State tax collections are running billions of dollars shy of projections, which means a new, expanding hole has been blown in the state budget. Late yesterday, the Legislature's nonpartisan fiscal adviser announced the bad news. And that's only the beginning: The really bad news will come when the new budget gets whacked to make up the difference.
From Greg Lucas at California's Capitol: "April tax collections will fall at least $2 billion short of estimates, worsening the state’s already $10 billion budget hole by a like amount, legislative budget writers said April 25."
"The Legislative Analyst says that by April 30 tax revenues for the fiscal year that began July 1 will be $3 billion short of projections."
“Results for April alone are on track to be over $2 billion below the (Brown) administration’s most recent budget forecast for the month,” the analyst wrote in a budget update posed April 25. Surprise late April collections remain a small possibility but, if the current trends hold, they suggest that the state’s revenues could be a few billion dollars below the administration’s January forecast...”
"Daily receipts reported by the Franchise Tax Board have been falling over the past two days and the month-to-date total remains well below the level anticipated in the budget proposed by Gov. Jerry Brown four months ago."
Brown, hoping to make up for at least a portion of the dwindling revenues, is asking voters in November to approve a tax-increase plan that will bring in new money for schools and law enforcement. A new poll shows that voters apparently like his idea more than that of a rival proposal headed by wealthy attorney Molly Munger. Early polls, however, are notoriously dicey.
From Jill Tucker at the Chronicle: "At this point, 54 percent of likely voters said they'd vote for Gov. Jerry Brown's ballot measure to temporarily boost sales tax and income tax on wealthy California residents, the Public Policy Institute of California poll found."
"If it doesn't pass, Brown's plan calls for school budget cuts to be triggered. Supporters of the tax hike measure expect to submit enough signatures to qualify for the Nov. 6 ballot sometime next month."
"Wednesday's poll signals something of a voter disconnect in the early stages of the campaign, said Mark Baldassare, the institute's president. Part of that could stem from the fact that most voters, 65 percent, like the idea of a tax on the wealthy to support schools, but 52 percent of those surveyed said they don't like the sales tax increase."
Alameda County politics has been roiled by assorted miscues lately, but just when you thought things finally were dying down comes word that former Assemblymember Mary Hayashi -- remember her? -- is eyeing the supervisorial seat formerly held by Nadia Lockyer, who resigned amid a sex-and-drugs scandal. The Contra Costa Times' Steve Harmon tells the tale.
"Fresh from admitting she shoplifted $2,450 of trendy clothes from Neiman Marcus, Assemblywoman Mary Hayashi appears to have her eye on a new job: Nadia Lockyer's just-vacated seat on the Alameda County Board of Supervisors."
"Word is out that the East Bay state lawmaker was asking around about the seat hours after Lockyer resigned in an interview with this newspaper Friday following weeks of scandalous revelations about drug abuse and an affair with a meth addict."
"Hayashi, who is termed out of the Legislature after this year, contacted members of the Alameda County Board of Supervisors to gauge their interest in appointing her to fill out Lockyer's term until 2014. "The technical term for this is chutzpah," said Larry Gerston, a political-science professor at San Jose State."
A PG&E employee who spied on activists did so with the blessing of the utility's management, according to a report from the Public Utilities Commission. The spy had used a false identity to penetrate a group of consumers who were opposed to SmartMeters, the devices that track electricity usage and automatically communicate regularly throughout the day with the utility,
From the Mercury News' Dana Hull: "At the time, PG&E characterized him as a rogue employee who acted alone. But a lengthy investigation by the PUC's Consumer Protection and Safety Division revealed that Devereaux forwarded emails that he collected using the false identity to his boss and other senior managers at PG&E, including a member of the legal department."
"PG&E senior management knew of Mr. Devereaux's deceit before it was reported in the press and failed to prevent and stop his inappropriate behavior," said the eight-page finding from the PUC, released late Wednesday. "By lying to and infiltrating anti-smart meter consumer groups, Mr. Devereaux, acting on behalf of PG&E, violated PG&E's obligation to provide just and reasonable service to its customers."
"The names of senior managers involved were not revealed. The ongoing investigation now enters the "penalty phase," where state regulators will determine what, if any, fines PG&E should pay."
Meanwhile, in three weeks, some 100,000 out-of-work Californians will begin losing up to 20 weeks of jobless benefits because a federal extension is set to expire, state officials say.
From the LAT's Marc Lifsher: "The extra benefits of as much as $450 a week are part of a federal extension to the regular state program known in bureaucratic parlance as FED-ED."
"The federal government instituted FED-ED in March 2009 to help the long-term unemployed in California during the worst recession in 50 years. But that assistance, the fifth such extension of benefits, is set to expire on after May 12 because of improvements in the Golden State's economy and a drop in the unemployment rate to 11% in March."
"The California Employment Development Department now is sending out notices to recipients to alert them that their FED-ED payments are about to end."
Word that mad cow disease was found in the carcass of a California animal is bad enough, but what's worse, farmers say, is the way the media covers the issue -- such as using stock TV footage that has little to do with reality.
From Bloomberg's Michael B. Marois: "The dairy business is hurting already and we don’t need this,” said Correia, seated at a dinette table near the cash register. He grows feed for cattle nearby in the southern San Joaquin valley. “Dairy down here makes the world go.”
"Farmers fear a repeat of 2003, when the first confirmed U.S. case led to losses estimated as high as $4.7 billion in 2004 for the American beef industry. Within hours of the latest announcement, cattle futures plummeted to a nine-month low. Some South Korean retailers said they would suspend imports of U.S. beef. “Mad cow disease” was the most-searched term on Google for a time yesterday."
"Correia, 56, and the other farmers gathered around that table complained about how television news showed stock footage of sickened cows that was unrelated to the case in California.
“People are going to think it’s in the food chain and the media is blowing it out proportion,” Correia said. “They are scaring people and they have nothing to worry about.”
Veteran political strategist Garry South is turning over a trove of his personal and professional material -- memos, tapes, strategy plans, never-before-seen TV spots -- to UCLA for a new library called the Garry South Collection of Political Research.
From the Chronicle's Carla Marinucci: "The South archives, to be formally inaugurated this month, present a complete portrait of insider dealings and strategies behind the campaigns of Gray Davis, the Democrat who was twice elected governor after serving as lieutenant governor and controller."
"South has advised campaigns, including Gavin Newsom's 2010 run for governor and Joe Lieberman's thwarted presidential bid in 2004. But the strategist, whom Newsweek once called "a one-man brain trust of the battlements of Fort California," has been most closely linked with Davis, whom he served as chief of staff and senior adviser for years."
"The unusually complete documentation of a slice of California political history was preserved because the self-described "anal-retentive" strategist meticulously catalogued the strategy and materials related to Davis' campaigns and guarded them in a "climate-controlled" storage room."
And from our "Sublime Irony" file comes the tale of a West Virginia woman who won a $10 million judgment against an abusive debt-collection agency and now is having trouble collecting her money.
"From her small-town home base in Wheeling, Mey went after a debt collection empire that hounds people nationwide and won. But she still hasn't received any money."
"I don't know that I'll ever collect a dime, but if I can get their operation shut down, that would make me very happy..."
"Millions of Americans are victims of this kind of mistaken debtor identity, partly because of a new breed of collectors called "debt buyers." They purchase old debts for pennies that the original creditors have given up on and then try to collect them for a big profit. Critics say debt buyers sometimes use outrageous tactics to get the money where others have failed. RFA is a debt buyer."
