Titan campaign a lesson in how to raise $270 million in 7 years

• March 31, 2023

By Nicole Gregory, contributing writer

The seven-year “It Takes a Titan Campaign” has concluded, raising more than $270 million dollars that will benefit current and future students for generations to come.

In a webinar presentation on March 10, Ellen Treanor, associate vice president for Strategic Communications, spoke with Greg Saks, vice president for University Advancement and executive director of the Cal State Fullerton Philanthropic Foundation, about the stages of this campaign and the hard work and happy surprises that went into raising this large sum of money.

“It Takes a Titan” was Cal State Fullerton’s first-ever comprehensive campaign, meaning it was intended to raise money for several goals, rather than one specific goal as in, for instance, a capital campaign for the construction of a building. “We found through this campaign an incredible eagerness to help our students and campus reach new heights of success. Supporting students has dividends beyond the classroom and Orange County,” Saks said.

He and his development team focused on key priorities. “One is academic innovation,” he said. “We want to make sure our faculty have all the tools they need, including funds for professional development for faculty and research funds for faculty-student collaboration.”

Second, Saks said, was student empowerment. “We want to eliminate barriers to student success,” he said. This might include funding for scholarships or tackling food insecurity.

The third priority was campus transformation — physical improvements for the campus such as the new baseball/softball complex. And fourth is community enrichment, supporting such efforts as the Center for Healthy Neighborhoods.

The first stage of the campaign involved assessments and planning. “It was our first time embarking on an ambitious fundraising effort,” Saks said. He and his team looked at data and the needs of the Cal State Fullerton community. “We asked what we could raise.” A working goal was put at $175 million. It was a stretch, Saks admitted, “but a reasonable stretch.”

“We also looked beyond our advancement staff and asked, ‘Who wants to help us tell the world about how important this campaign is for Cal State Fullerton?’” he said. “By the end, we had over 140 staff, faculty, administrators, students, alumni, parents and other stakeholders who served as campaign ambassadors.”

Next came the leadership phase — identifying campus groups and organizations that could lead the way with significant investments.

“So many times, I was blown away by the generosity (of groups)” Saks said, and in particular the Cal State Fullerton Philanthropic Foundation. “The board wanted to be a lead donor at the $10 million mark.” This goal was met in six months. “They said, ‘Let’s grow this goal to $12 million’ — and they met that goal again,” Saks said. “So, they said ‘Let’s go with a goal of $15 million.’ This was reached as well.”

Greg Saks, vice president for University Advancement, talks about the fundraising campaign to a group of potential donors. (Courtesy of CSUF News Media Services)

At that point, the campaign was ready for its official launch. “This is a crucial time in a campaign, when you declare to the world your goals,” Saks said. During the launch event in February 2020, the Nicholas and Lee Begovich $10 million gift was announced. This put the campaign at 63% of its goal at the official launch. President Fram Virjee then bumped the campaign goal to $200 million.

But then the COVID-19 pandemic disrupted the world, and the “It Takes A Titan” campaign had to pivot its efforts. “We focused on virtual engagement,” Saks said. Many students lost their jobs because of the pandemic, and meeting basic needs suddenly became difficult. The college community raised $600,000 to help students get through this time.

Work on the campaign continued through the pandemic and by spring 2021, it had reached 90% of the goal.

Then came an unexpected surprise. The university was chosen as a recipient of an unrestricted gift of $40 million from MacKenzie Scott and Dan Jewett. “It really validates the work that happens at Cal State Fullerton every day,” Saks said. “Here is one of the most sophisticated philanthropists in the world. I am proud of that level of recognition,” he said.

This large gift gave Saks and others the chance to rethink the campaign goal once again. “We went to $250 million,” he said. And that still wasn’t the end.

“Due to the amazing generosity and incredible work of our development team and advancement team, the alumni engagement officers, our incredible deans and cabinet of the university, and all our faculty and staff, we continued that progress,” Saks said. As of Dec. 31, when the campaign officially ended, $270,270,777 had been raised.

Saks can’t stop expressing his admiration for the individuals and groups that stepped up to make this campaign a success. “It was really the generosity of our donors and the incredible work of our campus stakeholders who were willing to tell the story of Cal State Fullerton that helped us reach so many milestones.”

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Consumer poll: mortgage rates could hit 8.8%

• March 31, 2023

By Ben Geier

Buying a home is always nerve-racking, but those looking purchase right now have even more reasons to fret: the Federal Reserve has been raising interest rates steadily for more than a year, meaning that those looking to get a mortgage are likely looking at a rate they aren’t going to like. The Federal Reserve Bank of New York just published the results of the 2023 edition of the Survey of Consumer Expectations Housing Survey, giving a snapshot of the housing market and how consumers are faring in it.

For help figuring out whether the time is right for you to buy a home, consider matching for free with a vetted financial advisor.

Among the most striking findings from the survey is that Americans have tempered their hopes for how much the value of their home will grow over the next year, dipping to 2.6% from 7%. Not only is that a precipitous drop, but it’s actually the lowest home price growth expectations recorded since this survey began in 2014.

Just over 68% of respondents felt that buying property in their zip code was either a “very good” or “somewhat good” investment, which is slightly below the numbers for the past few years but still above the optimism levels pre-pandemic.

Potential homebuyers don’t think they’ll be getting a good mortgage rate in the coming years. People expect mortgage rates to rise to 8.4% in a year and to 8.8% in three years.

The dream of owning a home still feels difficult for those that are currently renting, though, with respondents who rent placing their probability of owning a home at 44.4% on average – a slight uptick from 2022 but still below the rates of above 50% reported between 2015 and 2021.

With all this in mind, many people may be wondering if now is a good time to buy a home. The answer, as with most financial queries, is that it depends on your situation.

Clearly, mortgage rates are high right now. That generally isn’t a sign that it’s a great market for home buyers. If, like many people in this study, you think mortgage rates are going to continue to rise, it could make sense to lock in a relatively favorable rate now.

It also depends on the strength of the market where you live. If you’re wondering if you’re in a good position to buy a home, consider consulting with a financial advisor.

A recent study from the Federal Reserve Bank of New York shows that Americans think mortgages are going to keep going up while they’ve tempered their expectations of the increase in home values. Renters, meanwhile, are less sure than in recent years that they’ll be able to purchase their own place someday.

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Mortgage rates fall 3rd week in a row

• March 31, 2023

Homebuyers saw another week of falling mortgage rates, with the average rate dropping last week for the third week in a row, according to data from Freddie Mac released Thursday.

The 30-year fixed-rate mortgage averaged 6.32% in the week ending March 30, down from 6.42% the week before. A year ago, the 30-year fixed-rate was 4.67%.

“Economic uncertainty continues to bring mortgage rates down,” said Sam Khater, Freddie Mac’s chief economist. “Over the last several weeks, declining rates have brought borrowers back to the market but, as the spring homebuying season gets underway, low inventory remains a key challenge for prospective buyers.”

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

Fed’s recent rate hike

After hitting a 2022 high of 7.08% in November, rates started 2023 trending down. However, they climbed again in February, after robust economic data suggested the Federal Reserve was not done in its battle to cool the US economy and would likely continue hiking its benchmark lending rate.

Last week the Federal Reserve did raise interest rates — by a quarter point — in an effort to continue to fight stubbornly high inflation while taking into account recent risks to financial stability.

“As the dust settled after last week’s FOMC meeting, markets adjusted to the short- and long-term implications of higher interest rates and the possibility of stricter lending requirements, along with a possible end to rate hikes on the horizon,” said Hannah Jones, economic data analyst at Realtor.com.

The Fed does not set the interest rates that borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasury bonds, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.

The banking turmoil may do some of the Fed’s work of cooling inflation for it.

“These factors create a less hospitable borrowing environment, which would serve to bring inflation closer to a healthy level,” Jones said. “More expensive, stricter lending helps to usher in the long-term health of the economy, but the downside is that borrowing for large purchases, including a home purchase, may be relatively more challenging in the short term.”

Improvements in affordability

Potential buyers still face elevated mortgage rates and home prices, making buying less accessible than a year ago, said Jones.

In good news for buyers, home prices show continued signs of not climbing so fast or even dropping in some areas.

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“Pent-up housing demand is evident with every gain in affordability, whether it be softening prices or lower mortgage rates,” said Jones. “As the prime spring buying season takes off, buyers will be looking for well-priced, ready-to-move-in homes.”

Buyers continue to be very sensitive to mortgage rates and are expected to eye any more dips this spring as an opportunity.

“The mortgage market has seen a partial revival in March, with the recent decline in mortgage rates boosting borrower demand,” said Bob Broeksmit CEO of the Mortgage Bankers Association.

While applications for home purchases and refinances are still well below levels from a year ago, both have increased for four consecutive weeks, according to MBA.

“New and existing supply is still low, but lower mortgage rates and slower home-price growth have improved buyers’ purchasing power this spring,” he said.

​ Orange County Register 

What are the financial ‘crash’ dangers?

• March 31, 2023

More US banking turmoil, wider economic fallout, the Federal Reserve losing its inflation focus and even a “financial crash” are among a panoply of dangers troubling economists gathering by Lake Como.

“Very, very pessimist,” is how Valerio De Molli, host of the meeting in Italy on Friday, described sentiment among leading observers about prospects for the world after turbulence that tested monetary officials’ nerves from Washington to Frankfurt. Nouriel Roubini, chairman of Roubini Macro Associates, articulated the gloom.

“We’re entering a recession and financial instability having to raise interest rates because the inflation is too high, so we get inconsistency and a trilemma: We cannot achieve price stability, maintain economic growth, have financial stability at the same time,” he told Bloomberg Television. “So eventually we’ll have an economic and financial crash.”

That comment — from a man with a track record of predicting doom — was admittedly the most alarmist observation on threats persisting to the global economy and financial markets after rising interest rates, deposit flight and investor alarm provoked the demise of Silicon Valley Bank, Signature Bank and Silvergate Capital Corp.

Arguably more dangerously, it led to the downfall of a globally systemic institution, Credit Suisse Group AG. While the European House-Ambrosetti meeting in Cernobbio is just a short walk away from Switzerland, where that drama recently unfolded, menaces further afield within the US banking system concerned participants most.

“You always have to worry about what evil lurks around the corner,” said Ellen Zentner, chief US economist at Morgan Stanley. “With financial plumbing, you just don’t know.”

For her, risks in the shadow banking system are one concern because it’s “very difficult to understand the size of it.” Zentner also highlighted stress around commercial real estate that might impact US regional banks already nursing large mortgage portfolios.

“You might have a sort of a random report of a large office property owner just turning in the keys,” she said. “That can start to snowball with concerns about what other losing properties are out there that the banks might have to absorb onto their balance sheets.”

Meanwhile lingering doubts surrounding deposits in such institutions are what trouble Gene Frieda, global strategist at Pimco. He said even an “implicit guarantee” that policymakers have effectively offered isn’t enough to stop stress.

“It doesn’t seem like the US has fully gotten a handle on the uncertainty around bank deposits and bank depositors, uninsured deposits, and as a result I think everyone is on heightened alert,” he said. “We think the risks are sufficiently high that you do want to play it quite safe.”

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One vulnerability revealed by the UK bond market crisis of 2022 and by the SVB failure was how bonds no longer serve a traditional role as a safe asset, he said, warning that more such instances may follow.

By contrast, Mohamed El-Erian, chief economic adviser at Allianz and a Bloomberg Opinion contributor, offered more sanguine views on the banking episode. But he has other concerns instead.

“Banking is based on trust and if trust goes out the window, bad things happen,” El-Erian said, adding that “economic contagion” is what will now follow. “I actually worry less about a banking crisis, as much as I worry about the consequences of what we’ve already seen,” he added.

The problem for many participants is that turmoil presents new problems when existing ones remain unresolved, as Roubini explained. Despite the backdrop, the Fed and its global peers can’t afford to forget their inflation mandates, Pimco’s Frieda said.

“I don’t envy them the task,” he told Bloomberg Television. “We’ve got a two-front war between inflation and financial instability, and the Fed needs to keep its eye on the inflation prize.”

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HOA Homefront: 7 tips before the balcony inspection deadline

• March 31, 2023

On June 16, 2015, a fifth-floor balcony at a Berkely apartment building collapsed, killing seven people, allegedly due to weakening by severe dry rot.

Three years later, the state of California adopted Senate Bill 721, requiring owners of multi-unit residential buildings to obtain architect or structural engineer inspections of above-ground “exterior elevated elements” by 2025 and every six years thereafter.

The passage of SB 326 in 2019 imposed essentially the same requirements on HOAs with a deadline of 2025, except with a repetition requirement of every nine years instead of six. The new law is found in the Davis-Stirling Act at Civil Code Section 5551.

Unfortunately, many contracts presented to HOAs reflect misunderstandings of the statute’s requirements and propose more work (and expense) than required by the law.

Here are seven tips to help understand your HOA’s inspection contract to ensure your HOA is not paying for unnecessary costs.

1. The statute applies only to areas under HOA responsibility for maintenance or repair (5551((b)(1). If it’s not the HOA’s responsibility, it does not fall under the inspection requirement.

Many planned developments do not fall under the requirement, since they typically do not maintain or repair residence balconies, elevated walkways or stairs. Some townhouse style (side-to-side residences, no stacked homes) condominium associations are amending their CC&Rs to shift maintenance of second-floor balconies to the individual unit owners, taking the HOA out of the inspection requirement for those balconies.

2. The statute does not apply to all elevated elements but only to load-bearing components supported wholly or partly by wood or wood-based products (5551(a)(3)). Make sure that your HOA is not paying to inspect steel elements.

3. An “exterior elevated element” is a component extending beyond the exterior building walls that has a walking surface over 6 feet above ground level.

A deck on top of the building, garage or part of the main residence may be excluded, as only parts extending beyond the exterior building walls are included per 5551(a)(3).

Many associations have balcony patios that are partially within the main structure of the building or walkways, which are part of the main building structure, or other areas that do not protrude from the main building.

4. The statute requires inspecting enough locations to provide a 95% level of confidence that the sample represents the entire building. Some contracts propose to inspect 95% of the locations in a building, which in medium or larger-sized buildings may be overkill.

The statute doesn’t say how to achieve the 95% level of confidence – it might be the judgment and experience of the inspecting architect or engineer, or perhaps a formal statistical sampling calculation. The more locations in the HOA, the less percentage of the locations need to be inspected to gain a statistically valid sampling.

5. The required inspection is visual, not destructive, per 5551(a)(5). Inspectors need not tear open balconies or stairways (destructive inspection). Using moisture meters, infrared sensors, or boroscopes will satisfy the law.

6. When choosing the architect or engineer, consider contracting for only the inspection. Be wary of companies proposing to inspect and then design and perform the work all in one contract.

7. Don’t wait until the last quarter of 2024 to pursue this inspection.

Kelly G. Richardson, Esq. is a Fellow of the College of Community Association Lawyers and Partner of Richardson Ober LLP, a California law firm known for community association expertise. Submit column questions to [email protected].

​ Orange County Register 

Remember the great Walter E. Williams

• March 31, 2023

Walter Edward Williams, one of the world’s greatest champions of personal and economic liberty, was born on this date 86 years ago. His life and ideas will never be forgotten.

Born in Philadelphia on March 21, 1936, and raised in the Richard Allen housing projects, Williams never allowed himself to be a victim of his circumstances.

Williams believed in the value of hard work and the fundamental promise of America, despite the challenges particularly facing Black Americans in his early life.

After being drafted into the military, Williams penned a letter to President John F. Kennedy in 1963 calling out the rampant racism of the times and in the military itself.

“Should Negroes be relieved of their service obligation or continue defending and dying for empty promises of freedom and equality?” he wrote. “Or should we demand human rights as our Founding Fathers did at the risk of being called extremists? … I contend that we relieve ourselves of oppression in a manner that is in keeping with the great heritage of our nation.”

Williams devoted the more than half century that followed that letter pushing America to live up to the standards of the Declaration of Independence and the Constitution.

After receiving his bachelor’s degree in economics at California State University, Los Angeles and ultimately his doctorate in economics from the UCLA, Williams went on to become a longtime professor of economics at George Mason University. He taught there until his death on Dec. 1, 2020.

His first book, “The State Against Blacks,” published in 1982, is as relevant as ever.

In it, he presents his case that, although racial discrimination and bigotry certainly exist, “it is the ‘rules of the game’ that account for many of the economic handicaps faced by Blacks. The rules of the game are the many federal, state and local laws that regulate economic activity.”

Overregulation by the government, including laws like occupational and business licensing, zoning regulations and the minimum wage, Williams argued, “systematically discriminate against the employment and advancement of people who are outsiders, latecomers and poor in resources.”

The solution to these systematic barriers, Williams concludes, was to repeal such “antipeople” laws and unleash the power of the market to maximize opportunities for all people.

Although it is fashionable among younger people to condemn and demonize capitalism, Williams understood that capitalism is the greatest means for liberating people from poverty known to man.

“Prior to capitalism, the way people amassed great wealth was by looting, plundering and enslaving their fellow man,” he said.

“Capitalism made it possible to become wealthy by serving your fellow man.”

At the core of Williams’ views of the world is the notion of self-ownership, the principle that every individual owns themselves.

“I am my private property, and you are yours,” he wrote. Illegitimate, coercive and involuntary intrusions on individuals, he argued, are fundamentally immoral. Whether it’s a criminal assaulting you physically or the state dictating what you can or can’t do with our own life, Williams always put the dignity and integrity of the individual first and foremost.

If those on the left and right dreaming up their own respective ways to use government to control others could do the same.

There will only be one Walter E. Williams. His ideas must endure for the sake of liberty.

A version of this editorial was published in December 2020.

​ Orange County Register 

With complaints about growing homeless presence, San Clemente council looks at enforcement options

• March 31, 2023

To address public safety and nuisance issues, San Clemente leaders say they are looking for a broader approach to enforcing the city laws among a growing homeless population congregating at its beaches and in canyons, around the downtown and at RV parks.

The City Council looked at hiring a private security firm to establish a more visible presence as a deterrent to bad behavior being reported at North Beach, including at the Metrolink train station platforms and the trailhead leading to the popular beach trail.

Councilmembers said they’ve become increasingly concerned by reports from residents of illegal activity happening on public property. Complaints have included alcohol and drug use, smoking, littering and indecent public exposure, they said, especially in the beach area and along streets in San Clemente’s downtown. A host of complaints have also been lodged about illegal parking in some of the towns’ camping and RV areas and in neighborhoods between Avenida de la Estrella and Avenida Calafia, officials said.

Councilmember Gene James prompted a last-minute meeting to discuss hiring the security firm, but some of his colleagues were more interested in seeing what the Orange County Sheriff’s Department, which the city contracts with for police services, could do, along with adding more city resources such as code enforcement officers and rangers while still looking at private security contractors and possible bids for their services. City staffers will be getting back to the council with options at its April 18 meeting.

Julie Crandall, who said she represented the group Disability Rights of California, told councilmembers using a security agency and “targeted enforcement will hurt unhoused people, many of whom are disabled. This proposal hurts San Clemente and subjects them to targeted discrimination.”

James is proposing a 60-day trial period using Gatekeeper Security Services, which he said the city of Oceanside has used with success, to patrol the impacted areas and supplement what the Sheriff’s Department can’t devote time to, he said.

Gatekeepers would charge about $130,000 per month for its services, including four people on patrol at all times. A San Clemente resident operates the company.

“Our primary purpose is public safety,” James said. “There are certain standards by which you expect to live. Defecation on the sidewalk and urinating on the street are not part of these standards.”

James said he has been working with Rick Loeffler, chair of the city’s Public Safety Committee, to develop solutions. He’s also spoken with residents of the North Beach area and listened to their concerns.

“There is a significant gap in services between what the Sheriff does and what needs to be done,” James said. “We’re looking at a low-cost solution, hiring security officers is a low-cost solution. Many have aspired to live in San Clemente. You save money, work hard and arrive here because it’s a special place. We need to keep San Clemente special.”

Loeffler, who said he went as a resident, toured Oceanside in December with James to look at what the security contractor had accomplished there.

“I do think they’d be effective,” said Loeffler, who has 37 years of law enforcement experience. “This wouldn’t be an alternative to OCSD, they do a great job, but they can’t allocate people to go to a specific place and stay there for several hours.”

Loeffler said the difference in Oceanside was apparent and he believes “simply providing a presence” is a deterrent.

“They are trained about engagement and serve as an ambassador,” Loeffler said, adding that many of the company’s employees are military veterans or those still on active duty.

According to the county’s most recent point-in-time count, there are about 100 people considered homeless in San Clemente.

In 2019, as the number of people creating makeshift shelters at North Beach and the train station grew, the council approved an ordinance prohibiting camping on public property, but designated a city-owned parking lot not far from North Beach for people to use. It was later closed to camping.

Since then, problems with city code violations have ebbed and flowed, said Mayor Chris Duncan, who said he thought there was a lack of “real specifics about the security firm” proposal.

“We did not have a lot of time to vet the company,” he said. “It made sense to take a step back and do a thorough review where staff presents options to us to improve the quality of life for our residents.”

Duncan agreed there is urgency in getting the issues under control, and the council is aligned on addressing residents’ concerns, especially as summer approaches and more people make use of the city’s beaches and trail and visit the downtown.

“It’s a big problem,” Duncan said. “People don’t feel safe and their general quality of life has been affected. In the last few years, it’s gotten worse.”

Duncan said a comprehensive approach is needed to address issues on a “global level and not just push it from one place to the other.”

“Let’s increase funding for OCSD and increase funding to the staff so we are in a position to address this in a comprehensive way,” he said. “My default – if we’re spending money – is do it with people who are in a position of authority.”

“This is about enforcing laws and codes, it’s not about homeless people,” he said. “It’s making sure everyone and everybody is safe. This is a serious situation.”

James said he doesn’t expect to be dissuaded from his idea of the 60-day trial with Gatekeepers and he believes city staff will come to the same conclusion that this is a unique service not readily found.

“No security company has taken on this as a specialty,” Loeffler said. “It’s unique.”

Kathy Esfahani, chair of the San Clemente Affordable Housing Coalition, who said she lives just above North Beach, called the effort for increasing enforcement a “manufactured emergency” and criticized the council for not looking at other solutions.

“The really bad part was no council member said the solution we need is shelter or housing or safe parking,” she said. “The only identified solution was more law enforcement.”

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We shouldn’t shrug at Legislature’s attacks on Big Oil

• March 31, 2023

SACRAMENTO – Novelist Ayn Rand’s tales about the havoc that assorted government planners and “looters” wreak on society are a bit turgid and overwrought for my tastes, but I enjoy re-reading the conclusion of Atlas Shrugged. After bureaucrats tighten their control over the economy, entrepreneurs quietly exit society. The entire socialist edifice comes crashing down – quite spectacularly, with the collapse of the economically crucial Taggart Bridge.

If you haven’t read the book, I recommend Cliff Notes. It will spare slogging through John Galt’s 60-page radio speech. Or skip the voluminous book altogether and watch the state of California. The latest data shows that wealthy people – the ones who fund our highly progressive, capital-gains-dependent budget – have now joined the exodus. “Perhaps most striking, California is now losing higher-income households,” the Public Policy Institute of California recently reported.

Lower- and middle-income earners have long been fleeing to states where they can afford a house or operate a small business without having to deal with our meddlesome planners. High earners have largely stayed put given they can afford the costs. But the great climate and scenery only go so far. Anyone who watched a Capitol press conferencethis week might head to Galt’s Gulch (where Rand’s entrepreneurs fled) – or look for a Realtor in Idaho or Texas.

On Monday, Gov. Gavin Newsom signed a new gas-price “accountability” measure that lawmakers rushed through the Legislature. Flanked by lawmakers and Attorney General Rob Bonta, Newsom vowed to end price gouging by the nation’s oil companies: “California took on Big Oil and won. We’re not only protecting families, we’re also loosening the vice grip Big Oil had on our politics for the last 100 years.”

Specifically, the legislation, authored by Sen. Nancy Skinner, D-Berkeley, grants the California Energy Commission broad new powers to monitor gasoline pricing. It requires oil companies to provide extensive new supply chain data. The law lets bureaucrats determine the proper profit margins for oil companies and “establish a penalty for exceeding the maximum gross gasoline refining margin.”

Newsom originally conceived of a windfall-profits tax – similar to the disastrous policy President Jimmy Carter implemented. That tax slowed domestic oil production and made the United States increasingly dependent on imports from the Middle East. The final California law doesn’t repeat that stupidity, but it imposes new costs on oil companies and will discourage oil production and lead to higher gas prices.

Consider the official support argument offered from a coalition of environmental and social-justice groups. They argued the law will help the state “plan for and monitor progress toward the … transition away from petroleum fuels.” It’s part of a push to drive away the oil industry, which will – by design – reduce oil production. Leave it to California lawmakers to address high gas prices by purposefully reducing supply and increasing them further.

California does indeed have the highest gasoline prices in the nation. Those prices have fallen quite a bit in recent months to $4.82 a gallon. That’s still $1.38 a gallon higher than the national average – and $1.70 a gallon higher than in Texas. Oil companies are national operations, so a normal person might wonder why those companies are so much greedier in California than they are elsewhere.

The answer isn’t hard to find. For starters, California has the highest gas taxes in the nation. (We also get the least bang for our buck given the state of our freeways, but that’s a separate issue.) Those higher taxes instantly make our gasoline 48 cents a gallon higher than in Texas. There’s still a pricing gap, but despite officials’ blathering about a “mystery gas surcharge” here in California it’s not a mystery at all.

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“California’s tough environmental rules mandate that gasoline sold within the state be produced according to strict formulas that reduce pollution,” per a Los Angeles Times analysis. “But the gas is more expensive and difficult to produce than dirtier fuel sold elsewhere. Few refineries outside the state are equipped to produce it.” The report adds the number of California refineries is plummeting and our state has no interstate pipelines, thus forcing us to rely on costlier forms of transportation.

All of those supply-restricting measures are the direct result of public policy choices. Our state has chosen to require that special formulation. California has declared as one of its prime climate-change priorities ending the state’s reliance on fossil fuels. If you were an oil company, would you invest in new capacity in a state that wants you to leave? Regulators would never allow interstate pipelines.

California’s progressive leaders have imposed the policies that led to our high gas prices. Instead of doing anything about them, they are bloviating about price gouging. I don’t know whether many oil executives are fans of Rand, but I wouldn’t blame them for quietly pulling out of California and watching our economic edifice collapse from their homes in Houston.

Steven Greenhut is Western region director for the R Street Institute and a member of the Southern California News Group editorial board. Write to him at [email protected].

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