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THE NOONER for September 23, 2013

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$$$: The crack LAO team released a September revenue update on Friday. September is the fifth largest in terms of personal income tax revenue and overall revenue. Generally, things are looking good, although there's great uncertainty about that cluster**** in Washington, DC.

Here's the "simple" of what is going on in Washington. First, ignore everything you learned about the federal budget process. The last true budget adopted--where a budget outline is approved and then a series of appropriations bills are passed--was 1997. Since then, we have either had omnibus (or a few in some cases) spending bills or continuing resolutions ("CR"), which essentially continue (or reduce) the prior year's spending level.

The federal fiscal year starts on Tuesday, October 1, and the existing "CR" expires on September 30. With a divided Congress and a generally ascerbic attitude, there are few "pressure points" where major concessions can be extracted, particularly in this case from the President, who otherwise gets to maintain status quo, including on the divisive issue of health care reform, which was approved outside of the normal process by the Democratic majority in 2010. Because a Senate filibuster could not be overcome, the once-a-year shot of "budget reconciliation" was used.

The two pressure points Republicans opposing ObamaCare have are this expiring CR and a vote to raise the nation's debt limit, which is expected to be necessary mid-October. While certain Republicans will oppose raising the debt limit regardless, Republican leadership knows that playing with it is playing with economic fire. Investors around the world largely don't care if the federal government shuts down for a couple of weeks; but economic markets are very responsive to whether the U.S. government continues to repay its $11.9 trillion in obligations held by the "public"--meaning those paper bonds you have in the drawer and the huge amounts owned by U.S. and foreign institutions. (An additional $4.8 trillion is held by other federal government funds, such as the Social Security trust and the Federal Reserve.

So, it's game on relative to the fight over the continuing resolution, as the maximum political game can be played with fewer macro-economic consequences compared to the debt limit. (However, if you're a federal employee or planning a vacation in DC, it's a whole other story.)

A shutdown might happen simply because it's a better option than to have a resolution this week on the CR that upsets conservatives and leads to a bigger fight over the debt in a few weeks. Or, perhaps better heads will prevail and we will actually have a GOVERNment.

To California . . . 

Three California House Republicans want to see the issue be resolved quickly, and those are the three residing in districts won by Obama. Specifically, Gary Miller in CD31 (Obama margin over Romney: 16.6%), David Valadao in CD21 (Obama margin: 11.1%), and Jeff Denham in CD10 (Obama margin: 3.6%). While ObamaCare is likely opposed by majorities in these districts, a government shutdown that likely gives Obama a win is bad for these incumbents. Speaker John Boehner knows that and, while he's looking for some win to give the most conservative wing of his caucus, is looking for a way out of a shutdown.

Obama won all of the districts held by Democrats, with the smallest margins in Raul Ruiz's CD36 at 3.2% and Ami Bera's CD07 at 3.6%. Romney won 12 districts, and Obama's statewide edge was 26.3%.

Valadao and Gary Miller voted "no" on the bill restricting food stamps last week.

DEFINE "ACT": House Republicans say they’ll act on immigration reform this year [David Nakamura @ WaPo]

RETIREE HEALTH: Judge rules retiree health protected like pension [Ed Mendel @ CalPensions] - "The court ruling is a blow to the view that state and local governments, when looking for cost savings, may be able to make cuts in promised retiree health care that are not allowed for tamper-proof pensions."

CH-CH-CH-CHANGES: For minorities, San Mateo County district elections represent shift in balance of power [Aaron Kinney @ MercNews] - "Once almost completely white, the county in recent decades has seen a dramatic influx of ethnic minorities, particularly Asians and Latinos, who together now comprise more than half the population. Despite that transformation, the board has retained its alabaster hue, amid a big-money, at-large voting system that critics say protected the status quo. Since 1955, county records show there have been just two minority supervisors, one Latino and one black. . . But the electoral scales may soon tip closer to balance. After settling an anti-discrimination lawsuit in February, San Mateo County became the last county in California to move from countywide to district elections, meaning candidates will be elected only by voters in their supervisorial district starting next year."

SANDY EGGO: Financier and owner of the UT San Diego Doug Manchester wrote a $100,000 check to the California Republican Party on Friday, his largest state contribution since giving $125,000 to the Yes on Proposition 8 campaign in 2008. It is unclear whether the money is for party backing of his choice for San Diego mayor--Councilmember Kevin Faulconer--or as part of the Jim Brulte-led financial rebound in advance of next week's confab in Anaheim.

EVE: Tomorrow is the special runoff in AD52 between Paul Leon (NPP) and Freddie Rodriguez (D). In a district Obama received 65% of the vote in, Rodriguez is expected to win easily over Leon, who ran earlier this year in the State Senate vacancy as a Republican.

***A MESSAGE FROM MVLM ADVOCACY: K Street Consulting and McCallum Group, Inc. are pleased to announce our strategic alliance – McCallum Vargas Lopez MacDonald Advocacy Alliance. Now we can seamlessly offer clients the combined expertise and relationships of our respective firms. Please visit to learn more.

#CAKEDAY: Happy birthday to Dept of Education advisor Rebecca Barrett, Assemblymember Adam Gray, CMA VP Paul Hegyi and journalist Daniel Weintraub.



  • AB 797 by Assemblymember Richard S. Gordon (D-Menlo Park) – Transit districts: contracts.
  • AB 1391 by the Committee on Insurance – Insurance: omnibus.
  • AB 1410 by the Committee on Veterans Affairs – Courts-Martial Appellate Panel.
  • SB 4 by Senator Fran Pavley (D-Agoura Hills) – Oil and gas: well stimulation. A signing message can be found here.
  • SB 369 by Senator Kevin De León (D-Los Angeles) – State claims.
  • SB 639 by Senator Ed Hernandez (D-West Covina) – Health care coverage.
  • SB 665 by Senator Lois Wolk (D-Davis) – Oil and gas: drilling: indemnity bonds: wells.
  • SB 717 by Senator Mark DeSaulnier (D-Concord) – Search warrants: driving under the influence.
  • SB 762 by Senator Jerry Hill (D-San Mateo) – Secondhand goods: lost, stolen, or embezzled items.
  • SB 822 by the Committee on Business, Professions and Economic Development – Professions and vocations.

YOU GOT SOME SPLAININ TO DO: Strip club in SF sues Oracle over $33,000 bill



  • SEIU United Healthcare Workers-West Research Analyst-Workforce Development (San Francisco or Sacramento). 150,000 member California healthcare union seeks strategic, progressive, motivated Research Analyst, , 2-3 years research/union experience. Excellent benefits, career ladder. Salary $49k-$91k. Resume, letter, references:
  • Good Quality Office Furniture For Sale: Large rectangular conference table, including seating for 12-15; numerous desks; metal and wood 2 and 4-drawer filing cabinets; Hawthorn brand partitions with attached desks/storage for up to 15 cubicles; misc. chairs, etc. Non-profits encouraged to shop. Contact
  • Capitol Weekly and the University of California Sacramento Center present Health Care: 2014, a conference examining the California health care landscape as the Affordable Care Act takes effect. The day-long conference will be held in Sacramento on September 26, 2013. Register here.



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Judge Rules Retiree Health Protected Like Pension
Ed Mendel @
A superior court judge overturned a freeze on retiree health care for Los Angeles city attorneys this month, citing some of the same case law that made public pensions a vested right that can only be cut if offset by a new benefit.

Bay-front condo high-rise in S.F. ballot showdown
John Wildermuth @
Proposition B on the Nov. 5 ballot is a developer's attempt to make the November election the last chance for neighbors and environmentalists to block the 8 Washington St. condominium project on the city's waterfront.

GOP Sen. Ted Cruz Vows Bid To Block Budget Bill If It Funds Obamacare
Lisa Mascaro @
WASHINGTON — Republican Sen. Ted Cruz vowed Sunday he would seek to stop legislation to keep the government running unless President Obama agrees to defund the nation’s new healthcare law .

Billl Would Prevent Double Testing And Double Frustration For Students, Teachers
EdSource Executive Director Louis Freedberg @
Of all the bills sitting on the desk of Gov. Jerry Brown, perhaps none is more important to the future of education in California than Assembly Bill 484. Sponsored by State Superintendent of Public Instruction Tom Torlakson and authored by Assemblywoman Susan Bonilla, D-Concord, AB 484 would end the standardized tests that have been in place since 1999 and move California forward in implementing tests based on the new Common Core State Standards.

Strip club sues Oracle over employee's unpaid tab
A San Francisco strip club is suing Oracle after one of its employees ran up $33,540 in charges on a company credit card - and Oracle refused to pay the bill. According to the lawsuit, the employee - identified as Jose Manuel Gomez Sanchez - used his Oracle-issued American Express card to charge $16,490 in unspecified "services" at the New Century Theater on Larkin Street during the wee hours of Oct. 2 during last year's Oracle OpenWorld fest.

CSU Trustees To Talk Budget
Josh Dulaney @
Next year’s budget will be on the minds of California State University trustees this week when they gather here to examine a preliminary proposal that seeks at least $100 million more than what Gov. Jerry Brown plans for the 2014-15 fiscal year.

Napolitano Choice Fuels Criticism Over UC System's Selection Process
Larry Gordon @
Supporters of a more open method say better decisions are made when three or four finalists are formally identified to the public.

Pelosi: Would "Absolutely Positively Not" Accept Deal To Delay Implementing Obamacare
Joe Garofoli @
House Democratic Leader Nancy Pelosi would “absolutely positively not” accept a deal to delay implementing Obamacare for a year as part of a debt ceiling deal. That sounds like a no —according to what the San Francisco Dem told CNN’s Candy Crowley Sunday morning on CNN’s “State of the Union.”

New Focus On School Climate In Massive Student Survey | Edsource Today
EdSource Executive Director Louis Freedberg @
“The needs of schools have changed,” Austin said. The revisions on the Healthy Kids Survey, the most extensive since its introduction in 1999 by the California Department of Education, sharpen the focus on school climate and culture and add a new supplementary section on social-emotional health, he said.

Lower Health Insurance Premiums to Come at Cost of Fewer Choices
With insurance marketplaces set to open next month under the new health care law, consumers may find that insurers have put big limits on their choices.

Germany's Angela Merkel Begins Tricky Task Of Forming New Government
Henry Chu @
LONDON -- Fresh from her party’s best election showing in more than 20 years, German Chancellor Angela Merkel started the tricky task Monday of forming a new government after her preferred coalition partner was ousted from parliament in a shocking result.

More Business Travelers Booking Upscale Rooms And Airline Seats
Hugo Martin @
With the lingering effects of the Great Recession slowly disappearing, more business travelers are reserving high-priced hotel rooms and booking roomier seats in the front of the plane.

House Republicans Say They'll Act On Immigration Reform This Year
David Nakamura @
House Republicans intensified their outreach to Latino groups last week, offering renewed pledges that the House will deal with immigration reform this year. The effort has revived hope among advocates that a bipartisan deal can be reached to address the fate of the nation’s 11 million undocumented workers and students.

Rim Fire's Next Fight: Controlling Erosion
The soil does not absorb the droplet, it repels it -- a finding that tells Rust and his colleagues that fierce winter rains could rush down these hillsides burned barren in the 260,000-acre Rim Fire, flushing dirt, rocks and ash from one of California's most pristine watersheds.

Billion-dollar showdown: Silicon Valley trial against lead-paint industry finishing
Howard Mintz @
Local governments and lead-paint industry to square off in Santa Clara County Superior Court over alleged hazards in California homes.

Citations For Nuke Plant Breakdown
Morgan Lee @
Southern California Edison, operator of the recently retired San Onofre Nuclear Generating Station, says it and nuclear equipment manufacturer Mitsubishi Heavy Industries have been cited for failures that led to the plant's breakdown.

FPPC Vs Sock Puppets; Chron Gets Press Clipped
So we were delighted to see the FPPC adopt new regulations last week requiring disclosure by campaigns and committees that pay an individual $500 or more to post favorable or unfavorable content on Internet sites not run by those campaigns or committees. In periodic spending reports, campaigns and committees will have to identify who was paid, how much and to which website or URL the posting was made.

Chamber Of Commerce Successful Against Most 'Job Killer' Bills
Marc Lifsher @
But labor says the minimum-wage hike victory outweighs the California chamber's efforts.

Angela Merkel's Christian Democrats Win German Election
Jeevan Vasagar @
Angela Merkel is almost certain to serve a third term as German chancellor after the Christian Democrats' victory in the election.

If Newtown Massacre Didn't Move The Gun Debate, Navy Yard Killings Unlikely To Either
EdSource Executive Director Louis Freedberg @
That has become distressingly clear in the week since yet another massacre, this time at Washington Navy Yard just blocks from the U.S. Capitol.

Obama endorses NYC's de Blasio
Tal Kopan @
The president highlights his position on education, affordable housing and community hospitals.

Bay Area Investors, Commuters Driving Up San Joaquin Valley Home Prices
Hudson Sangree @
In the housing bubble of 2004 and 2005, Stanislaus County’s median peaked at $396,000.