Backers including owners of small businesses, social justice leaders and drug victim families gathered in San Francisco and Los Angeles to announce they have collected about 900,000 voter signatures, significantly more than the 546,651 required by April 23, and are turning them in to the Attorney General’s Office.

“Prop 47 achieved notable success in making California’s criminal justice system more equitable,” supporters of the proposed “Homelessness, Drug Addiction and Theft Reduction Act.”

“However, it led to unintended consequences over the past decade — repeat and often organized retail theft, inner-city store closings, and difficulty convincing people to seek drug and mental health treatment — that can only be corrected by the voters at the ballot box with modest amendments to Prop 47.”

Prop 47 was among a series of laws and initiatives over the last 15 years aimed at depopulating overcrowded California prisons and addressing social justice concerns that have since been blamed for spurring brazen retail thefts, store closures and unchecked drug addiction.

Promoted to voters as the “Safe Neighborhood and Schools Act,” Prop 47 reduced most drug possession and property crimes valued at $950 or less to misdemeanors and allowed for resentencing of those convicted of felonies for those offenses. The pitch was to stop wasting costly prison space on drug addicts and petty thieves convicted of non-violent crimes.

Backers included former San Jose and San Diego Police Chief William Lansdowne, progressive former San Francisco and now Los Angeles District Attorney George Gascon, Santa Clara County District Attorney Jeff Rosen, former Republican House Speaker Newt Gingrich, and then Lt. Gov. Gavin Newsom, now the state’s governor. Critics included most law enforcement officials like then-Alameda County District Attorney Nancy O’Malley, crime victim advocates and business organizations and then-U.S. Sen. Dianne Feinstein.

Prop 47 passed with nearly 60% voter approval. An effort to toughen up some of the penalties reduced by the law — Proposition 20 in 2020 — failed.

The impact on crime of Prop 47 continues to be furiously debated. The Public Policy Institute of California linked Prop 47 to some theft increases in 2018, and in a subsequent report found commercial shoplifting rose 28.7% from the unusually low rates of the pandemic years.

Newsom in January called for a package of new laws to crack down on retail theft while insisting Prop 47 isn’t the problem and doesn’t need to be touched. A bipartisan Assembly coalition obliged earlier this month with seven bills: AB 2943, AB 1794, AB 1972, AB 3209, AB 1779, AB 1802, AB 1960.

But supporters of the proposed November initiative say there’s no way to fix the state’s theft and drug problems without walking back parts of Prop 47. Backers of the proposed initiative include San Jose Mayor Matt Mahan, San Francisco Mayor London Breed and Sacramento County Sheriff Jim Cooper, all Democrats.

Supporters stress that the proposed initiative would amend but not repeal Prop 47. It would make a third conviction for retail theft a felony, regardless of the amount stolen. Before Prop 47, a second conviction would become a felony, but the 2014 initiative eliminated consequences for repeat offenses. The proposed measure also would add penalties for dealing fentanyl, a cheap and deadly synthetic opioid, and provide incentives for convicted addicts to seek treatment.

Cooper said the legislative bill package mostly addresses organized retail thefts, but that what he and other law enforcement officials mostly see are individual thieves stealing with impunity under Prop 47.

“The real problem is individual thieves and the lack of accountability we all got stuck with since the passage of Proposition 47,” Cooper said in a post on X on the legislative bill package.

State Sen. Josh Becker, a Menlo Park Democrat, has introduced a bill that would require insurers to consider the state’s efforts to thin flammable brush and trees as well as property owners’ steps to make their homes more fire resistant, such as covering vents and clearing vegetation. Those efforts would need to be incorporated into their risk modeling to determine coverage decisions and costs.

“What we’re seeing is that in addition to the impact of home hardening, that forest treatment is going to have a big impact on wildfire risk, and that’s not being taken into account,” Becker said. “You have to take these into consideration.”

Becker’s bill, SB 1060, comes as state officials scramble to prop up a home insurance market on the brink of collapse, with major insurers restricting coverage and refusing to renew policies in many parts of the state. The bill is scheduled for its first hearing before the Insurance Committee on April 24.

The American Property Casualty Insurance Association, which represents insurers, said that while it supports wildfire mitigation efforts such as home and community hardening, the bill “has several complicating factors to consider.”

“The California Department of Insurance already requires insurers that use risk models to take into consideration specific mitigations and provide consumers discounts,” the industry association said. “The department is also in the process of developing regulations to authorize new types of catastrophe models that factor in the risk of wildfires and mitigation efforts taken by individuals and communities. We believe the department should be allowed time to adopt these regulations.”

Becker said the proposed law wouldn’t mandate any particular discount or result, only for insurers to account for wildfire risk reduction efforts.

“The bill just requires them to do the work to collect the data,” Becker said. “If the models show these activities aren’t helpful, then we shouldn’t be spending billions of dollars on this, we should be spending it on other things.”

California suffered 14 of its 20 most destructive wildfires on record in the last 10 years, a period that included a record drought. Insured losses from those blazes totaled more than $45 billion, according to the Insurance Information Institute.

Insurers say that as wildfire risks have risen with global temperatures, California’s regulations on what they can charge consumers haven’t allowed policy premiums to keep up, forcing them to reduce their exposure by discontinuing coverage in riskier areas.

The state’s elected insurance commissioner, Ricardo Lara, has promised to overhaul regulations by the end of the year to address the industry’s top complaints. That would speed approval of rate increases, let insurers base them on catastrophe models, and pass on their costs for reinsurance, which helps them absorb catastrophic losses. Lara in exchange wants insurers to commit to covering more homes in areas at greater risk of wildfire.

Consumer advocates have argued the changes would just end up costing homeowners more without guaranteeing more coverage, pointing to other disaster stricken states like Florida.

Some California homeowners have been stung with massive increases in premiums — if not stripped of coverage altogether and forced onto the state’s last-resort FAIR Plan. That plan is a private high-risk pool that provides minimal coverage at multiple times the cost of regular policies. Many homeowners in the Santa Cruz Mountains, the North Bay and East Bay foothills have had to switch to that plan after their traditional coverage was dropped.

“This is top of mind for so many of my constituents,” Becker said. “This is affecting thousands and thousands of households.”

Becker said that it’s gotten so bad that the California Department of Forestry and Fire Protection can’t even get insurance for at least two and as many as 11 of its fire stations.

Becker said higher temperatures weren’t the only factor that fueled the state’s destructive wildfires. Vegetation management policies over the years allowed fuels to pile up in and around forests that before modern fire suppression would have burned more regularly. Those accumulated fuels, left bone-dry by the drought, drove explosive wildfires.

But California since 2017 has spent $3.7 billion on wildland fuel reduction, thinning and vegetation management, Becker said.

He points to a 2021 analysis by the Nature Conservancy and Willis Towers Watson, the world’s third-largest insurance broker, which found that applying ecological forestry practices — prescribed burns and thinning to remove smaller trees and other vegetation in overgrown forests — could lower insurance premiums 41% on average for homes. That research was based on an ecological forest restoration project in the watershed of the Placer County Water Agency in the Tahoe National Forest.

State officials in recent years also have been promoting techniques in which homeowners can reduce their property’s wildfire vulnerability by removing vegetation, wood and other combustibles near the home and cover vents with screens to keep hot embers out. Lara has told insurers they must credit homeowners on their policies for those measures, though many say they have yet to receive such benefits.

But Becker said that as these home-hardening measures get adopted across communities, it reduces overall fire risk, and that also should be reflected in the modeling insurers use in their underwriting decisions.

“We need to see a number of homes in a community (do the work) to have an impact on that model,” Becker acknowledged. “But it helps. Whether it’s cities or individuals, the people doing the work should get the reward.”

Shanahan, a lawyer with Silicon Valley connections as the ex-wife of Google co-founder Sergey Brin, said she was contacted by CBS about a letter from Khanna urging her to drop out of the race to avoid pulling votes from President Biden and helping former President Donald Trump return to the White House. She indicated that she hadn’t personally received the letter, and she posted on the social media platform X that the congressman initially encouraged her to run.

“In my conversation with Ro he congratulated me on the position and encouraged me to run, stating that every American has the right to run in this country,” Shanahan posted Tuesday. “He stated that we live in a democracy, and it was wrong for anyone to threaten me against running. Clearly, Ro has changed his stance based on pressure from the party. I hope he understands how anti-democratic it is to ask someone to step down from a race that empowers the American public to make their own decisions. I am very disappointed that he has been pressured into issuing this letter to me publicly…”

.@CBS just sent this to me:

“I have received a letter from Rep. Ro Khanna, intended for Nicole Shanahan, urging her to step down as RFK Jr.'s running mate. In the letter, Rep. Khanna warns Shanahan that supporting Kennedy could aid Trump's return to the White House and have…

— Nicole Shanahan (@NicoleShanahan) April 9, 2024

Khanna, one of the Democratic party’s leading progressives, tells a very different story: He said Shanahan phoned him for thoughts a couple days before Kennedy publicly announced she was his vice presidential pick and insisted he never encouraged her to join RFK Jr.’s campaign.

Im so grateful for your courage and grace Nicole. I have always admired RoKhanna. His flip flop here is disappointing. The party has power to bludgeon men of character into waivering.

— Robert F. Kennedy Jr (@RobertKennedyJr) April 10, 2024

In a posted response and in an interview with the Bay Area News Group on Thursday, Khanna said that while he’d indicated Shanahan had a right to run, he’d also cautioned that doing so would jeopardize issues she’s championed.

“I said she had every right to run but hoped she wouldn’t run because her climate goals would only be served by Biden winning, and her running would only take away votes from the president,” Khanna said. “I made the case to her respectfully, but said I recognize she had the right to run.”

Khanna said he later followed up with the text message that reflected their earlier conversation, and the open letter to encourage her to drop out, but that nobody from the Democratic National Committee or Biden campaign urged him to do that.

“I did that on my own,” Khanna said.

The congressman posted on social media an image of a text message to Shanahan in which he congratulated her on her selection as Kennedy’s running mate, and said “I want to be very respectful because I believe everyone has the right to run.”

“But I would hope you might consider joining the Biden efforts at some point to do and push for bold things on regenerative agriculture and climate,” Khanna’s text continued. “Let’s keep the lines of communication and dialogue open. Warmly, Ro.”

Nicole has every right to be on the ticket. My point to her both publicly and privately has been that RFK’s ticket threatens the very issues she cares about –such as climate and abortion rights and to welcome her into the Democratic Party. https://t.co/MDE15wONHU pic.twitter.com/tPzsU4IZWH

— Ro Khanna (@RoKhanna) April 9, 2024

Kennedy, the son of former Democratic New York Sen. Robert F. Kennedy, who was assassinated during a presidential bid in 1968, and nephew of former Democratic President John F. Kennedy who was assassinated in Dallas in 1963, is an environmental lawyer who also has criticized vaccine safety. At a recent campaign rally, many of the people there said he appealed to them because they feel alienated by the Biden administration and Democratic Party.

Polls have indicated a tight presidential race in November between Biden and his Republican rival Trump, but according to The Hill, Kennedy is the highest polling third-party presidential candidate since businessman Ross Perot in 1992. The RealClearPolitics national average on Wednesday put Trump at 41.9%, Biden at 40%, Kennedy at 10%, independent candidate Cornel West at 1.7% and the Green Party’s Jill Stein at 1.5%.

Khanna, who’s represented the South Bay’s 17th Congressional District since 2016, is a lawyer who aligns with the Democratic Party’s progressive wing, and co-chaired Rep. Barbara Lee’s unsuccessful U.S. Senate run.

Kennedy joined in the fray with a post that said he’d “always admired Ro Khanna” and that “his flip flop here is disappointing.”

“The party has power to bludgeon men of character into wavering,” Kennedy said.

Shanahan countered Khanna’s response Wednesday with a post calling his letter urging her to drop out “performative.”

“You have my phone number and could have called instead of going to the press,” Shanahan said.

.@RoKhanna you have my phone number and could have called instead of going to the press. This is performative. https://t.co/znc7uhrLuw https://t.co/ZSZiSAVyW5

— Nicole Shanahan (@NicoleShanahan) April 10, 2024

Newsom’s political critics — not the dining kind — pointed out the irony of a help wanted ad for a $16-an-hour busser job at a Lake Tahoe area cafe the governor founded that’s part of a hospitality group now run by his sister.

PlumpJack Cafe in the Lake Tahoe community of Olympic Valley, which posted the job ad last month for the restaurant and bar that opened in 1995, wouldn’t be subject to the state’s $20 fast-food minimum wage, which took effect April 1 for some 3,000 franchise restaurants belonging to chains with 60 or more locations nationally.

“I wonder why Gavin Newsom’s food businesses don’t pay $20/hour?” Assemblyman Joe Patterson, a Rocklin Republican, posted Tuesday on X. “It’s very, very expensive to live there… but he doesn’t do as he tells others and doesn’t pay a living wage.”

I wonder why @CAgovernor @GavinNewsom’s food businesses don’t pay $20/hour? Live job posting at $16/hr in Olympic Valley. It’s very, very expensive to live there… but he doesn’t do as he tells others and doesn’t pay a living wage. https://t.co/hwppKvQgSY pic.twitter.com/JcVDF5PrsD

— Joe Patterson (@Patterdude) April 2, 2024

The governor’s press office deferred comment to his personal spokesman, who noted the governor put PlumpJack Group, which Newsom founded as a San Francisco wine shop in 1992 and expanded into a hospitality portfolio, into a blind trust after he was elected governor in 2018.

“He has no role in any of the holdings held by the blind trust,” Newsom spokesman Nathan Click said.

But the trust has been run by a lawyer and accountant who’s a family friend, and Newsom’s sister Hilary is co-president of PlumpJack Group. The restaurant group did not respond to a request for comment. It updated its ZipRecruiter ad Wednesday to note the $16 hourly rate for the busser as well as a host job the cafe seeks to fill at the same hourly rate also would include tips.

The $20 fast-food minimum wage grew out of an ongoing labor dispute between state leaders and their organized labor allies and the restaurant industry. The state passed the FAST Recovery Act in 2022 that would establish a fast-food council empowered to raise minimum wages even higher and included provisions that could hold companies liable for labor violations by their franchisees.

Fast-food companies sought to put a referendum on the ballot this November to repeal that law, but pulled it last fall after reaching a compromise with a new bill, AB 1228. That bill eliminated the liability for franchise labor violations and allowed for a minimum wage increase to $20.

But controversy didn’t end there. The compromise law included a holdover provision from the original with an odd exemption for eateries that bake bread on site. Bloomberg, citing unnamed sources, reported in February that Newsom had pushed for the exemption to benefit campaign donor Greg Flynn, whose company owns two dozen Panera Bread restaurants.

Newsom and Flynn denied seeking the exemption. The governor’s office said Panera probably wasn’t exempt from the law and Flynn said his restaurants would abide by its $20 wage floor.

It isn’t the first time critics have called out the two-term governor for violating the spirit of rules he’s approved for the state. At the height of the COVID-19 pandemic while his administration was discouraging indoor dining to reduce spread of the potentially deadly respiratory virus, Newsom was seen dining with a dozen others at Napa’s elegant French Laundry.

Critics of Newsom’s lockdown policies, which dealt an economic blow to many businesses and their workers, pounced, and the governor apologized in a statement that “while our family followed the restaurant’s health protocols and took safety precautions, we should have modeled better behavior and not joined the dinner.”

The indiscretion didn’t hurt Newsom politically — he handily defeated a 2021 recall vote and was re-elected overwhelmingly the following year.

But the state’s minority Republicans continue to call him out for what they call a “rules for thee but not for me” mentality, where a $20 minimum wage Newsom signed applies to a franchise selling $6.29 Big Macs but not a cafe selling a $28 wagyu angus burger on a Truckee sourdough brioche bun.

“Governor Gavin Newsom has praised the new law repeatedly,” the California Republican Party said in a statement. “Governor, why aren’t you practicing what you preach?”

“It’s the rat race for sure — 100 percent the rat race,” Ortiz, 46, an accountant at a San Jose medical devices company, said Monday.

The smartphone, Silicon Valley’s signature gift to modernity, has made it easier than ever for work to intrude into personal and family time, tilting work-life balance further toward the job. Now a California lawmaker says there must be guardrails to keep that in check.

“Smartphones have blurred the boundaries between work and home life,” said Assemblyman Matt Haney, a San Francisco Democrat, who announced a bill Monday, AB 2751 that would give employees a “right-to-disconnect” from emails, texts and calls after work hours.

And, no, you don’t have to be at Disneyland or across an ocean to ignore your boss.

“Workers shouldn’t be punished for not being available 24/7 if they’re not being paid for 24 hours of work,” Haney said. “People have to be able to spend time with their families without being constantly interrupted at the dinner table or their kids’ birthday party, worried about their phones and responding to work.”

France pioneered such laws in 2017 and a number of other countries around the world have adopted similar legislation for at least some of their workforce, most recently Australia. New York City began exploring a law in 2019, but California would be the first U.S. state to adopt such legislation.

Haney said his bill makes exceptions for after-work contact during emergencies, to discuss scheduling and for collective bargaining agreements with organized labor. Industries with traditionally late or erratic hours or that require workers to be on-call still could reach out to workers as long as on-call time is compensated and non-contact hours are clearly stated in worker contracts.

“This bill has a lot of flexibility to make sure that it works for all California businesses,” Haney said.

But the California Chamber of Commerce is opposed, arguing “AB 2751’s one-size-fits-all mandate ignores and conflicts with existing laws.”

“There are some positions where compensation is higher because people in those professions are expected to be available more often or be responsive during atypical times,” Ashley Hoffman, Senior Policy Advocate for the California Chamber of Commerce, wrote in an opposition letter.

Hoffman added that the law is too vague about what would constitute an emergency and which employees can and cannot contact a worker after hours — for example, can an employee contact a supervisor or a coworker? Such a law also could end up curtailing the flexibility in work hours that many consider a perk.

“They may work on the weekend to free up time during the week,” Hoffman wrote.

Count Ortiz among those workers. She said she “rolls into work at 10 a.m.” and often doesn’t leave until after 7 p.m. When her boss texted during her European vacation, she said she was the only one who could have answered the questions.

“I would never want my boss to feel they couldn’t reach out to me because of legislation,” Ortiz said. “That would be tough in Silicon Valley. Can you imagine?”

Other Silicon Valley employees had a similar reaction — they like the idea of work-life balance but are skeptical of the proposed legislation. After all, this is a region where tech companies have sleeping pods and napping rooms and free food around the clock to encourage all-hours work. It’s a culture that runs deep.

“My boss calls me any time of day, but I know I’m basically on retainer,” said John Ferrari, 30, who works at the financial technology company GFT Rewards and was among a bunch of workers lined up to order falafels and hummus at DishDash in San Jose. “When you take a job at a startup company, it’s expected that you’re going to be available at unorthodox times. I’m willing to make that sacrifice.”

“I work weird hours, but not really long hours,” Wan said. “That’s the way we need to conduct business. I don’t see how this legislation is helpful.”

Others such as Andrew Hoeppner, a 28-year-old technician at a San Jose solar company, said the legislation makes sense, especially if workers aren’t being paid for those extra hours. But he and others say they’ve learned to discriminate about when to pick up or reply.

“I just have my notifications turned off,” he said, “so if they email me, I don’t even see it till the next day — and I think that’s fine.”

“You learn to filter,” agreed Jack Palmer, who was lunching with his solar company coworkers. “I have no problem leaving a bunch of things unread.”

Haney said that the global economy is exactly why such a law is needed. American companies already have to deal with employees in right-to-disconnect countries such as France, Portugal and Ireland and risk losing workers to places that value work-life balance.

He said the idea for his bill came from discussions with longtime friends he’s kept in touch with who are employed in various industries and complained about after-hours work intrusions after reading about Australia’s right-to-disconnect law.

“They’re asked to be working all the time. They don’t feel they have the ability to say no and feel there needs to be more clarity about this,” Haney said. “Here we are in Bay Area where we created a lot of the technologies that made people able to be contacted at any moment. I think it’s appropriate to come up with a way that we have that responsibility.”

But even as his neighborhood got certified as a “Firewise Community,” his longtime insurer, Farmers, discontinued his policy citing geographic characteristics like the property’s slope and nearby woods as a reason, he said, leaving him scrambling for new coverage expected to double his insurance bill.

“I could have had a concrete bunker with no windows and still couldn’t have gotten insured based on that formula,” said Bäuerle, 60, a UC Santa Cruz math professor.

Insurance Commissioner Ricardo Lara in 2022 announced a requirement that insurers provide discounts to consumers for wildfire mitigations and clarify the basis for their homes’ wildfire risk rating.

But amid an accelerating California insurance market meltdown, homeowners like Bäuerle are frustrated that they aren’t getting much if any credit for undertaking often costly measures to make their properties more resistant to wildfires as state officials have called for.

Adding to the problem, insurers are discontinuing coverage of homes even after customers make fire protection modifications. And at least one — Farmers — has referred customers to a group that certifies the completion of more than a half-dozen fire safety mitigations — and charges the homeowners $125 for the service. The commissioner’s mandate was that consumers wouldn’t have to pay for home hardening certification and would be credited for each individual mitigation.

There’s no question such measures benefit homeowners and their communities regardless of insurance benefits. Structural improvements to a home can reduce wildfire risk up to 40%, and when combined with vegetation modifications can reduce vulnerability up to 75%, according to Moody’s.

Neither Lara’s office nor the insurers themselves can say how many homeowners have qualified for and received the discounts. The department says it’s approved 140 insurer discount plans, but acknowledges many companies have yet to implement them.

The California FAIR Plan, the last resort, high-risk insurance for those who lose regular coverage, introduced the first fire protection discount plan last August. But it requires homeowners to complete multiple mitigations to qualify, contrary to the commissioner’s directive.

Deputy Insurance Commissioner Michael Soller said the home-hardening credit program is still in its early stages and that once fully implemented, it will provide consumers with important new benefits. They’ll get financial rewards for every step they take to fireproof their property, and transparency from insurers on what they see as wildfire risk concerns so homeowners can make changes or challenge their risk scoring.

“I think we’re making progress,” Soller said. “This story is still being written. We’re not all the way there.”

Farmers spokesman ​​​​​Luis Sahagun said the company offers its customers both community and property-level mitigation discounts. Sahagun and Soller said the Department of Insurance is working with Farmers’ on a new risk rating plan with discounts that are awarded for individual wildfire mitigation measures as required by the department’s regulations.

The state of California has experienced a home insurance exodus as losses from fires and other natural disasters mount. Over the last 10 years the Golden State has suffered 14 of its 20 most destructive wildfires on record, with insured losses topping $45 billion, according to the Insurance Information Institute.

Insurers have complained the state doesn’t let them collect enough in premiums to cover their rising costs and risk, and as a consequence, those companies have dropped coverage for tens of thousands of homeowners, particularly in areas considered higher risk for wildfires.

Lara plans to deliver regulatory changes by the end of the year to satisfy insurers’ biggest concerns, while extracting from them a commitment to offer more policies in areas at higher risk of wildfires. But those efforts haven’t calmed the state’s imploding market, where it’s biggest insurer, State Farm, just announced it will discontinue coverage for 72,000 homes and apartment buildings.

The situation angers homeowners who are doing what they can to save their homes and their insurance.

“Getting that wildfire-prepared home designation is hard for a lot of households, and we don’t want people to lose their insurance when they can’t check all those boxes,” said Amy Bach, executive director of the United Policyholders consumer group, which has pushed for homeowner credits for wildfire safety.

The FAIR Plan offers a two-tiered home hardening discount program. Homeowners can get a 10% discount for structural wildfire hardening of their home, and a 5% discount for hardening the home’s immediate surroundings. Those who meet requirements of both can get a total of 14.5% off their bill. And those who live in areas that implement broader “Firewise Community” protections can qualify for an additional 10% discount.

To qualify for the structural discount, homeowners must meet all of five of the following criteria:

• A “Class A” rated roof of asphalt fiberglass composition shingles, stone, concrete or clay tile, or metal.
• Noncombustible material such as concrete or metal along the bottom six inches of all exterior walls.
• Vents must be ember or fire resistant with approved wire mesh coverings.
• Windows must be multipaned or fully covered by shutters.
• Eaves must be enclosed.

To qualify for the immediate surroundings hardening discount, homeowners must meet these four criteria:

• Maintain an ember-resistant zone of clearance within 5 feet of the entire dwelling.
• Clear vegetation and debris from under decks.
• Remove combustible sheds or other outbuildings within 30 feet of the home.
• Regularly trim trees, clear brush and remove debris from their yard.

Most homeowners already meet some of those criteria in each discount category or can do so at minimal cost. All but 1% of California homes have Class A rated roofs — California moved away from Class B roofs like wood shingles after the 1991 Oakland Hills fire. Removing vegetation and debris near the home and installing wire mesh over vents are low-cost fixes.

But other measures can be far more costly or complicated. Chris Finnie, 73, of Boulder Creek, who had to get FAIR Plan coverage after her insurer discontinued her policy following the CZU Lightning Complex Fire, said her lot size didn’t leave enough room to move her shed 30 feet from her house. And when she looked into enclosing her open eaves with soffits, she was told it would cost $40,000.

“I don’t have $40,000,” said Finnie, who’s retired.

Edan Cassidy, an independent insurance broker in Scotts Valley, said most homeowners can qualify for the FAIR Plan’s 5% immediate surroundings discount, but only some are able to get the larger 10% discount due to the structure of older homes and retrofit costs.

“As a mountain resident, I can attest that it is a lot of work, very expensive, or virtually impossible,” Cassidy said.

For homeowners like Bäuerle, the fire protections he labored on are “still valuable even if it doesn’t necessarily get us into a better place with insurance.”

“I know I live in an area that has a non-zero probability of going up in flames,” Bäuerle said, but he added that after losing his regular home insurance, replacement coverage is likely to double his bill from $2,500 to $5,000. “There has to be a resolution for people getting priced out of their own homes.”

The number of homes and commercial properties in high-risk wildfire areas covered by the California FAIR Plan has more than doubled, from 154,000 in 2019 to 375,000, and liability exposure has ballooned from $50 billion in 2018 to $336 billion in February, its president told lawmakers at an insurance committee hearing last week.

“These are huge numbers,” California FAIR Plan President Victoria Roach told the committee. “And they continue to grow. … As those numbers climb, our financial stability comes more into question.”

Roach added that one bad wildfire or even a series of smaller fires could overwhelm the plan’s resources, forcing it to bill all the state’s insurers for liabilities it cannot cover, which they in turn would pass on to all their insured home and business customers as higher premiums.

“It’s a gamble,” Roach said. “We are one event away from a large assessment, there’s no other way to say it, because we don’t have a lot of money on hand, and we have a lot of exposure out there.”

The FAIR Plan’s financial instability has emerged as collateral damage from the state’s insurance market meltdown. Major carriers have discontinued or restricted coverage in recent years following a series of costly wildfires — 14 of California’s 20 most destructive wildfires burned the state in the last 10 years. That’s forced property owners who’ve lost coverage onto the FAIR Plan in rapidly growing numbers — with 1,000 applications now every work day.

Elected Insurance Commissioner Ricardo Lara last fall announced plans for a major overhaul of the state’s home insurance regulations and already has rolled out proposed new rules to speed approval of rate increases and allow computer catastrophe modeling to factor into them. Those changes are on track by the end of the year, Lara said.

But it isn’t coming fast enough for both consumers and insurers. State Farm, the state’s largest insurer, last year rocked the market by declaring it wouldn’t issue new policies in California. The company dropped another bomb when it announced this week it will begin shedding coverage of 72,000 California homes and apartment buildings over the next year. Those customers are expected to end up on the FAIR Plan as well.

The state created the California FAIR Plan in the 1960s in response to insurers refusing to cover inner-city businesses following riots in Los Angeles’ Watts neighborhood. It’s a nonprofit association of all the state’s authorized property insurance providers, chartered to provide temporary basic insurance for properties deemed so high risk that companies refused coverage.

The FAIR plan isn’t tax supported, and its bare-bones coverage — just fire and smoke damage — is paid from policy premiums that can be much more expensive than regular insurance because the risk pool is much higher.

The plan also isn’t subject to the insurance regulation under Proposition 103, the check on rates voters approved in 1988. But it is regulated by the state legislature and its rates approved by the elected insurance commissioner, though not under the review of consumer groups, which can intervene on regular policies.

Roach said that the FAIR Plan has encountered the same problems as regular insurance providers in getting policy rate increases approved to provide enough revenue to cover its risk exposure. Approvals take too long and don’t allow the plan to include the cost of reinsurance — which helps insurers absorb losses — or to factor in catastrophe risk models.

“Our rates are never actuarially sound because not all of our expenses are included in that ratemaking,” Roach told lawmakers. The plan must file for rate adjustments every two years, and she said its last increase requested in 2021 should have been “around 70%” but the plan asked for 48.8%. The insurance department approved only a 15.7% increase, she testified.

At the same time, the huge increase in properties needing last-resort coverage has greatly inflated the plan’s risk liability.

Much of the growth in Fair Plan policies has been in inland areas, such as at Lake Arrowhead, surrounded by the San Bernardino National Forest, with $8.4 billion in risk exposure. Other high risk concentrations include Big Bear City, also in San Bernardino County, with $6.3 billion in risk exposure, Truckee, with $4.1 billion in risk exposure, Grass Valley and Sonora, each with $2.1 billion in risk exposure.

Roach said the FAIR Plan has cash on hand “somewhere in the neighborhood of $700 million.”

Michael D’Arelli, executive director of the American Agents Alliance, representing insurance agents, told the committee that the state needs to lean on the insurance commissioner to move quickly and allow traditional insurers and the FAIR Plan adequate rates.

“It’s a ticking time bomb,” D’Arelli said. “It’s worse than I think you know. You’re going to hear from a lot of angry consumers and insurance agents.”

Kim Stone, representing Consumer Watchdog, whose founder authored Proposition 103, warned that “a complete loss for FAIR Plan policies in Lake Arrowhead could amount to a $975 surcharge on every other insurance policy.” Should all the top five FAIR Plan cities suffer a catastrophic wildfire at the same time, the bill would be $3,700.

But Stone said the answer to the insurance industry’s coverage withdrawals shouldn’t be to force other policy holders to pay more, too. She suggested the state require insurers to provide coverage to homeowners who meet “home hardening” guidelines to make their properties more wildfire resistant.

“Renters and lower- and middle-income home owners with comparatively low fire risk should not be on the hook for (the costs of) rebuilding more expensive homes or even second homes in high fire-risk areas like Lake Arrowhead or Truckee,” Stone said. “We urge the committee not to force struggling families with little to no wildfire risk to pay billions to bail out the insurance company for abandoning California neighborhoods.”

The Illinois-based insurance giant, which accounts for a fifth of the California home insurance market and is the largest property and auto insurer in the U.S., cited rising costs, increasing catastrophe risk and outdated regulations in declaring it won’t renew California policies for 30,000 homes and 42,000 apartments.

“This decision was not made lightly and only after careful analysis of State Farm General’s financial health,” the company said in a March 20 statement. “State Farm General takes seriously our responsibility to maintain adequate claims-paying capacity for our customers and to comply with applicable financial solvency laws. It is necessary to take these actions now.”

The announcement comes less than a year after State Farm announced it would not issue new policies in California, citing similar concerns. And it comes as the state’s elected insurance commissioner embarks on a yearlong overhaul of home insurance regulations aimed at calming California’s imploding market by giving insurers more latitude to raise premiums while extracting commitments from them to extend coverage in fire-risk areas.

The California Department of Insurance said the move raises questions about State Farm’s financial health.

“One of our roles as the insurance regulator is to hold insurance companies accountable for their words and deeds,” said Deputy Insurance Commissioner Michael Soller. “State Farm General’s decision today raises serious questions about its financial situation — questions the company must answer to regulators. … We need to be confident in State Farm’s strategy moving forward to live up to its obligations to its California customers.”

But it was unclear whether the department would launch an investigation into State Farm’s move.

Harvey Rosenfield, the Consumer Watchdog founder who authored the state’s insurance regulation system approved by voters in 1988’s Proposition 103, said the company’s announcement comes just after the state Department of Insurance approved a 20% premium increase for the company. That approval was based on State Farm’s existing number of policy holders, and he said the state should take another look at the rate hike considering the new cancellations.

“The commissioner has the authority and the responsibility to open up an investigation,” Rosenfield said. “The rate we’ve just approved is excessive based on the fact you’re dumping 72,000 policyholders.”

State Farm said the pending coverage cancellations account for just over 2% of its California policies but did not say where they are and what criteria the company used to mark them for non-renewal.

But Karl Susman, an independent broker and industry expert based in Los Angeles, said those who will be dropped are almost certainly properties in and around wildland areas considered at greater risk of wildfires, where standard coverage has become nearly impossible to get.

“You get rid of the worst risks,” Susman said.

Property owners who lose their coverage almost certainly will be left with no option but the California FAIR Plan, Susman said. The state-created private insurance pool provides minimal last-resort coverage that can cost much more than a standard policy.

Dependence on the FAIR plan has soared as many of California’s largest home insurers began limiting coverage in recent years after a series of destructive wildfires that followed a prolonged drought — 14 of the state’s 20 most destructive wildfires on record occurred in the last 10 years.

The number of FAIR Plan policies has more than doubled in five years, from 154,494 in September 2019 to 339,044 in December 2023. Total liability exposure topped $311 billion in 2023 compared to $112 billion in 2019.

State Farm said non-renewals would roll out starting July 3 for home, business and rental dwelling policies and Aug. 20 for commercial apartments.

Soller said those notified that they will lose coverage should call the insurance department at 800-927-4357 or use its insurance.ca.gov website to get help finding new coverage. He said the department “is on track for enacting the state’s largest insurance reform in over 30 years by our December 2024 target date.”

“Changes to outdated regulations will improve choices for all Californians so everyone has options beyond the FAIR Plan,” Soller said.

But that might not come soon enough for State Farm’s cancelled customers.

Susman said the department should just put out all of its proposed changes at once, rather than dribbling them out over the course of the year. Consumers are suffering now, and it will take time for any regulatory changes to provide improved coverage options, he said.

Soller said that “we are moving quickly to implement them while respecting the strong public review and transparency principles of California law.”

Rosenfield, who has defended the state’s regulatory framework and criticized the commissioner’s office as overly deferential to the industry, said “the insurance commissioner has given the industry everything it wants, and they’re still not satisfied.”

The plan is part of yearlong effort to overhaul regulations and ease the insurance market crisis in the wildfire-stricken state.

Insurers use catastrophe models to calculate rates in every other state, but California has instead required the companies to use only historic loss experience based on the past 20 years. Insurers say that keeps them from pricing the growing risks from a warming climate into policies. In recent years, many insurers have stopped offering new coverage and dropped customers in wildfire risk areas, forcing them to buy bare-bones, last-resort policies at two or three times the cost.

“We can no longer look solely to the past as a guide to the future,” Lara said in a statement Thursday. “My strategy will help modernize our marketplace, restoring options for consumers while safeguarding the independent, transparent review of rate filings by Department of Insurance experts, which is a bedrock principle of California law.”

The second-term elected commissioner has been in a political vice as a growing number of homeowners in and around wildland areas from the Bay Area and beyond face soaring premiums and cancelled coverage due to escalating wildfire losses. The state has experienced 14 of the state’s 20 most destructive wildfires over the past 10 years. It has only aggravated the state’s worsening problems with housing affordability, a top voter concern.

Consumer advocates behind the 1989 Proposition 103 voter initiative that set the state’s current insurance regulatory framework have criticized computer modeling as proprietary “black box” formulas that amount to fancy risk estimates insurers would use to drive unwarranted rate hikes.

Consumer Watchdog founder Harvey Rosenfield, Prop 103’s author, has noted that catastrophe modeling hasn’t helped hurricane-wracked Florida, which is facing a home insurance crisis of its own while homeowners there already pay some of the highest premiums in the country. He’s not necessarily opposed to them but said there must be transparency around their use. Consumer Watchdog says such models have helped push Florida rates two to three times higher than in California’s.

“Black box catastrophe models are notoriously contradictory and unreliable, which is why public review and transparency are key before insurance companies are allowed to use them to raise rates,” Rosenfield said Thursday. He said Lara’s plan “appears drafted to limit the information available to the public about the impact of models on rates in violation of Proposition 103.”

Insurers, however, applauded Lara’s proposal and argued that it will go a long way toward stabilizing the California home insurance market.

“As Californians grapple with record inflation and become increasingly vulnerable to climate-driven extreme weather, including catastrophic wildfires, this is a critically needed tool to help identify future risks more accurately and set rates that reflect our new reality,” said Mark Sektnan, vice president of state government relations for the American Property Casualty Insurance Association. “More accurate ratemaking will help restore balance to the insurance market and ensure all Californians have access to the coverage they need.”

The Department of Insurance is inviting public comment on the proposed catastrophe modeling regulation ahead of an April 23 meeting. That will help shape the final regulation expected by the end of the year.

It is the second initiative in a plan Lara announced last fall, spurred by Gov. Gavin Newsom, for what he called the biggest overhaul of the state’s insurance regulations in three decades. He expects to complete the plan by December.

Last month Lara unveiled a proposal to speed approval of requested rate increases, but both consumer advocates and insurers voiced concerns about that plan. A public hearing is scheduled March 26.

Faster rate approval and predictive catastrophe modeling are two of three key demands insurers have insisted are needed to stabilize the insurance market and provide homeowners with more coverage options. A third, allowing insurers to bill policy holders for reinsurance — coverage insurers buy for themselves to limit their catastrophic loss exposure — is expected to be announced soon.

Lara has promised that in exchange for granting insurers’ ratemaking wishes, they must agree to provide 85% of their statewide home insurance market share in wildfire-risk areas. Rosenfield and independent industry analysts have been skeptical that such a commitment is feasible or enforceable.

Catastrophe modeling already is being used in the state to set policy rates for earthquakes and fires caused by them, Lara said. The new proposal would expand the use to include wildfire, terrorism and flood protection for homeowners and commercial property.

Commercial insurance policies to cover terrorism are offered separately, while standard homeowners policies cover fire, smoke and explosion, which could include acts of terrorism. Terrorism is too infrequent in the U.S. to base risk on historical losses, but the department said catastrophe modeling could provide a tool to better assess that risk.

Rosenfield said the proposed rule could lead to even further expansion of catastrophe modeling to boost rates for car insurance and coverage of other risks unrelated to wildfires and that it “fails to spell out whether or how the Department of Insurance would assess a model’s bias, accuracy, or the validity of the science.”

The commissioner said that the proposal allows for sufficient public oversight because the catastrophe models used by insurers would be reviewed by a panel of experts overseen by his department. The models, he said, would stabilize rates over time and also take into account homeowner and community “hardening” efforts to lower fire risk.

After adopting a bill last year that outlaws four food additives statewide starting in 2027, California now is moving to ban more than half a dozen dyes — Blue 1 and 2, Green 3, Red 40, Yellow 5 and 6, and the white pigment titanium dioxide — from foods offered at public schools.

Gabriel noted a 2021 California Office of Environmental Health Hazard Assessment report that said “consumption of synthetic food dyes can result in hyperactivity and other neurobehavioral problems in some children,” and Food and Drug Administration safety assessments “are based on 35- to 70-year-old studies.” The report cited a dramatic rise in U.S. kids diagnosed with Attention Deficit/Hyperactivity Disorder in recent years.

The National Confectioners Association, which represents the candy industry, said the FDA constantly assesses the safety of food ingredients and that the move is being pushed by activists with little scientific training.

“These activists are dismantling our national food safety system state by state in an emotionally-driven campaign that lacks scientific backing,” the NCA said in a statement. “FDA is the only institution in America that can stop this sensationalistic agenda, which is not based on facts and science.”

It’s unclear how much the bill would affect meals and snacks offered by schools, which have made efforts to provide healthier alternatives. The dyes aren’t found in, say, a ham and cheese or peanut butter and jelly sandwich. They are, however, common in candies, colorful drinks and many processed snack foods.

Cheetos Crunchy Flamin’ Hot and Doritos Flamin Hot Nacho flavors have Red 40 and Yellow 5 and 6. Green Gatorade has Yellow 5. Hostess Donettes powdered sugar donuts have titanium dioxide. Some of those items might be found in a school vending machine.

The FDA had no immediate comment, but its website indicated that it considers the dyes that would be subject to the proposed law safe.

Yellow 5 dye “may cause itching and hives in some people” in rare cases, the FDA said, but “the totality of scientific evidence shows that most children have no adverse effects when consuming foods containing color additives,” though some “may be sensitive to them.”

The FDA said its food advisory committee reviewed dyes in 2011 and “concluded that a link between children’s consumption of certified color additives causing behavioral effects had not been established.”

The FDA website indicates the agency is reviewing a challenge filed last year to the safety of titanium dioxide, which it considers safe for use as a color additive in foods, according to the specifications that it not exceed 1% by weight of the food.

A United Nations and World Health Organization committee on food additives reevaluated titanium dioxide last year and found it to be safe, the FDA reported. And although the European Food Safety Agency could not rule out possible cancer links, health authorities in the United Kingdom, Canada and New Zealand disagreed, and the FDA also didn’t find a basis for cancer concerns.

Titanium dioxide, originally was to be banned in last year’s California Food Safety Act but was dropped before final passage. The additives banned in California in 2027 are Red No. 3 dye, potassium bromate, brominated vegetable oil and propyl paraben.

The FDA is currently reviewing the safety of Red Dye 3, says propyl paraben is generally recognized as safe, and potassium bromate may be safely used. In November, the FDA said it can no longer affirm the safety of brominated vegetable oil, a stabilizer for fruit flavoring in beverages and would revoke its authorization.

“The FDA continues to fail to keep us safe from harmful chemicals in our food,” said Melanie Benesh, Environmental Working Group’s vice president of government affairs. “In the absence of federal leadership, states like California continue to step up to keep us safe from toxic chemicals we and our families enjoy.”

But the confectioners association argued that the brominated vegetable oil example shows that the FDA is staying on top of food safety, and its role shouldn’t be usurped piecemeal by states.

“This is how our food safety system was designed to work,” the NCA said in a statement, “and it’s a real-time example of it working.”

The bill will be heard in the Assembly Education Committee in coming weeks.