Today’s Debate

Supervised injection sites (SISs), also known as safe drug consumption sites, are facilities where people can use illegal drugs under the supervision of trained staff who can intervene in case of overdoses. The main goals of these sites are to reduce drug-related deaths, prevent the transmission of infectious diseases, and connect drug users with health and social services.

Currently, it is illegal for a city in California to open and operate a SIS. However, reporters exposed San Francisco last year for turning its Linkage Center - originally designed to link people to needed social services - into a SIS. Controversy erupted, ultimately leading the city to shut down the Linkage Center in December 2022.

Senate Bill 57 would have changed the legal status of such sites in California, allowing Oakland, San Francisco, and Los Angeles to trial supervised drug injection sites through January 1, 2028. However, Governor Gavin Newsom vetoed the bill in August 2022:

“I have long supported the cutting edge of harm reduction strategies. However, I am acutely concerned about the operations of safe injection sites without strong, engaged local leadership and well-documented, vetted, and thoughtful operational and sustainability plans. The unlimited number of safe injection sites that this bill would authorize - facilities which could exist well into the later part of this decade - could induce a world of unintended consequences.”

While California is the in early stages of exploring legalizing supervised injection sites, other places around the world have been running such centers for years - and several cities around the United States have or are moving forward with their own projects - despite a federal ban on such facilities. New York City opened of 2 injection sites in November 2021 and Philadelphia, Boston, and Seattle have all taken steps to open similar sites.

The debate over open injection sites reflects the urgency of addressing the opioid crisis that has claimed thousands of lives across the country. Overdose deaths in California have increased by roughly 3 times in just the last 5 years.

San Francisco has reportedly renewed efforts to create a SIS in the city. The Board of Supervisors passed a motion last month that changes permitting laws to make it easier for a facility of this type to be created.

Argument in Brief

Should California legalize supervised injection sites?

Case For:

• Supervised injection sites save lives by preventing overdose deaths

• Supervised injection sites increase access to addiction treatment

• Normalizing drug use reduces stigma, increasing usage of supportive services

Case Against:

• Supervised injection sites increase drug usage and worsen addiction

• Supervised injection sites make the surrounding community drug-infested and crime-ridden

• Supervised injection sites violate federal law

My Assessment:

While it can be difficult to prioritize any action that jeopardizes a human life in the interest of achieving an alternative outcome, I believe it is more important to avoid fostering the creation of a population of people who are increasingly addicted to mind-altering substances. My most serious concern regarding SISs is the potential they have to encourage and normalize drug use.

Is it possible to authorize SISs without creating a larger, more seriously addicted population in California? It’s hard to say, but even if it could, the scientific evidence on both sides of the arguments below is quite weak.

As a result, like Governor Newsom, I don’t believe California is ready to even experiment with the opening of such sites. First, we need to ensure we have a full continuum of care set up to ensure that we are effectively pushing drug users into treatment and out of addiction. If we can satisfy these conditions, then we could move forward with some small-scale experiments, but importantly, we should still restrict usage of such facilities to those using illicit drugs as a sort of palliative care or to those suffering from the most extreme cases. The use of SISs should be a rare exception within a dominant anti-drug culture.

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Case For:

Supervised injection sites save lives by preventing overdose deaths

The primary goal of supervised injection sites is to prevent overdose deaths. Senator Scott Wiener, who authored SB 57, explains this goal:

“We know that we are experiencing a crisis of overdose deaths, and these are preventable. This is one way to help keep people safe and to actually help people get into treatment.”

Democratic Assemblyman Miguel Santiago threw his support behind such sites after seeing the open-air drug use in Los Angeles’ Skid Row:

“It is an attempt to create a safe place for people to use (drugs), to help them when they are at their lowest, and to prevent the worst from happening.”

A 2014 review of 75 studies suggested that these sites do reduce overdoses. An evaluation of North America’s first SIS - Insite in Vancouver - beginning in 2003 and published in 2016 reported that no overdoses resulted in death. Further, the report concluded that overdose deaths in the area surrounding the center fell by 35% during the 2 years after the center opened, compared to a 9% reduction across the city of Vancouver.

The New England Journal of Medicine found similar results in their evaluation of an unsanctioned SIS that reportedly opened in an undisclosed U.S. city in 2014:

“In total, there were 10,514 injections and 33 opioid-involved overdoses over 5 years, all of which were reversed by naloxone administered by trained staff. No person who overdosed was transferred to an outside medical institution, and there were no deaths.”

One analysis conducted in San Francisco estimates that for each dollar spent on supervised injection sites, $2.33 would be saved in emergency medical, law enforcement, and other costs, yielding a yearly savings of $3.5 million.

However, some dispute these findings, even the research on Vancouver’s Insite facility:

“The report by Brandon Marshall and colleagues (April 23, p 1429), in which it is claimed that the opening of a supervised injection facility on Sept 21, 2003, in Vancouver, BC, Canada, was associated with a 35% decrease in overdose deaths in its immediate surrounding, contains serious errors. The claim that all overdose deaths in Vancouver declined between 2001 and 2005 is strongly affected by the highly questionable inclusion of the year 2001—a year of much higher heroin availability and overdose fatalities than all subsequent years.”

The RAND Corporation performed a systematic analysis of studies on the topic, finding that on average sites were associated with reductions in overdoses deaths, but it warns that:

“The scientific evidence about the effectiveness of SCSs is limited in quality and the number of locations evaluated.”

Many of the studies contained in these reviews are focused on the one site in Vancouver. Keith Humphreys, an addiction researcher and psychiatry professor at Stanford University, issues a similar warning:

“Nobody should be looking at this literature making confident conclusions in either direction.”

For example, authorities in another Canadian town report vastly different results to those cited in Vancouver:

“In Alberta, public health authorities released a bombshell report that showed the sites did not reduce overall overdose deaths or opioid-related emergency calls.”

Despite these data concerns and limitations, Dr. Sharon Larson, a professor at Thomas Jefferson University, thinks we can move forward:

"It does not give me pause about developing these injection sites. What it tells me is if we want to demonstrate that this is an effective strategy for harm reduction, one of many, that we ought to be very thoughtful about how we develop data to answer the important questions."

Supervised injection sites increase access to addiction treatment

Even critics of SISs may grant supporters the argument that they save lives, arguing that they do so at the cost of increasing addiction. But if visiting these facilities makes drug users more likely to participate in addiction treatment, critics’ argument may be severely weakened. This would be harm reduction at its best: meet people where they are and from there, journey with them into greater levels of health.

In addition to employing staff trained to administer naloxone to reverse overdoses, most sites also offer a range of other social and medical services, including substance use treatment. A New England Journal of Medicine study cited research suggesting SISs do this effectively:

“Several studies suggest SISs improve the health of people who use the sites by facilitating access to general health and social services.”

A 2014 review of 75 studies reached the same conclusion.

When it comes to addiction treatment specifically, studies have found an “increased uptake of drug detoxification and addiction treatment” and “significant improvements in access to addiction treatment programs.”

For example, in one study, 185 people – 18% of those in the study -  began a detoxification program during follow-up. Another study of 50 people reported anecdotal evidence for this claim:

“IDU (Injection drug users) narratives indicate that the SIF (supervised injection facility) serves to facilitate access to health care by providing much-needed care on-site and connects IDU to external services through referrals. Participants’ perspectives suggest that the SIF has facilitated increased uptake of health and social services among IDU.”

However, at San Francisco’s Linkage Center (also known as the Tenderloin Center), referrals to treatment programs were minimal as of June of last year:

“The Tenderloin Center doesn’t have great numbers on getting people into addiction treatment — 53 people have been referred to substance abuse treatment so far and there’s no information on the outcomes.”

For context, from January to May of last year, the city reports that 50,000 guests utilized the center. Opponents of SISs in Alberta, Canada cite similarly meager referral rates:

“Advocates in favor of supervised injection sites assert that they provide connections for those with substance use disorders to find housing and treatment options. However, these sites have a poor record of moving drug users into treatment and recovery, with some referral rates as low as 1%.” 

Normalizing drug use reduces stigma, increasing usage of supportive services

SISs can reduce the stigma users of illicit drugs can often feel:

“The safe consumption sites didn’t just offer an escape from death and the unsanitary and dangerous conditions on the street. They offered escape from the stigma that pounds on the ugliness of their addiction until there is no daylight between who they are and what they do. Shame is rarely a long-term motivator.”

In fact, one researcher refers to Vancouver’s Insite facility as:

"a place which is an official healthcare setting which is not judgmental, which does not stigmatize them for their drug use, and which accepts that they are people first and foremost."

Insite’s longtime program coordinator, Darwin Fisher explains the importance of destigmatizing drug use:

"It's about making a space where drug users are allowed to feel like people. We're also mindful that this is a respite from the street and at times it might be difficult for people to leave the only situation that feels vaguely safe for them in a day."

While some supporters of SISs admit that these facilities are “a Band-Aid, not a solution,” they argue that reducing stigma so that drug users interact with staff can make a big difference:

“…every minute he spends getting someone to talk to him — even if they’re injecting fentanyl at the time — is a minute that could lead to change. ‘I just ask that people see the hope in it,’ he said. ‘Because there ain’t a lot of hope out here.’”

However, critics argue that destigmatizing drug use – which normalizes it – shouldn’t be a goal at all:

“Injection sites normalize intravenous drug abuse, encourage a horrible addiction, and let down the people who suffer from it. Promoters of these sites offer addicts little but failure — medical safety at the time of injection but, overall, mere complicity in a nightmarish cycle of addiction leading to death. Perhaps not when the addict shoots up under the careful eye of a medical professional, but one of the hundreds of other times she shoots up somewhere else.”

President Trump’s former Deputy Attorney General Rod Rosenstein makes the same argument against normalization:

“Injection sites normalize drug use and facilitate drug addiction by sending a powerful message to teenagers that the government thinks illegal drugs can be used safely.”

Case Against:

Supervised injection sites increase drug usage and worsen addiction

By facilitating drug use, it would seem logical to believe that SISs would increase drug usage.  Stanford School of Medicine professor Keith Humphreys explains this risk:

“If you’re coming into a place that’s supposed to guide you toward the end of seeking treatment and recovery and there are people using drugs around you, that becomes an incentive to keep going. It’s like trying to have an AA meeting in a bar.”

Data from an unsanctioned SIS in the United States suggests that this is the case, at least at the population level. Injection events almost tripled in just 5 years and overdoses per injection event increased by more than 5 times. Far more drugs are being consumed at far greater doses.

Similar data can be seen at Vancouver’s Insite facility where the overdose rate associated with heroin use increased by 4.8 times from 2010 to 2017.

Michael Shellenberger, an independent candidate for governor of California in 2022 and author, argues that the existing structure of SISs leads to continued drug use:

“What they’re proposing is addiction maintenance. … I think that we need to embrace addiction recovery.”

Shellenberger interviewed a senior government official from a European country who has studied SISs. He describes the difference between what happened and is being proposed in San Francisco and the models currently at work in Europe:

“‘These guys point to Europe as these fabulous utopias of using drugs safely, but when European officials visit they are horrified by what they see. They say to us, ‘We require the addicts to maintain their obligations as citizens. You let them off the hook. You don’t require them to take responsibility for their health and their obligations as a member of a community. That’s where you’re going wrong.”

Shellenberger explains that in Europe, police and medical professionals put pressure on law-breaking addicts to quit. This official, in fact, only recommends SISs for those who require some measure of lifelong dependency on drugs:

“‘I don’t disagree with the European model and don’t dismiss that the overdose prevention sites may have utility for a particular population. And there is no question in my mind that there is a very small subset of the addicted/using population whose needs are palliative in nature.”

Leaders from a grassroots San Francisco-based nonprofit, Mothers Against Drug Deaths, say “safe spaces make addictions worse.”

Shellenberger and his associated organization, California Peace Association, argue that the philosophy of harm reduction is fundamentally flawed:

“But many proponents of harm reduction misunderstand the nature of addiction by avoiding any measures requiring abstinence. Many addicts will not stop using voluntarily. By supplying housing and other services with no strings attached, San Francisco misses an opportunity to incentivize addicts to get better.

While some harm reduction measures are positive, they are not enough to stop addiction, as skyrocketing drug deaths show. We need to provide real incentives to drug users to break their addiction, including contingency-based housing predicated on abstinence and the introduction of mandatory treatment as an alternative to incarceration.”

However, other researchers argue that SISs do not lead to increased drug use. Specifically, conclusions from a long-term study of Insite suggest the opposite, according to the lead researcher:

“They found no signs of a so-called "honey pot effect," at Insite, meaning it didn't increase or encourage drug use.”

A review of 75 studies – almost entirely focused on SISs in Vancouver and Sydney – also suggest that SISs do not lead to increased drug use:

“SISs have largely fulfilled their initial objectives without enhancing drug use or drug trafficking.”

Supervised injection sites make the surrounding community drug-infested and crime-ridden

The authorization of illicit drug use in SISs is likely to attract drug addicts and their dealers and, by extension, all the challenges – including crime – associated with a street drug market:

“These consequences should surprise no one: If you’re a drug dealer looking for customers, an injection site is where you’ll find them. If your neighborhood hosts an injection site, drug addicts will go to your neighborhood. The City of Vancouver dropped the speed limit on the street next to Insite to about 20 miles per hour because addicts might wander into traffic.”

Others echo this argument:

“The activists like to keep the argument narrowly focused on the addict and overdose deaths. They don’t want to look at the impact of the [supervised drug] sites on crime rates or their devastation on communities and small businesses. It’s folly to think you can attract all those drug users without attracting all the problems of concentrating addicts. You will see drug traffickers moving into control the area.”

John Lovell, testifying on behalf of the California Narcotic Officers’ Association, echoes this sentiment:

“There is a magnet effect so that people come into the area.”

Specifically, Vancouver’s Insite reportedly resulted in challenges for the surrounding community:

“The presence of the site increased public disorder in Vancouver’s Downtown Eastside to the point that one official called it “a war zone.” Within a year of its opening, Vancouver Police posted four officers at the site and an additional 40 in the surrounding neighborhood.”

Officials in Alberta reported similar complaints:

“Drug traffickers appear to be openly conducting their business unabated near the SCS sites, due to a burgeoning client base. Drug users purchase their drugs from these individuals, as it reduces the need to transport an illicit substance over a distance, thus reducing the potential of being arrested for possession of an illicit substance. The police are placed in the untenable position of determining how to appropriately engage with clients of the SCS while clients engage in illegal activities such as theft, prostitution and break-and-enter to pay for their drugs.”

However, some health officials in Alberta claimed the previously cited report is biased and doesn’t include any of the science evaluating supervised consumption sites:

“Our observations and data indicate that these facilities, collectively, have not increased crime or disorder in the surrounding community.”

A systematic review of 22 studies of overdose prevention sites – again, primarily focused on Vancouver’s Insite facility – similarly claims there was not an increase in crime or nuisance activities in the surrounding neighborhoods.

Supervised injection sites violate federal law

Federal law – known as the “crack house statute” - currently prohibits operating, owning, or renting a location for the purpose of using illegal substances. The Justice Department, under the Trump administration, invoked this statute in 2019 to stop a supervised injection facility in Philadelphia from opening.

While the Biden Administration has not explicitly endorsed SISs, officials from the city of Philadelphia have reportedly had “productive conversations” with the Administration about authorizing one or more sites in the city. At the same time, New York City has authorized the opening of 2 facilities – despite the national ban on such facilities.

Some are not concerned with violating federal law. In fact, California’s sanctuary state status – as it relates to immigration – demonstrates its willingness to disregard federal statutes when its values don’t align with federal laws.

It’s no wonder, then, that San Francisco has not hesitated to discard California’s existing regulations that also make SISs illegal. Not only did San Francisco secretly operate a supervised injection site, its supervisors have also recently taken steps to streamline the opening of such facilities within the city.

My Assessment

Before assessing the details of the arguments above, I believe it’s necessary, in this case, to start with a discussion of the desired outcome. While it can be difficult to prioritize any action that jeopardizes a human life in the interest of achieving an alternative outcome, I believe it is more important to avoid fostering the creation of a population of people who are increasingly addicted and influenced by powerful and unregulated substances.

We should not normalize a drug-use culture. The authorization and even, facilitation of illicit drug use, will – should it become widespread – have a powerful cultural impact, further increasing our nation’s submission to drugs.

While some drug use can have minimal effects, even moderate ongoing use is associated with severe, long-lasting physical and mental consequences. For example, cocaine has a scary impact on the brain:

“The damage cocaine does to the brain may last the longest. Research from the University of Cambridge found that cocaine may make the brain age unnaturally fast; addicted users “lose twice the brain volume each year,” compared to their non-using counterparts. The brain loses grey matter as part of the normal aging process, which manifests as the usual signs of old age, such as memory problems and declining cognitive abilities.”

In short, widespread drug use is and will create an unproductive, anxious, depressed generation that uses powerful substances to escape reality rather than doing the hard work to achieve internal health so that medication is not necessary. The latter is by no means easy or simple – but it is the path we should be encouraging people to take.

Some also require such assistance to propel them forward on the path to recovery – but this approach should be limited to the most severe cases and limited in the duration over which they are applied.

The push to authorize such sites seems at least in part to be an overreaction to the war on drugs, which led to mass incarceration rather than recovery and rehabilitation. The war on drugs, however, was not wrong in its desire to minimize drug use. It was wrong in its use of incarceration as the primary tool for disincentivizing its use. Portugal’s success shows another way. Keep drugs illegal and disincentivize their use, but punish drug use with mandatory treatment, using incarceration as a way to drive people into treatment.

Is it possible to authorize SISs without creating a larger, more seriously addicted population and without further normalizing drug use in California? It’s hard to say, but let’s assume for a minute that it is. Would it then be a good idea to authorize the opening of SISs in California?

The main challenge in assessing this argument is the discrepancies and shortcomings in the data. As Stanford professor, Humphreys shared with NPR:

“He doesn't think the available evidence points to supervised injection as being harmful, but the research has not strongly demonstrated an overall reduction in overdose deaths over time.

The real problem, he says, is there just are not a lot of good studies, period, on supervised injection. "So I think we should be pretty cautious," he says.”

That said, some of the most concerning and straightforward data available is the number of injection events and overdoses per injection event from the unsanctioned site in the United States and from Insite. Data from both sites clearly demonstrated massive increases in injections and overdose rates. It’s possible these increases were driven by increased utilization of the sites and/or overall increases in drug use in the surrounding areas. Even if these contextual factors can explain some or most of the increase, this data leaves me concerned.

As a result, like Governor Newsom, I don’t believe California is ready to even experiment with the opening of such sites. First, we need to ensure we have the rest of the continuum of care set up to ensure that we are effectively pushing users of the facility into treatment and out of addiction. To do this, we should closely analyze the models used in Portugal and other European countries, being careful to replicate all components of their model, rather than cherry-picking the ones that align with the most permissive environment. And we must also cultivate a culture that discourages drug use and rejects addiction as an acceptable lifestyle.

If we can satisfy these conditions, then we could move forward with some small-scale experiments, but importantly, we should still restrict usage of such facilities to those using illicit drugs as a sort of palliative care or to those suffering from the most extreme cases and using illicit drugs as a short-term strategy to aid withdrawal. The use of SISs should be a rare exception within a dominant anti-drug culture.

This is just my opinion. I’d love to know yours. What do you think?

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Update: While I haven’t posted new articles in the past few weeks, I have been busy rolling out The California Quest in other formats. You can now watch The California Quest debates on YouTube or listen to The California Quest podcast on Spotify, Apple Podcasts, or Google Podcasts.

This week we’re also trying something a little different: sharing a slimmed-down video version and a link to the podcast in case you’d prefer to listen. Please subscribe if you’re enjoying The California Quest.

Argument in Brief

Should California's Superintendent of Public Instruction be Elected or Appointed?

Case For:

• The SPI doesn't have much authority anyway

• An appointed SPI would coordinate better with the governor

• An appointed SPI would likely be more qualified

• Voters don't know about the SPI role or the candidates to make informed decisions

Case Against:

• Changing it to an elected position steals a vote and voice from parents

• It would reduce the SPI's ability to use the "bully pulpit" to influence education priorities

• The SPI could slow down or obstruct the agenda of the State Board of Education and/or the governor's agenda

If you’d prefer, you can listen on the following platforms:

• Spotify

• Apple

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Today’s Debate

The California Environmental Quality Act (CEQA) is a state law passed in 1970 that requires state and local agencies to identify and analyze the environmental impacts of proposed projects, including housing developments, and to take measures to mitigate those impacts. Under CEQA, developers are required to prepare an Environmental Impact Report (EIR) for any project that is likely to have a significant effect on the environment. The EIR must identify all potential environmental impacts of the project, including impacts on air and water quality, habitat and wildlife, noise, and traffic, among others. The developer must also propose measures to mitigate those impacts.

Critics argue that the EIR process and associated litigation have made it difficult and expensive to build new housing in California, particularly in urban areas where demand is highest. Supporters of CEQA, however, argue that the law is an important tool for protecting the environment and promoting sustainable development. 

In September 2017, Governor Jerry Brown signed SB35 into law requiring local governments to streamline the approval of some projects if the locality hasn’t met its state-mandated housing targets. UC Berkeley’s Terner Center for Housing Innovation estimates that SB35 has been used to speed up the approval of more than 18,000 units since its passage (~3% of all units built since 2018). 

The law is supposed to sunset in 2025, but just this month, state Senator Scott Wiener announced that he’ll be proposing legislation to make SB35 permanent:

“California needs to deliver millions of homes in the coming years, and we need to give cities and builders every tool to make those homes a reality. Let’s remove that sunset and keep (SB35’s) success going.”

Argument in Brief

Should California skip environmental reviews to boost housing?

Case For:

• California is in dire need of more housing

• CEQA slows and even blocks housing production

• CEQA makes housing more expensive

Case Against:

• CEQA ensures important protections for the environment

• Local regulations are the primary deterrents of housing production, not CEQA

• CEQA has already been amended to minimize its impact on housing production

My Assessment:

California’s housing shortage is severe and damaging, requiring urgent action. However, the data is mixed on whether CEQA is a primary reason for the state’s housing shortage. The state should avoid pointing to CEQA reform as the silver bullet for the housing crisis while continuing to minimize the impact of CEQA on housing production without undermining its stated purpose. 

Given the severity of the current housing crisis, California should extend SB35 beyond 2025 - perhaps to 2035 - but not make it permanent. California should also look for ways to minimize misuse of the law by requiring those filing CEQA lawsuits to disclose their identity and environmental interests.

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Case For:

California is in dire need of more housing

California's housing shortage is a pressing issue that has been decades in the making. A 2016 report by McKinsey estimated that the state would need to build 3.5M housing units by 2025 to close the gap. When running for governor in 2017, Gavin Newsom pledged to meet this goal.

This would have required California to build 500,000 housing units per year. Last year, we built just over 120,000 units and we haven’t exceeded 200,000 units since 2005:

“In the nearly four years since he took office, California cities are projected to have permitted a total of about 452,000 homes — less than he pledged he’d build in one year alone…”

In 2016, California ranked 49th among the 50 US states in housing units per capita. New York, for example, built 80% more housing units between 2009 and 2014 than California. 

As a result, housing prices have skyrocketed, making it increasingly difficult for people to afford housing. The median home price in California is currently more than double the national average, and rents are among the highest in the country.  

“Virtually none of California’s low-income and very-low-income households can afford the local cost of housing. Nearly 70 percent of these households would have to spend more than half of their income to afford the local cost of housing.”

CEQA slows and even blocks housing production

CEQA can slow housing production by requiring extensive environmental impact reports (EIRs):

“In the early days, initial studies and EIRs were generally quite short, and covered only truly public projects… To minimize the risk of litigation, EIRs have ballooned into thousand-page documents covering potential impacts that few would normally associate with the environment.” 

It takes time to produce EIRs and other less intensive documentation: 

The approval timelines for housing projects in Southern California are very, very long. For multifamily projects approved between 2014 and 2016, the average time to approval was 13.1 months in Los Angeles, 16.3 months in Pasadena, and a whopping 48.3 months in Santa Monica. For projects requiring the highest level of environmental review, an environmental impact report (EIR), average timelines were 43, 28, and 77 months, respectively.”

According to the Legislative Analyst’s Office, local agencies took 2.5 years to approve housing projects requiring an EIR. 

CEQA also allows any California resident to anonymously file a lawsuit against a proposed development. These lawsuits can slow and block development, as the law firm, Holland & Knight, describes:

“...as our one-year snapshot of 2020 CEQA lawsuits shows, almost 50,000 housing units were challenged with anti-housing CEQA lawsuits - and thousands more were blocked in CEQA lawsuits challenging upzoning in existing communities to allow more housing, including near transit.”

Its 2018 report found that most of the challenged units were in “infill locations” (areas already approved for such construction), within half a mile of transit services, and in whiter, wealthier, and healthier areas. 

As one example, a state court blocked California’s $1B plan to replace the 70-year-old Capitol building, arguing that the state did not offer “a reasonable range of alternatives that fostered informed public participation and decision-making.” In another high-profile example, last year an Alameda County judge cited CEQA in ordering a limit on enrollment at UC Berkeley (this was later overturned).

However, some argue that this data is misleading and that these examples are outliers:

“While CEQA-based delays make good headlines, the scope of the CEQA “problem” may be smaller than it appears. For example, a study commissioned by the California Air Resources Board (CARB) found that less than 3% of approvals for housing projects faced litigation. On average, there are fewer than 200 CEQA-related lawsuits per year in California, which puts the rate of CEQA-based litigation at 0.7% for all projects that undergo environmental review.”

Several studies dating back to 1991 find similarly low litigation rates. A survey of 46 California cities and counties found that only 6% of projects between 2015 and 2017 even required EIRs. When EIRs were required, the Association of Environmental Professionals asserts that it only takes an average of 15 months to complete, compared to the 28 to 77 months cited above. 

CEQA makes housing more expensive

Navigating the CEQA process cost money, which gets added to the cost of housing, as state Senator Scott Wiener argues: 

“However, the CEQA process is subject to appeals and lawsuits that can increase project costs and create delays for reasons completely unrelated to the environment. It’s not unusual for it to take three to four years and millions of dollars to resolve a single lawsuit, while pre-lawsuit appeals regularly take six months to resolve. The delays and excessive costs associated with CEQA can slow down projects, or even prevent proposals from moving forward.”

There are 2 main costs: preparation of documentation and CEQA-related legal challenges, which can add up quickly, in part because of California’s legal rules.

“A project developer will usually have to pay both its own legal bills, as well as the tab the lead agency incurs in defending its CEQA document. What is more, if the CEQA document is found deficient, then the party that challenged it will usually be awarded its legal expenses (fees and costs), based on California’s “private attorney general” statute.”

While not related to housing, the impact of CEQA on the cost of windfarm construction demonstrates its cost-raising effect:

“These CEQA lawsuits, when combined with California’s extensive land use and permitting laws, help explain why it costs between 15 to 20 percent more to construct wind projects in California than in other areas of the country.”

Several case studies compiled by an environmental justice foundation suggest that such costs are insignificant compared to overall development costs:

“The report found that the direct environmental review costs for these five projects ranged from 0.025 to 0.6 percent of the total project costs. …The results [from the 2021 report] are very similar to the findings of the 2016 Report: the three new case studies indicate (1) direct environmental review costs ranging from 0.15 to 0.5 percent of the total project cost.”

Case Against:

CEQA ensures important protections for the environment

The primary goal of CEQA is “identify the significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible.” In the high-profile cases noted above, environmentalists generally believe that CEQA fulfilled its purpose.

For example, one of the lawyers who worked to block the state’s Capitol Annex Project described their legal victory this way:

“The court sided with the people of California today. [I hope state officials] will properly consider alternatives to the project which do not involve decimating these irreplaceable historical resources.”

While the pause on UC Berkeley enrollment was later overturned, some argue that the Court-ordered block was justified:

“The university’s proposal would have destroyed a landmark on the National Register of Historic Places in one of the most under-parked areas in the nation.”

The Rose Foundation warns against stripping CEQA of its power:

“Over time, CEQA has proved extraordinarily effective in protecting California’s environment, including minimizing air, water, soil and noise pollution that harms public health, while giving community members a powerful voice in the land use process… It is important to recognize that when the Legislature eliminates environmental review requirements through streamlining provisions such as those authorized by SB 35, there may be no mitigation for impacts causing public health and other harm.”

However, critics argue that CEQA is now frequently used to undermine its original purpose:

“Unsurprisingly, given the convoluted way in which CEQA litigation is being used today, a recent study showed that CEQA lawsuits are actually worsening the very thing that CEQA was made to protect: the environment… Instead, it has ‘evolved into a legal tool most often used against the higher density urban housing, transit, and renewable energy projects, which are all critical components of California’s climate priorities and California’s ongoing efforts to remain a global leader on climate policy.’”

UC Davis professor Chris Elmendorf describes it this way:

“Whether we’re talking big infrastructure, green infrastructure, shelter or even university enrollment, CEQA puts a heavy thumb on the scale in favor of maintaining the status quo. If anyone musters a ‘fair argument’ that any physical change that a project might cause would have any locally adverse effect, then the project can’t proceed unless the sponsor undertakes an exhaustive study and mitigates all physical effects found to be ‘significant’… This paradigm would make sense if humankind inhabited an ecological Eden in which everything was perfect until we touched it. But the world we live in today requires substantial physical changes to remain habitable.” 

The law firm, Holland & Knight, goes further, arguing that those filing CEQA lawsuits don’t even have environmental benefits in mind:

“Sixty-four percent of those filing CEQA lawsuits are individuals or local “associations,” the vast majority of which have no prior track record of environmental advocacy – and CEQA litigation abuse is primarily the domain of Not In My Backyard (NIMBY) opponents and special interests such as competitors and labor unions seeking non-environmental outcomes.”

Local regulations are the primary deterrents of housing production, not CEQA

The main strike against CEQA is its alleged role in worsening California’s housing crisis. However, research on the causes of the state’s current housing shortage, at a minimum, points to a range of factors, including high land and construction costs, restrictive zoning regulations, and limited availability of funding for affordable housing. 

Research by the Hoover Institute emphasizes one of the factors above the others:

“The substantial rise in California home prices since 1980 coincides with more restrictive land use regulations, including tighter zoning regulations. Many studies present evidence that these regulations are substantially increasing housing costs.”

Several economists believe that just returning to the land-use regulations of 2000 would have a tremendous impact. Others blame local land regulations too, explaining that even when CEQA is part of the problem, it's not necessarily the law itself, but the locality’s implementation of the law:

“All data points to local authority over land and local regulation as the most significant barrier to increasing infill dense housing and affordable housing. Local governments could eliminate obstacles associated with state level environmental regulation (and related litigation) by reforming their own local law.”

How exactly are localities thwarting housing production? A UC Berkeley study explains:

“We found that these local governments are imposing discretionary review processes on all residential development projects of five or more units within their borders. That means even if these developments comply with the underlying zoning code, they require additional scrutiny from the local government before obtaining a building permit. This triggers CEQA review of these projects.”

Localities also take wildly different amounts of time to process reviews, suggesting, again, that local variations are causing the problem.

For their part, California cities and counties generally blame factors other than CEQA for the limited supply of housing too:

“Respondents selected CEQA relatively infrequently among factors constraining new supply, with high development costs, neighborhood opposition, lack of sites, and lack of affordable housing funding as more common constraints to expanding supply.”

CEQA has already been amended to minimize its impact on housing production

Since its passage in 1970, CEQA has undergone significant changes intended to reduce its impact on development projects: 

“In 2020, the state legislature expanded that list [of exceptions that don’t require CEQA] to include certain green transportation projects, including pedestrian, bicycle, and transit improvements along existing rights-of-way, though these exemptions will sunset in 2023. This move followed an earlier 2019 bill, which exempted homeless shelters and permanent supportive housing within Los Angeles from CEQA requirements.” 

These exceptions are commonly used too:

“Because so many projects complete CEQA review via mechanisms other than EIRs, a large majority of all approved units did not require an EIR for project-level CEQA review. Our data indicates that compliance routes other than EIRs are not reserved for extremely minor projects, and are a key component of infill residential development in California.”

If CEQA is further disarmed, it could lose the ability to achieve its original mission:

“Misguided CEQA reform could undermine environmental protection throughout the state without providing meaningful improvements to our housing situation.”

However, as noted above, many of the more recent exemptions will sunset soon and some recommend extending exemptions further to, for example, more infill and affordable housing projects - and encouraging localities to take further advantage of existing exemptions. 

My Assessment

California’s housing shortage is severe and damaging. The 2016 McKinsey study cited above estimates that we lose 6% of the state’s GDP each year because of the shortage. With a declining population and a state budget deficit, this requires urgent action. 

However, the data is mixed on whether CEQA is a primary reason for the state’s housing shortage. While the anecdotes of delayed projects are powerful examples of the law’s effect, the data suggesting CEQA’s impact is minimal currently seems to outweigh the data condemning it in amount and rigor. 

This doesn’t mean that CEQA isn’t slowing housing production or being “manipulated to be a formidable tool of obstruction” as a recent San Francisco judge asserted, but the limited data proving CEQA is the problem and the abundance of other studies blaming local land-use regulations suggest there are other more significant causes of the shortage - albeit, ones the state may have more trouble addressing. 

As a result, the state should avoid pointing to CEQA reform as the silver bullet for the housing crisis, while continuing to minimize the impact of CEQA on housing production without undermining its stated purpose. 

Given the severity of the current housing crisis, California should extend SB35 beyond 2025 - perhaps to 2035 - but not make it permanent. The severity of the crisis warrants taking a risk on CEQA reform even though it may not make a big difference. California should also look for ways to minimize misuse of the law by requiring those filing CEQA lawsuits to disclose their identity and environmental interests. 

In 10 years, we can assess this balance again, judging at that time whether housing production is more important than enhanced environmental protection.

What’s your assessment?

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Today’s Debate

In December, the federal government held its first-ever auction for leases to build massive wind farms off California’s coast. The government auctioned off 5 sites about 20 miles off the coast of Morro Bay (central coast) and Humboldt County (northern coast), totaling 583 square miles, for a total of $757M. 

While there are many wind farms off the nation’s eastern coast and in Europe, this would be the first commercial-scale wind farm off the west coast. Due to California’s deep waters, these wind farms would consist of floating wind turbines - unlike the anchored turbines in the Atlantic.

This came after state and federal action in 2021 to advance offshore wind. In May 2021, the Biden Administration and Governor Newsom announced an agreement to enable the development of an initial 4.6 GW of offshore wind off California's Central and North Coasts. In September 2021, the California Legislature - with bipartisan approval and Governor Newsom’s support - signed AB 525 into law, requiring the California Energy Commission to establish offshore wind targets for 2030 and 2045 and a strategic plan to hit those targets.

Habib Dagher, who is helping develop the first offshore floating wind turbines in the U.S., describes the debate inherent in this opportunity:

“There’s a lot of opportunities, but there’s also some challenges. California has deeper waters than any other areas with these floating turbines so far in the world. How do you protect the environment, protect local stakeholders, protect the fisheries, protect indigenous communities, while also speeding up permitting so we make a difference with global climate change?” 

Argument in Brief

Should California build massive wind farms off the coast?

Case For:

• Offshore wind farms can generate a significant amount of renewable energy

• Offshore wind farms produce energy when it is needed most

• Offshore wind farms don’t use land or block the view

Case Against:

• Offshore wind energy is very expensive

• We currently lack the infrastructure to build and operate these wind farms

• Offshore wind farms will hurt the environment and fishing industry

My Assessment:

Offshore wind energy seems to have incredible potential to be an abundant and reasonably reliable source of energy in the years to come. However, in a heads-down sprint to achieve its aggressive climate action goals, California appears poised to skip an important step in the development of new technology: small-scale pilot projects. In addition to not having a working model of floating turbines for this specific context, we don’t know much about the impact of commercial-scale offshore wind farms on the marine environment and fishing industry. 

Add to that the fact that offshore wind energy prices are 3x the cost of several other energy sources and it starts to seem clear that we’re moving too fast. Right now, we don’t even have the port infrastructure to enable turbine fabrication and assembly. 

Instead of going big out of the gates, California should scale back the existing projects and do a few pilot projects with a focus on learning about the technology and construction requirements and the impact on the environment and fishing industry - while waiting for innovation to drive costs down. 

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Case For:

Offshore wind farms can generate a significant amount of renewable energy

These offshore wind farms have the potential to produce 4.5 gigawatts to power about 1.5 million homes and provide as much as 6.8% of the state’s energy - which would increase wind energy generation by ~50% in California.

These 4.5 GW would also help the state achieve its goal of 5 GW of offshore wind energy by 2030 and its larger goal of 100% clean electricity by 2045, as Governor Newsom explains: 

“Offshore wind is a critical component to achieving our world-leading clean energy goals and this sale is a historic step on California’s march toward a future free of fossil fuels.”

In fact, without this increase in wind power, it will likely not be possible for California to hit its goal:

“The state's 2021 SB 100 joint agency report concludes that for California to reach 100 percent clean energy by 2045, it will need a broad range of renewable energy that includes offshore wind. The study’s “SB 100 Core Scenario” calls for 10 GW of offshore wind by 2045, or as much as the model would allow.”

The initial 4.5 GW is just scratching the surface of California’s full offshore wind potential:

“The National Renewable Energy Laboratory (NREL) reports California has an enormous 200 GW of offshore wind technical power potential, representing more than 250 percent of the state’s current electricity use. So 10 GW of offshore wind is just a fraction of the state's full technical potential.”

Offshore wind farms produce energy when it is needed most

California’s increasing reliance on renewable energy sources requires a delicate mix of energy sources that ensures there is energy when people use it. Solar energy, which makes up 14% of the state’s total power mix, is only available during the day, while peak energy usage occurs between 4pm and 9pm.

“But when the sun goes down, we still rely on peaker plants for as much as 60% of our electricity. More solar panels and storage capacity will help, but they are unlikely to scale fast enough to close the gap at an affordable price. California needs to procure a diverse portfolio of renewable energy including offshore wind.”

The state already generates more solar energy than any other. But it needs another power source to fill in after the sun sets. The California Energy Commission hopes offshore wind can step in to provide enough renewable energy through the evening.

Winds off the coast are strongest in the late afternoon and evening, providing a good complement to solar power: 

Offshore wind is a very different profile compared to onshore. It actually corresponds and coincides very well with the demand profile.

Offshore wind farms don’t use land or block the view

When far enough offshore, offshore wind farms generally go unnoticed by coastal populations, providing an added benefit over onshore wind:

“Offshore turbines don’t have as much visual impact as those on land. They don’t interfere with land usage, and there are no physical obstacles that can interrupt the wind flow. For this reason, offshore wind farms can be made larger and generate more energy than those onshore, with less physical impact.”

However, wind turbines typically must be more than 25 miles off the coast to be out of sight and the leased areas are around 20 miles off the coast.

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Case Against:

Offshore wind energy is very expensive

Offshore wind is dramatically more expensive than all other energy sources. According to a U.S. Energy Information Administration report from last March, offshore wind’s levelized cost of electricity is more than 3 times higher than natural gas, standalone solar projects, and onshore wind. When you factor in tax credits, the gap shrinks some, but offshore wind is still 2.5 more expensive than any of those sources. It’s even 25% more expensive than advanced nuclear. 

This has been a sticking point for offshore wind:

“To date, offshore wind energy in the United States has been held back by a combination of high costs, lack of government support and, along the West Coast, geography… That’s why no commercial-scale floating offshore wind power projects have been built in the United States to date.”

Offshore wind high costs are driven up by the underwater infrastructure required to stabilize the turbines in the sea - which accounts for 75% of the total cost. 

Offshore wind farms have cut the cost by 60% since 2010 - and turbines today can generate twice the power of the average turbine built just 7 years ago. The Biden Administration is also focused on bringing costs down significantly lower:

“The Floating Offshore Wind Shot will aim to reduce the costs of floating technologies by more than 70% by 2035, to $45 per megawatt-hour.”

This would put the cost of offshore wind in the vicinity of onshore wind costs, just north of natural gas and solar, and cheaper than hydroelectric.

We currently lack the infrastructure to build and operate these wind farms

In addition to constructing and anchoring the floating turbines, California will need to build new port infrastructure to fabricate and assemble the turbines - and to transmit and receive the energy.

Adam Stern, executive director of Offshore Wind California, believes that California’s under-developed infrastructure is a key reason there were lower lease sales off the West Coast than in New York and New Jersey: 

“Our state is not as far along in preparing for offshore wind in areas like port infrastructure, transmission and procurement policies.”

According to CalMatters, this means that we need to play catch up:

“The scale and size of the technology means California would need to rapidly build specialized port facilities and servicing vessels to construct and transport the gigantic turbines… it’s critical that the state start now investing in transmission and port infrastructure and developing a clear roadmap on permitting and procurement.”

A 2016 analysis by the Bureau of Ocean Energy Management found that California would require significant investments in fabrication and assembly ports - and may require some new facilities. 

A recent assessment at the Morro Bay site confirmed this:

There is no existing infrastructure or harbor in the study area that can be upgraded to be a Large Facility with localized (minor, targeted) upgrades only, and therefore requires development of a new facility… In both cases, a new port facility appears technically feasible but would be subject to numerous onshore and in-water constraints and would need to be planned to avoid, minimize, and mitigate potential impacts. To accommodate land conservation efforts, regulatory considerations, existing uses, and onshore site constraints, significant new overwater coverage would be needed to build a port facility at either site. [emphasis added]

The California Independent System Operator (CAISO), which oversees the operation of California's bulk electric power system, transmission lines, and electricity market, believes we are better prepared to handle energy transmission:

“For California, a CAISO staff report indicates that up to 5-6 GW of offshore wind could be interconnected − utilizing transmission at a retired gas plant and two soon-to-be-retired nuclear generators on the Central Coast.”

Offshore wind farms will hurt the environment and fishing industry

Offshore wind farms have the potential to negatively impact the marine environment, the fishing industry, and in some places, Native American tribes, as an attorney from the Natural Resources Defense Council explains: 

“Sea turtles, fish and marine mammals could become entangled in the cables, while birds and bats could get caught in the turbines… There's a lot that we don't know about offshore wind in the West and what that means for various marine and coastal ecosystems.”

In Europe, where offshore wind farms have been around for many years, researchers published a study last year warning of the impact of offshore wind farms on the marine environment: 

“A scientific team on marine sciences and geography… recommends excluding and moving offshore wind farms from the protected areas in the Mediterranean due to the serious negative impacts these facilities can cause on the marine biodiversity and the landscape.”

The authors did direct these warnings toward the most ecologically fragile areas of the Mediterranean, noting that they may not be relevant in other areas.

Commercial-scale offshore wind farms are also poised to have a large effect on the fishing industry. Tom Hafer, president of the Morro Bay Commercial Fishermen’s Organization, explains the industry’s concern: 

“We’re totally against this. We’ve been consulting with the Castle Wind people for a long time, and we helped pick the spot and developed a memorandum of understanding on an area that we thought would be sustainable for us. That was about 120 square miles. This is 399 square miles. We’re going to lose a whole bunch of fishing grounds. There will be cables in the water. We don’t know how the whales will react. There are a lot of unknowns. People don’t realize how massive this project will be.”

On the East Coast, commercial fishers have been sounding the alarm: 

“They say problems exist even in spots where the turbines have yet to go up. Commercial fishermen, along with charter fishing boats, are seeing fish flee from the noise of the site surveys, only returning to regular spots a few days later… Cables and other construction needs are creating changes in the marine environment, which can be particularly harmful to bottom-feeding species like scallops, clams and flounder.”

Wholesalers and fishing groups filed a lawsuit last year against Vineyard Wind, arguing they would be “economically ruined” by the project.

While government officials and the wind energy industry say they will work to mitigate the impact on the environment and the fishing industry, most offshore wind supporters believe the fight against climate change is worth the impact on marine habitats. The former Assemblymember who penned AB 525 to increase offshore wind makes this argument:

“We know that we have to do something different. Offshore wind is different. That being said, we're also acutely aware that there are impacts on communities.”

Brandon Southall - the California Ocean Alliance scientist cited earlier - makes the same argument: 

“I hope that when we're looking at these concerns about impacts, that we, as a scientific community and as a conservation community, don't lose sight of the fact that we need sustainable, alternative energy. We need a balance of informed and conservative cautionary decision-making, but not so precautionary and so afraid of the uncertainty that we never get there.” 

My Assessment

Offshore wind energy seems to have incredible potential to be an abundant and reasonably reliable source of energy in the years to come. However, in a heads-down sprint to achieve its aggressive climate action goals, California appears poised to skip an important step in the development of new technology: small-scale pilot projects. The scientist who is developing the first offshore floating wind turbines in the country describes just how novel these projects are:

“The turbines off Eureka would be in waters 2,490 feet deep and for Morro Bay, 3,320 feet. No project in the world exists in waters this deep. The deepest project to date is in Norway, in waters 721 feet deep. That adds costs and risk because no one's building anything this big or this deep yet.”

In addition to not having a working model of floating turbines for this specific context, we don’t know a lot about the impact of commercial-scale offshore wind farms on the marine environment and fishing industry. The California Ocean Alliance scientist says “There’s a lot of uncertainty.” The environmental attorney at NRDC says “There’s a lot we don’t know.” 

Add to that the fact that offshore wind energy prices are 3x the cost of several other energy sources and it starts to seem clear that we’re moving too fast. Biden’s “wind shot” attempt to cut prices to a third of today’s price hopefully will work. If it does, then California should make big investments in offshore wind farms. 

Right now, we don’t even have the port infrastructure to enable turbine fabrication and assembly. 

Instead of going big out of the gates, California should scale back the existing projects and do a few pilot projects with a focus on learning about the technology and construction requirements and the impact on the environment and fishing industry - while waiting for innovation to drive costs down.

Today’s Debate

California’s public education performance needs improvement. The state ranks 40th in pre-K through 12th grade education, according to US News 2022 rankings. On average, 86% of California students graduate high school compared to 92% in Florida and 94% in Texas. 

Performance in the earlier grades is worse. Almost 70% of 4th graders are not achieving proficient scores in math or reading. In 2022, California was one of 15 states performing significantly below the national average for 4th-grade math. 

Test scores for non-white and non-Asian populations and for low-income students are much lower than the state averages. This difference in academic performance is called the achievement gap. The achievement gap can refer to the difference in educational achievement between either high-income and low-income students or white students and black or Latino students. In California, the achievement gap is stark on both of these dimensions.

Closing the achievement gap has been a major educational priority and topic of debate in California and around the country for over a decade. In the fall of 2022, Assembly Member Akilah Weber proposed directing more funding to the lowest-performing students in the state by making changes to what is known as the Local Control Funding Formula (LCFF). LCFF dictates how the vast majority of state funding is allocated to school districts. Weber’s hope was that this would help close the black-white achievement gap since many black students are currently among the lowest-performing students in the state.

But Governor Newsom asked her to withdraw this bill, promising to include something similar in his 2023 budget. And he did, kind of. He allocated $300M to what he has called high-need schools (elementary and middle schools where at least 90% of students qualify for free or reduced-price meals, and high schools where at least 85% qualify), arguing that most low-performing students go to high-need schools and that re-allocating funds in the way Assembly Member Weber suggested may present legal challenges.

Newsom is calling this new allocation of funds an “Equity Multiplier” because it is supposed to shrink the achievement gap. Will it? That is the debate for today.

Argument in Brief

Should California allocate an additional $300M to high-need schools to help close the achievement gap?

Case For:

• California’s achievement gap requires addressing because it is large and growing 

• Most of the lowest-performing students go to the high-need schools identified by Newsom

• Giving more money to these schools will drive up student achievement

Case Against:

• We already tried this and it hasn’t worked

• The money won’t be spent in ways that drive academic improvement

• The equity multiplier doesn’t address the root causes of the achievement gap

My Assessment:

California’s achievement gap is large, leading California to find itself in the bottom 20% of states in public education outcomes. The $300M proposed by Newsom is a drop in the bucket compared to the overall education budget, so it is unlikely to have a dramatic impact on the achievement gap.

However, directing more funds to high-need schools - as the state has been doing since 2013 - seems to be having an effect, albeit smaller than desired. California should move forward with this targeted funding for high-need schools while increasing transparency and accountability to ensure as much money as possible goes toward benefiting the highest-need students.

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Case For:

California’s achievement gap requires addressing because it is large and growing

In 2022, white students were more than twice as likely as black students to be meeting English/Language Arts standards and three times more likely to be meeting math standards, according to the state’s California Assessment of Student Performance and Progress, or CAASPP. 

The achievement gap along socioeconomic lines is similar in magnitude. Students not considered to be economically disadvantaged were 1.8 times more likely to be meeting English standards than their economically disadvantaged peers and 2.4 times more likely to be meeting math standards.

The achievement gap has held relatively constant over the last 15 years with some variation by race/ethnicity: 

“Moreover, we find that average test score disparities between non-poor and poor students and between White and Black students are growing; those between White and Hispanic students are shrinking.” 

The achievement gap matters in 4th-grade test scores because it has long-term consequences, as sociologist Christopher Jencks explains: 

“Reducing the test score gap is probably both necessary and sufficient for substantially reducing racial inequalities in education attainment and earnings.”

While the achievement gap between white and Hispanic students is similar in size to the gap between white and African American students, the former has a much larger influence on California’s overall education scores because Hispanic students represent the majority of California public school students: 

Most of the lowest-performing students go to the high-need schools identified by Newsom

In Newsom’s budget proposal, he stipulated that Equity Multiplier funding would go to schools with at least 85% (high schools) or 90% (elementary and middle schools) of the student population qualifying for free or reduced lunch. To qualify for free school meals, a household of 4 must make under $36,075, and to qualify for reduced-price meals and snacks, a household of 4 must make under $51,338.

It intuitively makes sense that children in low-income households would perform worse in school - and the data shared above established that economically disadvantaged students are underperforming their economically advantaged peers by roughly a 2 to 1 ratio. 

However, some advocates of Assembly Member Weber’s original bill argue that this won’t benefit many of the black students needing extra help:

“It sounds good, but it doesn’t actually get to the students who need the help. This is an apple, and what we wanted was an orange.”

This is a surprising claim because I’d expect many of the low-performing black students also to be part of low-income households. But a CalMatters analysis found that less than 26% of California’s black students are in schools that will qualify for the Equity Multiplier. This doesn’t mean that the students who do qualify won’t need help, but it does suggest, surprisingly, that most black students are not in “high-need” schools. 

This is shocking, given the racial wealth gap. Over 28% of black children in California are living in poverty, compared to 17% of all children. 

However, black students make up just 5% of the full student population. As a result, Newsom’s eligibility requirements could include the vast majority of low-performing students and still not include the majority of black students because they represent such a small portion of the total. This would imply that there is a sizable portion of economically disadvantaged black students who happen to be in schools that are not predominantly economically disadvantaged. 

Interestingly, this has forced a decision between targeting extra funds to black students (who are, on average, the furthest behind) and targeting extra funds to low-income students (who are almost just as far behind). If your goal is to improve the state’s scores the most, Newsom’s focus on low-income students likely makes sense. Almost 60% of California students qualify for free or reduced lunch, while just 5% of the student population is black.

Newsom’s office offers another reason for his choice: 

“Weber’s office and the bill’s sponsors said Newsom raised concerns about violating the state’s Proposition 209 and the 14th Amendment of the U.S. Constitution. The former prohibits preferential treatment of an racial or ethnic group and the latter guarantees equal protection for all citizens.”

Christina Laster, a co-sponsor of Weber’s bill argues that this is not a real obstacle:

“It was never once a racial thing. It’s about the category rather than who’s in the category… If after one or two years those students were progressing, it could be any other student group that could be considered.”

Giving more money to these schools will drive up student achievement

Regardless of whether you agree with Newsom’s target population or Weber’s, there remains an all-important question of whether this extra funding will actually help at all. In answering this question, it’s important to start with how much California spends on public education relative to other states. If it spends a lot more than other states while getting worse outcomes, then even if extra money might help, other states’ relative cost-effectiveness would demonstrate that there are other more cost-efficient ways to improve outcomes.

California currently ranks 19th in public education spending and funding, spending $13,642 per pupil*. The state’s education funding increased by 50% between 2017-18 and 2021-22, pushing California’s education spending above the national average after many years of what some call significant underfunding. California also has a higher cost of living than most other states. When adjusted for differences in labor costs, California’s rank drops to 35th. Further, when you compare the relative effort index for public education funding (education funding as a percent of state GDP) in California to the historic national standard of 4.0%, California is more than 25% below.

All these taken together puts California in the middle of the pack, if not slightly below average in spending. California could spend more money on education.

More spending does seem to be associated with better academic outcomes. The Learning Policy Institute's review of studies on this topic finds:

“Recent studies have invariably found a positive, statistically significant relationship between student achievement gains and financial inputs.”

And the Public Policy Institute of California (PPIC) agrees:

“Although policymakers and researchers have long debated the relationship between school spending and student outcomes, recent research using better data and statistical techniques has consistently documented a causal link between increased funding and improved student outcomes.”

But even if this correlation is generally true, it doesn’t mean that spending incrementally more in targeted districts would impact academic achievement in those schools. 

However, a natural experiment occurred in California when the state implemented the Local Control Funding Formula in 2013. LCFF allocates funds based on pupil needs and eliminates many limitations on the use of funds, allowing “local control” over spending decisions. In addition to base grants, which are based on Average Daily Attendance and grade level, local education agencies receive “supplemental” and “concentration” grants, based on the number and percentage of English language learners, students in foster care, and students from low-income families.

Researchers found that funding redistribution created by LCFF led to a meaningful impact on student performance:

“We find that LCFF-induced increases in school spending led to significant increases in high school graduation rates and academic achievement, particularly among poor and minority students. A $1,000 increase in district per-pupil spending experienced in grades 10-12 leads to a 5.9 percentage-point increase in high school graduation rates on average among all children, with similar effects by race and poverty. On average among poor children, a $1,000 increase in district per-pupil spending experienced in 8th through 11th grades leads to a 0.19 standard-deviation increase in math test scores, and a 0.08 standard-deviation increase in reading test scores in 11th grade.”

Research on the effect of education funding redistribution in 4 other states led to similar recommendations.

Case Against:

We already tried this and it hasn’t worked

The Equity Multiplier is, as the name suggests, a multiplier - rather than a new idea. LCFF, which was adopted in 2013, was designed to do the very thing the Equity Multiplier intends to increase - divert more funding to the students (and schools) who need it most. 

LCFF is the largest single source of education funding and it has increased significantly over the last few years.

Local education agencies (school districts and charter schools) receive “supplemental” and “concentration” grants, based on the number and percentage of English language learners, students in foster care, and students from low-income families. Dan Walters of CalMatters suggests that this progressive funding approach hasn’t yielded the desired results:

“So far, the disparity has resisted inconsistent efforts by the state to close it, most prominently by giving schools with larger numbers of at-risk students extra money for focused instruction.”

This is despite the fact that LCFF has resulted in more funding for disadvantaged student populations:

“Under LCFF, 2020–21 per student spending is higher for low-income than higher-income students (by $1,265), for English Learners (ELs) than non-ELs (by $500), and higher for Black and Latino than white students (by $1,278 and $1,185, respectively).”

The following charts show that African American and Latino students receive more per-student funding, as do lower-performing students:

Spending per student segmented by academic performance

Heather Hough, director of Policy Analysis for California Education, also believes that these extra funds haven’t worked: 

“What we have been doing has not worked. We’ve been talking about accelerated learning, but we have no experience with accelerated learning, and our track record with closing the achievement gap is not good. … We cannot revert to business as usual because that did not work. This requires large-scale, systemic change.”

But an extensive analysis by the Public Policy Institute of California (PPIC) seems to dispute Hough’s claim:

“When evaluated across districts—especially when focusing on the highest-need districts—LCFF has led to a more equitable distribution of funding and outcomes. Spending has increased fastest in the highest-need districts, leading to a relative rise in graduation rates and test scores; additional concentration grant funding appears to raise A–G completion rates at districts that received the most funding; and due to concentration grant funding, standardized test scores improved in these districts at a magnitude consistent with prior research.”

These gains in student performance have led to a shrinking of the achievement gap between districts, which is expected to continue:

“Furthermore, the relative increase in funding of $2,000 per year for highest-need districts could close test score gaps across districts—but not across students—within the next decade, if effects do not diminish over time or have not widened substantially during the COVID-19 pandemic.”

The achievement gap between different groups of students (e.g., different racial groups and different socio-economic groups) has been more resistant to change than the gap between districts, at least in part because school districts - which possess significant authority over how LCFF funds are distributed - have not distributed funds according to the proportion of high-need students in each school as much as they could have. I’ll explore this in the next section.

In addition, when you add in all other funding schools receive, the funding advantage high-need schools have from LCFF almost disappears:

“Thus, while LCFF represents an unprecedented shift in California school finance towards more equitable funding based on student need (Putnam-Walkerly and Russell 2014), when we include formula and non-formula revenue sources, it has generated only modestly greater increases in spending progressivity than those that existed before the recession.”

The money won’t be spent in ways that drive academic improvement

Schools received $190B from the federal government as COVID relief in 2020 and 2021, and now 2-3 years later, only 55% of the funds California has received have been spent, according to the U.S. Department of Education. Examples like this cause people to worry that funding given to schools will not be spent in the way it was intended.

Dan Walters of CalMatters agrees, arguing that more oversight is necessary:

“Giving poor districts such as Merced more money is one obvious response, but the Legislature should insist on better oversight on how extra money is spent and also accept that there’s more to the equation than money.”

And there are LCFF-related cases to support Walters’ suspicion: 

“In 2015, the ACLU sued the Los Angeles Unified School District for failing to spend the money generated by English learners, foster children and low-income students on services for those groups. In 2021, the California Department of Education found that three school districts in San Bernardino County misused funds for high-needs students.”

There are 2 ways that Newsom’s $300M could be misspent - and that LCFF funds, more generally, could be misspent. First, they could be spent on the wrong schools and the wrong students, as PPIC explains:

“While the funding formula targets districtwide need, it does not explicitly allocate these dollars to the students or schools that generate this additional district funding. If districts spend their supplemental and concentration grant funding only on high-need students, then any distinction between district- and school-level (or even student-level) funding is unimportant. However, if districts spend equally on all of their students, then it limits the ability of the LCFF formula to distribute spending progressively. There are numerous examples that suggest that districts may not be fully targeting LCFF dollars.”

How often are school districts spreading their total LCFF allotment evenly between schools vs. distributing them according to need? A PPIC analysis found that for each LCFF supplemental and concentration dollar generated by a school (i.e., by having high-need kids in their school), its site-level spending increased by only $0.55. This suggests that most districts could be distributing almost twice the LCFF supplemental and concentration grant funding to high-need schools.

Secondly, districts and schools themselves could also spend these funds on the wrong interventions. 

“Higher-need districts increased spending on salaries for pupil services and other support staff besides teachers and administrators (e.g., nurses, counselors, teachers’ aides) more than lower-need districts… Notably, the largest spending increases were in the category of staff benefits, the result of multiple factors.”

It’s hard to know if high-need districts are spending the right amounts on each of these categories because the evidence around what interventions make a difference is, as summarized above, rather mixed, and districts face some constraints around how they spend on benefits and staff. 

What we do know is that transparency and accountability could increase:

“Local Control and Accountability Plans are intended to account for the funding and services provided for high-need students, but these are often incomplete and unclear, making it difficult to use them to understand how districts use supplemental and concentration funds.”

The equity multiplier doesn’t address the root causes of the achievement gap

While much of the conversation about the achievement gap focuses on K-12 education, this is not where it begins:

“The gap between whites and blacks is present before children experience any schooling. By the time children are three or four, it is already a standard deviation.”

It turns out that school has less of an impact on the achievement gap than one would expect:

“Does the gap increase while students are in school? The surprising answer is no. Researchers have found that the rate of growth in achievement among blacks is equal to that among whites during the academic year. In the summertime, both groups show a decrease, but that decrease is larger for blacks than for whites. So while the achievement gap doesn’t increase while students are in school, it doesn’t decrease either.”

If differences in home life and community opportunities both create the achievement gap and perpetuate it, would it make more sense to focus our efforts there rather than on the public education system? Maybe, but education is one of the state government’s primary responsibilities and largest budgetary item, so it also makes sense to leverage its resources to try to address this problem.

What factors actually predict achievement gap magnitude?

“Racial/ethnic segregation is one of the strongest predictors of racial/ethnic achievement disparities, primarily due to the disproportionate concentration of Black and Hispanic students in high-poverty schools... Further, while racial/ethnic school segregation may not have changed much, socioeconomic school segregation has grown substantially since the 1980s.”

Stanford researchers cite a number of conditions that are associated with a shrinking achievement gap:

“While we do not have definitive evidence regarding the best way to achieve this synergistic pattern, our analysis points to several common factors associated with improving achievement. In other words, districts with more experienced and present teachers—and where those teachers are more equitably distributed—tend to be the districts where both achievement and equity are improving the most.”

Heather Hough, who was cited earlier, also points to teachers and other support staff as key to closing the gap:

“The state’s recent infusion of money into K-12 schools will likely not be enough. The changes need to be widespread and long-lasting, particularly regarding staffing. Prospective school counselors, for example, need to know their jobs will exist a decade from now.”

However, the Stanford researchers cited above indicate that this explains just a small percentage of the variation in the gap:

“Our models account for, at best, only about one-sixth of the variation in trends among districts, indicating that there are many other factors at work.”

Increased spending could help - particularly if it’s directed at increasing teacher quality, performance, and tenure - but this will likely still only address a small portion of the root causes of the existing achievement gap.

My Assessment

Closing the achievement gap has “resisted” years of effort by governments and nonprofits across the nation. Another $300M aimed somewhat vaguely in its direction is not going to make a dramatic difference. In fact, $300M is just 0.2% of the overall K-12 state spending and 0.4% of LCFF funding. 

That said, it might help some and in the absence of other evidence-based, cost-effective strategies for closing the achievement gap, it likely makes sense to pursue it. The LCFF experiment of the last 5-10 years seems to show that distributing more money to high-need school districts shrinks the gap. This is consistent with a larger body of research that consistently associates higher per-student spending with better academic outcomes.

There also appear to be tweaks California can make to the Equity Multiplier based on lessons from LCFF. Namely, the state should work with districts to get their funds distributed more progressively to the schools in the district, and it should increase transparency and accountability around how the funds are spent. 

That said, if we really want to close the gap, we’ll likely need a more comprehensive strategy that adequately addresses the issues outside of the school that seem to cause and then perpetuate the gap. It’s possible that the Governor’s Community Schools strategy - “an effort to ensure that students and families in local communities can get the resources they need at their school to thrive in the classroom” - is the answer or at least part of the answer to the social and familial issues that undermine academic achievement. 

While more holistic approaches are developed, as Assembly Member Weber said in her statement on Governor Newsom’s budget, “I believe this proposal is a step in the right direction.”

Today’s Debate

With more than 2 months left of California’s rainy season, 5 of our 16 main reservoirs are more than 75% full. The Sacramento-San Joaquin Delta which acts as a hub for the Sacramento and San Joaquin rivers is flushing 95% of the incoming water out to the ocean through the San Francisco Bay. At the same time, the US Drought Monitor finds that 92% of the state is still in moderate or severe drought. 

The unfortunate fact - especially for those who have suffered during these storms - is that California still needs more precipitation - a lot more. 

When we find ourselves inundated with rain and hoping for much more - as we do every 4-5 years - Californians begin to ask: How can we store as much water as possible to hold us over during the dry years? This was the question voters had in mind in 2014 when they voted by a 2-to-1 margin to approve Proposition 1, which authorized $7.1B of bond funding for water projects. 

One water storage project to surface in the aftermath of Proposition 1 is the Sites Reservoir. Sites Reservoir is an offstream reservoir that will capture excess water from the Sacramento River following major storms and save it for drier periods. The Sites Reservoir Project would be located in the western Sacramento Valley, by the town of Maxwell.

Sites Reservoir is not a new idea or even a 2014 idea. The California Department of Water Resources first proposed the idea in the 1950s, but it was abandoned in the 1980s as building dams in the West fell out of popular opinion. However, the passage of Prop 1 and the extreme 2012-2016 drought, breathed fresh life into the project. 

Progress has been slow over the last 10 years, but the project passed some key milestones last year. Jerry Brown, executive director of the Sites Project Authority, is optimistic:

“We’ve definitely turned the corner and we have a nice tailwind at our back.” 

The current project timeline has construction starting in late 2024 and operations beginning in early 2030.

Despite this progress, the project is meeting some significant and expected resistance.

Argument in Brief

Should California build Sites Reservoir?

Case For:

• Sites Reservoir will increase water for Californians significantly

• It increases the flexibility and resilience of the state’s 2 water projects

• Voters already approved financing for it

Case Against:

• It will harm the environment and wildlife

• It will negatively impact local communities

• There are more cost-effective ways to increase water supply

My Assessment:

California should build Sites Reservoir. It could store a meaningful amount of water and several analyses suggest that there is enough water in the Sacramento River to meaningfully fill it. There are legitimate environmental concerns, but these can mostly, if not entirely, be mitigated if Sacramento River flows north of Sites and flows into the Delta remain sufficiently high. Meeting these criteria and still filling the reservoir seem possible. 

Groundwater storage may be the more cost-effective option, but a portfolio approach that embraces multiple forms of storage designed to collect and distribute different sources of water seem necessary to compensate for the projected 10% reduction in water supply in California’s future. Finally, we can’t wait the 15-20 years we would need to start this process over. Sites has been through a rigorous process over the last 10 years and it’s a year away from breaking ground. Let’s get it over the finish line.

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Case For:

Sites Reservoir will increase water for Californians significantly

For Sites Reservoir to meaningfully improve California’s water supply, it must be big enough to store a meaningful amount of water, and then it must be consistently full enough to deliver meaningful amounts of water. Sites Reservoir is expected to be a 1.5 million acre-foot (MAF) reservoir. As the state’s 7th largest reservoir, it would increase Nothern California’s water storage capacity by ~15%. 

This is a meaningful amount of storage, but could we fill it? 

We likely could this winter:

“Were Sites a reality today, it would be absorbing excess flow from the Sacramento River, banking water for when it would be needed in the future.”

The Sites Authority Project estimates it would have diverted 120,000 acre-feet of water into its reservoir in just 2 weeks this month. 

But we don’t get these types of storms every year. Jeffrey Mount, a senior fellow at the Public Policy Institute of California’s Water Policy Center, argues excess river flow is an unreliable supply:

“Storms like this (current bout) just don’t come that often so you can’t always expect to fill your storage. What you want is reliable supply and this (type of storage) is not very reliable. You don’t know when you’re going to fill it.”

While this year’s rainfall has been exceptionally high, we do have reasonably consistent cycles of wet and dry years. The project’s original Environmental Impact Report estimated that Sites would receive an average of 500,000 acre-feet of water per year (a third of its capacity). Yet, the California State Water Resources Board doesn’t think we’ll be able to fill it:

“In a letter sent out by state regulators Friday, project officials were told that their application for a water right is incomplete because they failed to show that there’s sufficient flow to draw from in the Sacramento River.”

An analysis by the California Globe suggests the opposite:

“...if one-fifth of the Sacramento River’s flow upstream at Colusa had been diverted, and only during the seven mostly dry months from October 2021 through April 2022, the massive 1.5 million acre foot Sites Reservoir could have been filled nearly half way to capacity. In just one season, during a drought.”

Governor Newsom seems to agree:

“We did some analysis of those big flows that came in November and December of last year, and if we had the conveyance and the tools to capture that storm water, it’s the equivalent of those seven projects [7 storage projects totaling 2.77 MAF] that I just noted that take decades to build in terms of stored capacity.”

A robust analysis by the Public Policy Institute of California (PPIC) made a similar point back in 2017:

“The state should also more consistently track water that exceeds water demands and diversion capacity (“uncaptured water”), which can provide significant benefits for water users and ecosystems… During most years and on most rivers—even during droughts—there are periods when river flows exceed either the capacity of existing storage and diversion facilities or the combined demands for water diversions, system water, and ecosystem water.”

PPIC calculated uncaptured water flowing through the Delta between 1980 and 2016:

“Not surprisingly, uncaptured water is the most variable category of Delta water uses. It averaged 11.3 maf over the 1980–2016 period, with a low of 221,000 acre-feet in 1990, during an extended drought, and a maximum of over 64 maf in 1983, the wettest year in the sample.”

Sites Reservoir is 1.5 MAF and in the average year, 11.3 MAF of uncaptured water flows through the Delta. 

It increases the flexibility and resilience of the state’s 2 water projects

The state’s 2 water projects link much of Northern California’s water in a complex system of dams and pipes. This can mean that diverting water into added storage capacity means less water for other parts of the system. Would Sites have to steal from other already empty reservoirs to fill itself?

Importantly, no. As an offstream or off-river reservoir, it does not dam up an existing river. Instead, it diverts water from the Sacramento River when water levels exceed a certain level through a series of pipes and canals to the reservoir. This suggests that filling Sites won’t involve taking water from waterways or storage facilities that are already lacking. 

In fact, in a letter to the California Water Commission, US Senator Dianne Feinstein suggested that Sites would actually benefit other elements of the state’s water system:

“Sites Reservoir would allow reoperation of California's water infrastructure in numerous beneficial ways.”

The Sites Reservoir Project notes that this is a distinct benefit of Sites relative to other reservoirs in California:

“By operating in conjunction with other California reservoirs, Sites Reservoir substantially increases water supply flexibility, reliability, and resiliency in drier years. Sites Reservoir is the only proposed storage facility in the State of California that will help with statewide operational effectiveness of the State Water Project and Central Valley Project.” 

There are a few specific ways that Sites can benefit the overall water system:

• Making early water releases on behalf of northern reservoirs so that those reservoirs can store their water longer 

• Increasing the resilience of the water supply by relying on storm-related runoff rather than spring snowmelt

• Maximizing capture of flood flows to minimize regional flooding 

• Skipping traditional winter flood control releases that other reservoirs, like Shasta and Oroville, are required to make, enabling Sites to hold onto its water longer

• Enabling lower-cost replenishing of groundwater storage in the region

Mike Wade, executive director of the California Farm Water Coalition, says:

“They are the facilities of tomorrow that give us flexibility in managing the resource that we have today.”

Voters already approved financing for it

As noted earlier, 67% of Californians voted in favor of Proposition 1, which authorized bond funding for water projects and specifically water storage projects. 

The authorized bond funding was designated for the following uses, with $2.7B allocated to dams and groundwater storage:

Specifically, the funds for new water storage had the following stipulations:

“The bond includes $2.7 billion to pay up to half of the cost of new water storage projects, including dams and projects that replenish groundwater. This funding could only be used to cover costs related to the “public benefits” associated with water storage projects, including restoring habitats, improving water quality, reducing damage from floods, responding to emergencies, and improving recreation.”

This funding still hasn’t been used yet:

“Nearly 10 years later, none of the major storage projects, which include new and expanded reservoirs, has gotten off the ground. The seven dedicated storage projects funded by voter-approved Proposition 1 remain in various stages of planning… ”

It may be slow, but the California Water Commission has approved $875M for Sites Reservoir. The Sites Project Authority says it has lined up the remaining funds for the $4B+ project, including over $214M in federal funds through the Bureau of Reclamation. 

Voters deserve to see this money spent on water storage projects - or be given the opportunity to vote again to reallocate those funds. This doesn’t mean that these funds must be used to fund Sites Reservoir. Of the 6 other projects approved for Proposition 1 funding, 4 are for groundwater storage projects. 

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Case Against:

It will harm the environment and wildlife

Unlike most reservoirs, Sites Reservoir scores several points on the environmental scorecard on the basis of its design alone. It avoids damming up any river and only diverting water from the Sacramento River when the flow is higher than necessary for prior water diversions and the environment. 

And yet, the Natural Resources Defense Council (NRDC) still actively opposes it. The NRDC’s senior director of the nature program, Kate Poole, explains their opposition: 

“Building more storage generally means taking more water from the environment, and scientific reports have shown that California should significantly reduce water diversions from the Delta watershed to protect the environment, fisheries and water quality.”

The NRDC isn’t alone either. A petition against Sites started by the group, Save California Salmon, last year has obtained over 55,000 signatures. It argues that:

“[The Sites proposal] does not include protections for the Trinity River or Upper Sacramento River salmon or for the Tribes and fishermen that depend on them despite the fact it will lower flows and impact water quality some years.”

When the Sites Project Authority first submitted its Environmental Impact Report (EIR) in 2017, a number of groups, including the California Department of Fish and Wildlife shared concerns:

“The document’s disclosure and analysis of impacts to aquatic species is of particular concern to the Department, including an insufficient analysis of the impacts of increased diversions that would occur during Chinook salmon migration periods, smelt analyses that do not appear to reflect proposed Project operations and potential reductions in Delta outflow, and a lack of analysis of potential entrainment and impingement of green sturgeon and white sturgeon at Project intake facilitates.”

The Sites Project Authority submitted an updated EIR in November 2021 after trying to address initial concerns:

“The Project operations have been modified substantially over the last two years to be more protective of the environment. These modifications have reduced the Project diversions from the Sacramento River substantially (almost in half) as compared to the criteria proposed in 2017.”

However, the belief that Sites Reservoir will divert too much water from the Sacramento River remains the foundation of most concerns, with some opponents arguing that Sites could take more than 60% of the Sacramento River leading to a variety of harms:

• Reduced salmon and other fish populations

• Degraded Delta ecosystem, harming a variety of plants and animals

• Release of low-quality water back into the Sacramento from Sites

• Harmed northern water systems (Trinity River)

Reduced river flows could harm the salmon populations:

“In the upper Sacramento River, numerous studies have shown that the survival of juvenile salmon migrating downstream depends on adequate river flows, with survival of these salmon decreasing dramatically as flows decrease.”

As a result, NRDC says that the Sacramento River must have flows greater than 15,000 cubic feet per second before Sites can divert water into the reservoir. 

Sites will also reduce flows downstream, thereby reducing the Delta outflow, which could impact fish species there:

“For salmon, peer reviewed studies have demonstrated that reducing Sacramento River flows causes the survival of salmon migrating through the Delta to decrease when flows are less than ~35,000 cfs at Freeport (Perry et al. 2018, 2019). The reduction in Sacramento River inflows to the Delta will also reduce Delta outflow, harming species’ whose survival and abundance is dependent on Delta outflow, particularly Longfin Smelt (Nobrigra and Rosenfield 2018), but also Delta Smelt (Polansky et al. 2021).”

However, the California Fisheries Blog explains how Sites could actually benefit salmon and other fish populations:

“Under current operations, spring and summer irrigation diversions from the Sacramento River also cut flow and raise water temperatures in the lower river, which harms salmon, steelhead and sturgeon. Water diverted to storage in Sites in the winter could substitute for some of the spring and summer irrigation deliveries that currently come from Shasta. A greater percentage of water released from Shasta in spring and summer could then flow all the way to the Delta. More water could also be retained in Shasta Reservoir to protect the Shasta cold-water pool into the fall and as carryover for the following year.”

Steve Evans, a water consultant for conservation groups, suggests that Sites would harm more than fish populations:

“A reduction in the river’s annual surges means less vital habitat for bobcats, wood ducks, tree frogs and migrants including yellow-billed cuckoos.”

The Sierra Club echoes this concern and explains how Sites could lead to a reduction in water quality.

“For years, the freshwater flowing into the San Francisco Bay-Delta, located near Stockton, has been overdrawn. This has resulted in a loss of habitat, fish, and wildlife. The lack of freshwater also creates increased algal blooms that put nearby communities at risk. The tunnel and Sites Reservoir will only exacerbate these problems.”

The U.S. Environmental Protection Agency has also expressed concern that algal blooms could lead to high levels of cyanobacteria, which is common in shallow lakes and reservoirs. Jim Brobeck, a policy analyst for the Chico-based environmental group AquAlliance even predicts that Sites will become a “biological wasteland.”

While it appears that the project’s updated EIR has satisfied some of these concerns, many still feel the analyses done to date are inadequate:

“After review, we were disappointed to find that there was a significant amount of critical data missing from the Project’s environmental reports. Without that information [data such as a Reservoir Operations Plan, rare plant surveys, and inadequate tribal consultation], we are not sure how Sites Reservoir Authority can substantiate many of its claims that it will provide any benefit to the natural environment or mitigate its considerable harms.”

Governor Newsom, in contrast, generally feels that the ongoing resistance from environmental groups is overblown and even counter to the state’s environmental goals:

“The time to get these dam projects (like Sites Reservoir) is ridiculous, absurd and reasonably comedic. In so many ways the world that we invented, from an environmental perspective, is now getting in the way of moving these projects forward that can address the acuities of Mother Nature…permits that take years and years and years.”

It will negatively impact local communities

Groups located in the region but not at the site of the reservoir have voiced opposition to the project. Their concerns are not about the repurposing of the land specifically, since fewer than 2 dozen people live on the land that would become Sites Reservoir. In fact, Jerry Brown, Sites Project Authority executive director, has found that:

“There's pretty good support from those folks who are really giving up a lot in order to make this possible for all the rest of us.”

Instead, the concerns are more about the potential of reducing water flows in the Sacramento and the Delta - and the corresponding impact of such reductions on certain communities’ way of life. Malissa Tayaba, the Vice Chairman of the Shingle Springs Band of Miwok Indians, worries about the impact on the Delta: 

"The Delta is being further diminished along with its cultural and traditional resources that Tribes have utilized from the Delta for food, medicine, transportation, shelter, clothing, ceremony and traditional lifeways from the beginning of time. Additional diversions from the Sacramento River watershed will exaggerate an already damaged and diminishing Delta ecosystem and estuary and our Tribe’s ties to our homelands.”

Tayaba also took issue with how the project has moved forward:

“In addition, true and meaningful tribal consultation has not occurred. In fact, my tribe was not consulted.”

Morning Star Gali, a tribal organizer with Save California Salmon, echoes this sentiment:

“I’m very concerned with the lack of proper consultation with the tribes that will be affected within the area the Sites will flood to the tribal cemeteries, the ceremonial sites and the three creeks and will further degrade salmon runs, harming an important food source.”

There are more cost-effective ways to increase water supply

There are 2 main ways to store water: in reservoirs (surface water) and underground (groundwater).

Jeffrey Mount, a senior fellow at the Public Policy Institute of California’s Water Policy Center, argues that surface water storage is no longer ideal:

“What you want is reliable supply and this (type of storage) is not very reliable. You don’t know when you’re going to fill it. There are better ways to improve your water supply.”

The NRDC is also against big dams and reservoirs:

“There will undoubtedly always be some folks who believe the myth that building new dams and reservoirs will be a silver bullet that solves California’s water supply challenges. The reality, of course, is that California already has constructed nearly 1,400 dams and reservoirs, and compared to the excessive and unsustainable demand for water in our state, new dams and reservoirs provide little water—at high cost.”

Instead, water researchers are increasingly pushing for groundwater storage, as Heather Cooley, director at an Oakland-based water research center explains:

“Trying to recharge our aquifers, that is where our greatest storage opportunity lies. This is not easy to do and it’s not fast, but that’s the direction we need to head.”

Isabella Langone of the California Native Plant Society argues that groundwater storage is also better for the environment:

“Inundating open space and storing more water above ground is counterintuitive to the direction California water management must go in the face of climate change and California’s goal to protect 30 percent of land and water by 2030. The significant funds proposed for Sites should instead go toward multi-benefit solutions that promote native species, sustainable water management and land conservation.”

Groundwater is very important to California, providing 38% to 46% of the state’s total water supply. It is also more resilient than surface water because it doesn’t evaporate.

Some leaders in Los Angeles, whose regional water district bought rights to Sites water, also believe Southern California should be focusing on groundwater, not surface water:

“We need to do everything we can to invest in local smart water supplies. We need to focus on multi-benefit programs, groundwater remediation and stormwater capture. Sites Reservoir and Delta Tunnel are irresponsible.”

And our groundwater aquifers do need recharging. The California Department of Water Resources estimates that we’re drawing 2 MAF more of water from our aquifers every year than they can naturally replenish. Further, 21 groundwater basins have been designated as critically overdraft and overpumping has led Central Valley ground levels to sink about 1 foot per year.

In addition, groundwater recharging projects can also be more cost-effective:

“The idea of channeling runoff during wet periods into aquifers where cities and farms can pump it out is generally a lot less expensive than building reservoirs and has greater potential. The amount of underground space currently available for putting water may be three times the state’s total reservoir capacity, according to one estimate.”

The rising costs of building reservoirs have implications for who will buy water from Sites Reservoir, argues NRDC director Doug Obegi:

“...in large part due to these costs, the Westlands Water District, Kern County Water Agency, and most other irrigation districts south of the Delta are not paying for Sites and will not get any water from the project (a few irrigation districts south of the Delta have very small shares in the project, like the Wheeler Ridge-Maricopa Water Storage District, which would get less than 1.6% of the total water supply from the project). The project will not benefit the vast majority of water districts that are getting a zero percent water supply allocation in 2021.”

Despite this, Governor Newsom seems to be supportive of doing a bit of everything:

“By setting ambitious targets for expanding water recycling, desalination, stormwater capture, and by expanding storage above and below ground, Gov. Newsom’s plan is achievable and essential for ensuring water remains plentiful in the decades ahead.”

The approved Proposition 1 projects reflect this portfolio approach with $1.86B approved for 3 surface water projects (including Sites) and $724M approved for 4 groundwater projects. 

My Assessment:

The first question is: Will Sites Reservoir provide California with a meaningful amount of water - without robbing another storage facility to do it? If the answer is “no,” nothing else matters. 

The storage capacity of 1.5 MAF is meaningful. Urban water usage is around 10 MAF per year. At the height of the drought 2 years ago, Newsom urged residents to cut water use by 15% - roughly the amount Sites can hold.

But this storage capacity doesn’t matter if we can’t fill it. The California State Water Resources Board’s determination this past August that the Sites Project Authority failed to show that there’s sufficient flow to draw from in the Sacramento River gives me pause. But the fact that analyses by PPIC, the Governor’s Office, and the California Globe all show there is more than enough water leads me to believe we can divert a meaningful amount of water into the reservoir. An analysis just this month, albeit by Sites Project Authority, found that it could have diverted 120,000 AF during just the last 2 weeks.

It seems likely to provide significant value, but will it cause outsized harm to the environment or people in the region? Almost all of the potential harms Sites could cause are based on the assumption that it will draw too much water from the Sacramento River and steal too much water from the Delta. If neither of these assertions are correct, then it appears that most of the possible environmental consequences evaporate. Because Sites is, by design, only taking excess flow, it seems possible to satisfy even the stringent flow minimums put forth by the NRDC and still meaningfully fill the reservoir.

Even if the value is significant and the harm minimal, could California better spend $4-5B on other water storage projects? Sites Reservoir is the only surface water storage project of the 52 evaluated by the CALFED Bay-Delta Program in 1995 to have moved forward, suggesting that it is the best surface water storage option in the state. It’s possible that expanding existing dams - like 2 of the other Prop 1-approved projects are doing - would be more cost-effective, but there are challenges to getting these projects approved and the extra capacity won’t necessarily be located such that those reservoirs can capture excess rainwater or snowmelt. 

Should California spend two-thirds of the Prop 1 bond money on groundwater recharging rather than surface water storage? Maybe. But at this point in the process, it would be incredibly harmful to stop the Sites project just because another groundwater project may be somewhat more cost-effective. 

It has taken 10 years to get Sites within a year of breaking ground. It still won’t be operational until 2030 and then it may take a few years to fill. Can we afford to wait another 20 years for more water in California? No. 

Canceling the project on nuanced calculations would also seriously threaten the state’s ability to attract contractors for surface water storage projects in the future. What company and investors would go through 10 years of bureaucratic hell to have the plug pulled 18 months before breaking ground? 

While there are some legitimate concerns and uncertainties associated with the project, California should continue to move forward with building Sites Reservoir.

In this special edition, we break from our typical format to walk through the 6 metrics that matter to the state of California’s water.

March 22 Update

On January 17, we answered the question of whether California had received enough rain and snow. Our answer was: We’re making good progress, but no, we’re not there yet.

Now, 2 months after our initial analysis, the answer has changed. Watch the video below or read the summary beneath the video to see where we stand as of March 22 on 6 different metrics.

1. US Drought Monitor:

   1. Percent of state considered to be in drought: 95% on Jan 17 vs. 36% on Mar 20

   2. Percent of state coming out of drought: 5% on Jan 17 vs. 19% on Mar 20

   3. Percent of state not in drought: 0% on Jan 17 vs. 45% on Mar 20

2. Rainfall:

   1. 147% of historical average for this time of year

   2. 114% of total rainfall received in water year, which runs from October 1 through September 30

3. Snowpack

   1. 225% of historical average for this time of year

   2. 218% of total for snow season (amount on April 1) compared 120% of April 1 amount on Jan 17

4. Reservoirs

   1. Collective water levels of 16 primary reservoirs: 52% full on Jan 17 vs. 73% full on Mar 20

   2. Collective water levels of 16 primary reservoirs compared to historical average: 88% of historical average on Jan 17 vs. 104% of historical average on Mar 20

5. Groundwater

   1. Percent of groundwater aquifers below level: 64% on Jan 17 vs. 62% on Mar 20 (however, most groundwater levels are only measured twice a year, once in the fall and once in the spring)

6. Colorado River

   1. Percent of rainfall/river levels in Upper Colorado River basin compared to historical average: All sections are above 100%

   2. Percent of Colorado not in drought: 40% on Jan 17 vs. 63% on Mar 20

   3. Water level of Lake Mead: 28%

   4. Water level of Lake Powell: 23%

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How Do Know When We Have Enough?

There is no universally accepted definition of droughts because every region and even locality relies on different water sources. As a result, different localities will define droughts based on the status of the water sources that matter to them. 

The state of California has defined certain multi-year periods as droughts:1

• 1976-1977

• 1987-1992

• 2007-2009

• 2012-2016

Further, the U.S. Drought Monitor blends 4 different indexes, consisting of soil moisture levels, streamflow, precipitation, and temperature data to score regions across 5 levels of drought. The U.S. Drought Monitor currently classifies 5% of California as coming out of drought with the other 95% of the state either in moderate or severe drought and no regions of the state in the two worst stages of drought.

While this suggests that we still need more water, it doesn’t tell us the state of our water sources and storage and whether we’re on track to get more of the state out of the drought classification.

Water Sources

We have 2 key water sources. Rain and snow provide 200 million-acre feet (MAF) of water every year, 2.5 times our annual water usage.

Rainfall: Very Strong

Rain replenishes our rivers, fills our reservoirs, moistens our soil, and fills our groundwater aquifers/wells. 

In this water year (which started in October), we have received 167% of the historical average and 73% of the average amount of rain received for the whole water year. You can see below that we have surpassed 2 of California’s wettest years in history already:

California also pulls a significant amount of water from the Colorado River, which has been very low in recent years as well. However, rainfall in the Upper Colorado River Basin is currently exceeding historical norms and 40% of Colorado is drought-free compared to 0% last year this time.

Snowpack: Very Strong

Snow is important because it feeds our rivers and reservoirs in the summer when it melts, helping refill these water sources as their levels begin to dip. Most of the snowpack is in the northern and eastern parts of the state.

We currently have 247% of the normal snow water equivalent for this date and 120% of the April 1 historical average. This means we have 20% more snow right now than we typically do at the end of winter. An added benefit is that our snowpack is most above historical averages in the Southern Sierra region, which can help source Southern California this coming summer.

Similarly, Colorado’s snowpack - which is a major source of the Colorado River - was at 127% of the median level last week.

Water Storage

There are 2 main ways we store water in California: reservoirs and groundwater aquifers/wells.

Reservoir Levels: Moderate

These historic rains are valuable because California has an extensive system of 16+ reservoirs that can store 23.6 MAF of water. To put this in perspective, California uses 80 MAF per year on average, with the following allocations:

• Environment: 40.5 MAF (water for “wild and scenic” rivers, required Delta outflow, instream flows, and managed wetlands)

• Agriculture: 31 MAF

• Urban: 8.3 MAF (includes residential, commercial, industrial, and large landscapes)

Currently, our reservoirs are collectively just over half full, which puts us at 88% of the historical average for this time of year. Almost two-thirds of our reservoirs have levels above the historical average. If we continue to receive the same amount of rain, we could reach our historical average by next week. 

This is good progress and it would likely be sufficient if we could count on similar or even average rainfall next year - but we can’t. Instead, we should aim for 3 year’s supply, which would likely require reaching 90%+ full. 

For example, Lake Shasta was nearly full in June 2019, but by October 2022, it was only a third full.

Lake Shasta has risen by ~1 MAF since its low point on December 1. We need it to rise another 2.2 MAF in the next 2.5 months in order to get near the 90% level. Three of the next 4 biggest reservoirs are in a similar position to Lake Shasta. Filling all or any of them this winter seems unlikely. 

Groundwater: Moderate

Groundwater ends up getting stored in underground aquifers and wells, which supply water to many of the more rural parts of California, including much of the Central Valley where most agricultural production happens. 

The latest data shows that 64% of wells are below their normal level, but most well levels are measured just twice a year - in October and April. If you look at just wells measured in the last 30 days, only 35% are below normal levels (however, this included just 51 of the 3,500 wells). If you look at wells measured in the last 60 days, 56% were below normal levels (which includes 413 wells).

We’re trending in the right direction, but we’re still not in a strong position relative to historical norms. We’ll know more when the majority of measurements take place in April. 

Flushing Water into the Oceans: Moderate

There has been considerable controversy during our recent dry years over the allegation that state leaders are flushing much of our stored water out to the ocean for a variety of environmental reasons. There are 2 places where this controversy focuses: dam releases and the Sacramento-San Joaquin Delta, which flows into the San Francisco Bay.

Releases from Shasta Dam (the state’s biggest reservoir) have been historically low during these storms:

This is a good sign that we are keeping water in our reservoirs.

The Delta is the place where the Sacramento and San Joaquin rivers meet and the hub of the state’s 2 water projects: the Central Valley Project and the State Water Project. It accounts for 30% of the state’s uncaptured water. Unfortunately, roughly 95% of the water flowing into the Delta is being flushed out into the ocean (see raw data) - for a variety of reasons: some good and some more questionable. 

Last week, Californian Republican Congressmen sent a letter to President Biden and Governor Newsom urging them to stop existing “flush provisions” that govern how much water is directed through the Delta to the ocean:

“Government regulations should not and must not deny our constituents critical water from these storms. While we cannot make it rain, we must take advantage of opportunities to store water when it does and maximize what can be moved at all times through the Delta for the duration of these storms.”

Other places in California, like Los Angeles, are similarly watching as much of this rainwater drains out to the ocean. In Los Angeles County, they only expect to capture 20% of the rainwater because of a lack of adequate infrastructure.

Do We Need More Water?

Yes. We are not in the clear yet, despite the damage done to several parts of the state. Most of our biggest reservoirs are still too low and too many of our wells are still not full enough.

Let’s hope for more rain and snow (without the toll on human life and property) - but we also need to ask ourselves: what could we be doing to capture more water?

There is an increasing set of technologies we could invest in to strengthen our water infrastructure so that when it rains, we can take maximum advantage of the water we receive. Several questions remain: Which ones should we invest in? At what scale? And perhaps most importantly, can we overcome political challenges to bring these projects to reality?

In this week’s normal Friday article, we’ll evaluate the proposal to build Sites Reservoir.

Today’s Debate

California law enforcement officers make more than 3 million traffic stops every year, due in part to the incredibly large number of traffic laws and motor vehicle regulations. Historically, police officers have been given the authority to pull over anyone who is violating one of those laws. Police officers have used this authority to justify pulling over and then searching the vehicles of those they suspect of more egregious crimes.

For example, a cop pulls over a car for an outdated registration because she believes that the driver may have been involved in a recent shooting and have illegal firearms in the vehicle. Once pulled over, the cop asks the driver if she can search the car. Not thinking he has a choice, he consents, as most drivers do. The cop searches the car, which may lead them to find incriminating evidence. 

This is a pretext stop because the officer stopped the driver for a minor violation expecting it to lead to a serious arrest. Pretext stops became a component of broken windows policing - the focus on removing visible signs of crime, anti-social behavior, and civil disorder in the 1990s:

“You had the kind of powder keg that built up in L.A. through the ’80s and ’90s as a lot of policymakers and other decision-makers in the Southland and L.A. decided that the way to fight rising crime in L.A. was by allowing more pretextual stops, more investigative searches, more stop-and-frisk on wheels, more broken windows policing, zero tolerance policing.”

As pretext stops became more common, legal challenges arose, leading to the 1996 Supreme Court case, Whren v. United States. In this case, the Court ruled that pretext stops could continue: 

“The temporary detention of a motorist upon probable cause to believe that he has violated the traffic laws does not violate the Fourth Amendment’s prohibition against unreasonable seizures, even if a reasonable officer would not have stopped the motorist absent some additional law enforcement objective… Subjective intentions play no role in ordinary, probable-cause Fourth Amendment analysis.”

While pretext stops have drawn criticism at various points over the last 25 years, they entered the spotlight again after George Floyd’s death because of the history of racial bias in pretext stops. 

Police in San Francisco, Oakland, and Los Angeles, and city officials in Berkeley, have already implemented some restrictions on officers’ authority to make these stops or are working on them. A number of other jurisdictions outside California have also begun to implement reforms limiting traffic stops, including Virginia and Lansing in 2020, Philadelphia, Pittsburgh, and Minneapolis in 2021, and Oregon and Seattle in 2022. Last May, President Biden weighed in on the topic, issuing a nationwide executive order calling on police to end “discriminatory pretext stops.”

I cover this debate this week because the San Francisco Police Commission voted 4-2 to approve a ban on conducting traffic stops for 9 traffic violations this week - and 2 California state senators say they plan to introduce legislation this January aimed at limiting police authority to make pretext stops. 

Argument in Brief 

Should California ban officers from conducting pretext stops for minor traffic violations?

Case For: 

• Pretext stops are racially biased

• Pretext stops are an inefficient use of already inadequate law enforcement resources

• Minor traffic violations can be enforced in other ways

Case Against:

• Traffic deaths and injuries will increase

• Crime will increase

• Pretext stops are already infrequent and on the decline

• We shouldn’t ban police from enforcing the law

My Assessment:

California should not ban pretext stops, but it should prepare to implement the Los Angeles Police Department’s traffic stop policy statewide. The LAPD’s new policy allows pretext stops, but requires officers to explain on their body camera why they believe the stop will lead to evidence of a more serious offense before approaching a vehicle. Recent policy changes in Los Angeles, San Francisco, and a number of other Californian cities offer a helpful laboratory for evaluating the impact of reducing pretext stops. We’d be wise to wait 1-2 years to learn from them before making any changes at the state level.

Case For:

Pretext stops are racially biased

In its 2022 annual report, California’s Committee on Revision of the Penal Code made this claim:

“California law enforcement officers make more than 3 million traffic stops every year, with disturbing racial disparities in who is stopped.”

According to California’s Racial and Identity Profiling Advisory (RIPA) Board, in 2020, Black and Hispanic people were stopped 112% and 9%, respectively, more frequently than expected based on their proportion of California’s residential population, while white people were stopped 7% less frequently than expected.

This imbalance in stops occurs for many of the most common pretextual stops, including no registration, displaying license plates incorrectly, problems with lighting equipment, and something obstructing one’s window. 

Other analyses show similar imbalances as well. A San Francisco Chronicle analysis found that black people in San Francisco were 4.4 times more likely to be stopped than white people and 10.5 times more likely to be pulled over in a pretextual stop than white people. In Oakland, black people were 5.3 times more likely to be stopped. In Sacramento, black people were 3.7 times more likely to be stopped. And these disparities increased in 11 of the state’s biggest law enforcement agencies between 2019 and 2020. 

Los Angeles City Councilman Marqueece Harris-Dawson describes the frequency of these stops for black people this way:

“I don't know of an African American male driver, (and) I know very few Latino male drivers, who don't have half-a-dozen stories about being stopped by police for reasons that didn't make sense.”

This isn’t a California-specific phenomenon either. An analysis of over 8M traffic stops in Washington State following a court decision to allow more pretextual stops found a “statistically significant increase in traffic stops of drivers of color relative to white drivers.”

Further, black people aren’t just pulled over more frequently. They are searched 2.2 times more frequently than white people. 

Are officers’ disproportionate stopping of black drivers justified by higher rates of finding evidence of more serious crimes? 

The most recent RIPA annual report found that the rate of discovering anything illegal when conducting a consented search was just 1% higher for black people than white people (26% compared to 25%). This insignificant difference in discovery rate suggests that police are not justified in stopping black people at a considerably higher rate. 

The racial disparity in pretext stops is likely to have consequences too. William Briggs, President of the Los Angeles Police Commission, describes the effect:

“The current practice of pretextual stops only serves to alienate whole segments of our community from law enforcement.”

Los Angeles City Councilman Marqueece Harris-Dawson agrees, arguing that public trust in the police is "so easily degraded when a person is stopped and they can't figure out why they were stopped or that the reason they were given just doesn't add up for them."

Consistent with these comments, an analysis of responses to the Police-Public Contact Survey found that people who had been stopped by an officer in the previous year were less likely to contact the police for assistance or to report a neighborhood problem. 

In addition, many of the black people who are pulled over are not just being stopped either. Nearly 20% are searched, 18% are detained on the curb or in a patrol car, and 15% are handcuffed - all at nearly twice the rate white people experience these additional police actions. These additional officer actions turn what may start as an inconvenience into a “frightening, humiliating, and even dangerous” experience. A systematic review of traffic stop studies published this year found the following negative consequences for individuals experiencing traffic stops:

• 46% increase in the odds of a mental health issue

• 36% increase in the odds of a physical health issue

• Significantly more negative attitudes toward the police

• Significantly higher levels of self-reported crime/delinquency

Pretext stops are an inefficient use of already inadequate law enforcement resources

In 2020, the Commission on Police Officer Standards and Training (POST) issued 4,530 certificates to people who had done what was necessary to become a sworn officer. Last year, the number of certificates fell to just 2,424, a decline of almost 50%.

A resident of the tiny town of Mineral, California describes the impact of this shortage:

“When we called 911 even before they stopped patrolling, they’d say ‘Sorry, we can’t make it, handle it yourself.’ That’s not what someone wants to hear when you’re getting beat up.”

Law enforcement staffing shortages aren’t limited to small rural California towns either. The San Francisco Police Department could be short over 800 officers (roughly a third of full staffing levels) this year with the loss of 300 more officers and only 28 recruits currently in the academy.

National Police Association spokesperson Retired Sergeant Betsy Brantner Smith doesn’t see these shortages ending anytime soon either:

"I think this could be a generational problem. This could go on for years. Even if, let's say, I could flip a magic switch tomorrow, and everyone loved the police and every kid in America wanted to be a cop … it takes nine months to a year from the date of hire for a person to become a police officer."

Sam Blonder, the CEO of a recruiting agency who works with law enforcement agencies, shares a similar view:

“Ask 150 high school kids who wants to be a police officer — you won’t get one that will raise their hand.”

With such dire officer shortages, it’s clear California law enforcement agencies must prioritize the activities that will have the greatest impact on public safety. Given pretext stops’ low arrest rate and mixed impact on traffic safety, maybe they are not worth the time even if they do deliver some results. 

San Francisco Police Commissioner Max Carter-Oberstone doesn’t think they are worth the time:

“We’re not taking laws off the books, we are using data to inform what we should be focusing our time on as a police department. It just so happens that pretextual stops are just a very poor use of our scarce resources.”

The Commission’s report goes further, arguing that this time could be used more effectively to reduce crime:

“Expending less time and money on these stops will free up substantial resources that the Department can use on more effective public safety strategies.”

LAPD’s director of constitutional policing and policy, Lizabeth Rhodes, argues that pretext stops are lower priority than other policing activities:

“We have to be more efficient. You know, we want to really enforce public safety, not ticky-tack stuff.”

How much time is spent on pretext stops? 

“Data show that officers spend a significant amount of time –nearly 80,000 hours in 2019 – on traffic stops that lead to no enforcement action or discovery of contraband. For local law enforcement departments, 28,000 of those hours were spent on enforcing non-moving violations, which are more likely to be pretextual.”

28,000 is a big number, but there were roughly 33,000 municipal patrol officers in California in 2019, which means that the average local patrol officer spent just 51 minutes in all of 2019 enforcing non-moving violations.

Minor traffic violations can be enforced in other ways

With continued advances in technology, it is becoming increasingly possible for states and municipalities to enforce some traffic violations in an automated or remote way, making it theoretically unnecessary for police to make traffic stops for minor violations. This would render one of the key arguments against a ban on pretext stops - that it could increase traffic deaths and injuries - irrelevant.

To date, traffic monitoring technologies have primarily been used to monitor red-light-running and speeding. Nearly 350 U.S. communities use red-light cameras and more than 150 communities use cameras to enforce speed laws. California is 1 of 22 states that use red-light cameras - and it currently has no laws related to the use of speed cameras.

But these automated approaches to traffic enforcement are not without their challenges, as Jordan Blair Woods, author of Stanford Law article “Traffic Without the Police” explains:

“However, many communities are retreating from those programs in response to community and political backlash. Automated traffic enforcement programs have also been subject to legal challenges in courts with varying success. The strong skepticism of and pushback against automated traffic enforcement raises questions about whether and how technology can assist in reducing reliance on police-initiated traffic stops to enforce traffic laws.”

At this point, technology won’t be able to replace human enforcement, which is why Jordan Blair Woods and others, including the Vera Institute of Justice, argue for citizen (i.e., non-police) traffic monitors to oversee the enforcement of minor traffic violations. Berkeley, California voted to shift traffic enforcement away from the police department in July 2020.

However, this argument either fails to remember the goal of pretext stops or is a covert way to try to eliminate the need for them. The primary goal of pretext stops is to find evidence of more serious crimes, not enforce minor traffic laws. The best technological solutions could do is remove officers’ excuses for pulling people over. 

Case Against:

Traffic deaths and injuries will increase

While pretext stops are, by definition, aimed at something other than enforcing minor traffic violations, the argument is still made that these stops prevent accidents themselves and correct driver behavior or vehicle conditions before more serious safety violations occur. 

From a research methodology perspective, it can be difficult to prove that traffic stops cause changes in traffic safety. However, a bout of massive layoffs in police officers in Oregon in 2003 created a natural experiment to test this question:

“Due solely to budget cuts, 35 percent of the roadway troopers were laid off, which dramatically reduced citations. The subsequent decrease in enforcement is associated with a significant increase in injuries and fatalities. The effects are similar using control groups chosen either geographically or through data-driven methods. Our estimates suggest that a highway fatality can be prevented with $309,000 of expenditures on state police.”

Another sort of natural experiment involves click-it-or-ticket-it campaigns where law enforcement officers focus on enforcing seat belt rules in a defined geographic area for a designated period of time. An evaluation of these campaigns in Massachusetts found that “tickets significantly reduce accidents and nonfatal injuries.” 

An analysis of motor vehicle crashes on 2 Wyoming highways shows something similar:

“The modeling results showed that higher numbers of speeding and seat belt citations reduce the number of crashes significantly.”

However, a 2021 report by the National Institute of Health analyzing the relationship between over 161M police traffic stops in 33 states and motor vehicle crashes from 2004 to 2016 concluded that:

“State patrol traffic stops are not associated with reduced MVC [motor vehicle crash] deaths. Strategies to reduce death from MVC should consider alternative strategies, such as motor vehicle modifications, community-based safety initiatives, improved access to health care, or prioritizing trauma system.”

How do we square these different conclusions? Other more nuanced research suggests that it matters which traffic stops are increased or decreased. For example, one study analyzed the impact of the decision of the police chief in Fayetteville, North Carolina to prioritize safety (e.g., moving violations) stops over investigatory stops and economic (e.g., regulatory or equipment) stops. It found:

“The re-prioritization of traffic stop types by law enforcement agencies may have positive public health consequences both for motor vehicle injury and racial disparity outcomes while having little impact on non-traffic crime.”

By focusing on traffic violations that impact safety the most and ignoring those that have little impact, officers may be able to improve safety. Vision Zero, a San Francisco-based initiative focused on eliminating all severe and fatal traffic crashes, supports a ban of pretext stops for this very reason:

“We know that enforcement of the top five most dangerous driving behaviors was near rock bottom in 2022… The SFPD points to staffing shortages. We hear that, but we also point to the fact that many citations are given for low-level, minor offenses like sleeping in a car, having a broken tail light, or tinted windows.”

The debate in San Francisco transpiring over the last year over whether to ban pretext stops has placed particular emphasis on this question of which traffic stops should be banned:

“In early December, commissioners revised the number of stops that would be banned from 14 to nine, after feedback from members of the public, safety experts and academics.” 

This week, San Francisco voted to ban stops for these 9 infractions:

1. A vehicle that has a rear license plate with the plate number clearly visible

2. A vehicle that fails to display registration tags or is driving with expired registration of more than one (1) year

3. A vehicle that fails to illuminate the rear license plate

4. A vehicle driving without functioning or illuminated rear taillights

5. A vehicle that is driving without functioning or illuminated rear brake lights

6. A vehicle that has objects affixed to windows or hanging from the rearview mirror

7. A vehicle that fails to activate a turn signal continuously for 100 feet before turning

8. A vehicle that has a person sleeping in the vehicle

9. Any stop of a pedestrian for an infraction in violation of the California Vehicle Code or San Francisco Transportation Code unless there is an immediate danger that the pedestrian will crash with a moving vehicle, scooter, bicycle, or other device moving exclusively by human power

The 5 it removed from the ban after public comment and further review are:

1. Failure to display both license plates

1. Driving without functioning or illuminated headlights

2. Improperly mounted license plates

3. Tinted windows

4. Any parking infraction

The initial research cited suggests that banning enforcement of moving violations would result in more traffic injuries and deaths, but banning non-moving and equipment violations would likely have an insignificant - or even positive -  impact on traffic safety.

Crime will increase

While pretext stops may or may not improve traffic safety - depending on the specific stops banned - their primary goal is to reduce crime by enabling officers to catch people with illegal items. 

The State’s Committee on Revision of the Penal Code argued in 2022 that:

“Law enforcement openly admit that many of these are ‘pretext stops’ to investigate serious offenses — yet data show these traffic stops rarely result in the discovery of evidence of crime.”

As shared earlier, the annual report from the RIPA Board found that in 2022:

“Overall, officers searched 11.9 percent of individuals they stopped. Officers discovered contraband or evidence from 24.6 percent of individuals they searched.”

This means that of every 100 stops officers made, they discovered illegal items or evidence in 3 stops. This is consistent with an analysis by the LAPD’s inspector general, which found that 2% of traffic stops resulted in arrests. While this rate seems low, it is difficult to know without a comparable benchmark. 

However, it’s possible that even if traffic stops aren’t very fruitful in terms of finding contraband or evidence, they dissuade people from committing more serious crimes. To understand this relationship, we need to explore the relationship between traffic stops and crime rates.

A 2018 study of traffic stops in Nashville, Tennessee conducted by the Stanford Computational Policy Lab reported that traffic stops did not lead to reductions in crime:

“Our report further concludes that traffic stops are not an effective strategy for reducing crime. In particular, the MNPD’s [Metro Nashville Police Department’s] practice of making large numbers of stops in high crime neighborhoods does not appear to have any effect on crime.”

An additional Nashville-focused study by the NYU School of Law Policing Project reached a similar conclusion. Los Angeles Police Commission President William Briggs agrees with these findings:

“Those pretextual stops do not result in guns being taken off the streets, those pretextual stops do not result in curtailing murders and curtailing shootings ... there is no data that anyone can point to that establishes that pretextual stops curtail violent crime in our city.”

The LAPD Chief Michel Moore stood behind this assessment when Los Angeles was considering changing its policy for pretext stops earlier this year:

“I've heard thoroughly members of this organization who believe that this policy will stop us from identifying those responsible for violent crime, stop us from identifying those that are carrying weapons, firearms, engaged in street violence. I firmly believe that that is not the case.”

Returning to Nashville, the aforementioned report led to changes in Metro Nashville Police Department training around traffic stops, which resulted in a 90% reduction in traffic stops. 

How have crime rates changed during the 2018 to 2022 timeframe? Total crime dropped 5% from 2018 to 2021 (the last year we have city-level crime data), while violent crime increased by 8%. 2022 data from the county where Nashville is located shows a significant increase in overall crime, topping 2018 levels, and another increase in violent crime. This doesn’t prove that the reduction in traffic stops led to an increase in crime or refute the much more rigorous analysis done by NYU and Stanford, but, at a minimum, we should be wary to conclude reducing traffic stops has no effect on crime.

While Nashville’s correlation data doesn’t prove crime will increase if we ban pretext stops, a meta-analysis of 40 studies on police-initiated pedestrian stop interventions published this year found that such interventions were associated with a statistically significant 13% reduction in crime in the relevant areas and a distribution of crime reduction benefits to a broader area.

Pretext stops are already infrequent and on the decline

If pretext stops make up an insignificant portion of traffic stops and are declining on their own, then it may not be worth pushing through a new policy and then re-training officers. With local patrol officers spending just 51 minutes per year on pretext stops, it could be that this is not worth addressing. 

In 2022, moving violations accounted for 73% of all traffic stops in California. A San Francisco Chronicle analysis of traffic stops between mid-2018 and mid-2022 found that 20% of all stops were made for the 14 violations the Police Commission originally proposed keeping officers from enforcing. However, pretext stops for these violations dropped dramatically between mid-2019 and mid-2020 - and have continued to decline, such that there are now less than 100 per month compared to over 1,200 per month just 3 years ago.

The LAPD updated its policy on pretext stops in spring 2022, requiring officers to state the reason they believe a more serious crime is at play to their body camera before approaching the vehicle for a pretext stop. Traffic stops for minor violations dropped 40% almost overnight.

If Los Angeles can nearly cut pretext stops in half without banning the stops altogether, then is a ban necessary?

We shouldn’t ban police from enforcing the law

The idea of banning law enforcement officers from enforcing the law feels like the definition of an oxymoron. More importantly, banning police from enforcing select laws could cause confusion on the behalf of both officers and residents - and erode confidence and respect for the broader set of laws currently on the books. 

In the debate surrounding San Francisco’s decision to ban pretext stops for 9 traffic violations, San Francisco Police Chief Bill Scott made this argument:

"Prohibiting enforcement of the law I have a fundamental disagreement with that. What's in the best interest of the city? We have to address disparities. Of course, we do.  We have to take care of public safety. Of course, we do. Let's find a balance."

Mayor London Breed, who supports reducing pretext stops, agrees with Chief Scott that a ban, particularly from the Police Commission, is not the right way to achieve the end goal:

“Breed said it is the job of the legislature, not an un-elected commission, to change traffic laws, and that the proposal would cause confusion for officers and safety risks for citizens.”

Her spokesperson went further:

“Injury and death is the worst case, but if we don’t enforce traffic laws, there’s no reason for people to follow them. Enforcement is about deterrence too.”

Rather than telling police not to enforce existing law, supporters of reducing or ending pretext stops could pursue legislative action to change the law - which may happen this year.

My Assessment

It seems quite clear that pretext stops are racially biased, the racial bias is not leading to higher discovery rates of evidence of more serious crimes, and traffic stops, in general, have a negative effect on all people experiencing them. As a result, we should try to limit pretext stops if they have an insignificant or positive effect on traffic safety and crime.

It does seem possible to ban stops for certain violations without impacting traffic safety. This places significant importance on identifying the right violations to ban and then, continuing to monitor relevant data to see if the relationship between certain violations and traffic safety changes.

When it comes to the relationship between pretext stops and crime, I am definitely skeptical of Los Angeles Police Commission President William Briggs’ claim that no one could find data that shows pretext stops reduce violent crime, especially given the results of the 2023 meta-analysis cited earlier. The Nashville example, which is being lauded as a victory for pretext stop bans, presents a conflicted message, if not a warning of what could happen when traffic stops decline by 90%. While it’s too early to tell what will happen in Los Angeles, after pretext stops dropped dramatically this spring, violent crime was up 1% and property crime was up 10% from 2021. These correlations don’t prove anything, but they offer reason for caution.

Despite this caution, at a 2-3% arrest rate, pretext stops don’t seem to be a particularly effective or efficient tool for reducing crime. As a result, I would look for ways to reduce pretext stops without banning them in order to reduce racial bias in policing and to redirect officer time elsewhere - even if it only is 51 minutes per year per officer.

The LAPD's new policy - which allows pretext stops, but requires officers to explain on their body camera why they believe the stop will lead to evidence of a more serious offense before approaching a vehicle - seems to be the most sensical way to achieve this. The policy has resulted in a significant reduction in pretext stops, a reduction in racial disparities in traffic stops, and a slight increase in the rate of discovery of contraband or other evidence. 

Beyond those early results, it makes sense to allow officers to enforce existing laws, but to incentivize them to make better decisions about when to take the time to enforce laws. LAPD Sergeant William Batista says it well:

“What we’re doing is we’re explaining ourselves more and identifying the reasoning behind it, instead of, ‘Well, I just had a hunch. I saw the guy and he looked like he might have been doing something. He gave me that look.’ That’s not enough. We got to make sure that we’re appropriately criminally profiling. We don’t do racial profiling. We do criminal profiling.”

While LAPD’s policy seems most advantageous now, the state should consider waiting for 1-2 years before implementing a statewide policy. Recent policy changes in Los Angeles, San Francisco, and a number of other Californian cities offer a helpful laboratory to evaluate the impact of reducing pretext stops. We’d be wise to wait and learn from them before making any changes.

Today’s Debate

As covered last week, California has some of the highest gas prices in the nation, peaking this June at $6.29 per gallon. The ever-growing gap between California gas prices and gas prices elsewhere in the country has stoked frustration on the part of Californians, leading politicians to seek out solutions.

Republicans in the State Legislature proposed suspending the gas tax in January of this year, arguing that it is the “quickest, easiest way to provide relief to every California consumer on gas prices right now.”

While there are 4 different types of taxes/fees added to the price of gasoline, the tax under debate is the state excise tax, which is the largest of the 4 taxes, almost 3 times larger than the next largest tax. This tax began in 1923 when Californian voters approved a 2-cent per gallon tax. Over the next several decades, the tax increased slowly, hitting 18 cents in 1994. 

The tax remained 18 cents/gallon until 2011 when it climbed to 35 cents, which is roughly where it stayed until the passage of SB 1, the Road Repair and Accountability Act of 2017 - which increased the tax by 12 cents and required automatic annual inflation-adjusted increases.

Today, California’s state excise gas tax is $0.54 per gallon and it increases every July 1. As a result, suspending the gas tax could theoretically drop gas prices by as much as $0.54. The gas tax is intended to go toward highway and road improvement projects, but increasingly, it also goes toward a range of other transportation-related projects. 

This is not a new debate. Voters rejected Proposition 6 - which would have repealed fuel tax increases included in SB 1 and required voter approval (via ballot propositions) for California to impose, increase, or extend fuel taxes or vehicle fees in the future -  in 2018 by a 13-point margin. During the summer of 2021, Republicans called for a freeze on the gas tax increases, but that also failed to get traction in the Legislature.

We revisit this debate today in part because it stands as an alternative to imposing a windfall profit tax or price gouging penalty on big oil companies, which we covered last week - and in part, because Republican legislators have renewed their push for a state gas tax holiday with 2 new bills in the Assembly just last week.

Argument in Brief 

Should California temporarily suspend the gas tax?

Case For: 

• Suspending the gas tax is one of the easiest, quickest ways to lower gas prices

• California has one of the highest gas tax rates in the nation

• California has had 2 years of record surpluses

• California’s roads and highways are in bad condition, despite above-average spending

• The state is spending a significant portion of gas tax money on transportation projects other than road and bridge repair

Case Against:

• Suspending the gas tax would put our infrastructure further behind

• Because the gas tax makes up a fraction of the gas price, California’s gas prices would still be above average

• A gas tax suspension wouldn’t be focused on helping those who need it most

• It provides only temporary relief

• Big oil companies may keep gas prices high and pocket the extra profit

My Assessment:

Suspending the gas tax only makes sense if the case can be made that gas consumers need immediate relief on top of the California and federal government refunds many have already received. It seems unlikely that this case could be made and the proponents of the gas tax suspension have not made this case as far as I can tell. 

Suspending the gas tax will also do nothing to solve our problem of high gas prices for the long term and will undermine our already lagging infrastructure. Instead, we should make investments that address the structural reasons our gas prices are high and our infrastructure is among the worst in the nation.

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Case For:

Suspending the gas tax is one of the easiest, quickest ways to lower gas prices

Former Republican Assemblymember Kevin Kiley, the author of the bill that first proposed suspending the gas tax, saw his proposal as an immediate solution:

“This is utterly beyond belief. People are struggling right now. They need relief right now… 

This bill presents a very simple solution. It is a lever that we can pull immediately. It has an urgency clause. It will take effect immediately to provide folks with some measure of relief."

In its review of Governor Newsom’s proposal for a one‑year reduction in fuel excise tax rates this past winter, the Legislature Analyst’s Office explained the speed of implementation:

“For smooth implementation, the Department of Tax and Fee Administration (CDTFA) generally advises state and local lawmakers to enact sales and excise tax rate changes at least 90 days before they go into effect. If necessary, CDTFA likely could implement a rate change on a shorter timetable…”

Because the state charges this tax to gasoline suppliers before they deliver gasoline to retail stations, if such a proposal were passed, it could be implemented quickly - relative to disbursing refunds or stimulus payments to individuals, which take time to issue and to receive.

California has one of the highest gas tax rates in the nation

California’s state excise tax is the second highest in the nation currently, trailing just behind Pennsylvania, which has a gas tax of $0.58 per gallon. Our gas tax is nearly twice the national average. Only 4 other states have gas tax rates above 40 cents.

California has had 2 years of record surpluses

Over the last 2 years, California has cumulatively brought in over $172 billion in surplus revenue. Republican state Senator Patricia Bates, vice chairwoman of the Senate Transportation Committee, explains the paradox this presents: 

“It’s an insult to California’s drivers to force them to pay the nation’s highest gas taxes and then say it’s not enough, especially at a time when Sacramento is supposedly enjoying a budget surplus.”

However, Governor Newsom can’t, for example, spend the full surplus on infrastructure projects. The state must issue refunds when surpluses exceed a certain amount. Beginning in October, Newsom did take action to offset high gas prices within the legal limits of his office, issuing refunds totaling $7.5 billion.

Budget surpluses couldn’t be a long-term backfill for a suspended gas tax anyway. In the 2023-2024 Fiscal Outlook Report, the Legislator’s budget advisor, Gabe Petek, warns:

“State Faces $24 Billion Budget Problem and Ongoing Deficits.”

California’s roads and highways are in bad condition, despite above-average spending

The gas tax brings in over $8 billion per year, which is intended to cover the cost of maintaining our transportation infrastructure, specifically the infrastructure used by those driving: highways, roads, and bridges. Our high gas taxes translate into the 7th highest spend per lane-mile in the country at $206,924 per mile, more than twice the national average of $83,714. 

With such elevated taxes and spending, it would be natural to assume that California would top the charts on road and bridge quality, but unfortunately, California lands near the bottom. The Reason Foundation’s 2019 report explains the state’s dismal performance:

“California ranks 45th out of 50 states in overall highway performance and cost-effectiveness, while Texas ranks 16th overall. And California’s ranking has worsened from 43rd overall in previous editions of the report. Part of the reason for the slide—California does not rank higher than average (25th) in any of the Annual Highway Report’s 13 categories. Put simply, when it comes to highways and bridges, the state does many things poorly and nothing particularly well.”

The state underperforms in each area:

“California ranks next to last, 49th, in urban arterial pavement condition, 44th in urban Interstate pavement condition, and 40th in rural Interstate pavement condition. By comparison, 8.08% of the pavement on California’s urban Interstates is in poor condition while just 3.43% of urban Interstate pavement in Texas is in poor condition—and Texas’ highway system is the largest in the country, with nearly four times the lane miles of California’s state-controlled highway system.”

It appears that recent increases in funding brought on by the passage of SB 1 in 2017 have not helped yet either, given California’s drop in rank in the last few years. 

Former Democratic Assembly Speaker Anthony Rendon blames this paradox on past decisions: 

“The reality is that infrastructure repair was underfunded for decades and that neglect had no instant solution. If we agree that we want improvements for our transportation system, we have to pay for them, and the gas tax made the most sense as the way to do that.”

Republican Assemblymember Vince Fong blames California’s labor laws instead:

“California’s onerous and costly regulations make it impossible to build or fix things quickly and cost-effectively, which means taxpayers are paying more and getting less and less in return.”

Some also point to another explanation, claiming that a significant portion of the tax revenue meant for road and bridge repair is diverted elsewhere.

The state is spending a significant portion of gas tax money on transportation projects other than road and bridge repair

The key argument against suspending the gas tax is that we need the money for infrastructure projects. Given the condition of our infrastructure, it is hard to argue we don’t need the money - but if we’re not using the money we have allocated for roads and bridges then this argument falls apart. 

Carl DeMaio, a lead proponent of Proposition 6, which would have restricted the use of the gas tax revenue for infrastructure upkeep, argues:

“The problem is not that Californians are not paying enough in taxes. The problem is that the politicians are not spending the money we give them to fix our roads, to maintain our infrastructure.”

Michael Quiqley, executive director of the California Alliance for Jobs, disputes DeMaio’s claim:

“This proposal by DeMaio is a deeply flawed attempt to distract voters from his destructive Proposition 6, which would eliminate $5 billion in funding and jeopardize more than 6,500 bridge, road and transportation safety projects already underway all over California.”

Republican Assemblymember Vince Fong, who proposed an alternative to SB 1 sides with DeMaio, argues that it’s a matter of prioritization:

“As the author of the alternative to the SB 1 gas tax increase, I said over and over again that we can fully fund our roads without any fee or tax increases. We need to give voters an opportunity to tell Sacramento they need to prioritize our transportation infrastructure with the tax dollars motorists already pay.”

On paper, at least until September 2019, it appeared that gas tax funds would go to roads and bridges. There are 3 components of the gas tax, which have different allocation regulations. The Legislative Analysts Office breaks the allocation rules down in detail, which you can see in the visual below or read more about here.

This may be why the Reason Foundation makes this claim:

“California, as an example, diverts none of its gas tax revenue. Yet, the state collects over $8 billion in revenue per year from vehicle registration and miscellaneous motor vehicle fees, which is partially allocated to programs such as the California Highway Patrol, the California High-Speed Rail Authority and local public transportation.”

The text of SB 1, which anticipated raising $5B in new gas tax revenue, spells out exactly how these funds are to be spent. Of the $762M itemized in the bill, only $100M was allocated for active transportation, which could be linked to public transit improvements. Of the non-itemized portions (which is the majority) 50% of the remaining funds are for “maintenance of the state highway system or to the state highway operation and protection program” and 50% go to cities and counties. “The bill would authorize a city or county to spend its apportionment of funds under the program on transportation priorities other than those allowable pursuant to the program if the city’s or county’s average Pavement Condition Index meets or exceeds 80.”

This makes it difficult to make sense of the April 2018 announcement, which suggested nearly half of the tax revenue would go to transit projects:

“State officials announced Thursday that $2.4 billion from increases in the gas tax and vehicle fees will be spent on dozens of transit projects, including work to prepare Southern California for the 2028 Summer Olympics… The funding includes $36 million of the $102-million cost to the city of Los Angeles for 112 zero-emission buses to replace existing propane-powered vehicles and expand the DASH bus fleet so it will run more often and in more areas.”

Governor Jerry Brown, who “lobbied lawmakers hard for their votes on the tax measure, SB 1, citing a large backlog of repairs and improvements,” lauded such uses of the funds:

“These zero-emission bus and rail projects mean millions of tons less pollution in the air we breathe.”

Brian Annis, then secretary of the California State Transportation Agency, explains what may be the real motivation behind the gas tax increases:

“The transit projects funded Thursday also help the state meet climate and air quality goals, reducing greenhouse gas emissions by more than 32 million tons.”

Governor Newsom took this another step further in September 2019 when he signed Executive Order N-19-19 into law, effectively repurposing the funds obtained through gas taxes:

“The State Transportation Agency shall leverage the more than $5 billion in annual state transportation spending for construction, operations, and maintenance to help reverse the trend of increased fuel consumption and reduce greenhouse gas emissions associated with the transportation sector.”

Jon Coupal, president of the Howard Jarvis Taxpayers Association, slams the irony of using gas tax funds to reduce fuel consumption:

“It’s infuriating to hear Caltrans moan that it needs more money for road repair when, in a move that incensed both taxpayers and drivers in the Central Valley, Governor Newsom signed an executive order in 2019 that redirected gas tax money to fund railway systems and other non-road projects… When it comes to highway construction and maintenance, California delivers a low level of service at an inflated cost. We can fix this by directing gas tax revenues to projects that do the most good for the state’s driving public and by reducing our transportation bureaucracy.”

David Kim, then California’s secretary of transportation, reveals the real priority of the state in allocating these funds:

“Maintaining the condition of our highways, roads and bridges is of the utmost importance to the governor and this approach will continue. Having said that, we are legally required to meet climate goals. The transportation sector contributes more than 40 percent of greenhouse gas emissions in the state. Therefore, we must take the necessary steps to reduce the share of greenhouse gas emissions that come from the transportation sector.”

San Jose City Councilmember Johnny Khamis calls out Newsom for this bait-and-switch maneuver:

“He’s taking away $5 billion dollars from highway repair and I think it’s a shame. A lot of voters are not going to see their highways fixed, and they’re going to have less trust in government. As a government official, I think we have to live up to our promises and do what we say we’re going to do, otherwise no one will trust us with their tax dollars anymore… 

They’re going to stop fixing Highway 99 — a major artery in San Jose — and will be eliminating several other projects. The city could lose millions in funds. We were depending on a lot of money for highway cleanups and repairs that we may not be getting now.”

These priorities are reflected in the 10-year investment plan shared by Caltrans in February 2021. It plans to invest $49.3B in the State Highway Operation and Protection Program (SHOPP) compared to just $6.4B in maintenance. While SHOPP sounds like it would be focused on the highways, only half of the money will go toward pavement, bridges, tunnels, and drainage. 41% will go to “all other objectives.”

Case Against: 

Suspending the gas tax would put our infrastructure further behind

As described in detail in the Case For, California’s infrastructure is lacking. In the most recent rankings, California placed 45th in overall highway performance and cost-effectiveness. California is one of six states to have more than 20% of its urban arterial pavement condition in poor condition and it did not rank higher than 25th in any of the 13 categories - a low only shared with Oklahoma.

Clearly, the state needs funding to restore its aging infrastructure. 

But with the second-highest state excise gas taxes and record surpluses, shouldn’t the state have plenty of money to cover the costs of infrastructure upgrades and maintenance? 

Citing a February 2021 Caltrans (California Department of Transportation) report, the Los Angeles Times answers that question with a definitive “no”:

“Four years after the Legislature boosted the gas tax in order to fix California’s crumbling roads and bridges, the state has spent billions and made some progress in repairs, but officials now say the funding is sufficient only to complete less than half of the work needed.”

Available funding will address just 45% of the total identified needs. Caltrans projects a $6.1B annual shortfall that “imposes a constraint requiring transportation objectives to be prioritized.”

This shortfall is blamed on a host of factors, including sharp declines in gas tax revenue during COVID, increased electric or hybrid vehicle usage in the state, and increased maintenance costs. 

However, Caltrans representative Matt Rocco explained that the funding gap in the report represents the difference between the estimated cost to satisfy all transportation needs and available funding - not the funding amount needed to meet the goals set forth in SB 1:

“[The California] department [of Transportation] is making steady progress on the goals established by the legislation four years ago and remains on track to meet statutory benchmarks with the current level of SB 1 funding.”

How much additional funding is needed to enable Caltrans to meet its SB 1 goals - if any? That’s not clear. 

We don’t have enough money to do everything we would like to do, but if we’re happy with achieving the SB 1 targets by 2027, then we may not need significantly more money. 

Because the gas tax makes up a fraction of the gas price, California’s gas prices would still be above average

The gas tax is not insignificant, but $0.54 represents just 10% of the total per gallon price of gas on average this year. In contrast, the 3 primary costs associated with getting gas to the pump have made up 84% of the price of gasoline on average this year.

Further, cutting the gas tax completely would not be enough to put California’s gas prices in line with the rest of the nation. California’s gas would still have been $0.82 more expensive per gallon than the national average and $0.26 more expensive than the average of the 6 other West Coast states.

The gas tax suspension may provide some immediate relief, but it won’t solve California’s high gas price problem.

A gas tax suspension wouldn’t be focused on helping those who need it most

If the goal of suspending the gas tax is to provide “relief right now” to “people who are struggling right now,” as Assemblymember Kevin Kiley argued, then a compelling argument could be made for focusing relief on those who need it.

A gas tax suspension would benefit all those who are paying for gas, which, of course, includes people across the income spectrum. Severin Borenstein, a professor at UC Berkeley's Haas School of Business, makes this argument when explaining Democratic legislators’ counterproposal to the gas tax suspension:

“They're coming out with an overall rebate to help low-income families. It's also going to be more targeted at low income than rescinding a gas tax would be. Rescinding the gas tax would give money to everyone, including wealthy people who can easily afford it."

The Legislative Analyst’s Office makes the same case for going beyond the gas tax if the goal is helping those who need it most:

“In contrast, if the Legislature’s goal is to provide relief to those experiencing the greatest financial hardship, it may want to consider options beyond those linked to fuel taxes and vehicle ownership. For example, non‑vehicle owners—who also are facing high overall costs—represent 7 percent of households in the state and tend to be lower income.”

Ultimately, it depends on the goal of the relief and the justification for the relief. If the Legislature wants to provide general inflation-related relief, then it makes sense to go beyond vehicle ownership, but if the goal is to provide relief on account of high gas prices, then any relief should be given to both those who need it and those who are spending the most on gas.

In the spring of this year, Governor Newsom originally proposed a $400 tax rebate for every vehicle a person owned. This was met with considerable opposition from the Legislature and the Los Angeles Times Editorial Board for the very reason cited above:

“Newsom has insisted the fastest, easiest option is to give $400 debit cards to car owners to offset high gas prices. Individuals with two vehicles, including motorcycles, would get $800. No car? No debit card. To which we say, no fair. Californians too poor to afford a car or who choose to forgo car ownership also deserve financial relief. It makes no sense to exclude them when all consumers are feeling the pinch of rising grocery costs, rent and energy prices.”

Newsom ended up conceding to this argument, agreeing to a Middle Class Tax Refund that has since been issued to nearly 26 million Californians as a one-time payment, ranging from $400 to $1,050 for couples filing jointly and $200 to $700 for other individuals depending on income level and claimed dependents. Individuals making up to $250,000 qualified for a refund. The refund is not linked at all to vehicle ownership or the use of gasoline. 

It provides only temporary relief

Former Assemblymember Kevin Kiley’s original proposal was to suspend the gas tax for 6 months. The most recent proposal by Vince Fong extends this to one year. The stated goal is to provide immediate and temporary relief. 

The gas tax suspension wouldn’t fix the problem of high gas prices in California - and it couldn’t be extended indefinitely unless the state were to come up with a different way to fund its transportation work. 

If the proposal can only provide temporary relief, then the case must be made that temporary relief from high gas prices specifically is needed right now - and that those who would benefit from the gas tax suspension would be the ones who would need the temporary relief at this very time. 

This would be a difficult argument to make.

Big oil companies may keep gas prices high and pocket the extra profit

Even if you did believe that suspending the gas tax to reduce gas prices would benefit the Californians you want it to benefit, some argue that the drop in taxes would not lead to a drop in gas prices. Democratic Assemblymember Alex Lee, who rewrote Kiley’s AB 1638 to impose a windfall profit tax on oil companies, makes this argument:

"There is no guarantee that suspending the gas tax nets any savings on the consumer.”

This argument came up in the gubernatorial debate between Newsom and state Senator Brian Dahle, when the moderator pressed Dahle on the topic:

KQED's Senior Editor for Politics and Government Scott Shafer: "How do you guarantee that if the tax goes away, that it's actually going to go to consumers and not just the oil companies?"

"Well, we make sure that they do it," Dahle said.

Newsom took Shafer’s question further:

“We have seen other states that have moved with gas tax reductions and we haven’t seen the commensurate reduction because there is no guarantee. It means more money in the pockets of big oil companies.”

However, University of Pennsylvania’s Wharton School of Business’s analysis of the effect of state gasoline tax holidays published in June of this year mostly refutes Newsom’s claim:

“We provide causal evidence that recent suspensions of state gasoline taxes in three states were mostly passed onto consumers at some point during the tax holiday in the form of lower gas prices: Maryland (72 percent of tax savings passed onto consumers), Georgia (58 percent to 65 percent) and Connecticut (71 percent to 87 percent). However, these price reductions were often not sustained during the entire holiday.”

The Legislative Analyst’s Office reached a similar conclusion when evaluating a proposal made by, ironically, Newsom to reduce the gas tax for one year:

“Available evidence suggests that lower excise taxes likely would result in lower retail prices. The exact effect on retail prices is uncertain, but most of the change in the tax rate likely would be passed through to prices at the pump. For example, if the state declined to increase the excise tax by 3 cents per gallon on July 1, retail gasoline prices likely would be 2 to 3 cents per gallon lower than if the state proceeded with the increase.”

Further, the Republican legislators’ latest attempt at suspending the gas tax - AB 53 - contains a stipulation that would require oil companies to transfer the full savings to consumers.

My Assessment

Suspending the gas tax for a year would likely save the average driving Californian $300-$400. This would be meaningful for some. Yet, some of those savings would go to people who don’t need them. 

In turn, the state would lose roughly $9B in revenue aimed at infrastructure and transportation projects. A year later, none of the structural factors that drive the majority of California’s gas price premium would be different on account of the gas tax suspension. 

In short, we would be where we are today, but with less funding for infrastructure projects in the coming 10 years. 

The state’s time and resources would be much better spent addressing the structural issues that cause our prices to be so high (see last week’s debate) and the strategic, ethical, and structural issues that put California’s roads and bridges among the worst in the country. 

We could begin to address some of these structural issues undermining our infrastructure through some of the following actions.

We could start by performing and publishing an audit of the state’s gas tax spending over the last 5 years. 

From there, we should revisit road repair and maintenance goals set forth in SB 1 to determine if reaching those targets will increase our ranking on highway performance and cost-effectiveness to #25 or higher over the next 5-10 years. If not, we should re-evaluate those goals and then recalculate the funding Caltrans needs to meet the revised goals.

Finally, if, as a result of climate initiatives, we expect some of our existing infrastructure to be irrelevant in 5-10 years, then we should avoid spending money on that infrastructure (if possible), but prioritize bringing all other infrastructure up to fair or good quality before investing in active living and public transit projects with gas tax dollars.

Today’s Debate

California is no stranger to high gas prices, but this year’s record-setting prices provoked California’s leadership to consider ways to either reduce prices or “refund” part of the money spent on gas prices directly to drivers. Republicans in the State Legislature proposed repealing the gas tax as early as January, which their counterparts from the Democratic party rejected in March. 

Governor Newsom responded with a counterproposal a week later, proposing $9 billion in tax refunds to Californians in the form of $400 direct payments per vehicle:

“We’re taking immediate action to get money directly into the pockets of Californians who are facing higher gas prices as a direct result of Putin’s invasion of Ukraine.”

In June, the state Assembly formed a committee - Select Committee on Gasoline Supply and Pricing - to investigate why California’s gas prices are so much higher than the rest of the country’s. On October 4, KCRA reported that select committee chair - Democrat Jacqui Irwin - announced they would be “releasing a report in the next few weeks.” 

While we haven’t seen a report from the Select Committee, Newsom took actions into his own hands on September 30:

“We’re not going to stand by while greedy oil companies fleece Californians. Instead, I’m calling for a windfall tax to ensure excess oil profits go back to help millions of Californians who are getting ripped off.”

On December 5, at a special session of the Legislature he convened, Newsom unveiled what had morphed into a profit cap and price gouging penalty, asking the Legislature to enact a yet-to-be-determined “maximum gross gasoline refining margin” and to allow the California Energy Commission to impose a “price gouging penalty” for violations of the profit cap.

Leaders expect consideration of this proposal “to begin in earnest early next year.”

This brings us to today’s debate.

Argument in Brief

Should California penalize oil companies for profits earned this fall?

Case For:

• Gas prices spiked in California this August-October but they did not outside the western U.S.

• At the same time, a key driver of gas prices - crude oil prices - went down

• This led oil companies to earn very large profits

• Oil companies have not provided sufficient explanation for high gas prices and record profits

Case Against:

• Prices spiked because of acute reductions in refinery output

• Low gas supply applied additional upward pressure on prices

• California’s isolation from other U.S. energy sources limited its ability to respond

• California is a difficult state to try to “fleece”

• Oil companies need these profits to modernize the energy infrastructure

• A tax or penalty would likely result in higher gas prices and more price spikes

My Assessment:

The central question of this debate is whether the price spikes California experienced this fall were justified, unjustified but legal, or illegally achieved. While this is not an easy question to answer, given what we know now, I am inclined to believe they were justified. As a result, I believe the state should work with oil companies to make additional investments in the infrastructure we need to provide low-cost, reliable gas for the next 25 years rather than imposing a windfall tax as previously proposed or a price gouging penalty. This could involve a requirement that oil companies invest profits above a certain level back into California infrastructure.

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Case For

Gas prices spiked in California this August-October but they did not outside the western U.S.

In his proclamation to the Legislature, Governor Newsom claimed that “Californians experienced some of the highest gasoline prices ever recorded in the State” during this 3-month period.

According to the U.S. Energy Information Administration (EIA),1 California gas prices dropped from $5.90 in July to $5.33 in August and then remained almost unchanged in September with an average price of $5.38. Both of these prices are below 2022’s running average of $5.49. 

However, beginning in late September, prices began to rise leading October’s average gas price to hit $5.91, the second-highest monthly average on record.

In contrast, the rest of the nation - except other West Coast states2 - saw steeper declines in August and then additional declines in September before seeing modest increases in October.

While October’s price change reflects an anomaly compared to the rest of the nation, it is not unusual for California’s gas prices to diverge from the national average. From 2000 to 2014, California gas prices went from roughly equal to the national average to about $0.50 above the national average. Over the last 8 years, the gap has grown significantly with California gas prices coming in a dollar more expensive than the national average in 2021. The other western states have experienced a similar, albeit smaller, divergence.

In summary, California could argue that its September and October gas prices were differentially elevated compared to the rest of the nation - except for the West Coast. However, the last 8 years have led to an increasing gap between California gas prices and the national average, making such a difference less exceptional.

At the same time, a key driver of gas prices - crude oil prices - went down

The price of gas consists of 4 costs:

1. Crude oil cost (the raw material)

2. Refinery cost (the process of converting the raw material into something useful)

3. Distribution/marketing cost (transporting it to the pump and selling it)

4. Government taxes/fees

Historically, crude oil cost has been the largest driver of gas prices, making up an average of 40% of the total price during the last 3 years. 

This is why Governor Newsom made the following point on September 30 when announcing plans to consider a windfall tax:

“Crude oil prices are down but oil and gas companies have jacked up prices at the pump in California. This doesn’t add up.” 

Newsom is right that crude oil prices were and are down from early this summer. Crude oil prices dropped 6% month-over-month in August, another 10% in September, and then another 1% in October.

So if price increases weren’t driven by increases in the price of crude oil, what led to the increases?

The chart below shows the four costs above per gallon of gas from July through October in California.

In September, there was a massive spike in refining costs/profits. Since 2020, refining costs/profits have made up an average of 26% of the total price of gas, but this jumped to 38% during the 4 weeks beginning the second week of September. 

In summary, Newsom is right to say that crude oil prices went down. While this generally results in a decrease in gas prices, dramatic increases in refining costs/profits outweighed the decreases in crude oil prices. 

This led oil companies to earn very large profits

Oil companies and refineries have reported significant revenue and net income figures during each of the first three quarters this year. Specifically, Newsom calls out the following 8 companies for their third-quarter earnings:

• Phillips 66 profits jumped to $5.4 billion, a 1243% increase over last year’s $402 million;

• BP posted $8.2 billion in profits, its second-highest on record, with $2.5 billion going toward share buybacks that benefit Wall Street investors;

• Marathon Petroleum profits rose to $4.48 billion, a 545% increase over last year’s $694 million;

• Valero’s $2.82 billion in profits that were 500% higher than the year before;

• PBF Energy’s $1.06 billion that was 1700% higher than the year before;

• Shell reported a $9.45 billion haul that sent $4 billion to shareholders for stock buybacks;

• Exxon reported their highest-ever $19.7 billion in profits;

• Chevron reported $11.2 billion in profits, their second-highest quarterly profit ever.

These figures represent the total revenue and income of multinational companies offering large suites of products and services. On the basis of that data alone, we can’t assume that those record-high figures were driven by California gasoline sales generally and by the specific spike in gas prices this fall. 

However, Consumer Watchdog calculated the profits refineries made just in California, confirming Newsom’s point:

“The four big oil refiners who reported their West Coast profits – Marathon, PBF, Valero and Phillips 66 – together posted an average 73 cents per gallon profit in the 3rd quarter in the West. California oil refiners have only exceeded the 50 cent per gallon mark three times in the last twenty years…

PBF reported making 78 cents per gallon refining crude oil into gasoline in California in the third quarter– the greatest raw profits anywhere in the nation or world. By contrast, PBF's profits per gallon were 48 cents on the Gulf Coast, 49 cents per gallon on the East Coast, 55 cents per gallon in the Midwest – an average of 50 cents across the rest of America…”

Yet, looking at a single year only tells part of the story. In 2019, 2020, and 2021, these companies reported annual revenues less than their 2018 revenues. In fact, in 2020, collectively, they only brought in 57% of their 2018 revenue. They collectively lost $87 billion in 2020, making their average income over the last 5 years just two-thirds of their 2018 income. Even with substantial federal government funding as part of COVID relief, these companies experienced significant declines over the last few years. 

Further, while scoring record profits may seem abusive, it’s important to view these financial figures in the context of other industries’ financial performance. Other industries have reported higher earnings since 2018.

Oil companies have not provided sufficient explanation for high gas prices and record profits

To determine if refineries have engaged in price gouging, the state needs to know if there was ample reason for the spike in refining costs. Newsom has repeatedly turned to oil companies to explain the price spike.  

On September 30, Newsom said:

“Oil companies have failed to provide an explanation for the unprecedented divergence between prices in California compared to the national average.”

At the time, the California Energy Commission (CEC) sent a letter to industry executives: 

“demanding immediate and comprehensive explanations for this inexplicable, unprecedented spike in gas prices within the past 10 days. This explanation must address the fact that there haven’t been any new state costs or regulations, that planned and unplanned maintenance typically does not result in large increases like this, and crude oil prices are down.” 

The CEC also invited executives from five major oil refineries to explain what happened at a live hearing on November 29, but all of them declined to attend, sending letters explaining their perspectives instead. 

Most refiners attributed their absence to legal reasons:

“The refiners all told state officials, almost two weeks ago, that they didn’t plan to attend, citing concerns that sharing information about their operations could violate federal antitrust laws that prohibit price-fixing and other anti-competitive practices.”

But PBF Energy offered a more direct explanation:

“The politicization of this issue by Governor Newsom, heightened by the misleading information he released and commented on related to our 3Q22 earnings, precludes us from participating in this hearing.”

Catherine Reheis-Boyd, president and CEO of the regional trade association, Western States Petroleum Association, offered a brief explanation, blaming anti-oil policies and supply shortages: 

“The Governor and his Administration are failing to communicate what their policies actually cost Californians at the pump and how their decisions have led to the exact market conditions we have today. California faces a supply shortage as a result of repeated irresponsible policy decisions that have led to a lack of investment in refining capacity and necessary infrastructure, making California an energy island.”

But Governor Newsom did not find this rationale satisfactory:

“Oil companies have refused to provide complete and adequate explanations for their actions; WHEREAS the limited explanations refiners have offered, such as low inventory levels and overlapping scheduled maintenance schedules, can account for only part of the 2022 price spike and suggest the need for closer oversight of the refining sector to prevent supply  shortages that artificially drive up prices…”

Is a supply shortage adequate justification for the price spikes? We’ll cover the argument blaming shortages next in the Case Against.

Case Against

Prices spiked because of acute reductions in refinery output

The law of supply and demand dictates that if the supply goes down while demand stays constant, the price goes up. This is the argument Anlleyn Venegas, a spokesperson for the Automobile Club of Southern California, used to explain high gas prices:

“Planned and unplanned refinery maintenance issues have tightened fuel supply in [California].” 

The American Petroleum Institute made a similar point when responding to President Biden’s accusations of price gouging early this year:

“Gasoline prices are determined by market forces — not individual companies — and claims that the price at the pump is anything but a function of supply and demand are false.”

During the middle of September, 4 events reduced refining capacity on the following dates:

• September 3-9

• September 11

• September 16

• September 20

According to the U.S. Energy Information Administration (EIA), these outages resulted in a reduction of 3.5% in the four-week average of gross inputs to refineries from September 9 to October 7. From August 26 to September 23, California refineries saw a 5.1% decline in their four-week average throughput. 

Was this reduction in refining throughput enough to drive refining prices and in turn, gas prices through the roof? This is a difficult question to answer well. Governor Newsom does not think so:

“Big oil keeps saying that one of the reasons gas prices are up is because of maintenance but… recent refinery maintenance impacted only 5.8% of California refineries’ supply. It doesn't add up.”

However, the EIA seems to think that output reductions could be responsible:

“Recent price movements for both products reflect how sensitive West Coast petroleum product prices are to relatively small changes in refinery output and import levels.”

California Energy Commission Chair David Hochschild echoes Newsom’s argument, contrasting this price spike with other historical price spikes:

“In September 2019, five refineries experienced unplanned maintenance issues, and California was faced with several refinery outages. The price spike was a mere 34 cents — a fraction of what Californians have been paying over the past week. Even the 2015 explosion at the ExxonMobil refinery in Torrance caused a price increase of only 46 cents per gallon, and the California Department of Justice deemed this price shock to be exacerbated by illegal price-fixing. So, refinery maintenance alone — especially prescheduled maintenance — cannot explain a sudden $1.54 increase in what refineries charge for every gallon of gas Californians buy.”

While these numbers do make the recent spike look like an outlier, it’s not fair to compare absolute dollars when gas prices have changed so much in the last 7 years. We need to compare the percent change from the peak of the refinery cost to its lowest point within the previous month. When we do this, we find that this year’s refinery price spike was twice as large as the fall 2019 spike but significantly smaller than the winter 2015 spike.

Further, while the 2015 price spike led to ongoing litigation with the state, the state has focused that case on price spikes that lasted almost 2 years, conceding that the defendants may not have caused the initial spike:

“During the relevant period (beginning at least as early as February 2015 and continuing into late 2016), Vitol and SK reached agreements with each other and with third parties in violation of California’s Cartwright Act… Defendants Vitol and SK may not have created the supply disruption that impacted California starting in February 2015...”

In 2015, refinery costs/profits went from $0.36 per gallon on February 2 to $1.18 on March 2 and then remained near or north of $1.00 for almost a full year. In contrast, refinery costs/profits spiked on October 3 of this year and by October 24, they had already dropped below their previous trough. On November 21, 2022, the refinery costs/profits per gallon dropped to the lowest level in almost 2 years.

Maybe this was because of political pressure or maybe they were able to resolve capacity and supply issues?

Low gas supply applied additional upward pressure on prices

The EIA’s point is especially true when supply is already low - as it was at the time of the price increases. Christopher Knittel, a professor of applied economics at the Massachusetts Institute of Technology, seconds this perspective:

“Increases in the crack spread that we’ve seen recently has been just supply and demand.”

Crack spread is often used as a proxy for refiners’ profits because it represents the difference between gasoline prices and crude oil prices.

West Coast gasoline inventories decreased from the beginning of August to the end of September, falling significantly below their five-year (2017–2021) range.

“These low inventories may also have contributed to West Coast market conditions in which prices react strongly to relatively small changes in supply,” explains the EIA.

Record-low oil imports also contributed to an undesirable supply/demand curve for consumers. Over half (56.2%) of California’s oil supply comes from foreign sources. As shown in the chart below, imports zeroed out in early September, reducing the amount of oil available to refine.

Could these 3 variables combine to drive up gas prices by 10% from September to October in California while gas prices increased only 3% nationally? 

Experts, like Amy Myers Jaffe, the managing director of Tufts University Climate Policy Lab and a former executive director for energy and sustainability at UC Davis, have been warning that low supply moments can cause severe spikes in gas prices like this for years:

“[Other countries] don’t wait for the trading community to find it profitable to hold inventory, they require refineries to hold a minimum level of inventory. For a decade, I’ve been saying we need to do that in the United States, and I certainly said that it needs to be a requirement for the state of California.”

California’s isolation from other U.S. energy sources limited its ability to respond

These low supply problems are exacerbated and extended because California can’t open the spigot to oil from the Gulf Coast states or other domestic sources when we’re running low. WSPA President and CEO Catherine Reheis-Boyd describes California as an “energy island” for 3 primary reasons:

• State regulators require different gasoline than the rest of the country

• Our refineries refine a heavier crude oil than the Gulf Coast crude oil so California’s refineries cannot use Gulf Coast crude oil

• There aren’t pipelines to transport fuel to California from other states

This severely limits California’s ability to course-correct when refining output drops and inventories are low, as the EIA explains:

“Consequently, the West Coast generally must maintain steady refinery runs to ensure regional supply meets demand, and any refinery outages can disrupt this balance. Furthermore, when refinery outages occur, West Coast markets must draw down local inventories or import product from refineries in Asia to meet demand because of the different fuel specifications.”

California’s declining refining capacity may also reduce our ability to respond to disruptions. The number of operating refineries in California has dropped from 40 in 1983 to just 13 this year, corresponding with a 30% decline in total refinery capacity. Valero vice president Scott Folwarkow explained why this is happening in a letter to the state Energy Commission:

“California policy makers have knowingly adopted policies with the expressed intent of eliminating the refinery sector. California requires refiners to pay very high carbon cap and trade fees and burdened gasoline with cost of the low carbon fuel standards. With the backdrop of these policies, not surprisingly, California has seen refineries completely close or shut down major units. When you shut down refinery operations, you limit the resilience of the supply chain.”

In summary, acute reductions in refinery capacity coupled with already low supply, low imports, and a stripped-down refining industry likely explain the gas price spikes this fall. 

California is a difficult state to try to “fleece”

If oil companies were interested in ripping off consumers in a state, there are several reasons why they would likely avoid California. The first is that California is openly hostile to oil companies, suggesting that the state would have no qualms about penalizing oil companies. The American Fuel & Petrochemical Manufacturers explains the industry’s relationship with the state this way: 

“Hostile policies and rhetoric have also contributed to a difficult production environment for liquid fuel producers.”

Second, and more directly, California Attorney General Rob Bonta put oil companies on notice on March 18 when his office sent all refiners a letter:

“During this turbulent time, I want to warn oil refineries against taking advantage of the current market disruption. My office is currently litigating against multinational gas trading firms SK Energy Americas and Vitol for anticompetitive conduct, we are closely monitoring the market, and we will not hesitate to take action against others if they violate the law.”

The ongoing litigation against the gas trading firms and the creation of the Legislature’s select committee to investigate high gas prices would also likely dissuade refineries from trying to deceive the state. Would oil companies really try to rip off Californians amidst all the scrutiny and track record of litigation and hostility? 

It seems unlikely, but one could argue that California’s hostility makes it easier for oil companies to blame gas price spikes on policy and regulatory issues or even that oil companies are out for revenge, as Consumer Watchdog argues:

“[The oil and gas industry] has declared war on the state of California and is raising prices unreasonably to punish the public and lawmakers for enacting tough new (environmental) laws.”

Oil companies need these profits to modernize the energy infrastructure

Given recent losses, aging infrastructure, and increased costs associated with updating infrastructure to meet new climate goals, oil companies could argue that they need these profits to prepare us for a more reliable energy future. One of California’s refiners, PBF Energy, makes this case in its letter to the state Energy Commission:

“Refining is an extremely capital-intensive business." 

PBF also explained that it is using this year’s record profits to pay off “exorbitant debt” accumulated during COVID.

While PBF may be using these profits to pay off debt, a Wall Street Journal analysis showed most are not:

“Oil prices are at their highest in years and politicians want companies to pump more. But most large American frackers are standing pat, or even letting production decline, and instead are handing investors cash… Nine of the largest U.S. oil producers this week said they shelled out a combined $9.4 billion to shareholders via dividends and share repurchases in the first quarter, about 54% more than they invested in new oil developments.”

A tax or penalty would likely result in higher gas prices and more price spikes

Imposing a new tax or price gouging penalty - whether justified or not - may have the unintended consequence of increasing gas prices and causing more price spikes. 

In their letter to the state Energy Commission, executives from Valero warned that adding costs, such as a new tax, “will only further strain the fuel market and adversely impact refiners and ultimately those costs will pass to California consumers.”

In addition to causing price increases directly, another refiner explained the potential effect on future investments:

“California's regulatory environment is putting future investment in refining and fuel manufacturing at risk in the state.”

And this is likely to lead to more problems as Gregory Brew, a historian of oil and a postdoctoral fellow at the Jackson School of Global Affairs at Yale University explains:

“California has long discouraged local fossil fuel production to protect the environment, with processing now increasingly reliant on an array of aging refineries… These facilities’ infrastructure is aging — several refineries have been operating for more than a century — and production is interrupted when machinery fails.”

My Assessment

This is a very complicated issue, which is likely why - in part - California has been trying to solve this problem for over 2 decades without much progress.

“California officials have had repeated warnings over the last two decades that the state’s unique blend of gasoline is susceptible to supply shortages and sharp price spikes. But despite multiple reports and special committees, California has struggled to find solutions as it tries to rapidly reduce its reliance on fossil fuels.”

While I can’t offer a comprehensive solution here, I can evaluate the proposals under discussion. To do so, it’s important to distinguish between the windfall tax and the price gouging penalty. 

To make the case for a windfall tax, the state only needs to make the case that oil companies made unusually large profits off of their activities in California. Consumer Watchdog has already done this using these companies’ publicly reported data. 

This does not, however, mean that a windfall tax is a good idea. Comparing the earnings of the oil and gas industry to earnings in other industries casts immediate doubt on the idea that oil companies are raking in greater profits than companies in other industries. Why charge oil companies a windfall tax if we’re not going to do the same for other industries - especially those that benefited greatly from pandemic-induced lockdowns? Not only that, but it feels hard to justify stripping a portion of the profit from these companies after years of government-ordered lockdowns produced significant losses for them.

Price gouging is a different story because it implies that refining companies intentionally manipulated the market to benefit their shareholders. This is illegal. If the state actually believes this is what these companies did, then the California Department of Justice should launch an investigation, as they did for the 2015 gas price spike scenario. 

While it’s impossible to know, at this point, if those companies engaged in market manipulation, the reasons they offer for the price spikes seem reasonable. In fact, experts on all sides of the debate have been warning the state about the potential for price spikes for these very reasons for decades. 

Further, Ed Hirs, an energy fellow for the University of Houston, says “he’s seen no hard evidence of price gouging during this spike” and argues that the state would need to engage in “some serious research” before being able to claim refineries gouged prices. A federal judge in San Diego just dismissed a class-action lawsuit accusing major oil companies of colluding to keep fuel costs artificially high, demonstrating the legal challenges for such an allegation.

Rather than spend time and money on such an investigation, I believe the state should make additional investments in the infrastructure we need to provide low-cost, reliable gasoline for the next 25 years (even though new gas-powered vehicles will not be sold by 2035, many people will still drive used gas-powered vehicles). Any new tax or penalty that could come from such an investigation would likely have the opposite effect anyway: higher gas prices in California over the long term and reduced investment in our energy infrastructure.

Given the dire needs of the California infrastructure, it seems unfortunate that oil companies’ record profits are ending up primarily in the pockets of investors - and not in additional investments in infrastructure. Perhaps, the state could require oil companies to invest profits above a certain level back into California infrastructure rather than pushing to put oil profits in the state’s coffers. 

Today’s Topic of Debate

On Election Night 2022, as races were called and vote counts reached the high ninety percentile in many states around the country, California had counted just north of 40% of the expected ballots by midnight. The percent counted didn’t change much over the next few days. Several days later all but the closest races in other states had been called and the vast majority of votes counted. 

Politico’s California Playbook on November 28, said, “Yes, it’s true we’re still waiting on final calls in several Assembly and Senate races” even though we’re now 3 weeks from election day. The fate of the control of the House hung in the balance for over a week until several of the not-so-close California races were finally called.

California’s laggard performance in this November’s election begs the question: Is California really significantly slower than the other states or was this just an outlier or the effect of being on the West Coast with a late poll closing time? 

A review of election reporting data from the 2020 primary (Washington Post), 2020 general (New York Times), and 2022 primary (FiveThirtyEight) reveals 3 characteristics of California’s vote counting speed:

1. California is the slowest or among the slowest in reporting final results, taking 10 days in the 2020 primary while 50% of states shared final results in less than 24 hours

2. Yet, California’s initial reporting of results - within an hour of polls closing - is roughly average among West Coast states

3. However, California makes little progress over the next 24-48 hours while most other states plow through all or almost all of their ballots, leaving California way behind

I walk through the data in detail in this Instagram video.

California’s vote counting has also slowed considerably. In the November 2004 presidential election, 81% of ballots were counted within 2 days of the election. In this year’s primary, less than 50% were counted within 2 days. 

This brings us to today’s question, which California State Senator Steve Glazer tees up nicely: “Is there a way to make it faster? Yes, there is. Is it worth the price, the cost?” 

Argument in Brief:

Given the impact of California’s slow vote counting, today’s topic of debate is: Should California count and report on votes more quickly?

Case For:

• Reduces voter faith in the system

• Slows the transition to new government and leadership

Case Against:

• Voting rules that slow the vote count increase voter participation

• Voting rules that slow the vote count increase the integrity and accuracy of election results

• It is too expensive to count and report results significantly more quickly

My Assessment:

We should speed up our vote counting and reporting since the policies California blames for slowing it down either don’t deliver the benefit they promise or they’re in place in other states that deliver results much more quickly.

Case For

Reduces voter faith in the system

According to a Newsweek poll conducted last month, 40% of Americans believe the 2020 Election was “rigged or stolen.” Whether you believe the election was stolen or not, this level of distrust in our elections is a major threat to future elections and a functioning democracy. 

Why do so many Americans believe the election was stolen? The Brennan Center for Justice calls out slow vote counting as a key reason:

The slow pace of counting mail ballots in states such as Pennsylvania, Michigan, and Wisconsin was a key source of election disinformation in 2020. The delays provided President Trump and his allies with a pretext to claim that the election was being stolen from them as mail ballots, which overwhelmingly went for Biden, were counted and added to vote totals. 

Slow vote counting feeds skepticism about our elections because it can result in changes in projected winners. This doesn’t mean that California (or any other state) must finish counting votes by midnight on Election Day. Virtually no state achieves this today. However, the lower the percentage of votes counted on Election Day, the more likely it is that the expected outcome could flip - and this is what, perhaps more than anything, raised suspicion on behalf of many Trump supporters in 2020, including this Georgia voter:

“When I went to bed, Trump was so in the lead, and then (I got) up and he’s not in the lead. I mean, that’s crazy.”

California saw an example of this closer to home in 2018 when the Associated Press called the 21st Congressional District for David Valadao on Election Night only to retract that projection 22 days later when Democrat TJ Cox pulled ahead.

The challenge with this effect of slow vote counts is that it doesn’t matter if there are logical reasons for changes in the projected winner. What matters is perception - and this perception, among other factors, is why just 63% of Americans are very or somewhat confident in the accuracy of US elections.

Michael Wines of The New York Times extends this effect beyond distrust in elections:

“What happens when Election Day lasts for weeks? The short, glib answer to that question is that Jan. 6 happens…”

Voter skepticism linked to slow vote counts predates both the 2020 election and January 6th. In a March 2017 report, California’s nonpartisan Legislative Analyst Office made the following assertion:

“…counties now take weeks to finish counting ballots. Some voters are saying this undermines their confidence in the election process, in part because California counts ballots so much slower than other states do.” 

While we don’t have hard evidence, anecdotes suggest that if we could count more votes on Election Night and in the following few days, we could restore some confidence in our elections.

Slows the transition to new government and leadership

While it may seem trivial to argue for speeding up vote counting to give elected officials more time to transition into office, the 2-month gap from Election Day until a new Congress, for example, convenes is critical - especially for newly elected officials.

The 118th Congress will convene on January 3 of next year, exactly 8 weeks after the election. In California, final results don’t need to be tabulated until December 8 and reported until December 9. In close races, this leaves elected officials just 3.5 weeks to prepare. 

For California state senators and assembly members, the preparation time is even less - particularly this year since Governor Newsom is expected to convene a special session on December 6, several days before final results are required. As Politico describes, 

“...we’re one week away from the Dec. 5 organizing session, where legislators will gather in Sacramento for the first time to be sworn-in and cast leadership votes. They’re also expected to gavel in for a special session that day, per Gov. Gavin Newsom’s request, though details on that session and the gas windfall tax that is supposed to go along with it remain scant.”

And yet we’re still waiting on final calls in a few races.

Delayed results also have implications for chamber leadership too. In 2020, the Georgia runoff process kept the country from knowing which party would control the Senate for an additional 2 months.

Case Against

Voting rules that slow the vote count increase voter participation

There are 4 primary voting regulations that could increase voter participation and in turn, slow the vote count:

• Universal mail-in ballots (AB 860 - signed in June 2020 - required the state to send a vote-by-mail (VBM) ballot to all registered voters due to COVID. AB 37 - signed in September 2021 - made this permanent.)

• Mail-in ballots can arrive up to 7 days after Election Day (also became law through AB 37)

• Voters whose ballots are rejected can submit a corrected ballot up to two days prior to certification of the election (the election is certified on the 30th day after the election) (part of Election Code amended in 2007)

• Voters register and vote on Election Day or may vote in the wrong precinct using a provisional ballot (same-day registration was enacted in 2012)

We need to answer 2 questions about these rules:

1. Do they increase voter participation?

2. Do they slow down vote counting significantly?

If the answer to both questions is “yes,” then we can make the case that California has uniquely accessible election rules that increase participation at the cost of speed of reporting. 

First, let’s see if these bills increase voter participation, an argument California Secretary of State Shirley Weber made at the signing of AB 37:

“The bill will permanently expand access and increase participation in our elections by making voting more convenient and meeting people where they are. Vote-by-mail has significantly increased participation of eligible voters. Voters like having options for returning their ballot whether by mail, at a secure drop box, a voting center or at a traditional polling station. And the more people who participate in elections, the stronger our democracy and the more we have assurance that elections reflect the will of the people of California.”

If California has uniquely accessible election rules, we would expect voter participation in the state to be high compared to other states. In both the 2016 and 2018 elections, California came in below average in voter turnout, ranking 42nd (59.7% turnout) and 32nd (54.9% turnout) respectively according to the U.S. Election Assistance Commission reports1. 

However, in 2020, after all the noted changes were enacted, California jumped to 16th, achieving a turnout rate of 81%. This increase of nearly 22 percentage points from the last presidential election was the third-highest increase and more than double the national average. 

Was this jump driven by California’s new policies?

We can’t know conclusively, but the percentage of people voting by mail jumped from 52% in 2016 to 82% in 2020, suggesting that universal vote-by-mail (VBM) played some role. 

Did we see this same pattern across the nation?

Not necessarily. There is no correlation between increases in VBM and increases in turnout when looking at data from all 50 states, as shown in the chart below. Of the states that saw above-average increases in VBM, almost twice as many (17) saw below-average increases in turnout than above-average increases in turnout.

This isn’t to say that there is no relationship between VBM and turnout. There is a small positive correlation between VBM percentages and turnout rates in 2020. 

What can we conclude?

For California, the changes in election policies leading up to the 2020 election seem to have spurred a significant increase in participation. However, it’s important to consider that a different factor could have caused the increase in turnout. While there is still time to count more votes, the turnout in California’s 2022 election is just 50% as of November 29, which is less than the turnout in 2018. 

With moderately strong support for the idea that the noted election rules drove increases in voter participation, we turn to the question of whether they significantly slow down results reporting.

There are 3 key policy decisions that impact the speed with which vote-by-mail ballots are counted:

1. How election officials must verify the identity of the voters

2. When election officials can begin processing and counting VBM ballots

3. What election officials are required to do if there is a problem with a VBM ballot

Verification: California and 26 other states conduct signature verification on mail ballots, in which they compare the signature on the envelope to the signature on file for the voter. Most of the other states require even more stringent verification processes, while 9 states only verify that the ballot has been signed but not that the signature matches the voter’s signature on file. 

Timing: Here is when states can begin counting VBM ballots:

• 10 states allow both processing and counting to begin before Election Day

• 23 states, including California, allow counting to begin on Election Day but before polls close

• 16 states and Washington, D.C. do not allow counting until polls close

Curing Ballots: California and 23 other states require election officials to notify voters when there is a missing signature or a signature discrepancy—and require that voters must be given an opportunity to correct it. 

In summary, California’s policies will, for the most part, yield the slowest counting process, but they share these policies with large portions of other states. As a result, we can’t conclude that California’s vote-by-mail policies are driving the slow counting because other states with the same policies are reporting results much more quickly.

However, California could argue that these policies differentially slow its vote count down if it has to process a far larger share of VBM ballots than other states. Secretary of State Shirley Weber alluded to this argument the week after this year’s general election:

“We have a huge population of registered voters and California stresses enfranchisement, so we have a process that by law ensures both voting rights and the integrity of elections.”

In the 2020 general election, California had a higher VBM percentage than all but 7 states. However, all but 1 of those 7 states had counted a higher percentage of votes by 9am PST the next day than California. On average, the 7 other states had reported 83% of the vote vs. California’s 68%. The one state that was slower than California (New Jersey) went from 7% VBM in 2016 to 86% in 2020, likely requiring them to overhaul their election processing system.

California’s provisional ballot rules - which aim to increase voter participation - can also significantly slow down vote counting. When a provisional ballot is cast, it is stored separately from other ballots and investigated by local election officials. In 2016 and 2018, California received roughly 9 times higher percentages of provisional ballots than the national averages with 8.9% and 7.8% of ballots cast being provisional, respectively. 

These unusually high provisional ballot numbers could slow down California’s results reporting, but something interesting happened in 2020 that likely lets provisional ballots off the hook. California’s provisional ballot percentage dropped from 7.8% in 2018 to just 1.2% in 2020 - and yet, as I have covered, our vote counting didn’t speed up. 

California did implement policies in 2020 that both seem to have increased voter participation and would likely slow down vote counting, but we can’t blame these policies because we underperform states that have the same policies and that are processing the same portion of mail ballots.

Voting rules that slow vote counting increase the integrity and accuracy of election results

Alex Padilla, current US Senator from California and former California Secretary of State said that when he explains to those frustrated with the slow pace of California’s election reporting the process we go through, “most people do settle with, it’s smarter to get it right.” Padilla’s implicit argument is that going slow allows California to get its election results right. 

Kim Alexander, president of the California Voter Foundation, makes the same argument: 

“The ironic thing is that the people who are making claims questioning the veracity of our election results because of the long vote counts are overlooking that the reason it takes a long time to count mail ballots is because we are ensuring the security of the vote.” 

Padilla’s and Alexander’s statements inversely suggest that going faster - as essentially every other state does - leads to less accurate results. But does California get more accurate results than other states? 

This, as you can imagine, is very difficult to determine because there is no master answer sheet to compare any state’s results to. The one scenario in which we do have a comparison to the initial vote count is vote recounts.

The last recount in a statewide election in California was the 2014 state controller primary. The recount stopped before it was completed when the trailing candidate conceded. During the 6 days the recount was underway in one county (the recount was only going to take place in select counties and only a few had started), 3 of the 3,520 votes were changed resulting in a 99.925% accuracy rate. For comparison, Georgia conducted 2 recounts of the 2020 presidential election and changed ~1,700 of the more than 5 million votes for an accuracy rate of 99.964%.

While the limited recount data we have doesn’t support the idea that California is any more accurate than other states, let’s assume, for the sake of argument, that it is. What exactly is California doing that would enable us to get more accurate results than other states? 

The 3 voting regulations that one could argue increase the count accuracy and also slow the vote count are:

• Poll workers verify the signature on mail-in ballots, matching the signature to a signature on file

• Voters whose ballots are rejected can submit a corrected ballot up to two days prior to certification of the election 

• California waits until Election Day to start processing mail ballots

The problem with pointing to these regulations as the reason for California’s slow vote count is that most other states do the exact same thing - as established above.

But maybe California rejects more ballots, which leads to a larger share of ballots requiring curing (i.e., fixing). This is not true. In the 2020 election, California rejected 0.6% of ballots while the national rejection rate was 0.8%. 

Further, unlike the 28 states that have laws prompting automatic recounts, California does not. California also requires the recount requesters to pay for the recount, while a number of other states will pay for the recount if the margin is small enough, further dissuading recounts.

It would be too expensive to count and report results more quickly

Cathy Darling Allen, Shasta County’s Registrar of Voters told CalMatters: 

“Someone I worked with once told me, ‘Elections can be cheap and fast, and they can be accurate — but you have to pick two.’”

This begs the question: Does California spend less on its elections (per voter) than other states? 

This is a difficult question to answer because who pays for what share of election administration costs varies from state to state and from election to election (based on the type of election). In many states, including California, counties cover a share of the costs. The California Association of Clerks and Election Officials (CACEO) did try to get accurate cost data through a privately funded project several years ago. 

CACEO concluded in its 2019 report that the statewide average cost per voter of California elections was $8.31. Notably, this was before universal vote-by-mail ballots were being sent, which has driven up costs in California and the 7 other states that have such a policy.

The MIT Election Data and Science Lab collected election cost data from 26 states in 2017, finding an average of $8.10 per voter. While we don’t have much data to draw from, here again, the data we do have suggests that California’s elections are, if anything, marginally more expensive than other states’ elections.

Unfortunately, it appears that California’s elections are neither cheap nor fast - and arguably, no more accurate than other states’ elections where elections are fast.

My Assessment

Let’s return to where we began - Steve Glazer’s comments: 

Is there a way to make it faster? Yes, there is. Is it worth the price, the cost?”

What would California be sacrificing to speed up its election reporting? 

The short answer appears to be almost nothing. Based on the arguments above2, the price of speeding up elections could be negligible because the very policies that aim to increase access and reduce costs are already in place in many other states which count votes much more quickly while scoring higher turnout rates. The cause of California’s slow vote counting is neither the policies aimed at increasing turnout and accuracy nor the percentage of voters engaging in voting methods that take longer to process.

The reasons to speed up the vote count are less concrete and quantifiable than the reasons to maintain the status quo, but they don’t have to be as strong. If we can get results faster without sacrificing participation or accuracy, we should. Other states are doing better than us on participation and accuracy and getting results much more quickly at a lower financial cost. 

Should California speed up its vote counting and reporting? Yes, we should.

But how? If our policies and proportions are similar to other states, then what is slowing us down? The Legislative Analyst’s Office’s recommendation to the state legislator in 2017 carries an important implication. Here’s what they recommend: 

“Should the Legislature determine that swift determination of elections results is an important state goal, the Legislature could make receipt of funding conditional on counties demonstrating efforts to improve the swiftness of their tallies.”

This suggests that counties could count votes faster, but they have no incentive to right now. In the words of New York Times contributor Michael Wine, “In California, at least, a leisurely tally is effectively state policy.”

The official counting of votes did not need to start until November 10 - 2 days after the election (which explains why California makes almost no progress during the 48 hours after the election). Once the counting starts, county offices are required to continue the vote count every day for just 6 hours a day, excluding weekends and holidays. 6 hours a day? Counties have 30 days to finish counting. Why rush?

This isn’t to say that our election officers are lazy. Our state policies have created an environment where Parkinson’s Law - work will expand to fill the time allotted for its completion - may just be causing California to count votes and report results much slower than other states without reason. It’s time we do something about this.

Today’s Solution Proposal

California has become notorious for its homelessness problem with just over half of the nation’s unsheltered homeless. Of the more than 161,000 people without a home in California, 70% were living in tents, cars, or on the street as of January 2020. The state has responded by pouring billions of dollars primarily into converting motels and other facilities into permanent housing. 

Cities and counties, however, have increasingly begun building communities of tiny homes. These micro-shelters vary considerably but often stand at 60-100 square feet (compared to 757 square feet of an average 1-bedroom apartment). Some have just a cot and a heater/AC, while others have a small kitchen and bathroom. These shelters are grouped together with anywhere from 3 others to as many as 117 units in one of the largest villages. 

Some of these communities are managed by local or nonprofit agencies, while others are self-governed. Regardless of oversight, most have community norms and rules that outline who can live there, what behaviors are appropriate (e.g., no weapons), and what behaviors can lead to expulsion. For those managed by outside agencies, many also provide regular access to other services, including healthcare. 

While the tiny homes concept has been around for a while, it really began to take off as a source of transitional housing for the homeless in March 2020. The pandemic turned congregate shelters (also known as “group shelters” and the most common form of emergency shelter) into potential COVID spreaders, increasing demand for single-residence housing. In 2020 alone, Pallet, a DC-based company, constructed 1,500 new units for states.

Cities and counties up and down the state have clamored to add tiny home communities as Californians have put more pressure on elected officials to do something about tent encampments. Los Angeles, Sacramento County, Santa Barbara, Oakland, and Silicon Valley have all created tiny home villages. Another 15 projects are in the works in Alameda, Contra Costa, Solano, San Joaquin, and Shasta counties.

Argument in Brief:

Given micro-shelters' rising popularity, today’s question is: Should we continue to invest in micro-shelters as a key part of the solution to homelessness?

Case For:

• Micro-shelters are much less expensive than other forms of housing

• Micro-shelters can be constructed and set up much more quickly

• Micro-shelters are generally more appealing to unsheltered people than group shelters

Case Against:

• Micro-shelters do not offer humane living conditions

• Micro-shelters do not solve homelessness for anyone because they only offer temporary housing

• There aren’t good places to locate these shelters

My Assessment:

We should continue to invest in micro-shelters as part of the solution to homelessness - and simultaneously invest in long-term housing options and research that evaluate tiny homes’ success in getting people into long-term housing.

Have something to add to the conversation? Let us know.

Case For

Micro-shelters are much less expensive than other forms of housing

The most compelling case for micro-shelters is their cost. While tiny homes vary in cost, these micro-shelters typically cost between $5,000 and $15,000 to build or purchase. Los Angeles has priced them as high as $55,000 per shelter, but even that price is far less expensive than most other shelter options. The typical development cost for extremely low-income housing is roughly $200,000 per unit, but an audit recently revealed that Los Angeles is spending $837,000 per unit. 

In San Francisco, congregate shelters typically cost more than $40,000 per bed to build, while one of its new tiny house communities only costs $10,000 per unit. Even tent villages often end up costing more to maintain than tiny homes. 

Micro-shelters can be constructed and set up much more quickly

Speed is another massive benefit to tiny homes.

“The major issue is the speed at which they need to be delivered,” said Kadribegovic, a partner at Lehrer Architect, one of the firms designing these villages. “Given the mandate, they have to be churning housing units fairly regularly. So when the city gives us the go-ahead on a project, we’re tasked with designing and building the entire project in basically 90 days.”

Pallet boasts that its structures can be set up in less than an hour. In the Bay Area where one community constructed the homes themselves, the construction took just 2 months. Like other housing developments, tiny home villages can get caught up in permitting and zoning delays, but increasingly localities are passing ordinances to remove these snags.

Micro-shelters are generally more appealing to unsheltered people than group shelters

Another key factor that determines the viability of a solution in this space is whether those without shelter will deem the proposed solution more compelling than life on the street. Group or congregate shelters have received a lot of criticism on this front. In one survey done in Santa Barbara County, 72% of homeless people said they are not willing to stay in a group shelter.

While some unsheltered individuals have expressed skepticism toward these small structures, the overwhelming sentiment has been positive:

“They [people who moved into the tiny homes] said, ‘Are you kidding me?’” said Everett Butler, co-director of Urban Alchemy, a nonprofit that provides on-site services. “They were beyond appreciative to be able to go inside their own space and lock the door behind them, turn the heaters on and kick back.”

“Within just a few months, we were getting calls from way more people than we expected,” says Taryn Sandulyak, the co-founder of Firm Foundation Community Housing, an all-in-one service provider that does everything involved with creating a tiny home village. 

One of the main reasons for tiny homes’ appeal is the privacy they offer, as Pallet CEO Amy King describes: "What we felt was really missing from the housing spectrum was a dignified shelter option that honored their individuality and allowed them to have autonomy in their rehabilitation process.”

The autonomy afforded by tiny homes also enables families (including pets) to stay together:

“There was a case of an adult mother with an adult son who suffered from mental disability. If they went into the congregate shelter, she’d have to go to the women’s section and he’d have to go to the men’s section. She wouldn’t be able to take care of him, and he wasn’t able to take care of himself. So they stayed on the street until they had the opportunity to move into a tiny house.”

Tiny homes are significantly cheaper than most other options, take much less time to set up, and are much more compelling to those who need them than group shelters. 

Now let’s look at the case against tiny homes as a key part of California’s homelessness solution.

Case Against

Micro-shelters do not offer humane living conditions

Barbara Poppe, who coordinated federal homelessness policy for most of Barack Obama’s presidency, says that micro-shelters are simply not nice enough. In fact, she calls them “completely deplorable,” asking rhetorically:

“Why would we accept that people should be living in huts that don’t have access to water, electricity and sanitation? …I don’t understand why you find it acceptable for children and infants to live like this.” 

Some of the leaders in Seattle - where tiny homes have abounded earlier than most other places - have made similar arguments. Harold Odom, a member of Seattle’s regional authority implementation board, believes tiny home villages have turned into “warehouses for people.” A group of advocates who have experienced homelessness called the Washington State Lived Experience Coalition says that tiny homes are “sheds” that “do not meet federal human habitability standards.” Despite its colorful exterior, other homeless advocates said one tiny home village “looks like a prison.”  

Proponents of tiny homes, such as Lewis, respond to this criticism, saying they are “just responding to consumer demand” and that “people are willing to stay [in tiny houses] long-term as an alternative to a tent while they wait to get placed in housing.” Demand for such housing, as noted in the Case For, seems to favor Lewis’ argument.

Micro-shelters do not solve homelessness for anyone because they only offer temporary housing

Perhaps, the most ardent argument against tiny homes is that they don’t actually solve homelessness:

“The focus that we need to have is on housing, and I simply cannot stress that enough. Shelter is not permanent, and we are locked into a proliferation of shelter options rather than a proliferation of housing options and we must course-correct on that. Tiny homes, as a subset of a broader shelter strategy, make sense, but they’re not an end point and we shouldn’t proliferate them as they are... What I am saying is that I don’t see the evidence, either in community or in the data, to talk about moving to that scale,” says another Seattle/King County official.

Barbara Poppe agrees: “I look at those spaces, and I wonder what would it take for your community to rapidly deploy the resources and construct some permanent apartments there.”

The Washington State Lived Experience Coalition agrees, arguing that tiny homes “do not end anyone’s experience of homelessness.” Part of the argument is that tiny home communities will be no different than the tent encampments already disrupting cities. What is to keep those communities from devolving into drug-filled, crime-ridden villages that scare people from the surrounding area and result in another wasted public investment?

Donald Whitehead Jr., executive director of the National Coalition for the Homeless, similarly, suggests that tiny homes may be a good emergency option, but they are not a long-term solution. Worse, he thinks tiny homes are a reflection of a prevailing mindset that dehumanizes those on the streets: "There's been this theme since the '70s that there are some people in society that are less deserving. And the tiny home kind of fits within that mindset." This mindset, Whitehead and others argue, will lead us to stop at getting people into tiny homes.

In 2016, Mayor Eric Garcetti of Los Angeles agreed with this argument too. A spokesperson for the mayor said:

“Mayor Eric Garcetti does not favor tiny houses for homeless people. The mayor is focused on providing permanent supportive housing that gets people off the streets for good.”

But by 2021, he had changed his mind: “The only way to end this crisis is with more long-term and quality housing options -- and as the largest tiny homes village in the country, the Arroyo Seco Village is the latest milestone in our commitment to deliver healing and hope to our most vulnerable neighbors.”

While tiny homes do not often serve as permanent housing, you could argue that they are still an important part of the solution particularly if they do a good job of positioning people to get into permanent housing. Unfortunately, on this question, the data is frustratingly sparse and mixed. 

For example, in one village in Seattle, 34% of the residents were able to transition into permanent housing, while another Seattle community reported a 22% placement rate, and research in another Seattle community found a 16% placement rate. Oakland, which has been investing in tiny homes since 2017, has reported a placement rate as high as 60% and some places have offered a range as large as 27% to 65%.

For comparison, 20% of those participating in California’s Project Roomkey - which converted 15,000 hotel and motel rooms into transitional housing for the homeless - transitioned into permanent housing. In summary, it appears that tiny homes may be at least as good as other interventions in getting people into permanent housing, but given the lack of compelling data, it’s too early to tell. 

There aren’t good places to locate these shelters

There are also tactical challenges to tiny home villages. The main one is where to put them. As with group shelters, housed individuals are rarely eager to see a tiny home community spring up next to them. 

One developer of tiny homes describes how significant the resistance can be:

“Each and every time we open the shelter, we get death threats, we get protested. So often they want to blame the homeless for the situation they find themselves in.” 

Designers of such villages and structures recognize this challenge too and go out of their way to make these communities more palatable to neighboring residents:

“It’s really important through our work as architects and planners to destigmatize these types of projects so that the neighborhoods are actually more accepting of them.” 

Finding space for these villages is challenging, but un- and under-used religious properties may offer at least a temporary solution to this obstacle. A 2020 Berkeley study found that ~38,800 acres of religious land in California - roughly the size of Stockton - have the potential to be turned into housing.

The conversion isn’t simple. Even if faith-based organizations are interested in repurposing their properties for the homeless, their neighbors are typically not as supportive of their altruism. However, organizations like Firm Foundation Community Housing are springing up to help faith-based organizations set up their own villages and having some success around the state.

My Assessment

Let’s start with what we can say with reasonable confidence. Tiny homes are a cost-effective, time-efficient option for temporarily housing people living on the street which tend to lead to permanent housing at roughly the same rate or better than other interventions. 

But these points are moot if tiny homes do not represent humane living conditions. Are 60-square-foot barebone shelters without bathrooms the most humane housing situation? No. But the better question is: Are they more humane than living in tents on a street or under an overpass? Based on demand and usage to date, the answer unsheltered individuals seem to offer us is yes. 

If we accept that we won’t be able to get everyone into permanent housing at all times (which we should for the foreseeable future since as far back as 2013, there were only 30 affordable apartments available for every 100 renters of extremely low income), then we are left with a choice between leaving people on the streets and inviting them to live in tiny homes or congregate shelters. This is an easy choice in my mind. Tiny homes beat the street and congregate shelters.

However, you could argue that it’s worth leaving people on the streets to accelerate the construction of permanent housing. For this argument to be compelling, your savings from foregoing tiny home construction would have to fund a significant number of permanent housing units - and the time it would take to get to a sufficient supply of permanent housing would have to be reasonably short. Given the cost differential between tiny homes and permanent units and the size of the current shortage in permanent housing, a portfolio approach that makes investments in both seems superior. 

That said, the twin challenges of location (where to put them) and management (how to keep them from ending up like the tent encampments) are not something to dismiss easily. Localities will need to make tough and smart decisions in order for the tiny home villages to be successful - but it appears that this is possible.

We should continue to invest in micro-shelters as part of the solution to homelessness - and simultaneously invest in long-term housing options and research that evaluate tiny homes’ success in getting people into long-term housing.

Conversation

Have an additional case either for or against micro-shelters? Arrive at a different conclusion? Have a question? Email us to let us know and we’ll update the article if appropriate.

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