The day starts off with the Department of Finance admitting that the deficit is "significantly higher" than the LAO's forcast, a new PPIC poll, and the location of the Bordeaux wine.
"California's looming budget deficit has ballooned to an estimated $14 billion, creating a crisis that fiscal experts said Wednesday
is likely to require higher taxes in addition to across-the-board cuts in education and other services," writes Matthew Yi in the Chron.
"The last time the state faced a major tax increase was more than 15 years ago. In 1991, Gov.
Pete Wilson faced a $14.3 billion budget shortfall, and state officials responded by increasing the sales taxes and imposing an income tax on the wealthiest Californians for five years."
"Finding addition revenue will be critical for the state's next fiscal year, which begins July 1, said
Steve Levy, director and senior economist at Palo Alto's Center for the Continuing Study of the California Economy.
"I don't see where this state is well-served by making a $14 billion cut or even a $7 billion cut," he said.
"One way to raise revenue would be to apply sales tax to services, such as those provided by attorneys, accountants, consultants, architects and auto repair shops, Levy said.
"'This has been widely discussed around the country for 10 to 20 years. We are a service economy, and we have this sales tax (on goods) that's doomed to grow slower than the economy,' he said.
H.D. "Palmer said his agency is putting together options for Schwarzenegger to consider as he prepares to unveil a balanced budget in January.
One thing that won't be on the menu will be new or increased taxes, Palmer said."
While advocacy groups may be reading hopeful tea leaves, the administration is reading the polls. PPIC is out with a
new statewide poll this morning, and--shockingly--voters don't seem too excited about a tax hike.
"Do you think that tax increases should be included in the governor’s budget plan?
Yes: 30%
No: 65%
Don't Know: 5%"
So, what is to be done? CW's John Howard
outlines some options.
"One option is for Gov. Arnold Schwarzenegger to declare an emergency under voter-approved Proposition 58, which would give the Legislature 45 days to act on any budget proposal he submits. Another is to negotiate a deal that includes cuts, new taxes and borrowings — but the tax piece already has incurred the wrath of Republicans, whose political support is needed for a tax hike. A third is to
call a special session on the budget in which majority-vote bills can take effect in 90 days."
Wow, these economics people are total Debbie Downers...
"The subprime mortgage crisis and signs of a worsening economy are taking a toll on Californians, who, according to a statewide poll,
have lost the optimism with which they began the year," writes Steven Harmon in the Merc News.
"The poll, released Wednesday by the Public Policy Institute of California, shows that
65 percent of residents expect bad economic times in the coming year - up from 39 percent last January.
"Amid growing concerns about the weakening housing market, 52 percent of California residents worry their own financial circumstances will be hurt. Renters (62 percent) are more likely than homeowners (46 percent) to be concerned.
"'This is an early warning of widespread fallout from the housing market crisis,' said PPIC President and Chief Executive
Mark Baldassare.
"The economic worries are reflected in the top three issues that residents listed: immigration, jobs and the economy, and health care.
"'
This combination of concern about immigration and escalating economic anxieties makes for a highly charged and unpredictable political atmosphere,' Baldassare said, 'especially as we head into an election year.'"
PPIC also tested Proposition 93, the term limits measure, and found:
47% yes
38% no
15% don't know
Nancy Vogel
continues toying with Assembly Speaker Fabian Nunez, tracking down
just what happened to that $3,200 case of wine the Speaker bought in Bordeaux.
"Party officials said the wine was for use at a Democratic fundraiser. But nearly half of the 36 bottles, valued at about $90 each, are in a Sacramento wine locker kept by Nuñez's sometime roommate in Los Angeles who is a fundraiser for both the speaker and the state party."
Roommate? Great how the Times makes fundraiser Dan Weitzman and Nunez sound like
Ernie and Bert...
But here's a tip: if you go to L'Avant Garde wine shop, bring your fundraiser, and your Visa card. Because at L'Avant Garde wine shop, they don't take no for an answer, and they don't take American Express..."Friends of Fabian Nuñez, the speaker's political committee, bought the wine from a shop in the French region of Bordeaux because the merchant did not accept the party's American Express card, party spokesman Roger Salazar said. But it did take Nuñez's Visa.
In some good news for the Speaker, Warren Furutani is coming to town. And Capitol Weekly says
for Nunez, that's a very, very good thing.
"
In the end, the big winners, once again, were organized labor, which proved its prowess in low-turnout elections — and Speaker Fabian Núñez, who beat back what some were viewing as an open mini-revolt from within his own caucus.
The election harkened back to an older political era in which Democratic factions fought openly in primary election battles. These Democratic primary battles were proxy wars between speakership candidates. Battles between Los Angeles Assemblyman Howard Berman and San Francisco Assemblyman Leo McCarthy, both Democrats, were legendary, hard-fought and expensive.
“I think you can look at (the California Correctional Peace Officer’s Association) coming in with us, and obviously they’re having their issues with the speaker right now,” said Gipson campaign manager Patrick Furey. “There were a lot of different groups out there trying to make a statement about the speaker.”
"California
won its legal battle against the world's automakers over global warming Wednesday. But the state still needs the Bush administration's permission to enforce a landmark greenhouse gas law that would dramatically improve vehicle fuel economy," reports Dale Kasler in the Bee.
"A federal judge in Fresno tossed out a lawsuit filed by the major automakers that tried to kill AB 1493, a state law requiring a 30 percent reduction in greenhouse gas emissions from new motor vehicles by 2016. The law would force automakers to improve fuel economy by an estimated 38 percent, to an average 35 mpg.
"The decision provides fresh momentum for California's closely watched crusade against climate change. Yet under federal law, the state can implement its own air pollution regulations only after receiving a waiver from the U.S. Environmental Protection Agency.
"'It's a major victory for California,' said state Attorney General
Jerry Brown. 'I hope it sends a powerful message to the White House to grant our waiver.'"
"Up to 33,000 prisoners in California
may be entitled to release earlier than scheduled because the state has miscalculated their sentences, corrections officials said Wednesday," writes Michael Rothfeld in the Times.
"For nearly two years,
the overburdened state prison agency has failed to recalculate the sentences of those inmates despite a series of court rulings, including one by the California Supreme Court. The judges said the state applied the wrong formula when crediting certain inmates for good behavior behind bars.
"Some inmates released in recent months almost certainly stayed longer in prison than they should have, said corrections officials, employees and advocates for prisoners. Some currently in prison most likely should be free, they said. But many whose sentences are too long are not scheduled to be released for months or years.
"The inmates in question --
19% of the state prison population -- are serving consecutive sentences for violent and nonviolent offenses. The sentencing errors range from a few days to several years."
"The state Supreme Court
took up the incendiary issue of sex criminals' residency requirements Wednesday, agreeing to decide the constitutionality of a voter-approved law prohibiting paroled rapists and other sex offenders from living within 2,000 feet of a school or park," reports the Chron's Bob Egelko.
"The justices voted unanimously to review legal claims by four registered sex offenders, two of them from the Bay Area, who could be returned to prison for parole violations because of where they lived after being released. The court blocked the state from acting against the four men when it first intervened in their case two months ago, but parole officials have started to arrest others in similar circumstances.
"The ballot measure, Proposition 83, was approved by 70 percent of California voters in November 2006. One of its provisions barred all registered sex offenders - whose crimes range from forcible rape to indecent exposure - from living within 2,000 feet of a public or private school or a park where children regularly gather."
From our
Arm Your TiVO Files, The Big 4 tribes
took to the air with two new spots. Coming soon, and every 11 minutes to a television near you...
And you gotta love the Germans for
coming up with a way around new international restrictions on liquid containers on flights.
"A man nearly died from alcohol poisoning after quaffing a liter (two pints) of vodka at an airport security check instead of handing it over to comply with new carry-on rules, police said Wednesday."
And this wasn't some teenager, mind you. It was a 64-year-old man.
"A doctor called to the scene determined he had possibly life-threatening alcohol poisoning, and he was sent to a Nuremberg clinic for treatment."
