Columns

Today’s items: Further efforts to save PACE programs and Berkeley’s leading edge approach to marijuana regulation. 

Ten Square Miles of Influence 

Berkeley has a strange way of influencing legislation and politics throughout the state and around the nation, but not always as it might intend. In the 1970s, for example, Berkeley passed one of the strongest rent control ordinances in the nation only to see significant provisions of it overturned by the 1995 Costa-Hawkins act at the state level. Another example: when Berkeley City Council admonished the US Marine Corp for recruiting downtown, howls of outrage were raised around the nation among military hawks, setting off ridicule on the Internet that persists to this day. 

This is not say that Berkeley was right or wrong in either action, only that consequences can be hard to predict or control. 

Currently, two other initiatives from Berkeley are taking on national significance. First, there are the woes and troubles of the PACE programs (“Property Assessed Clean Energy”) that sprung up around the nation after originating in Berkeley City Hall. Second, there is an odd emerging conservative reaction against the Berkeley marijuana initiative upcoming on the November ballot, not because it liberalizes pot—but because it restrains trade. 

PACE-saving Legislation Introduced 

Congressman Mike Thompson (D-CA) has introduced new legislation which, if passed, would conceivably rescue PACE programs. Interestingly, he thinks PACE should be saved by some other means. 

PACE programs, invented in Berkeley, allow a municipality to finance the up-front costs of energy efficiency improvements to residences and commercial structures. In exchange, property taxes on the improved structures go up for a time. After starting in Berkeley, PACE programs spread rapidly throughout the state and to many other states. Recently, as earlier reported in the Berkeley Daily Planet, mortgage giants Fannie Mae and Freddie Mac and the Federal Housing Finance Authority forced the suspension of nearly all PACE programs around the country. In response, Attorney General Edmund G. Brown Jr. filed a suit in federal court in an attempt to force a reversal of those actions. 

Thompson, with 29 Democratic co-sponsors, introduced the “PACE Assessment Protection Act of 2010”. The act would “order lenders to adopt standards that support Property Assessed Clean Energy (PACE) programs, rather than stymie green energy efforts,” according to a press release from Thompson’s office.  

The legislative attempt to save PACE comes alongside Brown’s lawsuit and yet there is something odd about both attempts: neither Brown nor Thompson regard their efforts as the desired solution. 

Thompson told the environmental issues blog grist.org, “"I think we can do this without legislation, and I think we should do it without legislation. PACE does everything from reducing greenhouse-gas emissions to creating jobs to reduce our reliance on traditionally generated energy. This is something that needs to continue. There are hundreds of jobs that have been created by this program." 

Brown, similarly, in his letter to President Obama, wrote “I reluctantly filed a lawsuit against these federal entities, but it would be much better to solve this problem without litigation.”  

These are hardly the words of a legislator and an Attorney General who are confident in the success of their attempts to save PACE programs. Perhaps this is because PACE programs have been questioned on both federal and (in multiple states) constitutional grounds.  

For example, as PACE programs took root in New York, government news site “The Capital” reported “Gov. David Paterson’s administration expressed strong concerns that allowing the state and counties to issue PACE bonds would violate a provision in the state constitution that bars public money from going to someone’s private benefit—in this case, the benefit being the reduced utility bills of homeowners.” State constitutional concerns have been raised in Georgia, California, and Washington as well. Additionally, there are concerns that PACE programs violate a provision in the federal Constitution forbidding legislative alteration of contracts.  

PACE advocates have argued that, at least in California and the federal level, PACE programs don’t violate the constitution. If they are mistaken, however, neither Brown’s lawsuit nor Thompson’s proposed legislation can prevail. 

Pot Protectionism? 

Berkeley’s upcoming referendum on revised medical marijuana ordinances is widely regarded as a liberalization of the law. Similarly, the upcoming Prop. 19 legalization issue on the state ballot. Not everyone sees it that way, though. For some, what is at stake is a restraint of trade. Some are in favor, others against. 

Here are two contrasting yet compatible views to contemplate: 

The blog investingcontrarian.com blog writes: “Other cities’ government regulations could be even more severe — As in, forced redistribution of production, trade barriers, and the creation of a marijuana oligopoly: The Berkeley City Council last week approved a measure for the November ballot that would authorize the city to license and tax six pot cultivation sites. Companies running the facilities must agree to give away some pot to low-income users, employ organic gardening methods to the extent possible and offset in some way the large amount of electricity needed to grow weed. 

“Long Beach officials want to reduce the amount of medical marijuana being sold in the city that isn’t grown there.” 

Oddly enough, some marijuana businessmen don’t disagree with the analysis – they just like the trade restraints. A dispensary operator in Venice Beach, CA told Huffington Post: “Last month there were 24 operating marijuana collectives in Venice. A month from now, there will only be two. And we'll be one of them." Later, he remarked, explaining his opposition to proposition 19, “Did you know that Phillip Morris just bought 400 acres of land up in Northern California? The minute marijuana becomes legal, they'll mass produce and flood the market. And of course, they'll add the same toxins they put in regular cigarettes to get you addicted, and very little THC, so you'll have to buy more... In short, they're going to ruin weed.” 

At least they agree about something. 

Until next time, do be in touch: lord@emf.net