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THE NOONER for November 21, 2013

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  • AD40 (Redlands): removed Assemblymember Mike Morrell (R)

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Busy day with my annual convention starting in Burlingame...this will be a quickie...

AD45: The official lead for Matt Dababneh in the west San Fernando Valley Assembly seat is 173 votes. There are 2,841 unprocessed ballots, and Susan Shelley would need 57% of those to win the seat. There is no playbook, as we haven't seen a Republican outpace a Democrat on Election Day vs. early absentees in a competitive race.

SD23/AD40In the last couple of days, several folks have inquired about what choices Mike Morrell has in relation to running in the special election to succeed Bill Emmerson and his reelection to AD40. What we know is that Morrell fully intends to run for the senate seat.

The special primary for the senate vacancy is likely to take place on March 25, with a runoff consolidated with the statewide primary election on June 3. Yes, Morrell could run for both the special election for SD23 and reelection to AD40, but I just don't believe it will happen. Even if he won the senate special outright in March, it would be past the filing deadline for AD40 (March 7). And, if he goes to the runoff, leaving his name on the ballot would look bad for both races in June. 

QUALIFIED: The referendum to overturn the compact that would lead to a casino off Highway 99 in Madera County has qualified for the November 2014 ballot.

MONEY MATTERS: The Legislative Analyst's Office came out with its fiscal forecast yesterday, confirming that the outlook through 2020 is far better than what lawmakers have become accustomed to in recent years.

Here are some important grafs:

OVERALL: We project that operating surpluses will grow at a rate of between about $1 billion and $3 billion each year between 2014–15 and 2017–18, at which point we estimate that they will reach $9.6 billion under current laws and policies. As the temporary taxes authorized by Proposition 30 phase out over several fiscal years near the end of our forecast period, we project that operating surpluses will remain stable as revenues and expenditures grow at similar rates.

PROP 98: We estimate that the minimum guarantees for 2012–13 and 2013–14 will be up a combined $4.4 billion. Given the 2012–13 school year has been completed and the 2013–14 school year is underway, the additional funding in practical terms is available for one–time purposes, including paying down the state’s still sizeable outstanding school and community college obligations.

HOUSING: We view the pace of recent price gains as unsustainable, and accordingly expect housing inventories to expand as more homeowners feel it is a good time to sell, as cash investor purchases decline, and new housing construction begins to ratchet up, each of which should absorb existing demand and therefore slow price increases.

DEBT SERVICE: We estimate that the [debt service ratio] will remain just under 6 percent throughout the forecast period. This is because General Fund debt service and General Fund revenues are expected to grow at similar rates. To the extent additional bonds are authorized and sold in future years beyond those already approved, the state’s debt–service costs and DSR would be higher than projected...

The Chron's Melody Gutierrez has a response from Director of Finance Michael Cohen: "The state's budget has come a long way in the past three years. . . Any additional revenue that materializes will be inextricably linked to capital gains - the state's most volatile revenue source. Recent history reminds us painfully of what happens when the state makes ongoing spending commitments based on what turn out to be one-time spikes in capital gains."

Central Valley Land Sink Issue For High Speed Rail, Flood Control, Water Deliveries [Amy Quinton @ CapRadio]



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  • Pacific McGeorge's Mike Belote Annual Endowed Capital Center Lecture Series presents "Protecting Individual Privacy in the Internet Age" Thursday Dec. 5 at 5 p.m. Sutter Club, 1220 9th Street. Free, Register at:
  • Tulchin Research, a leading Democratic polling and strategic consulting firm based in downtown San Francisco, seeks an Analyst for a full-time exempt position. Tulchin Research provides consulting services to candidates for elected office, ballot measure campaigns, labor unions, non-profits, corporations, and foundations. More information on the Tulchin Research website, and interested candidates should send a cover letter and resume to
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California Special Election In 45th Assembly District Remains Close
Jeremy B. White @
A special election that could restore the Democratic supermajority in California's Assembly hung in the balance on Wednesday, with uncounted ballots representing far more votes than the current margin between the two candidates.

LAO Projects Huge Prop. 98 Increase For K-12, Community Colleges Next Year
John Fensterwald @
The LAO projects that Prop. 98 increases will continue through 2019-20, though at a slower clip, declining from 7.3 percent to 1.5 percent in 2018-19, when the Prop. 98 guarantee would rise only $1.1 billion. However, the good news is that this coincides with the end of the temporary income tax increase that voters approved a year ago under Proposition 30. Instead of a revenue cliff, which many had feared would occur, there would be a gentle slope.

Area School District Settles Lawsuit, Will Change Elections
Jean Merl @
The ABC Unified School District in Cerritos will switch its election system after a lawsuit alleging voting-rights violations.

Wall Street Firm Sells Bonds Backed By Sacramento Rental Homes
Hudson Sangree @
A home at 1678 Bridgecreek Drive is one of the hundreds in the region owned by Blackstone. In early August 2012, THR California, a subsidiary of Blackstone, the international hedge fund, owned no properties in the Sacramento market, county tax records show. By early mid-November, it owned 475, having added about 50 new properties a week. Blackstone’s tally now stands at about 1,500 in the area and 40,000 nationwide.

Will S.F. mayor become ambassador to China?
John Cote and Carolyn Lockhead @
Maybe it was just coincidence, but the timing of U.S. Ambassador to China Gary Locke's announcement Wednesday that he would resign early next year has only fueled rumors that Mayor Ed Lee could be Locke's replacement.

State Senator Burned Out By Polarization
George Skelton @
Fed up with a lack of compromise, Republican Sen. Bill Emmerson says he's lost his passion for politics and it's time to leave.

Uncounted ballots to decide race for Assembly seat
Fewer than 200 votes separate two candidates in a tighter-than-expected Southern California runoff election to fill a vacant state Assembly seat.

California Controller Chiang sues firm over failed payroll project
Jon Ortiz @
After months of finger-pointing over who is to blame for a failed payroll system upgrade, California Controller John Chiang is taking global tech firm SAP Public Services Inc. to court for breach of contract.

Obama Plans Public Event In S.F. To Talk Immigration Reform
Carla Marinucci @
President Obama is expanding his planned fundraising trip to San Francisco on Monday with a visit to the Betty Ong Recreation Center in Chinatown “to deliver remarks on the importance of taking action to pass commonsense immigration reform,” the White House said Wednesday.

State analyst projects years of budget surpluses
David Siders and Jim Miller @
In its most optimistic budget forecast in more than a decade, the Legislature’s fiscal analyst said Wednesday that California is poised for years of multibillion-dollar surpluses.

Hope Grows For Budget Deal
They’ve been written off as a doomed-to-fail duo: Rep. Paul Ryan and Sen. Patty Murray, the congressional budget leaders who are on an uphill quest to reach any kind of fiscal deal.

California's Finances Improving Faster Than Expected
Chris Megerian @
State revenue could pump more than $4 billion in unexpected funds into schools and community colleges starting next summer.

Democrat clings to lead in Assembly special election
Jeremy B. White @
If Democrat Matt Dababneh hangs on, Democrats once again will have a two-thirds supermajority in the Assembly. If Republican Susan Shelley wins, Democrats will lose a seat but could still reclaim the supermajority Dec. 3, when three Democrats are running in a special election in the the 54th Assembly District.

'Dire' prediction for state water allocation
Michael Cabanatuan @
As the first significant rain of the season fell on Northern California Wednesday, the state Department of Water Resources issued an ominous water supply estimate that makes it clear that much more precipitation is needed this winter.

San Jose Council Deadlocks On Rocketship Charter School In Tamien Neighborhood
Mike Rosenberg @
The nonprofit Rocketship Education wants to build the $10 million Tamien Public School and a neighboring public park in time for it to open for the school year that begins in fall 2014.

Kathleen Sebelius Watches Obamacare Website Crash
Sebelius looks at the screen: 'Sorry, our system is temporarily down.' | AP Photo

Senate Democrats invoke 'nuclear option' on filibuster
Michael A. Memoli @
WASHINGTON – In a historic move, Democrats in the United States Senate voted to eliminate the use of the filibuster as a tool to block presidential appointments, upending a decades-old precedent that gave the minority party unique leverage on nominations.

BART unions will talk - after contract ratified
BART's Board of Directors is scheduled to decide Thursday whether to approve the tentative agreement with the Service Employees International Union Local 1021 and Amalgamated Transit Union Local 1555, which represent about 2,300 workers ranging from train operators and station agents to janitors and clerical staff. The district's directors said Friday night that the section providing workers with six paid weeks of family leave was signed in error and called for contract talks to be reopened.

California faces obstacles complying with Obama’s health care offer
Christopher Cadelago @
California officials considering a presidential invitation to extend canceled health policies face potential roadblocks: Possible legal action from outside parties and insurers’ inability to meet exceedingly tight deadlines.

Next health care law problem? Keeping your doctor
President Obama promised people could keep their doctors. But in many states the new plans appear to offer a narrow choice of hospitals and doctors. Overall, it's shaping up as less choice than what people get through Medicare or employer-based coverage. Also, it can get complicated tracking down which medical providers are in what plans.

Taste California Act draws cheers
For the first time since Prohibition, it will be legal in the state for most spirit makers to charge a fee for samples. [...] the Taste California Act was passed - effective Jan. 1 - it was illegal to sell distilled spirits at the place they are made - even a sip. "The state's liquor laws are among the most convoluted and restrictive in the country," said Arthur Hartunian, outgoing president of the California Artisanal Distillers Guild, which has about 40 members. The new law, sponsored by Assemblywoman Nancy Skinner, D-Berkeley, and signed by the governor, still won't allow distillers (with the exception of brandy makers) to sell bottles directly to the public. At Alameda's St. George Spirits, makers of Hangar One Vodka, absinthe, rum, whiskey, bourbon and eaux de vie, the tasting room loses $100,000 a year, said Andie Ferman, the tasting room manager.