No Smoke Detectors – No Fire Sprinklers – No 24 Hour Security Patrol to Detect Fires Early – No Technology – No Security Cameras – Not Even a Webcam – there's More Security at a 7-Eleven – No Nothin' – No One Will Buy Your House Now Either – "Remember there's Another Hangar Too"!
CALIFORNIA (WTVO) — With California’s power grid under strain due to extreme heat and high demand, the utility grid operator is asking residents to avoid charging their electric vehicles. This comes days after the state announced a plan to ban the sale of gas-powered cars by 2035.
The California Independent System Operator is asking residents for “voluntary energy conservation” over the Labor Day weekend.
According to the National Weather Service, the western United States is facing a “prolonged and record heat wave.”
“The top three conservation actions are to set thermostats to 78 degrees or higher, avoid using large appliances and charging electric vehicles, and turn off unnecessary lights,” the American Public Power Association said, asking residents to limit energy usage during 4 p.m. and 9 p.m.
“Today, most people charge their electric cars when they come home in the evening — when electricity demand is typically at its peak,” according to Cornell University’s College of Engineering. “If left unmanaged, the power demanded from many electric vehicles charging simultaneously in the evening will amplify existing peak loads, potentially outstripping the grid’s current capacity to meet demand.”
The regulations passed by the California Air Resources Board last week say that 2035 the state will require automakers to sell only cars that run on electricity or hydrogen, though some can be plug-in hybrids that use gas and batteries. People will still be able to buy used cars that run on gas, and car companies will still sell some plug-in hybrids.
The regulation will help California meet clean air standards by cutting emissions, resulting in a 25% reduction in smog-forming emissions from passenger vehicles by 2037.
California already has the nation’s largest electric vehicle market in the country with over 1.1 million vehicles registered. That comprises 43% of the nation’s plug-in vehicles.
Today, though, there are just 80,000 public charging stations around the state, far short of the 1.2 million the state estimates it needs by 2030.
The U.S. Department of Transportation has made $5 billion in federal money available to states for EV charging stations over five years, under President Joe Biden’s infrastructure law. Under Transportation Department requirements, states must submit plans to the federal government and can begin construction by this fall if they focus first on highway routes, rather than neighborhoods and shopping centers.
The law provides an additional $2.5 billion for local grants, planned for later this year, to fill the remaining gaps in the charging network in rural areas and in disadvantaged communities.
Electric vehicles amounted to less than 3% of U.S. new auto sales last year, but forecasters expect big increases in the next decade.
In the U.S., Massachusetts, Washington, and New York are among states that have set goals to transform their car markets or have already committed to following California’s new rules.
Two California Highway Patrol vehicles and a half dozen unmarked vehicles blocked off the parking lot of Super Clinik, a licensed cannabis store in Santa Ana, just after the shop opened at 8 a.m. on the morning of March 18.
With an agent from the California Department of Tax and Fee Administration looking on, several CHP officers went inside, counted out a couple six-inch high stacks of cash and took them from the Birch Street store, according to witness reports and photos from the scene.
Super Clinik owners didn’t respond to multiple requests to speak for this story, while state tax officials said privacy laws prevent them from discussing specific cases. But experts said the operation at the Santa Ana shop had all the hallmarks of a “till tap” civil warrant, which the tax agency uses to seize cash from businesses that haven’t paid sales tax bills despite escalated warnings.
This is the second such operation reported at a longstanding, licensed cannabis shop in Southern California in the past month. In early March, a shop called TLC in Boyle Heights, owned by the well-known industry veterans Jungle Boys, also got raided by the CDTFA and CHP. The business posted video from the incident on its Instagram page, saying officers came in with guns drawn and took more than $100,000 from their cash registers after they paid $18 million in taxes in 2021.
“That’s triggering to all of us because this is what used to happen regularly,” said Dana Cisneros, an attorney who’s worked with cannabis businesses for 15 years.
For decades, law enforcement raided pot shops in California, arresting people on site and seizing goods as businesses operated in the gray space created by loose medical marijuana laws. But with recreational consumption of cannabis legal in California since 2016, and the state giving members of the fledgling industry some leeway, raids of licensed shops have been rare in recent years.
Now, the recent reports of tax raids have industry insiders wondering if state authorities are entering a tougher phase of enforcement when it comes to dealing with licensed operators.
Such an escalation was inevitable on the one hand, as the industry matured. But there’s also evidence that even as most cannabis businesses are paying their tax bills on time, the industry is a bit less likely than others to do so.
The state reports that 99% of all businesses in California pay their sales tax on time each quarter, but the pay-on-time rate for the cannabis industry is about 90%. And with nearly $309 million in tax revenue collected from cannabis businesses in the final quarter of 2021, and nearly $3.5 billion raised since taxes took effect in January 2018, that default rate means cannabis businesses owed the state more than $11 million in past-due taxes at the end of last year.
Add to that another factor — some licensed cannabis operators continue to do work in the unlicensed side of the industry.
Rob Taft, owner of 420 Central in Santa Ana, said he’s long predicted that California and other governments would eventually use tax enforcement to target potential bad actors in the cannabis industry, the way gangster Al Capone was ultimately brought down for tax evasion. In that case, rather than giving businesses leeway, Taft and others suggest the state might have been giving cannabis operators just enough rope to hang themselves.
“We’ve pretty much pounded into (our clients) that the scariest boogeyman in the scope of enforcement is the tax man,” said Hilary Bricken, a cannabis industry attorney in Los Angeles.
Taft and others in the industry said they don’t support anyone not paying their taxes. But they also say there couldn’t be a worse time for the state to start targeting licensed businesses in such a forceful way.
Just 26% of California’s cannabis businesses are turning a profit, according to a January report from the Portland-based data firm Whitney Economics. That’s well below the national average of 42%. Among the 17% of operators who are only breaking even, and the 56% who are losing money, some anecdotally are talking about either leaving California or going back to the illicit market where many of them got their start.
“They’re choking us out,” Taft said.
Where is the protection?
One problem is the persistent existence of the underground cannabis market. It’s tough for licensed operators to start up in California, while it’s not hard for illegal operators to stay in business. As a result, most experts believe the underground cannabis market is about twice as big as the licensed business in California.
That makes tax raids on licensed businesses — by state officials who, in theory, could be stamping out illegal operators — particularly frustrating, Cisneros said.
“I’m not saying anybody should not pay their taxes,” she said. “But where’s the enforcement to protect people who are complying with the law, or at least trying?”
The state’s Department of Cannabis Control has been reluctant in the early years of legalization to make aggressive moves even against unlicensed cannabis businesses. Leaders said they wanted to use a “carrot” rather than a “stick” approach in hopes of getting more illicit operators to move into the regulated market.
While some licensed operators have been frustrated with that approach, Bricken said she’s concerned about the chilling effect that aggressive CDTFA raids will have on efforts to convert more businesses.
“People in the illegal market will see this and it’s another reason to say, ‘Why would I ever transition?’”
The second main factor that licensed businesses say is throttling the industry is the same thing sparking the recent raids: taxes.
Sellers have been raising flags about a need for relief from industry taxes that can easily hit rates of 45%, driving up the cost consumers pay for safe, regulated products and creating a window for unlicensed operators to grab market share. In Sacramento, some lawmakers are pushing to ease cannabis taxes, but most in the industry aren’t confident that they’ll pass.
So in recent months some licensed operators have threatened to withhold their tax payments from the state and put that money into escrow accounts as a way to prove a point. But there’s no evidence that any licensed businesses have followed through on that threat, or that either of the recent CDTFA’s raids had any connection to such an effort.
In the case of Jungle Boys, the company reports it’s been appealing $60,000 in penalties and interest that CDTFA says it owes on a $130,000 tax bill. While that appeal was still pending, the company says the agency came and collected more than what they reportedly owed.
“CDTFA is coming out swinging,” Bricken said. “And they’re the perfect agency to do it because they’re nearly untouchable.”
When asked about till tap operations, agency spokeswoman Tamma Adamek pointed to a document that explains such civil warrants (which typically are executed with help from either the CHP or local police) are issued only after verbal and written collection requests have proven unsuccessful.
The policy states that CDTFA also can collect funds beyond the overdue tax fees to cover the cost of executing the till tap.
That’s why Bricken said she always advises her clients to pay whatever taxes the state says they owe up front, and then appeal to get back any funds that are rightfully theirs.
When businesses get upside down with CDTFA, she said she expects the agency will share that information with the IRS, which can invite federal attention. Reports of raids also can harm relationships with customers, vendors and financers, who already are hard to come by in an industry that’s still considered high risk.
“They are looking to make examples of people,” Bricken said. “And the bigger the target, the more influential the message.”
The CDTFA is not specifically targeting cannabis businesses, Adamek said. But till taps, she explained, do work best with cash-heavy businesses such as bars, gas stations and cannabis stores. While other industries are cash-heavy for different reasons, cannabis operators rely on cash because their product is illegal under federal law and they can struggle to get access to federally-regulated banks.
Rather than risk such drastic action by refusing to pay tax bills, Taft said he’s encouraging licensed businesses to be “good operators” and to protest California’s high cannabis taxes by joining organized efforts to bring rates down. He’s part of a group of licensed business owners that recently filed a petition, for example, asking Santa Ana to lower its local cannabis tax from 8% to 4%.
SAN RAMON, Calif. — Despite ever-tightening budgets, hefty paydays are actually becoming the norm for a lot of firefighters.
In 2015, some firefighters with the San Ramon Valley Fire District were making as much as $400,000 a year in total compensation, CBS San Francisco reports. More than half of the full-time employees at the department make more than $300,000 in total compensation a year, according to data collected by the watchdog group Transparent California.
“Does it make sense that a battalion chief in San Ramon should earn $300,000 when our governor only earns $180,000 a year in compensation?” said Jack Weir, president of the Contra Costa Taxpayers Association.
But one department said that paying out a lot of overtime is actually saving taxpayers money.
San Ramon Valley Fire Chief Paige Meyer says the $300,000 figure doesn’t tell the whole story. That number includes pension and benefits, so in reality, he says, firefighters take home about half of their total compensation.
“So, if someone makes $1, we ending up close to spending 90 cents for their pension, so that’s $1.90, roughly,” Meyer said. “And then we also have the costs of healthcare.”
Meyer said pension and healthcare obligations can mean it’s cheaper to pay a firefighter overtime instead of hiring someone new and adding an extra set of benefits costs.
“Saving can be upwards of 25 to 30 percent,” Meyer said.
Firefighters are guaranteed about 70 percent of their income after retirement in their 50s. In San Ramon, firefighters contribute close to 25 percent of their income to their pension.
Weir believes the system won’t work in the long run.
“It’s unreasonable, it’s unaffordable and most importantly, from a taxpayer’s perspective and from the perspective of the firefighters, it’s unsustainable,” Weir said.
But Meyer says San Ramon is an example of a fire district doing things right.
“We have a very sustainable system,” Meyer said. “We’re paying all of our unfunded liabilities. We’re actually one of the only agencies that I know of in the United States that pays extra money toward our unfunded liabilities in retired, medical and pension costs.”
Meyer also says a starting firefighter in San Ramon would make about $90,000 in salary alone.
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