn’t get your car from the impound where it was taken when you got arrested. The impact on people’s lives has been enormous.

It has also been an enormous cost to taxpayers. Sixty-three percent of the people sitting in Downtown Los Angeles jail are pretrial detainees, many of whom are people who simply couldn’t afford to get out. Each one costs between $160 and $215 a day.

My bill gets rid of bail completely. Judges looking at flight risk—and for the first time—public safety risk, will determine pretrial detention. We will treat people as human beings, not an ATM or checkbook.

This bill has been hard; I’m still reeling, in some ways. I put an industry out of business, and that didn’t come easy. Bail agents have sued me. I’ve been followed and harassed extraordinarily. I started receiving anti-Semitic hate mail and death threats.  Now the bail agencies are trying to put the bill to a referendum.

It was also hard because a few bellwether progressive groups weren’t on board—they want to end pretrial detention altogether, and they’re worried about the disparate impact of judicial review. I agree that this is a concern, so I’m introducing a bill next year to deal with judicial bias.

To close, many polls and commentators suggest that the voting public is ill-informed about the legislative process, increasingly uninvolved in the policymaking process, and cynical about government’s ability to manage the delivery of public services. Are the commentators and polls wrong? 

There are now 5,000 subdivisions to California government. Sometimes it feels like you need a double PhD to figure it out. I’ve been in and out of government for 45 years, and I’m still figuring it out. But people have busy lives—of course it’s hard for them to keep straight what the county does versus what the city does versus what a different city does. It’s unreasonable to expect them to.

We in government need to think about what it’s like to be a consumer. We need to think about making government easy for folks. That’s why my office is working on developing simple explanatory tools to help people to find out what their government actually does.

When I use my cell phone, I have no idea about all the electronic transmissions going on in that box—and I don’t need to. All I know is: I want a screen where I can push the buttons and get what I want.

I passed a bill on traffic tickets, so that people won’t have to take a day off work to go stand in line to pay a ticket. I also want to put in self-help kiosks at shopping centers where people can access small claims courts. And I authored a bill with Ben Allen to make it easier for people to vote by creating a 10-day voting window. If you can only vote on one particular day, what happens if your kid gets sick that day, or your car breaks down?

I have a bill that would allow government to use blockchain, and I’m looking at ways to make procurement faster and easier for the people government does business with.

I’ve been giving a lot of thought to how to make things super simple. Rather than focusing inside government, I’m thinking through the consumer side of things to figure out how state, federal, city, county, and special districts should talk to each other.