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THE NOONER for May 11, 2012

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Good morning from Santa Clara, where there's a big hole in the ground for the 49ers.

Today I am attending the California Economic Summit, sponsored by California Forward and the California Stewardship Network. Speakers include Thomas Friedman, George Schultz, Laura Tyson, and Gavin Newsom. Perhaps the most symbolism is found in the location--Santa Clara. As California emerges from the Great Recession, our cash hopes are found far more in Silicon Valley than Los Angeles and San Francisco. Today's summit is looking beyond the existing need for cash to stem cuts and rather the ongoing structure of California's economy in all regions.

Our addiction to Silicon Valley cash will be evident in Monday's May Revise. The question of whether or not Facebook goes public next month directly affects the revenue projections that will be used to construct the revenue projections. The LAO estimates that Facebook will bring in $2 billion in revenues in the first 18 months after going public, but that is highly variable based on market performance. Also, if Facebook punts the IPO until September, that will push some of that revenue out of the 2012-13 fiscal year into 2013-14. After all, 2013 personal income taxes are due in 2014 (although most filers involved in Facebook should be paying quarterly).

The reliance on the Silicon Valley also begs the question of whether a "Designed in California. Assembled in China" economy is sustainable. Indeed, the wealthiest corporation in the world is headquartered in Cupertino, but it only employs 12,000 Californians at its various campuses. In contrast, FoxConn, which makes most of the products dreamt up by companies throughout Silicon Valley, reportedly has 1.2 million employees. As outlined in a recent NYT article, Apple evades California taxes by running money through an office in Nevada.

Don't get me wrong, I love my Apple products. Of course, I can't say necessarily whether I paid use tax on each and every item I bought from Amazon, and the money associated with the transaction between Apple, Amazon, and me (including my money housed in a bank headquartered in Japan) probably never touched California. Similarly, it's very likely that the only Californian that had his hands on my MacBook Pro that I'm typing on was my UPS deliveryman.

While we see booms that rescue the general fund occasionally, the revenue is coming from a relatively few number of Californians, and we must constantly ask the question of where the jobs will be in this state's economy that is becoming more of a "designer economy" than a "maker economy." The economic and political environment in the state simply can't rely on high unemployment and taxes paid by newly minted millionaires and the angels that helped them get there. We will have economic and social unrest if we don't focus on this issue and have an economy that with full participation of every region and every part of our demography.

Hopefully, today's summit, crafted to have both regional and sector focuses, gets people talking about the long-term issues, rather than the Sacramento focus, which is too often mostly on annual, or even monthly, cash receipts. I applaud the conveners for doing what Sacramento should have done several years ago. You can follow the summit, which continues until 4:30 at the hashtag #caeconomy. Kudos to the four legislators who showed up.

Meanwhile, with the clock ticking toward an uncertain deadline, California Forward gave up trying to hash out a legislative alternative to its ballot measure and submitted signatures, reports Joe Mathews. Campaign spox Roger Salazar says that there is still an opportunity to compromise, even if it means a legislative alternative is put on the ballot alongside the reform group's measure. 

With three tax measures, "government reform," and "political reform" on the November ballot, now's a good time to read the book Joe Mathews co-authored with Mark Paul.

CD30: LAObserved: Obama chooses Berman in the battle for the Valley (not an endorsement)

QUALIFIED: Human Trafficking. Penalties. Sex Offender Registration. Initiative Statute.

$$$: Molly Munger kicks in another $1,097,754.

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State Independent Expenditure Reports

Committee Candidate (Support/Oppose) Amount Received Date Report Date
California Tribal Business Alliance Ie Pac Rudy Bermudez (Oppose) $23,104 05/09/2012 05/10/2012
Californians Allied For Patient Protection Independent Expenditure Account Candidate Raul Bocanegra (Support) $18,626 04/30/2012 05/10/2012
Californians For Jobs And A Strong Economy Tom Calderon (Support) $11,826 05/09/2012 05/10/2012
Jobspac, A Bi-partisan Coalition Of California Employers Susan Eggman (Support) $32,519 05/09/2012 05/10/2012
Jobspac, A Bi-partisan Coalition Of California Employers Tom Daly (Support) $30,234 05/09/2012 05/10/2012
Jobspac, A Bi-partisan Coalition Of California Employers Tom Daly (Support) $80,532 05/05/2012 05/10/2012
Perez For Assembly 2012, Sponsored By Orange County Federation Of Labor, Afl-cio, Orange County Dignity Pac To Support Julio Julio Perez (Support) $6,100 05/09/2012 05/10/2012
Perez For Assembly 2012, Sponsored By Orange County Federation Of Labor, Afl-cio, Orange County Dignity Pac To Support Julio Julio Perez (Support) $24 05/08/2012 05/10/2012
Roth For State Senate 2012, Fund For A Working Majority To Support General Richard Richard D. Roth (Support) $29,359 05/10/2012 05/10/2012

TOP HEADLINES ON AROUNDTHECAPITOL.COM AS OF 12:00PM
Steinberg Expects 'News To Be Rough' In Jerry Brown's Budget
Torey Van Oot @
blogs.sacbee.com
Legislative Democrats are bracing for "more work on the cuts side" once Gov. Jerry Brown releases his revised budget next week, Senate President Pro Tem Darrell Steinberg told reporters during a weekly q-and-a in his office.

Katehi, Reynoso Expected To Discuss Pepper-Spray Report Tuesday At Capitol
Sam Stanton @
sacbee.com
UC Davis Chancellor Linda P.B. Katehi will appear before a legislative panel at the Capitol on Tuesday along with Cruz Reynoso, whose task force investigated the 2011 pepper-spray incident at the university, and other key figures.

Jerry Brown Mum On Term-limit And Tobacco-tax Measures
David Siders @
blogs.sacbee.com
Less than a month before California voters decide on tobacco-tax and term-limits initiatives, Gov. Jerry Brown remains unlikely to take a public position on either one.

Gov. Jerry Brown Warns More Budget Cuts Are Coming
Chris Megerian and Anthony York @
latimes.com
Gov. Brown issued the warning as he delivered boxes of petitions to election officials requesting his proposed tax hike be put on the November ballot.

Jerry Brown Submits Tax-hike Petitions
Marisa Lagos @
sfgate.com
Gov. Jerry Brown and backers of his tax initiative submitted petitions Thursday to county elections officials they said contain nearly twice the number of signatures needed to qualify for the November ballot, but the...

FEC Fails To Approve Plans To Allow Dianne Feinstein To Resolicit Donors
Amanda Becker @
rollcall.com
Sen. Dianne Feinstein's re-election campaign can’t approach donors who already contributed the maximum amount permitted by law in order to replace roughly $4.5 million that was siphoned from its accounts in an embezzlement scheme -- at least for the time being.

Jerry Brown submits tax petitions, says 'difficult' budget cuts next
David Siders and Torey Van Oot @
sacbee.com
In one choreographed appearance at the office of the Sacramento County Registrar of Voters, Gov. Jerry Brown's campaign to raise taxes appeared on Friday to take shape.

Video
David Siders @
blogs.sacbee.com
U.S. Transportation Secretary Ray LaHood warned the California Legislature today that the Obama administration will not wait until fall for a vote on high-speed rail, urging its approval in a budget vote next month.

Jerry Brown fires doctor in tobacco tax ad
Kevin Yamamura @
mercurynews.com
Under pressure from health advocates, Gov. Jerry Brown on Thursday removed a controversial physician from a state health board after she appeared in an industry-funded ad against a tobacco tax hike on the June ballot.

Gov. Jerry Brown Bounces Prop. 29 Doctor From State Panel
Kevin Yamamura @
blogs.sacbee.com
Under pressure from health advocates, Gov. Jerry Brown on Thursday removed a controversial physician from a state health board after she appeared in an industry-funded ad against a tobacco tax hike on the June ballot.

State Education Board Wants To Avoid New Teacher Evaluation Plan
Howard Blume @
latimesblogs.latimes.com
The state Board of Education voted Thursday to seek relief from federal rules that label more than 6,000 California schools as failures, but in the process, it declined to authorize a new evaluation system for teachers and principals. The federal...

President Obama's Influence On Gay Marriage Will Be Tested
Paul West @
latimes.com
With Maine, Maryland, Minnesota and Washington state expected to decide in November whether to allow gay marriage, the effect of President Obama's new stance in favor of it will be put to the test. Proponents hope he'll help change minds; opponents say he won't.

Capitol Alert video: Obama administration tells California it's time to vote on high-speed rail
David Siders @
blogs.sacbee.com
U.S. Transportation Secretary Ray LaHood warned the California Legislature today that the Obama administration will not wait until fall for a vote on high-speed rail, urging its approval in a budget vote next month.

Brown submits ballot petitions for tax increases
JUDY LIN, Associated Press @
utsandiego.com
Gov. Jerry Brown made a personal appeal Thursday for California voters to support his tax-hike initiative, saying their support is crucial because the state's finances have been "screwed up" for a decade.

Jerry Brown fires doctor in anti-tobacco tax ad
sacbee.com
Under pressure from health advocates, Gov. Jerry Brown on Thursday removed a controversial physician from a state health board after she appeared in an industry-funded ad against a tobacco tax hike on the June ballot.

Speaker Boehner wants to focus on jobs, not gay marriage
Lisa Mascaro @
latimes.com
WASHINGTON-- House Speaker John A. Boehner showed little interest in making an election year debate out of President Obama’s support for same-sex marriage, steering away from a social issue that could weigh heavily in some regions where GOPcandidates must appeal to voters on both sides of the debate.

Assembly OKs Controversial Bill On Children's Immunizations
Jim Sanders @
blogs.sacbee.com
The California Assembly approved legislation Thursday requiring parents to receive counseling about the risks and potential benefits of vaccinations to prevent communicable diseases before opting out of their children receiving the medicine.

State Political Watchdog Is Investigating L.A. Coliseum Chief
Paul Pringle and Rong-Gong Lin II @
latimes.com
California's Fair Political Practices Commission is trying to determine whether John Sandbrook illegally sought a job with USC while negotiating a turnover of control of the stadium to the university.