Both houses of the Legislature will be playing Parliament
today for a 3 p.m. briefing by the state's fiscal officials, who wil read aloud everything that's been in writing for months.
The Chron's Matthew Yi reports: "California lawmakers will convene today in a rare joint legislative session to tackle an $11.2 billion budget deficit, a fiscal mess that many warn
has to be solved quickly before the state's finances sink deeper in the red ink.
"The budget gap is expected to grow by another $2 billion by middle of January, unless lawmakers can
strike a deal to stem the bleeding, whether by cutting
spending or finding new ways to generate revenue.
"Without a solution, the state could also see its cash
reserves dry up by March and be forced to issue IOUs
to employees or withhold some payments, such as money
owed to vendors that do business with the state."
Dan Walters writes that, if those fiscal officials
were honest, they would put a much larger deficit number on the table. "Privately, many of those involved in the budget believe
that the deficit could easily top $15 billion this year and $20 billion next year, not only because the economy is
continuing to contract and state revenues are continuing
to decline, but because local property taxes are likely
to fall short and the state is obligated to make up
those shortfalls to schools.
"Whatever the deficit's dimensions turn out to be, were the state's politicians to be brutally frank, they'd also admit that the gap ignores some big costs lurking
out there on the periphery.
"The time for hide-the-pea politics is past. The time for absolute candor
about the dimensions of this fiscal calamity should
be now."
From our Misery Loves Company Files, Steve Wiegand writes in the Bee that California is not alone in its deficit.
"If it's true misery loves company, then Californians may
derive
some small comfort from this: At least 40 of our sister states are also
struggling with budget deficits, totaling as much as
$48 billion,
according to the Center on Budget and Policy Priorities.
There are some
sharp differences among state governments in how they
collect and spend
money."
Don't expect the gloominess to cause Darrell Steinberg
to ditch one of his top priorities, writes the Bee's Aurelio Rojas. "In his inaugural session as head of the California
Senate, Darrell Steinberg singled out health care for
all children as one of the issues he plans to tackle
in his first 120 days.
"The ambitious effort comes as the state is sinking
under the weight of an $11.2 billion deficit, state officials are preparing to
freeze enrollment in the Healthy Families program and
local Children's Health Initiatives are teetering on insolvency.
"In an interview with The Bee on Friday, Steinberg said
he plans to cover the estimated 800,000 uninsured children in California and shore up existing
programs without additional state funding.
"The Sacramento Democrat's plan calls for cobbling together money from foundations
and the First 5 California Children and Families Commission, which
is funded by a voter-approved tax on cigarettes.
"Those dollars would then be leveraged to draw down
federal matching funds after President-elect Barack Obama takes office.
"'It's my opinion that the Legislature and state government
need some early, significant victories to instill confidence
again in the public in our ability to get things done,' the Senate president pro tem said."
And, since, apparently nothing can be done about the
deficit, let's move on to something else.
And if that doesn't work out, maybe they can de-deregulate the state's electricity market.The LAT's Marc Lifsher reports, "With memories of California's millennial energy meltdown fading, a top
utility regulator and some businesses are maneuvering
to resurrect a
key element of the state's infamous electricity deregulation law.
That
effort -- and fears about fiddling with the state's delicate power grid
-- are sure to amp up political tensions between the
constitutionally
independent California Public Utilities Commission
and the
Democrat-controlled state Legislature.
Led by its president, Michael Peevey, the commission is exploring ways
to lift a freeze on a program that allows residential
and large power
users, including big-box stores, cement plants and universities, to
shop around to get the best price for electricity."
While Steinberg still has ideas, the governor is dusting
off his "We're Not Going to Take It" vinyl and hoping to take over the debate again as reformer in
chief.
The Merc News's Mike Zapler writes:
"The governor and his advisers are still mulling over
which measures to pursue in a reform package, which
would likely be announced during his State of the State
address in early January. But there are a few leading
contenders.
"One that was approved to go on the next ballot as part
of last summer's budget agreement would enhance the state's rainy day reserve, and make it more difficult for
legislators to tap. The proposal would sock away the
first 3 percent of tax revenues each year in a special account
and enact tight restrictions on using the money. It
is designed to prevent lawmakers from spending any
tax windfall that might arrive when the economy rebounds,
as they have done in past economic booms.
"Another idea the governor is seriously considering
is to do away with Democratic and Republican primary
races in state legislative races, which he believes
produce candidates who hew to the extreme right or
left. Under one alternative, candidates from any party
would run in a single primary, with the top two finishers
advancing to the general election, regardless of party.
"In tandem with the just-approved redistricting initiative, Schwarzenegger believes
a so-called "open primary" could produce a more moderate Legislature.
"Other possibilities include a ban on political fundraising
while the budget is being deliberated — an idea the governor first floated during his 2003 recall campaign — and docking legislators' pay when they fail to complete the budget on time."
The Chron's John Wildermuth checks the hearbeat on California Republicans. "With their registrations sinking and their political
clout withering, California Republicans have come out
of the November election in danger of slipping into
political irrelevance across much of the state.
"'There's been a broad repudiation of traditional conservative
Republicans in California,' said Tony Quinn, a former GOP analyst and co-editor of the California Target Book, which focuses
on political contests in the state. 'There are almost no areas in the state that can be
considered safely Republican anymore.'
"Since 2004, Republican registration has dropped by more than
317,000 in the state, while Democrats have picked up 563,000 new voters. Five previously GOP counties, including
San Joaquin, Stanislaus and San Bernardino, now have
more Democrats than Republicans.
"Things aren't any better in the Legislature, where Democrats hold
commanding majorities in both the Assembly and state
Senate. The Democrats picked up three seats in the
Assembly last month, including the last partisan post
held by a Republican in the nine-county Bay Area.
"And with Democrats moving to eliminate the two-thirds majority requirement for passage of a state
budget, the GOP could lose the last bit of real power
it holds in the Legislature.
"Ron Nehring, chairman of the state Republican Party, doesn't paint nearly as grim a picture for California Republicans,
especially in the wake of the pasting the party took
across the nation in the Nov. 4 election.
"'In a year where all the externals favored the Democrats
in California, they came away with little to show for
it,' Nehring said. 'They won a net three seats in the Assembly, but didn't pick up anything in the state Senate or Congress.'"
The Chron's Carolyn Said reports:
"The California Public Employees' Retirement System portfolio has lost 31.1 percent of its value since peaking last fall, a staggering $81.4 billion drop. CalPERS officials say a "rainy day fund" is helping to defray the losses - for now. But if the market slump continues, they will
hit up state and local employers for more money. That's a painful prospect as California struggles through
a fiscal emergency and municipalities cope with the
foreclosure crisis and economic downturn.
"The good news for the 1.6 million CalPERS retirees, workers and family members
is that their pension benefits are guaranteed.
"'Obviously, if there is a downturn, there are going
to be ramifications,' said Rob Feckner, president of the CalPERS board. 'Our job is to make sure we protect the system and the
funds that are there for the pensioners.'
"The CalPERS portfolio hit a high point of $260.6 billion on Oct. 31, 2007. As of market close on Dec. 4, it had fallen to $179.2 billion - almost back to its value in mid-2000.
"The portfolio drop comes amid a time of extraordinary
financial turmoil, with wrenching contractions on Wall
Street that have wiped out trillions of dollars of
shareholder value. The Dow Jones Industrial Average
has dropped 39.8 percent during the same period that the CalPERS portfolio
fell 31.1 percent, for instance.
"Unlike many pension funds, CalPERS can require employers
to dig deeper when needed. Since those employers are
public entities, their funds come from taxpayer dollars.
This fall, CalPERS warned that it might ask for more
money from the state starting in July 2010 and from local-government employers starting in July 2011."
The U-T's Michael Gardner writes that the California Air Resource
Board will take on diesel at its meeting this week.
"'Ultimately, we have no choice but to proceed to control
this source,' said Mary Nichols, the air board's chairwoman. 'They are a huge source of emissions that up until now
have been essentially uncontrolled.'
"The proposed regulations – considered to be the nation's most restrictive – would require many truckers to either gradually replace
their rigs or install anti-pollution devices starting in 2010, depending on the model year and fleet size. By 2023, most diesel rigs “would have the cleanest engines available,” according to an air board report.
"Moreover, during its two-day meeting Thursday and Friday in Sacramento, the
air board also is expected to adopt rules to squeeze
better fuel efficiency out of long-haul big rigs.
"That proposal is part the state's ongoing quest to reduce reliance on fossil fuels
contributing to greenhouse gas emissions linked to
global warming. To move in that direction, regulators
want truck cabs and trailers, depending on size and
age, to be outfitted with smoother rolling tires and
better aerodynamic equipment to cut wind resistance,
for example.
"The rules also would apply to out-of-state trucks that deliver goods to California. Most
shuttle buses, such as those at airports, also must
comply. In all, 900,000 trucks and 170,000 businesses could be affected."
With a new Legislature, it means there's a new chance to take a shot at the cars being provided to lawmakers , and Matier and Ross oblige. "California's multibillion-dollar deficit hasn't stopped the state from shelling out an estimated
$1.3 million to keep 40 new and returning lawmakers rolling in style during
these toughest of times.
"Nearly all 28 of the newly sworn-in members of the Assembly, plus several of the 52 holdovers, have leased new wheels through the state
- at a cost well below what the average wage slave pays
at the dealer. On the Senate side, nine of the 11 new members - all of whom just moved over from the Assembly - picked up new rides along with their new titles.
"Among them, San Francisco Democrat Mark Leno, who has a new, $32,000 Toyota Camry hybrid.
"Contra Costa County's newly minted Sen. Mark DeSaulnier and fellow Democrat Joe Simitian of Palo Alto both have new, $34,000 Nissan Altimas.
"While most members have gone hybrid green with their
car selections, there's one notable exception.
"Republican Sen. Bob Huff of Diamond Bar (Los Angeles County), who proudly declares on his Web site that he has
led the fight to cut government waste and has never
voted for a tax increase, ordered himself a brand-new, 2008 Cadillac CTS - priced at $46,000.
Huff "said he was happy to dump the Ford Explorer he had
been driving in the Assembly because 'frankly, it was a piece of junk.'
"'I understand the perception that I'm driving a Cadillac,' Huff
told us by cell phone Friday, stuck in a Southern California
traffic
jam in his new red wheels. But it's hardly top of the line, he says,
and it still costs him $200 out of his own pocket.
"'At least I'm buying American,' he said. 'But I'll take my hits and move on.'"
Speaking of legislators and cars, Carole Migden got that waste board appoinment on Friday.
The Bee's Jon Ortiz follows up on the governor's warning about state employee layoffs.
"Unlike Schwarzenegger's recent proposal to furlough state workers one day
each month, a governor can impose layoffs without getting
state worker unions or the Legislature to go along.
"But the process from ordering job cuts to actually
eliminating them can take months.
"Generally, state workers with the least service time
are the first to go. Some workers whose jobs are eliminated
can take lower-level positions by bumping employees with less seniority.
"The state gives workers 120-day "surplus" notices that their jobs may be eliminated. Depending
on the terms of labor contracts, unions get a 30- or 60-day heads-up on which jobs could take a hit.
"Individual employees get 30 days' notice before they're dismissed. The notification periods can overlap."
Meanwhile, from our Gimme My Bailout Files, looks like
the LA Times' parent company is heading for Chapter 11 . The Wall St. Journal reports, "Tribune Co. is preparing for a possible filing for
bankruptcy-court
protection as soon as this week, according to people
familiar with the
matter, in a sign of worsening trouble for the newspaper
industry.
"In recent days, as Chicago-based Tribune continued talks with lenders
to restructure its debt, the newspaper-and-television concern hired
investment bank Lazard Ltd. as its financial adviser
and law firm
Sidley Austin to advise the company on a possible trip
through Chapter
11 bankruptcy, people familiar with the matter say."
And finally, from our Kitsap Bureau, "A malfunctioning gun gave three people the chance to
wrestle a would-be
shooter to the ground Saturday night in front of Brewski's Bar and
Grill before he could shoot anyone.
"Bremerton police were called to the bar . for a fight
between two women and two men.
When police arrived, the two women and one man were
on top of another
male, beating him up.
""I can't believe I got my ass kicked by two girls," the man said, according to reports.
Believe it, buddy.
