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THE NOONER for April 25, 2013

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TWEET DU JOUR: @redistrict (Dave Wasserman from Cook Political Report) "Q for CA tweeps: according to CA Sec of State, Obama '12 did 23% WORSE in the city of Beverly Hills than Gore '00. Is this possible?"

 

THE CASH REPORT:

  • LAO (April 24): Month-to-Date Collections and Refunds: $12.133 billion. (91.2% of budgeted projection for the month)
  • Controller (April 23): $11.532 billion  

LAO:

Today Was Another Surprisingly Strong PIT Collection Day. The state's PIT collections for both yesterday and today were unexpectedly strong, given the time that has passed since the April 15 filing deadline. Moreover, PIT refunds have been relatively modest. In total, today's PIT collections equaled $586 million, net of refunds. As of this afternoon, month-to-date collections total $12.13 billion, net of refunds (all funds).

Effects on State's Financial Bottom Line May Be Limited. As we have discussed since January, these additional revenues raise a number of challenging questions for next month's updated budgetary forecasts, and the corresponding improvement to the state's financial bottom line may be quite limited. This is because a large portion of the additional revenues may be required to be allocated to schools and community colleges. These issues are discussed in more detail below. 

Wow. $586 million on April 24...

SCHOOL FUNDING FIGHT: The additional revenues, which will probably be split and characterized as about half one-time and half ongoing, probably won't be sufficient to lubricate the main budget fight down the stretch--the governor's local control funding formula for K-12 schools. The issue, of course, is the classic urban vs. suburban fight, which had been oiled over the years with lots of categorical programs weighted to urban districts that serve more educationally disadvantaged students.

This has been strained in recent years as the categorical programs have been cut and a large revenue limit deficit factor has accrued. The governor has proposed weighting funds toward districts that serve more educationally disadvantaged students, and providing much greater flexibility for all school boards under the new formula. The suburban schools, and the California School Boards Association, are okay with that--so long as the budgets of all school districts are restored to what they would have been had the state provided COLA and no budget cuts in recent years, which would cost $5 billion. Senate Democrats are somewhere in the middle between the governor and CSBA.

It's probable that state revenues will outpace budget projections by over $5 billion. As of now, we're very likely to be $4-4.5 billion in personal income tax revenue above projections as the vital month of April closes, and all other revenue sources appear on track. As I've written before, the problem is identifying how much of this is consequence of the 2012 tax law changes, which creates one-time tax events that don't impact baseline revenues for the state.

Simply put, if you are rich, you may have sold stocks in December to avoid the increase in capital gains from 15% to 20%. That may have resulted in personal income, although the state can't count on that next year. However, if you plunged the dough into real estate to ride the housing recovery, that very may well be recurring. It's very hard, however, for the state to monitor these events, as opposed to the trends in withholding, which more accurately reflects the economic situation and the more stable salary- and wage-related tax revenue.

Let's say the LAO and Department of Finance agree that half the $5 billion above projections is one-time and half is ongoing. That would result in $5 billion in one-time cash that can be spent in the budget, and roughly $2.5 billion of new ongoing money in the 2013-14 budget. Even if all of it was plunged into K-12 schools, that may not be enough to seal the deal for the governor's new school funding formula. However, after losing on the issue last year, he promises a level of tenacity on this issue that we haven't seen from governors in recent years:

"This is a matter of equity and civil rights," Brown said at a news conference flanked by local school officials. "So if people are going to fight it, they're going to get the battle of their lives, because I'm not going to give up until the last hour, and I'm going to fight with everything I have, and whatever we have to bring to bear in this battle, we're bringing it." [David Siders @ SacBee]

This will be a fascinating debate that will play out between the release of the governor's revised budget (expected May 14) and the completion of the budget by June 15. The governor is very serious about this issue, and ask redevelopment agencies about his success rate when he digs in.

AD09: Sacramento school board member Diana Rodriguez will run to succeed Richard Pan, with Mark Capitolo as her consultant.

AD52: Senate candidate Paul Leon (R) reportedly will seek Norma Torres's Assembly seat should he fall short in the SD20 runoff, as expected. While the Democrats' margin in AD52 is such that a win would be extremely difficult for the Ontario mayor, his presence would have a significant impact on the several Democrats eyeing the race.

ESCORT SERVICE: Nevada changes psychiatric discharge policy; patients to have travel escorts [Cynthia Hubert & Phillip Reese @ SacBee] - "In a dramatic change to their controversial discharge practices, Nevada health officials no longer will send state psychiatric patients alone on buses to cities across the country, they said Wednesday."

A Nooner reader reminds us that, while we can criticize Nevada for patient dumping, our Department of Corrections has been known to dump parolees from Susanville in Reno. Of course, if Nevada had an income tax, all those Susanville prison guards who live in The Silver State would be paying it.

COOL: Smartphone app lets CA lawmakers track special interest gifts [Torey Van Oot @ SacBee]

Now can we please have Form 700 reports in a searchable format? I can't read Leland Yee's chicken scratch.

SQUAB: Mike Tyson: Ex-Girlfriend Cooked, Ate One Of My Pigeons

DEPT OF CORRECTIONS: Finger-brain disconnect: the candidate for AD73 should be Steven Baric and Danielle Soto is a former member of the Pomona City Council, as she lost reelection last November. And, I was correct initially that AD45 candidate Dennis De Young is now a Democrat, as he reregistered from the GOP on 12/26/12.

 

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**CLASSIFIEDS**

  • California League of Bond Oversight Committees: Second Annual CaLBOC Statewide Conference - May 10, 2013 in Sacramento - Keynote speakers Bill Lockyer and Assemblymember Joan Buchanan - More info and registration
  • Common Cause FREE Screening & Panel Discussion - Bill Moyer's "The United States of ALEC" Crest Theatre May 1st RSVP
  • Join Mayor Christopher Cabaldon, Councilman Steve Hansen, Supervisor Phil Serna, the Rev. Faith Whitmore and Dr. Claire Pomeroy as they are honored as recipients of Four Freedoms Awards at the Sacramento Stonewall Democrats' 9th Annual Gala, Wednesday, May 15 at the Red Lion Hotel Woodlake Conference Center, Sacramento. Purchase tickets @ www.sacstonewall.org/events/4freedoms2013.

 

 

TOP HEADLINES ON AROUNDTHECAPITOL.COM AS OF 12:00PM
Brown Vows 'battle Of Their Lives' For School Funding Critics
John Myers @
news10.net
Gov. Jerry Brown laid down a large political marker Wednesday, vowing to do whatever it takes to get the Legislature to approve his plan for shifting more education dollars to school districts that serve low-income students and English learners. "Kids can't wait," said Brown in a news conference at the Capitol. "California can't wait."

Jerry Brown Promises Opponents 'Battle Of Their Lives' On Education Overhaul
David Siders @
blogs.sacbee.com
Facing resistance at the Capitol to his proposal to overhaul California's school financing formula and to shift more money to poor and English-learning students, Gov. Jerry Brown said today he considers the matter one of civil rights and will give opponents "the battle of their lives."

Ca Lt. Gov. Gavin Newsom, “trailblazer” On Same Sex Marriage, To Be Honored By Glaad
Wyatt Buchanan, Michael Collier, Richard Dunham, Bob Egelko, Joe Garofoli, Marisa Lagos, Carolyn Lochhead, Carla Marinucci, @
blog.sfgate.com
CA Lt. Gov. Gavin Newsom, “trailblazer” on same sex marriage, to be honored by GLAAD

Jerry Brown Pledges Foes 'Battle Of Their Lives' Over Education Funding
David Siders @
sacbee.com
Facing resistance at the Capitol and in suburban school districts to his effort to shift more education money to California's poor and English-learning students, Gov. Jerry Brown on Wednesday called his measure a civil rights issue and promised opponents "the battle of their lives."

Senators predict another vote on gun-control legislation
Lisa Mascaro @
latimes.com
WASHINGTON – Two top senators predicted Thursday that gun legislation will come up again for a Senate vote – possibly before the end of the year – as public attitudes shift toward stricter controls.

Tax Revenue Flows But Brown Doesn't Celebrate Yet
Chris Megerian @
latimes.com
SACRAMENTO -- April tax revenue continues to outpace expectations even in the slower final days of the month, according to the latest figures.

Smartphone App Lets CA Lawmakers Track Special Interest Gifts
Torey Van Oot @
blogs.sacbee.com
Having trouble keeping track of all those concert tickets, reception tabs and bottles of wine you have to report as gifts as a California elected official or legislative staffer?

Astronaut Jose Hernandez Still Undecided About Taking On GOP Rep. Jeff Denham Again
Wyatt Buchanan, Michael Collier, Richard Dunham, Bob Egelko, Joe Garofoli, Marisa Lagos, Carolyn Lochhead, Carla Marinucci, @
blog.sfgate.com
Astronaut Jose Hernandez still undecided about taking on GOP Rep. Jeff Denham again

Mark Vargas Fills California Coastal Commission Vacancy
Torey Van Oot @
blogs.sacbee.com
Assembly Speaker John A. Pérez has named a green building specialist to the California Coastal Commission.

Move by CalPERS gives governor leverage in union contract talks
sacbee.com
State employee unions in contract talks with Gov. Jerry Brown's administration took a hit recently from a traditional ally: the California Public Employees' Retirement System.

The Caucus: Schumer and McCain Express Optimism on Chances for Immigration Overhaul
SHERYL GAY STOLBERG @
thecaucus.blogs.nytimes.com
Senators John McCain and Charles E. Schumer, who are leading a push for bipartisan immigration legislation, said Thursday that they were aiming to win 70 votes in the Senate and hoped to gain the backing of a majority of senators in both parties.

New measure of economy will include focus on government pensions
sacbee.com
As part of a new push to broaden the way economic growth is measured, government statisticians will soon begin using a new accounting method that’s likely to spotlight the problem of underfunded pension funds, particularly those managed by state and local governments across the nation.

House Lawmakers Pull Immigration To The Right - The Hill - Covering Congress, Politics, Political Campaigns And Capitol Hill | Thehill.com
Jesse Helfrich @
thehill.com
The Hill 1625 K Street, NW Suite 900 Washington DC 20006 | 202-628-8500 tel | 202-628-8503 fax

Brown rallies support for school-funding changes
utsandiego.com
Gov. Jerry Brown is calling his education funding plan a "cause for the children of California" as he tries to persuade reluctant members of his own party to include his proposal in the upcoming state budget.

Plans To Close Hud Offices In Sacramento, Fresno Draw Lawmakers' Ire - Real Estate - The Sacramento Bee
sacbee.com
Doris Matsui

Boxer’s New Bill Would Require Labels For Ge Foods
ibabuzz.com
By Josh Richman Wednesday, April 24th, 2013 at 11:33 am in Barbara Boxer, U.S. Senate.

New Measure Of Economy Will Include Focus On Government Pensions - Business - The Sacramento Bee
sacbee.com
Steve Landefeld is director of the Bureau of Economic Analysis.

O.C. Offers Settlement To Slain Marine's Family
Nicole Santa Cruz @
latimes.com
Orange County supervisors have unanimously approved a proposed settlement in a federal wrongful death lawsuit filed by the family of Manuel Loggins Jr., an unarmed Marine sergeant who was shot to death by a sheriff’s deputy in a darkend high school parking lot.

Nevada Changes Psychiatric Discharge Policy; Patients To Have Travel Escorts
Cynthia Hubert and Phillip Reese @
sacbee.com
In a dramatic change to their controversial discharge practices, Nevada health officials no longer will send state psychiatric patients alone on buses to cities across the country, they said Wednesday.

California PUC Says It's Making Changes
Steven Harmon @
mercurynews.com
Paul Clanon, executive director of the Public Utilities Commission, claims to have increased its enforcement actions, fining utilities by many tens of millions of dollars, conducted many audits, and published a natural gas safety action plan that is on its website. That allows the Legislature and the public to see exactly what were doing on specific safety actions related to natural gas.

Rumor Of Deal Roils Teachers Union
Howard Blume @
latimes.com
L.A. teachers union roiled over alleged deal between school board candidate Antonio Sanchez and UTLA vice president Gregg Solkovits.