Capitol Basement

"California stands to receive possibly as much as $14 billion in direct budget relief from the federal stimulus plan, which the House is to consider today.

"But the state, struggling to close a $40 billion budget deficit, isn't ready to cash it in just yet.

"It still doesn't know how much money is coming this way. And the one-time cash infusion can't be applied for permanent costs, ones beyond 2010.

"'You only can set off anything if you know that you get it permanently, because otherwise it has no effect on the structural deficit,' Gov. Arnold Schwarzenegger said Monday. 'And so we don't want to take money and say OK, we get this year the money and maybe next year and from then, boom, it drops off.'"

But the money may ease the pain for public schools, reports the Chron's Nanette Asimov. "An economic stimulus package working its way through Congress could provide $10 billion in federal relief over the next two years for California's public schools, raising optimism among educators that it might ease cutbacks caused by the state's budget crisis.

The package would provide millions of dollars to most school districts in the Bay Area and across the state for construction, special education and help for low-income students."This does not solve the fiscal crisis, but it does throw us a lifeline," state Superintendent of Public Instruction Jack O'Connell said Tuesday.

Although no package has been approved, California educators are salivating over what could be the largest infusion of one-time federal cash for schools in the state's history.

To put it in context, in 2007, the federal government spent $54 billion on education nationwide, an amount dwarfed by the $140 billion in the stimulus bill. California's share would be about $10 billion - more than $1 billion of it for the huge Los Angeles Unified School District."

"Chiang has vowed to stop making certain payments, including taxpayer refunds, as of Feb. 1 to conserve cash. The state faces a roughly $40 billion deficit through July 2010. More acutely, beginning in February the state doesn't have enough money in its coffers to pay its current bills."

Does that mean that people with tax liabilities are allowed to send in IOUs instead of checks?

"Gov. Arnold Schwarzenegger and Atty. Gen. Jerry Brown will ask a federal judge today to end court oversight of healthcare in California prisons and return the inmate medical system to the state's control," reports Michael Rothfeld in the Times.

"In a filing with U.S. District Judge Thelton E. Henderson, who seized prison healthcare from the state nearly three years ago, Brown and Schwarzenegger administration officials are expected to contend that the receivership has exceeded its authority and violated federal law with an $8-billion plan to renovate healthcare clinics and build seven "holistic" facilities for 10,000 inmates.

"'We believe the receivership has become a government unto itself, operating without accountability, without public scrutiny and without clear standards,' Brown said Tuesday. 'Tremendous sums have been spent, and tremendous progress has been made, but we feel that it's time to place the responsibility on the director of corrections and not have this parallel government operating on its own.'

"The state intends to ask Henderson to replace the receiver with a special master who could report on the state's progress and work with state officials but would not have the same broad powers."

"Frustrated emergency room doctors filed a class-action lawsuit against the state Tuesday , saying that California's overstretched emergency healthcare system -- which ranks last in the country for emergency care access -- is on the verge of collapse unless more funding is provided," writes Kimi Yoshino in the Times.

"Across the state, scores of hospitals and emergency rooms have shut their doors in the last decade, leading to long waits, diverted ambulances and, in the most extreme cases, patient deaths.

"Doctors say the situation is only getting worse. State officials, struggling to balance the budget, have proposed another $1.1 billion in Medi-Cal cuts.

"'Are people truly suffering consequences? Absolutely,' said Irv Edwards, one of the doctors represented in the lawsuit and president of Emergent Medical Associates, which staffs 14 emergency rooms in California. 'This could happen to you or me. We could be traveling through San Francisco or San Jose, get in a car accident, have a broken leg and end up in the ER, where it takes hours to be treated regardless of our screams. Then we get to diagnosis, and they say, 'There's no orthopedic on call. I'm sorry.' ' "

If you thought things were bad between the legislative leaders, check out the ongoing rift between Andy Stern and Sal Rosselli. As union wars go, the war between SEIU's Andy Stern and Sal Rosselli seems anything but civil . Charging Sal Rosselli and UHW’s leadership with “financial malpractice and efforts to subvert democracy,” SEIU President Andy Stern placed UHW--its third largest local-- in trusteeship yesterday. Stern’s action comes a day after UHW announced it was rejecting SEIU’s conditions for avoiding trusteeship. Stern based his decision on three independent grounds, all of which derive from SEIU’s fundamental dispute with UHW over the transfer of 65,000 UHW members to a new statewide longterm care local.

And it looks like a new state law is helping to stem the tide of foreclosures. "Foreclosure activity in the Bay Area is slowing, but it has nothing to do with an improvement in the hard-hit housing market, according to a report released Tuesday by MDA DataQuick," the Merc's Eve Mitchell reports.

"Instead, a new state law that requires lenders to wait longer before they start foreclosure proceedings against people who are behind on their mortgage payments is the reason for the slowdown, the report said.

"Lenders sent out 11,157 default notices — the first step in the foreclosure process that happens after several missed payments — to Bay Area homeowners in the fourth quarter 2008. That's a 25.8 percent drop from the third quarter ending in September and a 12.2 percent decrease from fourth quarter 2007.

"In September, a state law was rolled out that requires lenders to wait 30 days before filing a notice of foreclosure after they have first contacted a borrower who has stopped making mortgage payments."

But the relief may be temporary , reports the Chron's Carolyn Said. "Foreclosures and default notices hit new highs for California and the Bay Area in 2008, according to a real estate report released Tuesday.

"A total of 236,231 homes statewide, or 2.8 percent of all the state's housing stock, were repossessed by banks last year, according to the report from real estate information service MDA DataQuick of San Diego. In the nine-county Bay Area, lenders took back 35,709 homes, or 2 percent of all homes and condos.

"This was a misery-packed year for a whole lot of people who bought homes at the height of the real estate market," said Andrew LePage, an analyst with DataQuick.

More misery lies in wait for thousands, judging by the increases in default notices - the first step in the foreclosure process. Statewide in 2008, 404,952 homeowners were notified that they were in default, generally at least three months behind on payments. In the Bay Area, 61,347 households received the notices. Both numbers were about 60 percent higher than a year ago."

"Dellums, the wife of Oakland mayor Ron Dellums, was confirmed with 20 votes from Democratic lawmakers, while all but two of the Republicans stayed silent, abstaining from the vote.

"Both husband and wife are Democrats. Nothing against Dellums, GOP lawmakers said. Their refusal to vote, several said, was a protest against perpetuating what they see as an unnecessary state commission in the midst of a $42-billion budget crisis. A spokesman for Sen. Sam Aanestad (R-Grass Valley) put it this way: 'It’s the senator’s opinion that the Commission on the Status of Women should be abolished.'"

Does that mean none of these outgoing Republicans are going to accept a $100,000 appointment on their way out the door? How about signing a pledge on that?

As if on cue to justify the commission, Nathan Olivarez-Giles writes in the Times. "California insurers are discriminating against women, charging them more for individual health insurance than men, the city of San Francisco maintained in a lawsuit filed Tuesday against the state regulators who govern them."

"The suit contends that Insurance Commissioner Steve Poizner and Cindy Ehnes, director of the Department of Managed Health Care, approved a system that allows the insurance companies to impose "gender rating" when pricing policies, resulting in women paying as much as 39% more for coverage then men.

"At issue in the suit are rates for individuals and not group policies. These policies are often purchased by people who are unemployed or work for businesses that don't offer health insurance or adequate coverage.

"The lawsuit contends that the state's existing health insurance laws are unfair to women and should be declared unconstitutional. Poizner's office disagreed and said the rates were in line with state law."

And, for those of you still looking for a bill idea before Friday's deadline: "After a Lutheran school expelled two 16-year-old girls for having "a bond of intimacy" that was "characteristic of a lesbian relationship," the girls sued, contending the school had violated a state anti-discrimination law," writes Maura Dolan in the Times.

"In response to that suit, an appeals court decided this week that the private religious school was not a business and therefore did not have to comply with a state law that prohibits businesses from discriminating. A lawyer for the girls said Tuesday that he would ask the California Supreme Court to overturn the unanimous ruling by a three-judge panel of the 4th District Court of Appeal.

"The appeals court called its decision "narrow," but lawyers on both sides of the case said it would protect private religious schools across California from such discrimination suits.

"Kirk D. Hanson, who represented the girls, said the "very troubling" ruling would permit private schools to discriminate against anyone, as long as the schools used their religious beliefs as justification."

And people waiting for that state tax refund aren't the only ones who will be left in the lurch. Dale Kasler reports on more financial woes in the newspaper biz.

"The McClatchy Co. said today it would suspend paying shareholder dividends after April 1.

"The Bee's publisher said it would make its last quarter dividend payment April 1 and then suspend the payouts "for the foreseeable future in order to preserve cash for debt repayment."

"McClatchy cut the dividend in half last fall, to 9 cents a share. Then, pressed by declining revenue, it renegotiated its bank loans. Under the new agreement, the Sacramento-based chain was forbidden from paying dividends if its "leverage ratio" exceeded a certain threshold."

And the economic pain is not just being felt in continents that aren't permanently frozen. Times are tough in Antarctica, too, AP reports, "Once the "delicacies of the Antarctic," fresh seal brains, penguin eggs or grilled cormorant are off the menu at research bases where chefs rely on imported and often frozen food.

"'You have to use what you've got in the store. Frozen stuff, tinned stuff and if you're really desperate the dried stuff,' said Alan Sherwood, a widely praised chef at the British Rothera base on the Antarctic Peninsula.

"'We're now onto dried onions because we've run out,' he said. 'You can't just go out and buy some.'"

Stimulation simulation