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THE NOONER for August 10, 2011
THE CARDOZA/COSTA CHA-CHA: I've written about this before, but the suspense continues--will Dennis Cardoza retire? The Modesto Bee Garth Stapley writes "Dennis Cardoza . . . is not denying reports he may retire rather than seek re-election next year."
As a refresher, incumbents Dennis Cardoza (D), Jim Costa (D) and Jeff Denham (R) all reside in the new CD16, a solid Dem seat based in Merced. Denham will run for CD10 in Stanislaus, which is where most of his district is now. The "natural" thing to do would be for Cardoza to run for CD16 and for Costa to run for CD21, based in Kings county, west of Fresno. However, CD21 is seen as a Latino seat, with 49.3% Latino CVAP and 71% Latino population. Three Latino candidates--Dean Florez (D), Michael Rubio (D) and David Valadao (R)--have talked about running for the seat, although only Valadao has announced.
Stapley gets this quote from Costa: "The heart of Fresno has always been my political base, and that is where I intend to run when the lines are finalized." The "heart of Fresno" is in CD16. Either two friends face off or Cardoza is retiring. We'll bet on the latter, and we've thus moved Costa to CD16.
TRIGGER HAPPY: As you've likely heard, the state's revenues for July were significantly under projection, and the underlying indicators suck. And, this was BEFORE the Dow dropped 9%. If you are a budget geek, here's what I had to say to my community college folks today about the revenue numbers, stock market and likely pulling of the budget-cutting triggers:
In July, the state's corporate taxes came in $69 million (-19.3%) below forecast, sales taxes came in $139.4 million (-12.5%) below forecast. While personal income taxes came in $89 million (2.9%) above forcast. The bulk of the "miss" in July's numbers was in "other revenues," small amounts that are one-time in nature. Thus, the headline number of July is illusory, although the underlying economics call the state's anticipated revenue into serious question.
Personal income tax (PIT), even with the January 1 sunset of the temporary tax surcharge, outperformed collections in July 2010. However, non-agriculature employment was only up 1.1% between June 2010 and June 2011, which is not enough to explain the surge in PIT revenues. Rather, the revenues are largely a function of large wealth generation in the stock market and the high-tech sector. With the latest market roller coaster, this may not be sustainable, and we might actually have to "give back" some of that money if people decide to swap out capital gains for capital losses taken over the last week. As of right now, the market is off 14.8% from its spring highs.
While the market will bounce around, it is the uncertainty of the roller coaster that will likely hit California and will cause the budget triggers to be pulled when the $4 billion in new revenue doesn't come in. Most of that $4 billion was speculative revenue that assumed that Facebook, Twitter, Zynga and a handful of other California-based high tech companies would go public this fall. However, in a market like this, all of these companies are reconsidering their plans and will push off their IPOs to the spring or even next fiscal year. The later in the state's fiscal year an IPO occurs, the less likely the state is to receive PIT revenues from the IPO. (Insiders and venture firms are often prohibited from selling as part of the IPO contract with underwriters.)
Meanwhile, the non-tech economy and regional economies away from the Bay Area are in bad shape. The housing market continues to be abysmal with all three major indicators--median home price, sales, and new units--all down from a year ago. We are in a modest recovery, although the uncertainty of the stock market is shaking consumer confidence and is causing economists to bring up the most feared phrase--"double-dip recession."
I hope I am wrong.
California Budget Gimmickry Falls Short - Dan Walters @ sacbee.com
Jerry Brown was specifically nonspecific when asking voters last year to return him to the governorship â especially when it came to the state's chronic budget deficit.
Senator Asks Harris To Review Hospital Sale - californiawatch.org
The chairman of the state Senate Health Committee is asking Attorney General Kamala Harris to take a skeptical look at approving the purchase of Victory Valley Community Hospital by Prime Healthcare Services.
Our Legislative Districts Just Too Big - Timm Herdt @ vcstar.com
It is likely not possible to propose an idea that would be more universally condemned, certainly at first blush, but hear me out: What California needs is more legislators.
S.F. Gay Married Couple Loses Immigration Battle - Carolyn Lochhead @ sfgate.com
Citing the Defense of Marriage Act, the Obama administration denied immigration benefits to a married gay couple from San Francisco and ordered the expulsion of a man who is the primary caregiver to his AIDS-afflicted...
L.A. NFL Stadium Agreement Approved By City Council On 12-0 Vote - latimesblogs.latimes.com
L.A. NFL stadium: The plan to build a $1.2-billion NFL stadium in downtown Los Angeles took a big leap forward Tuesday when the City Council approved the overall framework for financing the project.
Lawmakers question jump in high-speed rail costs - ADAM WEINTRAUB @ pe.com
Some lawmakers who have supported California's ambitious high-speed rail project are questioning whether the state can afford it after a newly released report showed sharply higher costs to build the first segment.
A Sneak Preview Of GOP Contenders' Brag Sheets On Education - Peter Schrag @ toped.svefoundation.org
The year ahead will see no end of blather about the education records and policies of the major presidential contenders, but few assessments are likely to be as much of a curiosity as âThe 2012 Republican Candidates (So Far)â in the next issue of the magazine Education Next.
Survey: Ballot Measure System Needs Reform - Josh Richman @ ibabuzz.com
Californians like the ballot initiative process but want to see it reformed, according to a survey being rolled out tomorrow by an East Bay nonprofit.
Gas Tax Issue Could Be The Next Political Fight - Megan Ruyle @ thehill.com
The Senate and House are in the process of considering a long-term highway bill. Passing a short-term extension while they work out the details of a longer measure would normally be considered routine, but so was a short-term extension of FAA funding.
California Tax Revenues Plunge, Deep Cuts To Schools Could Be Triggered - Shane Goldmacher @ latimesblogs.latimes.com
Californiaâs tax revenues plummeted in July, falling more than 10% below expectations and making it more likely that deeper cuts to public schools built into the state budget in case of a stalled economic recovery will occur.
High-speed Rail Price Tag Soars Again, This Time On Pace To Surpass $60 Billion - Mike Rosenberg @ mercurynews.com
Cost for full project on paceto surpass $60 billion, nearly twice what voters approved
Reprieve For Copper Paint Used On Boat Hulls - Michael Gardner @ signonsandiego.com
State Sen. Christine Kehoe has shelved her legislation aimed at limiting the use of copper-based paints on the hulls of recreational boats.
New District Maps Misplace Mount Whitney By 125 Miles - blogs.sacbee.com
California's new redistricting commission has been moving the lines of 177 congressional, legislative and Board of Equalization districts, but who knew it could move a mountain -- and the state's tallest mountain at that?
California's New Budget Already Facing Shortfall - Wyatt Buchanan @ sfgate.com
California's budget already is showing signs of trouble less than seven weeks after it was enacted, as taxes and other revenue fell short by 10 percent of the state's projected income for July, Controller John Chiang said Tuesday.
Wisconsin Republicans Hold On To State Senate - Rick Pearson, Chicago Tribune @ latimes.com
Republicans kept their majority in the Wisconsin state Senate on Tuesday, retaining four of six seats in a recall election that could foreshadow next year's battle for Congress and the White House .
California's Rookie Judges Train In Swank Digs - Phillip Matier,Andrew Ross @ sfgate.com
California's budget cuts have prompted some courthouse shutdowns and clerk layoffs, but 119 new Superior Court judges are spending two weeks at a judicial rookie camp at a San Jose resort.
Candy Bears, Gold Doubloons & Jihadist Logorrhea - calbuzz.com
Whether the Tea Party Downgrade of the Full Faith and Credit of the USA will or will not have much impact on Californiaâs state finances, it surely has already had an effect in terms of perceptions about whether a government divided by partisan ideologues can get anything done. What's unclear yet, as Charlie Cook of the National Journal explained, is if voters will apply their widespread disgust with Washington selectively or aim it at anyone who was at the scene of the crime.
Cardoza doesn't deny reports he may retire - Garth Stapley @ modbee.com
Dennis Cardoza, who has represented the Northern San Joaquin Valley in Congress for more than eight years, is not denying reports he may retire rather than seek re-election next year.
For-profit College Company Inflated Job Placement Rates - Erica Perez @ californiawatch.org
A for-profit education company with five locations in California has admitted that some of its health education campuses reported inflated job placement rates for its graduates.
Gov. Rick Perry's "Texas Two Step" Spells Trouble For Part-time CA Resident Mitt Romney - Carla Marinucci @ sfgate.com
Texas Gov. Rick Perry, who has racked up the frequent flier miles to ATM California, is ready to jump into the 2012 GOP presidential race -- a move making lots of California Republicans happier than a hog in slops, to borrow an old Lone Star phrase.
California Medical Board Fails To Discipline 710 Troubled Doctors - Los Angeles Times @ latimes.com
California's medical board failed to discipline 710 troubled doctors, even as they were disciplined by hospitals, surgical centers and other healthcare organizations, a Public Citizen report says.
State Schools Chief Lays Out 'blueprint' For K-12 - californiawatch.org
State Superintendent for Public Instruction Tom Torlakson said yesterday that California can become more competitive and stop a future shortage in college-trained professionals by simply investing more to improve the public school system.
California Health Insurance Cost For Individuals Could Be Worse - latimesblogs.latimes.com
Californians who bemoan high insurance premiums may not have it as bad as they think. It turns out that people in other states pay a lot more for health coverage. A new analysis of individual insurance markets across the country...