One of the major issues facing the returning legislature will be influenced by the wildfires that currently are consuming too much of California. The legislature is set to determine the extent of liability for utility companies when the company equipment is responsible for some fires. While Gov. Jerry Brown tries to find a diplomatic balance to offer some form of protection to both utilities and property owners, the still burning devastating fires could well determine the outcome and possibly involve taxpayers in the solution of confronting fires’ costs.
Brown seeks a compromise that would prevent extensive liability payments from forcing shareholder supported utility companies into bankruptcy. “My goal was to try to find a reasonable balance that would reward players, including utilities, for doing the right thing, but make them liable when they didn’t take the steps that commonsense and prudence would warrant,” Brown said.
The governor’s idea brought opposition from insurers who are afraid they would be on the hook if utilities don’t carry the burden if the utilities are not required to pay for destructive fires they are responsible in staring. Consumer groups and trial attorneys also want to keep utilities as the responsible actors in fire situations.
Under current law utilities are responsible if fires occur on private property in which a company’s equipment was involved with the fire. Brown wants to create a standard of “reasonable action” by a utility to prevent fire. If utilities took such reasonable action, they would no longer be totally responsible for any resulting fire damage as they are under the current standard of “strict liability.” Brown’s goal is to find a balance.
However, the fires that are searing California add another dimension to the debate.
One issue is how to pay for battling all the fires that are currently raging and confronting the need to pay for future fires that many in the legislature, including the governor, believe could come because of climate change.
The current situation takes me back 25 years to a ballot measure in a state special election. Proposition 172 was a permanent one-half percent sales tax for local public safety, including fire protection.
Campaigns for each side battled over whether a half-cent sales tax should expire as promised or made permanent and set aside for the purpose of public safety.
Then the fires came right before the election.
You are not supposed to quote yourself when making a point, but in researching Proposition 172 I was surprised to find a paragraph that I wrote published on the Ballotpedia website explaining the success of Prop 172 in 1993 special election. Here it is:
“Outside events can influence the outcome of elections. In 1993, during a special election, a half-cent state sales tax that was about to expire was put on the ballot to be made permanent, if the voters agreed. The tax was dedicated to local public safety, including fire protection. Right before Election Day, devastating fires broke out around Southern California. The blazes consumed over 1,000 structures. Laguna Beach was hit hard as was Sierra Madre and Malibu. Ten days went by from the start of the first fire until the last one was extinguished – a period that extended beyond Election Day. While seven measures were on the 1993 special election ballot, only two passed, including the tax measure with nearly 58% of the vote.”
No question in my mind that the fires raging at the time helped convince voters to pass Proposition 172.
Likewise, I expect the fires burning now will be on the minds of lawmakers when they decide how to face cost and liability issues with the fires scorching California.
And, perhaps, once again, taxpayers could find themselves as part of the fix.