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THE NOONER for May 14, 2012
Good morning, The Nooner is coming out a bit early this morning, as by noon everyone will be talking about the governor's revised budget.
BACK TO BUDGET
In case you took time off the Interwebs to play in your garden, you might have missed the governor's message to the people via "The YouTubes," as mom might say. The message: the deficit is now $16 billion, rather than the $9.2 billion projected in January. The increased deficit is due to 1) lower revenues in the current year, 2) lower projected revenues in the budget year, and 3) increased expenditures in the current year due to court decisions and higher workload in health and human services.
Okay, since most of us have been watching politics and not the budget, let's do a reset. The governor proposed to close the January gap by making $4.2 billion in cuts and $6.9 billion in tax increases. The LAO initially said that the receipts from the tax increase would only reach $6.9 billion at the top of the projection range of $4.8-6.9b. Meanwhile, advocates for an alternative tax on millionaires got a $6-9.5 billion scoring from the LAO in 2012-13.
As the tax debate continued, Assembly Democrats rejected more than $2 billion of the governor's $4.2 billion in cuts, primarily to health and human services and Cal Grants.
In March, the governor and proponents of the "millionaires tax" combined forces on a plan to raise sales taxes by 0.25% for four years and personal income taxes on earnings over $250,000 for seven years. The LAO scores the receipts for this tax in 2012-13 as between $6.8-9 billion. Thus, if the governor takes the high end of the range as he did in January, he would need $7 billion in cuts even if the tax measure passes. This is an increase in cuts of $2.8 billion, assuming he could get the votes for the original cuts that Assembly Democrats have bucked.
The governor's January plan relied on "trigger cuts" to balance the budget in case the November ballot measure failed. Specifically, $5.4 billion would be cut, including $5.2 billion from K-University education. Assuming the governor uses the "best case" revenue scenario of $9 billion for the compromise tax plan, he would need at least $2.1 billion more in trigger cuts based on the January framework. And, it is unclear if the original $5.4 billion in triggers would be accepted by the Legislature, as it relies on changing precedent by requiring general obligation debt service to schools to be paid for under the Proposition 98 guarantee.
This is my seventeenth state budget and, while the headline numbers are smaller than in past years, the options are far fewer. While there will be a sprint between June 6 (after the election) and mid-to-late June to ensure legislator paychecks continue, I have no clue how you begin to assemble the votes for this spending plan.
The May Revision should be available at 10am here.
WHETHER YOU LIKE IT OR NOT: Gavin Newsom was summoned to David Gregory's roundtable to discuss Barack Obama's gay marriage announcement.
THE OTHER MUNGER: Charles Munger Jr., sister of Molly, financier of the redistricting referenda, and chair of the Santa Clara County Republican Party, launched an effort Friday to elect Leslie Daigle in AD74. Of course, the notable part of the Newport Beach councilwoman's bid is that she is challenging Assemblymember Allan Mansoor. Munger kicked in $360,222 and he is joined in the effort by the California Dental Association, which kicked in $150,000. Look out strict partisans--of the $510,222, only $39,111 was spent in this first effort on behalf of the Spirit of Democracy California committee.
CD30: An IE reported Friday by the "Committee for an Effective Valley Congressman" committee formed to support Howard Berman caught my eye. The committee paid $11,620 for "slate mail" by the Budget Watchdogs newsletter. Budget Watchdogs was formed in 2011 and features three articles on its website--an article by San Jose mayor Chuck Reed supporting his pension reform, and two articles from FlashReport on CSU accountability (by John Hrabe) and one supporting a state spending cap (by Tom Hiltachk).
Hehe...Howard Berman, Flash Report conservative.
POLITICO: "Hollywood's Congressman" May Fall
AD20 POLL: Bill Quirk 25%, Mark Green 14%, Jennifer Ong 13%, Luis Reynoso 13%, Sarabjit Cheema 9%.
[Godbe Research, n=554 likely, questions not provided]
Ballot-box Pension Reform Wins First Court Test
A superior court judge this month upheld a voter-approved initiative giving lower pensions to all city of Menlo Park new hires except police, the first court ruling as unions challenge similar measures in Pacific Grove and Bakersfield.
Q&A: Insurance Commissioner Dave Jones On Health Care Reform
Jennifer Garza @ sacbee.com
Since he took office early last year, state Insurance Commissioner Dave Jones has made health care reform his top priority. Now he's backing a ballot measure â the Insurance Rate Public Justification and Accountability Act â that would give him the power to block health insurance rate increases he deems excessive.
Cigarette Tax Is A Lifesaver
George Skelton @ latimes.com
Tobacco companies are taking aim at Proposition 29, which would raise cigarette taxes $1 a pack. But it's a worthy plan to fund research on tobacco-related illnesses.
Lawmakers: Health Care Districts Must Unleash Bank Accounts
Katharine Mieszkowski @ californiawatch.org
California lawmakers are moving to crack down on taxpayer-funded health care districts that have banked tens of millions of dollars at the expense of funding community-health projects.
Brown: California's Budget Shortfall Has Risen To $16 Billion
Judy Lin @ dailybreeze.com
California's budget deficit has grown to a projected $16 billion and the state will have to make severe cuts to schools and public safety if voters reject tax hikes in November, Gov. Jerry Brown announced Saturday.
Dan Walters: Municipal Bankruptcy Infighting Flares Anew In California
Dan Walters @ sacbee.com
When Vallejo declared bankruptcy in 2008, one collateral consequence was a years-long political duel in the Capitol between lobbyists for local governments and those for unions representing their workers.
June Primary Is Key Test For State's Top-two Election System
Jean Merl @ latimes.com
Candidates are campaigning earlier, spending more money and trying to broaden their appeal as only those who come in first and second will advance.
CA Forward Reformers Sail Into The Perfect Storm
The party line says California Forward is sailing steadily towards approval of its bipartisan reform agenda for repairing state government, either with a ballot initiative or through a legislative substitute that would satisfy critics on the left and right.
How Obama Distanced Himself From Gavin Newsom
Phillip Matier,Andrew Ross @ sfgate.com
President Obama's position on same-sex marriages has indeed been "evolving" - back in 2004, he wouldn't even have his photo taken with Gavin Newsom , for fear that being pictured with the man who opened the City Hall...
A 'War On Women' At L.A. City Hall?
Kate Linthicum @ latimes.com
Labor unions say Los Angeles Mayor Antonio Villaraigosa's proposed city layoffs disproportionately target women.
Brown to detail budget for tackling $16B shortfall
JUDY LIN, Associated Press @ utsandiego.com
California Gov. Jerry Brown will lay out details of a revised state spending plan Monday after announcing over the weekend that the state's budget shortfall has swelled to $16 billion.
On Marriage, Obama Tried to Limit Risk
After President Obama announced his support for gay marriage, he and his team embarked on a quiet campaign to contain the possible damage among religious leaders and voters.
Political Blotter: House again refuses to stop federal raids on medical marijuana
This is a sampling from Bay Area News Group's Political Blotter blog. Read more and post comments at www.
Lincoln Exemplifies Tough Economic Times Of Recent Years - Roseville/placer County News - The Sacramento Bee
Lincoln interim Fire Chief Mike Davis, in the budget-shuttered Fire Station 33, says the firetruck behind him was delivered just "when the budget fell apart." The Fire Department's woes are only part of the city's fiscal mess.
CSU Long Beach Spends Student MBA Fees On Professor Pay
Erica Perez @ californiawatch.org
Officials at CSU Long Beach spent nearly $200,000 on extra pay for some business school faculty, tapping student fees that were supposed to be spent on recruiting professors, getting more research published and boosting enrollment.
S.F. Mayor Ed Lee Courts Golden State Warriors
Phillip Matier,Andrew Ross @ sfgate.com
It's official - San Francisco Mayor Ed Lee is openly calling on the Golden State Warriors to jump the bay and return to San Francisco "in time for the 2017 NBA season." In a letter also signed by all 11 city supervisors,...
Obama, Romney campaigns release dueling Mother's Day videos
Morgan Little @ latimes.com
President Obama and Mitt Romney's campaigns released Mother's Day videos Sunday, saluting each candidate's wife or mother and also injecting some political jabs into the holiday festivities.
Gov. Jerry Brown Calls For Cuts As Deficit Jumps
Wyatt Buchanan @ sfgate.com
California's budget deficit has jumped to $16 billion, forcing Gov. Jerry Brown to call for even deeper cuts in state spending when he releases his revised budget plan on Monday. Brown revealed the dramatically higher...
Editorial: City can't keep cutting to plug budget deficit
Tuesday, the City Council dives into the details of Sacramento's proposed 2012-13 budget. It will focus on three departments – fire, police, and parks and recreation – whose services residents probably notice most.
'Hollywood's Congressman' May Fall
Michelle Quinn and Jonathan Allen @ politico.com
If Howard Berman is the Oscar, Brad Sherman's the People's Choice Award in the race to represent a new district in the shadow of Hollywood.
Dan Walters Daily
Dan Smith @ blogs.sacbee.com
Dan Walters says the Legislature has become subordinate to the initiative process in California.