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THE NOONER for December 17, 2014
THREE WAYS TO SUPPORT THE NOONER:
MONEY MATTERS: Well, today's theme seems to be about the dollars and sense. We'll start with the good news.
The Legislative Analyst's Office posted a revenue update yesterday, finding:
The "Big Three" taxes are running about $1.4 billion above DOF budget act projections. (Our figures, in contrast to those in the Finance Bulletin, adjust 2014-15 sales tax receipts to exclude an approximately $350 million one-time negative adjustment expected to be attributed to prior fiscal years in the state's budget accounting system.) All revenues, including the insurance tax and some other minor revenues, are about $1.6 billion above budget projections through Nov. 30. As noted above, some of the gains in the insurance tax are likely to erode in December.
December and January are important collection months for estimated payments that high-income PIT filers make on capital gains and business income, so collections over the next few weeks may be key in determining how much revenues exceed the 2014-15 budget act projections. As we noted in the Fiscal Outlook, virtually all higher revenues in 2014-15 will be required to go to schools and community colleges under the Proposition 98 minimum funding guarantee, and this could leave the state budget's bottom line worse off in future years in certain scenarios.
And, the LAO later added this frosting to the cake:
@LAOEconTax: "Big #CABudget revenue day: $957m of corp taxes in today. Gross corp collections already above Dec monthly forecast. More info in coming days"
The Department of Finance released its monthly finance bulletin yesterday, reporting "Preliminary General Fund agency cash for November was $154 million above the 2014-15 Budget Act forecast of $5.682 billion. Year-to-date revenues are $1.206 billion above the expected $33.638 billion."
So, with a couple of more big corporate tax days and expected large personal income tax pre-payments because of the stock market left in December, we could easily begin the new year $2 billion above projections.
Okay, now to the bad news. State Controller John Chiang sought an analysis of the state's unfunded post-retirement health liabilities (OPEB), consistent with the Government Accounting Standards Board (GASB) Statements 43 and 45.
The accountants report provides three scenarios for the implications, using different investment return assumptions, which estimate General Fund costs ranging from $1.87 to $3.65 billion annually.
Pay-as-you-go funding at 4.25 percent - $71.81 billion Actuarial Accrued Liability
Partial-funding at 5.765 percent - $57.31 billion Actuarial Accrued Liability
Full-funding at 7.28 percent - $46.81 billion Actuarial Accrued Liability
SD21: Bad News for Rep. Paul Cook: Tim Donnelly not running in special election for Steve Knight's seat [John Hrabe] -"I look forward to spending more time with my family while my boys are still living at home, and am excited about future opportunities to serve–political and otherwise that lie ahead," he said.
#CAKEDAY: Happy birthday to Angela Babcock and Steve Knight!
FAREWELL: Maureen DiMarco, Secretary of Education under Pete Wilson (1948-2014).
TOP HEADLINES ON AROUNDTHECAPITOL.COM AS OF 12:00PM
Jerry Brown Plans To Target Cost Of Retiree Healthcare
Gov. Jerry Brown plans to address the growing cost of healthcare for retired state workers next month when he releases his new budget proposal, a spokesman for his finance department said Tuesday.
Bad News for Rep. Paul Cook: Tim Donnelly not running in special election for Steve Knight's seat
John Hrabe @ calnewsroom.com
Former Assemblyman Tim Donnelly announced Tuesday that he won't run in the 2015 special election to replace Congressman-elect Steve Knight.
Maureen Dimarco, Wilson Education Adviser, Dies At 66 | The Sacramento Bee
Dan Walters @ sacbee.com
DiMarco was born Maureen Marilyn Gallagher in Rochester, N.Y., but as a teenager moved to California with her family and attended the University of Southern California, where she met her husband, Richard DiMarco.
Senate Ends Chaotic Session With A Late Flurry Of Votes
A turbulent lame-duck session of Congress came to a sudden end Tuesday as the Senate rushed to clear a lingering tax bill and some key presidential nominations in a late-night flurry of final votes.
Congress Quietly Ends Federal Government's Ban On Medical Marijuana
Tucked deep inside the 1,603-page federal spending measure is a provision that effectively ends the federal government's prohibition on medical marijuana and signals a major shift in drug policy.
Rain Could Spell Trouble For Calif. Water Conservation | The Sacramento Bee
ELLEN KNICKMEYER @ sacbee.com
After California's driest three years on record, there have been few sounds as disturbing to water conservationists as the whisk-whisk-whisk of automatic lawn sprinklers kicking on directly behind TV reporters covering some of the state's first heavy downpours in years.
Mr. Waxman Leaves Washington
It was a Republican who once paid Democrat Henry Waxman the rough compliment of being "tougher than a boiled owl." Many of the big things Waxman helped to make into law in his four decades in Congress took bipartisan work, the kind that has all but disappeared in Washington: tobacco regulation, easier access to generic drugs, increased food labeling and safety, cleaner air and water, AIDS healthcare and Obamacare. But that's not why Waxman — a vastly influential legislator and among the last of Congress' 1974 "Watergate baby" generation — is retiring. He figures he has a lot of tread left on his tires, but he wants to drive down roads other than the ones leading to Capitol Hill.
California’s Retiree Health Care Debt Rises … Again | Faultlines | Kqed News
In this new era of California tackling more of its future debt obligations, get ready for a new conversation about one that’s been under the radar for a very long time: the cost of long-term health benefits for retired government workers.
PG&E Email Hints At Improper Contacts With PUC's Mike Florio
Marc Lifsher @ latimes.com
An ongoing scandal continues to unfold over what critics contend is an overly chummy relationship between electricity and natural gas companies and state utility regulators.
S.F. business lawyer confirmed as federal judge
Bob Egelko @ sfgate.com
The Senate on Tuesday confirmed President Obama's nomination of Haywood Gilliam, a San Francisco business lawyer and former federal prosecutor, to become a federal judge. Gilliam, 45, a graduate of Yale University and Stanford Law School, was an assistant U.S. attorney in San Francisco from 1999 to 2006, the last two years as chief of the office's securities fraud section. [...] he has practiced business law, most recently at Covington & Burling, where he was made a partner in 2009 and is vice chairman of the firm's white-collar defense and investigations group.
OPD Improves Handling Of Protests
Robert Gammon @ eastbayexpress.com
For decades, the Oakland Police Department had a reputation for being one of the most brutal law enforcement agencies in the state, in terms of its treatment of political protesters. That reputation was solidified after OPD's harsh crackdown on Occupy Oakland demonstrators in 2011 and 2012 forced the city to pay out millions of dollars in police misconduct settlements. But the recent, almost-nightly demonstrations in Oakland against police killings in Staten Island and Ferguson, Missouri have revealed that OPD has made significant strides in its handling of protests, and no longer deserves the reputation it once had. In fact, OPD has become more effective in dealing with mass demonstrations, and is doing a much better job than the Berkeley Police Department and the California Highway Patrol.
The Great Uncertainty Facing California Businesses
CEQA, the state's premier environmental law, allows outsiders to wade into developments. That's a big part of why it's one of the biggest headaches for San Diego businesses.
UC Berkeley Hack: Personal Data On 1,600 People Possibly Compromised
The personal information of about 1,600 people–including Social Security and credit card numbers–may have been hacked from UC Berkeley servers, a university official said.
Bush Takes a Step Toward a Presidential Run
Jeb Bush, the former governor of Florida, could commandeer the center-right of the Republican Party, but his positions on immigration and education may not make more conservative members of the party very happy.
Emails: Police Asked For Dirt On O.C. Councilmen
In the months before the 2012 city elections, police officers in Costa Mesa mocked members of the City Council and suggested ways to catch them in compromising positions, according to emails contained in court documents.
Critics Say College Graduation Rates Don't Tell The Whole Story
Pushing public colleges and universities to increase graduation rates has become a key objective for President Obama and California Gov. Jerry Brown, among others, as they seek to hold higher education institutions more accountable.
Apple Wins Ruling In $1-billion Antitrust Suit Over Itunes Updates
An Oakland jury found Tuesday that Apple did not violate federal antitrust laws when it blocked music downloaded from competitors' software from playing on iPods and other devices, ending a nearly decade-long legal battle that could have cost the California tech giant as much as $1 billion.
U.S. To Open Talks On Normalization With Cuba
MARY LOUISE KELLY @ politico.com
President Barack Obama announced the most sweeping shift in U.S. policy toward Cuba in more than half a century Wednesday, calling the move to reestablish diplomatic relations a ânew chapterâ for the two countries.
Martha McSally, a Republican Challenger, Wins Recount in Arizona Election
In the last undecided congressional race from the midterm elections, Ms. McSally edged out the Democratic incumbent, Representative Ron Barber, by 167 votes.
Lawyers Lie Down In The Rain To Protest Killings By Police
Amid calls for justice and chants of “black lives matter,” more than 100 lawyers, law students and others staged a “die-in” outside a downtown Los Angeles courthouse Tuesday, arguing that the legal system in which they operate is broken.
Incoming County CEO Mark Denny Under Scrutiny For $1 Million In No-bid Deals
MEGHANN M. CUNIFF @ ocregister.com
The county has hired an outside law firm to suggest what discipline, if any, should be handed out to officials who approved the contracts.