Credit check

May 2, 2012

Wall Street and Main Street seem to head in diametrically opposed directions, so one wonders if Wall Street's take on California's budget is any value at all. At any event, the latest episode: Standard and Poors has raised concerns about gimmicks in the cash-strapped spending plan and the impact of a judicial ruling that said the controller can't block lawmakers' pay when budgets are late.


From the AP's Judy Lin: "The Standard & Poor's memo cautioned that the agency could revise its positive outlook on California's debt if the Legislature fails to pass a balanced budget by its June 15 deadline. S&P cited concerns stemming from two developments last month."


"First, the deficit has grown as income tax revenue in April fell nearly $2 billion below expectations. Then a Sacramento judge ruled the state controller doesn't have authority to withhold pay from lawmakers."


"That ruling undermines Proposition 25, a 2010 initiative approved by voters that bans lawmakers from getting paid if they fail to pass a spending plan. The initiative also lowered the legislative threshold for passing the state budget from a two-thirds vote, which requires support from both parties, to a simple majority."


Meanwhile, back at the ranch, the Legislative Analyst -- who does know a thing or two about California budgets -- says the revenue picture is bleak, indeed, with tax receipts coming in some $3 billion below projections.


From the LAT's Chris Megerian: "The legislative analyst’s office has a new number that is adding to California’s financial headache: $3 billion. That’s the total amount that tax revenue has lagged behind goals set by Gov. Jerry Brown’s administration in the current fiscal year.


"The shortfall was detailed in a report released on Tuesday by the nonpartisan office, which provides budget advice to lawmakers."


"Much of that gap comes from a disappointing April, the most important month for income taxes. Income taxes were $2.07 billion short of the $9.43-billion goal, and corporate taxes fell $143 million short of an expected $1.53 billion, according to the report."


Over at the University of the Pacific, economy watchers say financial recovery is just around the corner.


From the Bee's Dale Kasler: "California's economic recovery will remain slow but steady over the next two years, forecasters at the University of the Pacific said today."


"UOP's Business Forecasting Center said 2012 is the first true year of recovery in the Central Valley, which suffered some of the worst of the housing crash. "The drag from housing has bottomed out," said economist Jeff Michael,director of the center."


Octogenarian Pete Stark, the mouthy, 20-term South Bay Democratic congressman who got into hot water recently for publicly -- and wrongly -- accusing a rival of taking bribes, is sounding off again. This time, he wrongly accused a journalist of contributing campaign cash to Stark's foe!  We put an exclamation point there because anyone who knows journalists knows they don't have enough money to contribute to anyone. 


From the Chronicle's Carla Marinucci: "On Tuesday, he was at it again — but this time his target was columnist Debra J. Saunders, who he wrongly accused during a Chronicle editorial board meeting of contributing toDemocratic opponent Eric Swalwell’s campaign."


"Stark was forced to publicly apologize to Swalwell last month after his unsubstantiated charges."


"On Tuesday, he had to apologize once more after he said he had documentation to prove that Saunders – who writes the Chronicle’s “Token Conservative” blog” — donated to the Swalwell campaign."


State Assemblyman Roger Hernandez, D-West Covina, has been charged with two counts of drunken driving stemming from an incident in Concord last month.


From the AP's Hannah Dreier: "He is expected to enter a plea May 21, Contra Costa County District Attorney spokeswoman Bobbi Spinola said Tuesday. Charges filed Monday say the lawmaker had a blood alcohol level of at least 0.08, the minimum level for a DUI, the Contra Costa Times reported."


"After police released the results of his blood test last week, Hernandez issued a statement saying he had exercised poor judgment in thinking he was sober enough to drive. In an interview Tuesday, he said he was glad the district attorney was following normal protocol. "I don't want to be treated any differently than any member of the citizenry," he said."


"Previous reports said Hernandez, 36, was with a female lobbyist for Kaiser Permanente when he was stopped at 2 a.m., but he told The Associated Press that the woman had been misidentified. "I'm not dating any lobbyists," he said. "On the evening in question, I wasn't out with anyone paid to persuade me in the Legislature."

Speaking of lawmakers, 10 Assembly Democrats have spent some $200,000 in state funds to mail out 600,000 fliers promoting the Assembly speaker's scholarship plan for middle-class students.


The Bee's Jim Sanders tells the tale: "The fliers ask residents to sign a postcard supporting Pérez's proposal, which needs a two-thirds supermajority vote in the Legislature for passage, requiring Democrats to solicit at least two other votes in each house."


"Pérez's legislation would alter corporate tax law to raise about a billion dollars, which would bankroll scholarships intended to cut by 66 percent the cost of attending college for a student from a middle-class family earning less than $150,000 a year."


Oakland Mayor Jean Quan, who got into big trouble for her handling of the Occupy protests last year, is being targeted for recall but it looks like the effort to boot her from office is losing steam.
From the Contra Costa Times' Matthew Artz: " The group seen as having the best chance to oust Mayor Jean Quan now appears short on cash, volunteers and signatures just weeks before a self-imposed deadline to put a recall vote on the November ballot."

"The Committee to Recall Mayor Quan Now has collected fewer than 7,000 signatures, committee member Lee Edwards said -- less than half of the nearly 20,000 valid signatures from registered Oakland voters needed to trigger a recall."


"The group also has failed to meet its fundraising targets, forcing it to cut back on paid signature gatherers and saddling it with debts of more than $26,000. Most of the unpaid bills are owed to the group's attorney, James Sutton."


Occupy Oakland isn't going away, either: Protesters hit the streets in a May 1 demonstration against the 1 percent.


From Julia Prodis Sulek in the Contra Costa Times: "Thousands of protesters took to the streets, BART stations and banks around the Bay Area on Tuesday -- at times dancing to bongo drums in San Francisco or fleeing tear gas in Oakland -- to express frustration at economic inequality and corporate greed and renew momentum for the Occupy movement."


"Protesters and union organizers shut down ferry service at the Larkspur and Sausalito terminals during the morning commute, marched to the Fruitvale BART station in East Oakland made famous by the police shooting death of Oscar Grant III, and in San Francisco swarmed a bank, and retook a vacant building owned by the Catholic Archdiocese on Turk Street. At least one person was hurt at the site when a protester on the roof hurled a brick into a crowd of demonstrators and police who were tussling below."


"In Oakland, as a brigade of police made a noontime arrest on Broadway Avenue, more people raised their camera phones than protest signs and shouted "the whole world is watching you. We are not afraid." 


And from our "We Knew It All the Time"  file comes word that Tetris -- that compulsive, obsessive, exasperating game of falling blocks -- is good therapy for post traumatic stress disorder.


"In recent years, the military’s top brass have funded some truly bizarre approaches — from neck injections to Reiki — in an effort to treat symptoms of post-traumatic stress afflicting today’s soldiers. Turns out, they could’ve just equipped troops with Game Boys."


"At least according to one research team out of Oxford University, who claim that Tetris — yes, the ubiquitous, tile-stacking videogame of your youth — can actually prevent PTSD-related flashbacks. Those harrowing moments of recall are among the most devastating symptoms of the condition, which is estimated to affect at least 25 percent of soldiers coming home from Iraq and Afghanistan."


"In a study presented last week at the British Psychology Society Annual Conference, a team led by Oxford psychiatry expert Dr. Emily Holmes concluded that when played soon after exposure to trauma, Tetris served as “a cognitive vaccine” that seemed to “inoculate against the build-up of flashbacks.” Why? Because the process of playing Tetris, the team hypothesizes, places demands on one’s brain that interfere with its ability to form and retain the traumatic memories that later emerge as flashbacks."



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