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THE NOONER for September 20, 2011

[jump to the headlines]

DISTRICT UPDATES

  • CD35 - Removed Assemblymember Norma Torres (D) - expected to run for reelection in AD52

FROZEN DOUGH: The LAT's Patrick McGreevy reports that the Fair Political Practices Commission is holding a special meeting next Friday to discuss whether campaigns that were clients of Kinde Durkee should be given reporting and contribution limit flexibility. With literally hundreds of committee accounts apparently frozen, candidates want to know whether someone that has maxed out ($7,800 for state legislative elections) can go back to that same donor to replenish their coffers.

Meanwhile, Durkee client California Young Democrats sent out a fundraising appeal "Donate on ActBlue to help with the recovery effort." 

THE RED MEAT: Flashreport's Annual Top 20 Bills To Veto

TOP BILL SEARCHES: With 70,000 visits sent to aroundthecapitol.com each month from search engines, it's pretty cool to look at what people are searching for on search engines that brings them to the site. The following are the top 5 pending bills bringing people to aroundthecapitol.com in the last 7 days, with much of the traffic driven by talk radio.

  1. AB 499 (Atkins): Minors: medical care: consent 
  2. AB 131 (Cedillo): Student financial aid
  3. AB 353 (Allen and Cedillo): Vehicles: checkpoints
  4. AB 144 (Ammiano and Portantino): Firearms 
  5. SB 469 (V. Manuel Perez): Land use: development project review: superstores

IN IT TO WIN IT: State Senator Gloria McLeod reiterated that, despite Congressman Joe Baca's decision to run in CD35, she's still a candidate. Baca lives in CD31, but chose CD35 because 1) it's a safer Democratic seat or 2) because he was yielding to Congressman Jerry Lewis (R-Redlands), depending who you ask. McLeod beat Baca, Jr. for the State Senate in 2006 and is termed out in 2014. We're betting Norma Torres is running for reelection.

AMAZON'S MOTIVE? They came in like a lion and out like a lamb. Just why did Amazon.com back down from the referendum and cut a deal with Democrats at the end of session?

As a reminder of what happened in the frenzied waning days of session, Amazon agreed to commence collecting sales taxes on September 15, unless a federal uniform sales tax for online retailers is adopted. The deal was approved in AB 155 (Charles Calderon) on a bipartisan vote.

There essentially were four, perhaps overlapping possibilities, and I'll rank them from least probable to most.

  1. Amazon feared a two-thirds vote could pass the Legislature, eliminating the possibility of a referendum. (least likely)
  2. Amazon has a need to expand distribution and technical facilities, which will likely land it in California, thus requiring it to collect sales tax anyway.
  3. Amazon didn't want a public and ugly fight with Wal-mart and Target on the California ballot and to be branded "anti-California."
  4. Amazon worried about the validity of the legal argument that, as a budget-related bill, the tax included in the budget package wasn't subject to referendum. (most likely)

Obviously, it is in Amazon's interest to have a national, uniform sales tax, but it's not for technical reasons. There are plenty of online databases that an intern could integrate with Amazon's billing system for the price of a case of Red Bull. What Amazon really wants is a uniform national sales tax that, on average, is lower than local sales taxes. This will continue to ensure a modest price advantage. While the difference between 5% and 7.75% doesn't seem like much on that $5 Hunger Games paperback, it is a $47 difference on that new $1,699 MacBook Air that I want. People drive over the border to Oregon to save that kind of dough.

The most interesting question is whether a budget-related bill is subject to referendum. There are several specific types of bills that are not subject to referendum, each of which goes into effect immediately upon signing it. All other bills go into effect 90 days (or close to 90 days, such as bills signed by the governor leading up to October 10) after enactment. This gives a would-be referendum effort time to collect sufficient signatures, at which point the effectiveness of the bill is "stayed." 

Specifically, the following bills are not subject to referendum (Cal. Const. art. II, § 9):

  • statutes except urgency statutes
  • statutes calling elections
  • statutes providing for tax levies or appropriations for usual current expenses of the State

Before Proposition 25, most bills that were adopted as part of the state budget were urgency bills and adopted with a two-thirds vote. Clearly, these were not subject to referendum. However, Proposition 25 eliminated the requirement to use urgency clauses by creating a new creature--a simple majority "bill relating to the state budget" that went into effect immediately.

This issue was raised both in the campaign and during the budget's aftermath. While the Legislature's lawyers opined that, absent a specific clause in Proposition 25 making it clear the new majority-vote-budget-trailers were subject to referendum, then they weren't. However, there are plenty of lawyers that would argue the other side, and they would point to the ballot arguments in which opponents claimed Prop. 25 "[e]liminates voter rights to use the referendum process to reject hidden taxes and repeal bad laws at the ballot." That's the sort of thing judges look for in determining the "intent" of the voters in ballot measures. If the opponent claims a gray area law will do something and voters approve it anyway, courts are more likely to defer to the public arguments.

It is very possible that Amazon would have spent $5-10 million preparing for a campaign to overturn the tax and then have the whole issue kicked off the ballot. I would bet, as much as for any other reason, that's why Amazon backed down and cut a deal with the Legislature.

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On to the hottest headines on atc...

California Assembly Says Budget Records Lawsuit 'Unfounded' - Jim Sanders @ sacbee.com
The California Assembly has criticized as "unfounded and unnecessary" a public-records lawsuit filed by The Bee and Los Angeles Times seeking access to current fiscal records.

The Redistricting Report for 09-20-11 - aroundthecapitol.com


Agency Weighs Help For Politicians Affected By Kinde Durkee Case - Patrick McGreevy @ latimesblogs.latimes.com
The state's ethics watchdog agency has set a meeting next week to consider whether campaign finance limits and spending report deadlines should be temporarily waived for politicians affected by the alleged misuse of funds by campaign treasurer Kinde Durkee.

Jerry Brown Creates Advisory Post On Tribal Affairs - David Siders @ blogs.sacbee.com
Gov. Jerry Brown today established by executive order a new, unpaid advisory position on tribal affairs.

Tax On Millionaires Gets Hostile GOP Reception - Jim Puzzanghera @ latimes.com
Congressional Republicans accuse President Obama of trying to incite 'class warfare' with his plan for a new tax on millionaires, part of a $3-trillion deficit reduction package to be announced Monday.

Budget Analysts Say Obama Deficit Plan Is Likely To Miss Its Targets - Lori Montgomery and Jia Lynn Yang @ washingtonpost.com
President Obama projects that his new plan for reducing the federal debt will save more than $3 trillion over the next decade by raising taxes on the wealthy and slashing spending on a host of government programs, from farm subsidies to federal worker pensions.

Obama Vows Veto If Deficit Plan Has No Tax Increases - HELENE COOPER @ nytimes.com
WASHINGTON — President Obama called on Monday for Congress to adopt his “balanced” plan combining entitlement cuts, tax increases and war savings to reduce the federal deficit by more than $3 trillion over the next 10 years, and said he would veto any approach that relied solely on spending reductions to address the fiscal shortfall.

Obama's Plan To Slash $3 Trillion From Deficit - Peter Nicholas, Washington Bureau @ latimes.com
President Obama will unveil a plan to slash more than $3 trillion from the deficit over 10 years by winding down wars, raising taxes on wealthier Americans, closing tax loopholes and cutting the cost of Medicare and other health programs.

Federal Public Land Policies Bashed At Capitol Hearing - Matt Weiser @ blogs.sacbee.com
A Congressional hearing in Sacramento Monday provided a stage for complaints about the U.S. Forest Service, as off-roading groups, ranchers and others bemoaned access restrictions and steeper fees.

California Assembly says budget records lawsuit 'unfounded' - sacbee.com
The California Assembly has criticized as "unfounded and unnecessary" a public-records lawsuit filed by The Bee and Los Angeles Times seeking access to current fiscal records.

Delta Water Grab Fears Unfounded, Says U.S. Resources Chief - Mike Taugher @ contracostatimes.com
Interior Secretary Ken Salazar says it is possible to increase water exports without harming the Delta

Liberals Pan Benefit Cuts In Obama Plan - Meghashyam Mali @ thehill.com
Liberals on and off Capitol Hill are hammering President Obama's proposal to scale back Medicare and Medicaid benefits as part of his newly released strategy to cut deficit spending.

Tougher Laws Considered For Unvaccinated Students - pe.com
Lawmakers say they will consider tougher requirements for schools that have been defying state law by letting students who cannot prove they have had the whooping cough vaccine remain on campus.

Schwarzenegger urges regional action on climate change - David Siders @ blogs.sacbee.com
Former Gov. Arnold Schwarzenegger, speaking about climate change at a United Nations forum in New York this morning, said he will "keep pushing regional governments around the world to come off the sidelines" to enact green energy programs such as California did during his tenure.

California Won't Slip Back Into Recession, UCLA Study Predicts - Walter Hamilton @ latimes.com
Despite U.S. economic woes, the state and the nation won't lapse back into another recession, according to a quarterly forecast by UCLA's Anderson School of Management. The state's jobless rate is expected to remain around 12% through next year.

California Muni Bond Deal Sees Light Demand From Individual Investors - Tom Petruno @ latimesblogs.latimes.com
A steep drop in interest rates on tax-free municipal bonds this year has curbed individual investors’ appetite for a new California debt offering.

Thousands Of Nurses To Strike At Kaiser, Sutter Hospitals Thursday - sacbee.com
Thousands of nurses at more than 30 Sutter Health and Kaiser Permanente hospitals in Northern California will walk off the job Thursday in what union officials say will be the nation's largest-ever nurses' strike.

Californians Know They Need Long-term Care Coverage, But Don't Buy It - Herbert A. Sample @ healthycal.org
For the second time in as many months, a survey of Californians has found they are more aware than ever of the potential need for long-term health care in the future. But, paradoxically, fewer are taking steps to prepare for that costly possibility.

Eric Holder: Close Gitmo Before Election Day - MJ Lee @ politico.com
U.S. Attorney General Eric Holder said on Tuesday the Obama administration is doing everything it can to shut down the U.S. prison at Guantanamo Bay, Cuba, before the 2012 presidential elections.

A 'Fair Share' Of An Anemic Economy - Debra J. Saunders @ sfgate.com
"None of the changes I'm proposing are easy or politically convenient," President Obama noted from the Rose Garden on Monday. I've never seen a president less in a hurry to get things done - or as quick to display his...

Salazar: Risky Times For Western Water - blogs.kqed.org
Interior Chief to California: Don’t allow significant water supply and infrastructure projects be derailed

Using Plastic To Pay Anthem Bill? Prepare To Lose Your Coverage - David Lazarus @ latimes.com
Andrea Kreuzhage is the kind of customer all health insurers dream of having. She's in excellent shape, never submits medical claims and pays all her bills on time. So, of course, Anthem Blue Cross canceled her coverage last week.

Dolores Hope, Widow Of Comedian Bob Hope, Dies At 102 - latimesblogs.latimes.com
Dolores Hope, who throughout her 69-year marriage to comedian Bob Hope oversaw their charitable giving and played a key role in establishing the Eisenhower Medical Center in Rancho Mirage, has died. She was 102. In the late 1960s, the Hopes...