Molly Munger, a wealthy civil rights attorney, talks with reporters in Sacramento about the tax measure she’s backing.(Rich Pedroncelli / Associated Press)

Wyatt Buchanan
Tuesday, February 7, 2012

Sacramento –Supporters of two ballot initiatives that would raise taxes to fund public education and other services said on Monday they will not back down from those efforts, upending Gov. Jerry Brown’s crusade to clear the November ballot of any competing tax measures.

Backers of the so-called “Millionaires Tax” officially began a signature-gathering effort Monday, while the wealthy proponent of another measure, speaking to the California State PTA in Sacramento, pledged that she would spend millions to get her initiative on the ballot.

Those actions could significantly undermine Brown’s efforts, as voters are known to reject all tax measures when faced with multiple initiatives. Molly Munger, a wealthy civil rights attorney from Southern California whose family is worth billions, rejected the notion that she or others should show deference to Brown by letting his tax measure be the only one on November’s ballot.

“I don’t think we’d have a very good functioning democracy if we always just did what one person at the top wanted,” Munger told reporters after presenting her plan to members of the state PTA, which has endorsed the measure. She received an extended standing ovation after her remarks.

She added that, “In fact, one of the reasons we have democracy is because that old method, which is to just do what the king says, led to some very bad decisions over time.”

Under Munger’s plan, called “Our Children, Our Future,” the income tax for everyone in California would increase, though with the largest increases on the highest wage earners. She estimates the proposal would generate $10 billion a year that would be dedicated solely to education, with criminal penalties if lawmakers try to adjust that. It would expire after 12 years.

Another version would dedicate some of the money to pay back the state’s debt for the first few years, and Munger said backers have yet to decide which to pursue. Munger has been the sole large contributor to the effort so far, giving $800,000, according to the secretary of state.
‘Millionaires tax’

The other measure, for which proponents started a signature-gathering effort Monday, would increase income taxes on people who earn more than $1 million a year in California. Backers estimate that would generate about $9.5 billion annually, with the bulk dedicated to education. Health services and public safety would get some of the new revenue as well. It has no expiration date.

That measure, “The Millionaires Tax of 2012,” is supported by the California Federation of Teachers, the Courage Campaign, the California Nurses Association and others. Leaders of the effort, along with Munger on her initiative, said they had not personally heard from the governor with a pitch to end their efforts.

Both also expressed confidence that conventional wisdom is wrong and that one or more tax measures could pass even with multiple initiatives on the ballot.

“We’re not concerned that there will be multiple measures on the ballot,” said Joshua Pechthalt, president of the California Federation of Teachers, adding that he had confidence voters would “be able to decide which makes sense for them.”

To read entire story, click here.

Dan Walters

By Dan Walters
dwalters@sacbee.com
Published: Tuesday, Feb. 7, 2012 – 12:00 am | Page 3A

Gov. Jerry Brown’s campaign to balance the state budget with new income and sales taxes took a double hit Monday.

Brown has been describing his temporary sales and income tax increases as necessary to protect schools and public safety. But a new report on school finance from the Legislature’s budget analyst, Mac Taylor, makes it clear that even were Brown’s taxes to be increased, his budget would continue to reduce California’s per-pupil spending. Virtually all of the school money in the package would just pay schools what the state already owes them.

Meanwhile, Molly Munger, a wealthy civil rights attorney, declared that she intends to spend whatever is necessary to place her own $10 billion-a-year income tax increase just for schools on the same November ballot, saying it would boost per-pupil spending by an average of more than $1,500 per year.

Brown has made no secret of his desire to have the only tax boost on the ballot, fearing that multiple measures would confuse voters and perhaps lead them to reject all. He persuaded the Think Long Committee for California to suspend its complex tax reform campaign, but Munger spurned entreaties from the Brown camp to do likewise.

Munger took a couple of indirect shots at Brown’s $7 billion-per-year measure during a speech in Sacramento to state PTA leaders, who pledged to become her field army. She told reporters later that she hadn’t talked directly to Brown about the conflicting proposals, but refused to say whether she had talked to Brown’s wife, Anne.

To read entire story, click here.

Joe Nelson, Staff Writer
Posted: 02/05/2012 05:15:27 PM PST

The San Bernardino County Board of Supervisors is poised to adopt a new policy precluding supervisors from using discretionary funds from their respective districts to cover staffing costs.

The board will vote on the recommendation at its Tuesday meeting.

County Chief Executive Officer Greg Devereaux also is proposing that supervisors disclose, on a quarterly basis, how their discretionary funds are being spent.

The proposed policy change also includes a provision that any unspent funding appropriations remaining after the 2015-2016 fiscal year be returned to the county’s general fund.

In June, the board issued a directive that each district exhaust its remaining discretionary funds over a four-year period.

Discretionary funds were initially intended to fund projects and programs in each supervisorial district, but prior policy allowed the funds to serve an ancillary purpose: to inflate supervisor staffing budgets. Supervisors also had complete autonomy in deciding how the funds were allocated in their districts.

To read entire story, click here.

Joe Nelson, Staff Writer
Posted: 02/05/2012 07:38:16 PM PST

SAN BERNARDINO – The City Council today will vote on recommendations to lay off 77 employees of its now defunct economic/redevelopment agencies – 33 civil service employees and 44 contract employees, City Attorney James F. Penman said Friday.

The action comes after the dissolution Wednesday of the agencies, spurred by a Dec. 29 state Supreme Court decision upholding legislation calling for the shuttering of California’s roughly 400 redevelopment agencies.

In June, the Legislature passed two bills that shaped the groundwork for the demise of redevelopment agencies, but the legislation was challenged in court. In its December ruling, the state Supreme Court determined the state had authority to close redevelopment agencies but not to give municipalities the option of paying to keep them open.

That ruling has allowed the state to seize billions of dollars of property taxes previously controlled by the cities that established the redevelopment agencies.

Under recommendations by the City Manager’s Office and Human Resources department, the city would lay off 33 civil service employees and 44 contract employees.

To read entire story, click here.

Carter

By Jim Sanders and Phillip Reese
jsanders@sacbee.com
Published: Monday, Feb. 6, 2012 – 12:00 am | Page 1A
Last Modified: Monday, Feb. 6, 2012 – 7:10 am

With California billions behind on its budget and public services shrinking, the Assembly collectively tightened its belt last year – but not all of its members did.

Records released under court order show that Assembly Speaker John A. Pérez boosted the budgets of six members by tens of thousands of dollars apiece despite the fiscal emergency.

Member-by-member records lift the curtain, for the first time, on how often Pérez used his authority to add to lawmakers’ budgets, who benefited, and by what amounts.

Most Assembly members stayed within dollar limits set by Pérez; in fact, five legislators returned more than $150,000 apiece that they were authorized to spend, records show. But Assembly Republican Nathan Fletcher and Democrats Wilmer Amina Carter, Julia Brownley, Jim Beall, Sandré Swanson and Anthony Portantino saw their discretionary funding boosted by Pérez in a year when most state agencies were slashing costs.

Nearly every recipient of an augmentation from Pérez was a Democrat. The party’s members control the 80-person house and receive the most coveted posts and largest budgets. Republicans typically receive some aid from their caucus to fund staff.

Any extra money from Pérez went to the members’ committee or leadership coffers, not to their personal office budget of $263,000, making it difficult for the public to track how much was spent on personal aides.

Overall, the newly released records shed light on the extent to which legislators use committee funds for their own purposes: Of more than $17.5 million in committee funding last year, roughly $8.8 million was spent for committee staff and $8.7 million for office or district aides of their chairmen.

Totals are from Assembly data through mid-October and the house’s own projections of its spending through the Nov. 30 end of the legislative year.

Robin Swanson, Pérez’s spokeswoman, said that the Los Angeles Democrat “offsets any necessary augmentations by reducing Assembly spending overall.”

“He expects members of the Assembly to stay within their office budgets and act as conscientious stewards of public funds – and the overwhelming majority of them do,” Swanson said.

Collectively, the Assembly donated about $23 million, more than 15 percent of its $146.7 million budget, to assist other cash-strapped agencies last year.

Pérez sets member-by-member budgets and later weighs changes to them behind closed doors. They are not voted upon. The Assembly fought, unsuccessfully, to keep from releasing those records to the public in a lawsuit filed by The Bee and Los Angeles Times.

Portantino, the lone Democrat to vote last year against the state budget, was the only legislator accused by the speaker’s office of overspending. The La Cañada-Flintridge Democrat denies the claim, saying he was retaliated against for not toeing the party line on the budget.

Boosts to other lawmakers’ budgets were due to workload increases or other extenuating circumstances, Swanson said.

Moderate Republican wins

Fletcher, a moderate San Diego Republican, received a budget boost from Perez of $37,000 last summer, which he used to hire press aide Amy Thoma at $7,084 per month. Thoma previously had helped the lawmaker unveil his candidacy for San Diego mayor. She left the Capitol to join a GOP consulting firm this year and now serves as Fletcher’s deputy campaign manager.

Months after Thoma’s hiring, Fletcher, who often is courted by Democrats on tight budget-related votes, bucked most of his GOP caucus to help pass a controversial plan to raise about $1 billion in corporate taxes, mostly from out-of-state companies, and redirect that money toward tax breaks for California businesses and individuals. The plan later died in the Senate.

Assemblywoman Carter, D-Rialto, received a $50,000 boost from Perez that erased months of projected red ink without having to cut staff.

Beginning early in 2011, projections warned that Carter would be short money to bankroll her 13-person staff, which included a chief of staff making $116,856.

To read entire story, click here.

Canan Tasci, Staff Writer
Created: 02/03/2012 01:29:27 PM PST

CHINO – As tears were shed and pleas were made, Chino Valley Unified School District board members approved $19.6 million in budget reductions.

In a 4 to 1 vote board members accepted more than 26 district reductions or eliminations that were proposed by the superintendent, which included 23 full-time high school counselors, transportation for students in grades 7-12, 10 high school assistant principals, a district secretary, a grounds worker and a number of grant-supported programs.

Board member James Na voted against the cuts at the meeting.

The reductions were made so the district could remain fiscally solvent. The cuts will be in effect in the 2012-13 and continue into the 2013-14 school year.

“One can only imagine the shock and dismay that is felt throughout our district today,” said Superintendent Wayne Joseph in a statement. “I can tell you that although our board members felt compelled to enact the cut list, there is deep sadness within every one of them for having to do so. At times, the `right’ thing to do is not necessarily the most `popular’ thing to do.”

When Gov. Jerry Brown presented his budget proposal for 2012-13 fiscal year he indicated the state is $9.2 billion in the hole.

The governor has proposed up to $10.3 billion in financial solutions, with one proposal built on the assumption Brown’s tax initiative will be approved by state voters in November General Election.

If the tax $6.9 billion initiative passes K-12 school districts will be spared from any additional cuts to their next school year.

However, the San Bernardino County Office of Education has required school districts to prepare a plan to address the budget shortfall in the event the tax initiative does not pass.

“Right now the district made it clear they believe that we can do without nurses, counselors and music teachers,” said Justine Cunningham, president of Associated Chino Teachers.

To read entire story, click here.

Dan Walters

By Dan Walters
dwalters@sacbee.com
Published: Sunday, Feb. 5, 2012 – 12:00 am | Page 3A

Gov. Jerry Brown and his fellow Democrats in the Legislature settled on a hastily revised state budget last June – after Brown had vetoed legislators’ first version – and pronounced it to be balanced and timely.

“My colleagues and I have voted on a responsible budget,” Assemblyman Roger Dickinson, D-Sacramento, told constituents in a newsletter, adding, “While we have projected additional revenues, we have also identified further tough cuts if these revenues are not realized. We are charged with the responsibility to pass a balanced budget on time. Democratic lawmakers have done so.”

Dickinson wasn’t alone in crowing to constituents about the budget. But it wasn’t on time, nor was it balanced, as Capitol insiders suspected then and we know for certain seven months later.

The quickly revised budget hinged on a sudden, even miraculous, projection by Brown’s bean counters that the state would receive another $4 billion in revenue. But in December, they acknowledged that more than half of the windfall won’t show up, thus triggering some spending cuts, although not enough to offset the missing income.

If anything, the situation has deteriorated.

Last week, Controller John Chiang revealed that revenue is falling $2.6 billion short while spending is running $2.6 billion over budget. It means that this supposedly balanced budget will be somewhere between $4 billion and $5 billion in the red by the end of the fiscal year on June 30.

It’s about half of the $9.2 billion deficit that Brown says his new budget will cover – but only if voters agree to temporary increases in sales and income taxes next fall.

To read entire column, click here.

PolitiCal
On politics in the Golden State
February 3, 2012 | 11:28 am

Gov. Jerry Brown has courted a coalition of business and labor groups to back his November initiative that would raise taxes on sales and upper incomes. Now, some on the left are lashing out at the governor’s plan, and his early donors, reaffirming their intent to place a competing tax measure on the ballot this fall.

The governor has said repeatedly he wants his initiative to be the only tax-increase proposal before voters in November. But thus far, he has been unable to get some of his fellow Democrats to step aside.

Civil rights attorney Molly Munger continues to fund her proposal to hike income taxes across the board to raise more money for schools. Another initiative backed by the California Federation of Teachers, which would raise taxes on upper incomes exclusively, received new public backing from the California Nurses Assn. this week, and backers of that plan blasted Brown’s proposal in an email to supporters.

To read entire story, click here.

The Orange County Employee’s Retirement System ended 2011 with an investment return of 0.74 percent — that’s 7 percent less than projected.

But OCERS officials, though concerned, say it is too early to panic. For one thing, says CEO Steve Delaney, the 20-year average is 7.9 percent on investments, right where the system needs to be.

Also, OCERS makes enough on contributions to pay for current retirements, Delaney said. With an $8.8 billion portfolio, the system won’t need to start dipping into investments for another 10 years or so, he said.

OCERS wasn’t the only retirement system that made a poor showing last year. The California Public Employees Retirement System earned 1.1 percent last year, while the California State Teachers Retirement System earned 2.3 percent.

“We continue to feel the effects of the most precarious markets in decades,” said CalSTRS chief executive officer Jack Ehnes, in a statement. “The funding shortfall can be managed, but the governor and the Legislature must develop a specific funding plan, as only they have the authority to do so.”

Pension reformers looked at the the poor showings as evidence that retirement systems will ultimately tank, leaving the debt on the backs of taxpayers.

To read entire story, click here.

Dan Walters

By Dan Walters
Published: Friday, Feb. 3, 2012 – 12:00 am | Page 3A

Many years of partisan wrangling over the state budget reached a climax in 2010 when public employee unions and Democratic politicians persuaded voters to pass Proposition 25, eliminating the two-thirds vote for budgets.

It gave the Legislature’s majority Democrats the power to pass budgets without having to garner Republican votes. But that’s not all it did.

Worried that voters might see it as a political power play, the measure’s sponsors added a political sugarplum, one declaring that if legislators didn’t pass a budget by June 15, the constitutional deadline, their salaries would be cut off.

They also included another proviso that extended the simple-majority vote to so-called “trailer bills,” measures supposedly needed to implement the budget.

This column and other critics suggested that the trailer bills could become political Christmas trees – ways for the majority party to bypass procedural rules and jam into law things that had nothing to do with the budget.

Although the Legislature has been in session for just a month, we’ve already seen two cases of how the Democrats are treating Proposition 25.

Last year, they used their newly won authority to pass a budget without Republican votes. When Democratic Gov. Jerry Brown vetoed it, saying it was unbalanced, Democratic Controller John Chiang cut off legislators’ paychecks, citing Proposition 25.

Brown and legislators quickly cobbled together a new budget on the miraculous assumption that the state would get an extra $4 billion in revenue. Most of the miracle money didn’t show up, and the budget is about $5 billion in the red. The Legislature is now suing Chiang, claiming that he had no authority to enforce Proposition 25.

To read entire column, click here.

By Dale Kasler
dkasler@sacbee.com
Published: Friday, Feb. 3, 2012 – 12:00 am | Page 6B

By lowering its investment forecast by another quarter point, CalSTRS made a bow toward economic reality – but also may have complicated efforts to shore up its finances.

The teachers’ retirement board agreed Thursday to reduce CalSTRS’ official investment forecast to 7.5 percent, down from 7.75 percent. It was the second cut in 14 months, after the $144 billion fund left the forecast untouched for 15 years.

In a volatile investment climate, following a year in which CalSTRS’ portfolio earned just 2.3 percent, board members took their consultants’ advice and went with the lower number.

“I think it’s best that we be conservative,” said Terry McGuire, representing board member and state Controller John Chiang.

The board of the California State Teachers’ Retirement System voted 9-1 to reduce the forecast. The lone dissent came from Pedro Reyes of the Department of Finance. The higher forecast “is not unreasonable,” he argued. “Let’s stay where we are right now, (and) visit this in another year.”

By cutting investment projections, the board instantly ballooned CalSTRS’ funding gap – the estimated shortfall of assets available to meet the pension fund’s long-term needs. The gap will grow by nearly $6 billion, or roughly 10 percent.

That could create problems in the Legislature, which must OK changes in how CalSTRS is funded.

CalSTRS gets around $5.6 billion a year from the state, school districts and teachers. The pension fund had already calculated that it needed another $4 billion a year to eventually get healthy. With the lower investment forecast, those needs grow by another $500 million a year.

While CalSTRS is pushing for more money, many Republicans want to erase funding shortfalls for public pensions by reducing benefits. Democratic Gov. Jerry Brown wants to give newly hired employees a combination traditional pension and a 401(k)-style program.

Read more here: http://www.sacbee.com/2012/02/03/4235828/calstrs-gap-rises-as-return-forecast.html#mi_rss=Business#storylink=cpy

Capitol Alert
The latest on California politics and government
February 2, 2012

A “millionaires tax” initiative spearheaded by the California Federation of Teachers and the Courage Campaign received petition language today, as well as backing from the powerful California Nurses Association.

CFT spokesman Fred Glass said his group expects to begin collecting signatures Monday now that state Attorney General Kamala Harris has issued official petition language today. Harris titled the measure “Tax To Benefit Public Schools, Social Services, Public Safety, And Road Maintenance.”

The CFT/Courage plan would raise taxes by three percentage points on income above $1 million and five percentage points on income above $2 million. State fiscal analysts say the proposal would generate $4 billion to $6 billion annually, with a $6 billion to $9.5 billion windfall in the 2012-13 fiscal year because the plan would capture 18 months of taxes.

The plan is competing with Gov. Jerry Brown’s tax initiative, which would raise income taxes on earners starting at $250,000 for single filers, as well as increase the statewide sales tax by a half-cent.

To read entire story, click here.

Gov. Jerry Brown laid out a detailed plan to alter California’s state and local public retirement systems on Thursday – and immediately drew fire from his core labor constituency.

The details delivered to the Legislature on Thursday generally tracked with an outline he unveiled in October. Representatives of a union coalition hoped to negotiate what they consider a less severe package. On Thursday, they said they felt blindsided.

“To launch this bomb in the early stages of the legislative season can only be counterproductive,” said Steve Maviglio, spokesman for the union coalition Californians for Retirement Security. “The timing and severity of this was quite a surprise.”

Because the package of proposals amends the state constitution, it needs support from two-thirds of lawmakers in the Democrat-controlled Senate and Assembly to be put on the Nov. 6 ballot.

The centerpiece of Brown’s plan ends traditional pensions for state and local government employees hired July 1, 2013, and later. Employers would be offered “hybrid” plans that combine a smaller guaranteed payout with a more volatile 401(k)-type component.

“I think there’s a lot of really good stuff in the proposal,” said retired state Finance Director Mike Genest, who is now aligned with California Pension Reform, a group that is raising money for its own ballot measure.

While the unions and some experts have warned that hybrid pensions would devastate retiree security, Genest said that the idea is fair because “at least some of the risk is shared with the employee.”

Brown’s plan aims to replace 75 percent of an employee’s income assuming 30 years of service and a retirement age of 57 for public safety employees. Other workers would reach full retirement at 67 after serving 35 years.

To read entire story, click here.

Joe Nelson, Staff Writer
Posted: 02/01/2012 02:01:30 PM PST

The labor union representing roughly 11,000 San Bernardino County employees announced Wednesday it will support another union’s effort to reduce county supervisors’ jobs to part-time.

Paula Ready, president of the San Bernardino Public Employees Association (SBPEA), said in a statement that the union’s board of directors had voted unanimously to support the San Bernardino County Safety Employees Benefit Association (SEBA) in its push to slash county supervisor salaries to $60,000 a year and their district budgets from $1.5 million to $250,000.

The unions are accusing the board of foisting its duties onto county Chief Executive Officer Greg Devereaux and voters.

Though the board has cut its meeting schedule in half, it still reviews the same number of agenda items, only now more items are going on the agenda, county spokesman David Wert said.

He said the unions are aware of this and their arguments are ill-informed.

“The unions are close enough to the county’s operations to know those meetings are only a small portion of what board members do,” Wert said.

To read entire story, click here

State government payroll increased by half a billion dollars last year, even as California cut thousands of state worker jobs, according to a Bee analysis of new data from the Controller’s Office.

The payroll increase added about $140 million in wages to the Sacramento economy in 2011, contributing to a budding recovery.

The trend is largely due to a shift away from worker furloughs and toward layoffs and hiring freezes. Absent furloughs, most state workers got a full paycheck for the first time in years during 2011, plus some step raises and other union-negotiated bumps.

“Payroll would have grown a lot faster if those (job) reductions hadn’t taken place,” said Michael Shires, a professor of public policy at Pepperdine University.

State payroll eats a large chunk of the state’s budget – almost $18 billion in 2011. During recent lean times, former Gov. Arnold Schwarzenegger and current Gov. Jerry Brown have tried to keep payroll in check, but have taken different approaches.

Through much of 2009 and 2010, the Schwarzenegger administration required workers to take three unpaid furlough days a month, dubbed “Furlough Fridays.” That program ended in late 2010, though many workers still had to take one unpaid furlough day a month last year.

The furloughs cut state worker pay by more than $1 billion from 2008 to 2010. But, despite threats of layoffs and hiring freezes, Schwarzenegger never substantially reduced the number of full-time state workers.

The opposite happened during the first year of Brown’s administration: The number of full-time state workers fell but total payroll rose 3 percent.

With the demise of Furlough Fridays, roughly 80 percent of state workers made more money during 2011 than during 2010. The end of furloughs, combined with other raises, increased the pay for those who earned more by an average of 10 percent.

But the number of full-time state workers fell by 7,500, or 4 percent, during 2011. Most of that was due to the Brown administration’s enforcement of a hiring freeze, though layoff notices became more common at the end of the year.

Among large state agencies, the biggest payroll increases came at the Department of Mental Health and the Department of Motor Vehicles.

Mental Health’s payroll rose almost $50 million in 2011 to about $840 million. The department employed the two highest-paid state workers in California last year, not counting the University of California, which has many highly paid medical specialists.

Mohammad Safi, a senior psychiatrist at the Salinas Valley Prison psychiatric program, earned $803,000 in 2011. Gertrudis Agcaoili, a staff psychiatrist at Napa State Hospital, earned $772,000 last year.

Beth Willon, a spokeswoman for the Department of Mental Health, said psychiatrists earn healthy salaries in the private sector, and that the state must remain competitive. State law mandates constant monitoring of patients, she said, and “Dr. Safi’s pay reflects many hours of work after hours, on holidays and on weekends.”

To read entire story, click here.

Supervisors’ second-largest union argues it was asked to give up too much before terms were imposed; terms reached with biggest union

BY DUANE W. GANG AND DUG BEGLEY
STAFF WRITERS
dgang@pe.com | dbegley@pe.com

Published: 31 January 2012 09:15 AM

More than 1,000 Riverside County workers took to the streets Tuesday protesting benefit reductions and warning that additional strikes could be on the way if county officials don’t reopen contract negotiations.

The 24-hour work stoppage was expected to last until 6:59 a.m. today and marks the latest escalation between county management and the Service Employees International Union Local 721, the county’s second-largest employee group.

On Monday, the county and a state labor relations board went to court and successfully blocked 248 county nurses and other health care workers from taking part in the strike.

“We will take any job action necessary to get them to come back to the table,” said Wendy Thomas, the union’s chief negotiator and a Riverside County employee.

But while SEIU members picketed, the county reached a tentative new contract with its largest employee group, Laborers’ International Union of North America Local 777.

The laborers’ union represents about 7,000 employees. The four-year deal would start July 1 and provide $60 million in annual savings once fully implemented, according to a county statement.

Because the employees have yet to vote on the contract, the county did not release specifics, but it did say employees would pay 8 percent of their salaries toward their retirements.

“This is what happens when both sides sit down with realistic goals that honestly consider the county’s budget picture and the needs of our employees,” Board of Supervisors Chairman John Tavaglione said in a statement.

In the same statement, laborers’ union Business Manager Stephen Switzer said the agreement addresses the county’s budget woes in a meaningful way while valuing the employees and their work.

SEIU represents about 5,800 county workers ranging from clerks to social workers and nurses.

County officials said Tuesday they had no major problems conducting business, despite the strike. Managers filled in where needed, health clinics reduced appointments, and the county hospital canceled elective surgeries, officials said.

According to the county, 1,394 workers did not show up for work Tuesday. The most, 556, came from the Department of Public Social Services.

BIG TURNOUT

Wearing SEIU’s signature purple T-shirts and holding strike signs, the picketers started making their feelings known about 8 a.m. outside the County Administrative Center in downtown Riverside, where a regular meeting of county supervisors was scheduled. The crowd steadily grew.

By the time the supervisors opened their meeting at 9 a.m., SEIU members filled every available seat in the board’s chambers and swarmed into the lobby and atrium of the county building.

They chanted “fair contract now” and “Hey-hey, ho-ho, Bob Buster’s got to go,” referring to the supervisor who has been the board’s most vocal advocate for requiring employees to pay more toward their retirements.

Inside the board’s chambers, employees waved their hands in the air to show their displeasure with the county over the contract talks. Tavaglione warned the crowd that clapping and cheering was not allowed, but at one point, when Buster spoke, the room erupted in coughing.

Inside and out, the crowd peaked at more than 2,000. About 1,500 SEIU members and supporters later marched through downtown Riverside.

Some union members said they felt they had no choice but to join the picket line.

“I’ve seen some bad deliberations, but this is the worst,” said Linda East, 53, a policy writer for the county-operated CalWORKS program.

East said holding a picket sign is unfamiliar turf for her.

To read entire story, click here.

PolitiCal
On politics in the Golden State
January 31, 2012 | 11:59 am

California is running out of cash, the state controller warned in a letter to lawmakers Tuesday.

Controller John Chiang said lawmakers need to scrape together $3.3 billion by March — assuming the state’s financial situation doesn’t get any worse.

By Feb. 29, the state is expected to dip below its “safety cushion” of $2.5 billion. Then, in a little more than a week, it will burn through all its cash and drop $730 million into the red, Chiang said.

He urged the state to delay some payments, borrow more money and shift cash among various funds.

To read entire story, click here.

Dan Walters

By Dan Walters
Published: Wednesday, Feb. 1, 2012 – 12:00 am | Page 3A

Gov. Jerry Brown is scaling back the state’s highly controversial bullet train project to keep it alive.

Just three months ago, his administration unveiled – with great fanfare – a revised “business plan” for building the north-south bullet train system to answer the embryonic project’s many critics.

The project would be slowed down and stretched out timewise with a new and supposedly more realistic cost structure, officials declared. It would be, California High-Speed Rail Authority chairman Tom Umberg said at the unveiling, “a new time, a new day and a new beginning.”

But the revised cost, about $100 billion or three times the original estimate, shocked many and raised questions about whether the state, which had only $9.95 billion in bond funds available, could raise the remainder from the federal government and private (or foreign government) investors.

The CHSRA’s own “peer review” committee issued a scathing analysis, saying that to begin construction without firm financing would be very risky, and the state auditor’s office echoed those sentiments.

Statewide polling indicated that Californians had turned against the project, and legislators whose votes were needed to appropriate construction balked.

Brown vigorously defended the project, adopting it as a symbol of California’s transformation to a green economy. But Umberg stepped down so that Brown could appoint his own chairman, longtime adviser Dan Richard, who had helped rewrite the business plan. And the operating head of the agency, Roelof van Ark, who had alienated some legislators, departed.

To read entire story, click here.

Capitol Alert
The latest on California politics and government
January 31, 2012

Rural and urban school districts in California that make heavy use of buses appear safe — for now.

State lawmakers are fast-tracking legislation that would transform a $248 million midyear school bus cut into a general-purpose reduction that hits each K-12 district evenly. The Assembly Budget Committee passed Senate Bill 81 with bipartisan support Tuesday, while an aide to Gov. Jerry Brown testified that the governor supports the proposal.

But Brown still wants to eliminate specific funding for buses in his 2012-13 budget, along with removing earmarks for a variety of other K-12 programs. He instead proposes a new block grant funding system for schools, out of which he suggests districts could fund bus service if they choose.

In Tuesday’s hearing, Republicans and Democrats representing rural areas joined together to lobby for SB 81, which only applies for the remainder of this school year. The bus cut was triggered when state forecasters determined last month that California would fall $2.2 billion short of a $4 billion tax revenue bump that Brown and lawmakers assumed in the 2011-12 state budget.

“It’s a catastrophic problem in my district and in many other rural parts of California,” said Assemblyman Wesley Chesbro, D-Arcata, who represents the North Coast area. “Eliminating the school bus system creates dangerous situations for many children in California, but for my district it means it would be impossible for many children, if not most children in some districts, to attend school at all.”

To read entire story, click here.

By Dale Kasler
dkasler@sacbee.com
Published: Wednesday, Feb. 1, 2012 – 12:00 am | Page 6B

CalSTRS is thinking of cutting its investment forecast for the second time in barely a year, a move that acknowledges the increased financial strain on the pension fund.

The teachers’ retirement board on Thursday will consider a recommendation from its actuarial consultant to cut the forecast by a quarter point, to 7.5 percent.

The consultant, Milliman Inc., told the board the current forecast “exceeds the expected long-term return.”

Pension funds are reluctant to adjust their investment forecasts. After months of hand-wringing, the California State Teachers’ Retirement System cut its forecast by a quarter point in December 2010 – the first adjustment in 15 years.

Now it might do so again, just a week after CalSTRS revealed that its earnings for calendar 2011 came to just 2.3 percent.

The timing is coincidental, pension officials said. The latest recommendation is part of a typical review that takes place every four years, said Ed Derman, CalSTRS’ deputy chief executive.

What happened in 2010 was unusual, and was a reaction to the extraordinary losses suffered in the 2008 market crash, he said.

To read entire story, click here.

Riverside County officials have gone to court in an effort to stop a one-day strike by health care professionals.

BY RICHARD K. De ATLEY
STAFF WRITER
rdeatley@pe.com

Published: 30 January 2012 11:33 AM

A judge Monday barred 248 health-care workers from joining a one-day strike by members of Riverside County’s second-largest union.

After a daylong hearing, Judge John Vineyard issued a temporary restraining order against all but 17 members of a group of 265 workers whose jobs the county argued were vital. Vineyard ordered the majority not to take part in the one-day walkout by members of Service Employees International Union Local 721.

The SEIU local represents 5,800 county workers. It is not certain how many will strike today, but union officials have said they expect thousands to take part in the protests in front of the County Administrative Center on Lemon Street in Riverside.

Those ordered to stay on the job today include nurses in Riverside County Regional Medical Center’s medical and surgical units as well as its emergency department, critical and progressive care units, pediatric units and psychiatric unit, as well as nurses working at jail facilities.

“A strike is not worth somebody becoming dead or somebody being seriously injured,” Riverside County Counsel Pamela Walls argued during the all-day hearing.

County officials on Jan. 24 appealed to the California Public Employment Relations Board to take action against the union regarding the health-care workers, and the state agency filed its lawsuit on Friday.

The county sought to keep the nurses — many of whom will get an 8 percent raise starting next month — on the job.

Vineyard said 17 members of the challenged group — including clinical lab scientists and operating room scrub techs — could join the strike.

An attorney for the union said the county had provided Vineyard with skimpy evidence to back its arguments that the 265 contested health workers had to stay on the job, especially after 11 days’ warning of the strike.

To read entire story, click here.

Would it be churlish to say that the much-ballyhooed Think Long Committee for California fell short on fortitude?

Or merely accurate?

Billionaire Nicolas Berggruen created the committee and invited a Who’s Who of California’s political, civic and economic upper crust – including two former governors, one former chief justice and two former secretaries of state – to become members.

It issued a “Blueprint to Renew California” that advocated major changes in how government is organized and financed, to be put before voters this year.

Berggruen, the committee and the plan received loads of mostly positive media attention – including much outside California – because it appeared to be the first potentially viable effort at structural reform to cure the state’s political dysfunction. But one segment would have been an extensive overhaul of California’s cockeyed taxation system, and it interfered politically with Gov. Jerry Brown’s relatively modest proposal for a temporary hike in income and sales taxes.

Brown doesn’t want competing tax measures on the November ballot, fearing that voters could be confused and reject them all. He and his allies pressured the Think Long Committee to back off and it did.

Instead, Think Long is endorsing some relatively minor, incremental changes in governance, such as a two-year budget cycle, proposed by California Forward, another blue-ribbon civic group.

Briefly put, an organization whose declared goal was to rise above politics-as-usual and improve governance succumbed to politics-as-usual.

To read entire story, click here.

California Supreme Court Chief Justice Tani Cantil-Sakauye lost a round over Judicial Council power

The state’s top judge lost a political battle Monday when the state Assembly voted to shift key budget decisions from the state Judicial Council that she heads to local trial courts, some of which have complained about the panel’s handling of money.

The legislation, which next goes to the Senate for consideration, was vigorously opposed by California Supreme Court Chief Justice Tani Cantil-Sakauye, who is also the chairwoman of the Judicial Council. The council said the bill is an “inappropriate intrusion into the fundamental governance of the judicial branch.”

But AB 1208 was supported by a dissident group known as the Alliance of California Judges, which said too much power has been centralized with the statewide court bureaucracy to the detriment of local court operations.

The measure by Assemblyman Charles Calderon (D-Whittier) would give local trial courts power to decide how to spend their share of funding to pay for court operations. Calderon said his measure is needed because some courtrooms have had to close in the face of budget cuts imposed by the Judicial Council at the same time that the panel diverted more than $70 million to a problem-plagued computer modernization program that has gone over budget.

To read entire story, click here.

Understaffed, overwhelmed, Riverside and San Bernardino county officials say the verdict is few options on further cuts

RICHARD K. De ATLEY/Staff

RICHARD K. De ATLEY
STAFF WRITER
rdeatley@pe.com

Published: 29 January 2012 07:33 PM

Like passengers on a plane with half the engines snuffed, Inland court officials can only wait and watch as Gov. Jerry Brown’s proposed budget for next year fiscal year moves through the state’s political turbulence.

After four years of cuts reduced the statewide court budget by nearly $653 million — losses passed on to the state’s 58 superior courts, including $5.7 million slashed for Riverside County and $6.1 million for San Bernardino County courts for the current fiscal year — Brown has no further cuts proposed in his new budget.

But there’s a catch: Brown’s budget is based on his tax package getting approved. If it doesn’t, an additional $125 million in cuts to the courts will be imposed.

And court officials have expressed ambivalence about Brown’s proposed revenue plan of increasing fees and fines to raise $50 million.

“We do have money problems but the fees and fines are getting to be a problem for folks who are coming in for civil cases and family law cases,” said San Bernardino County Court Executive Officer Stephen H. Nash in a phone interview. “We do appreciate the governor’s support for new money, but we are not excited about higher fees.”

The interest in court funding is especially keen in Riverside and San Bernardino counties, where courts for years have been seriously understaffed as the counties’ populations each soared past 2 million during the past decade.

The state Judicial Council funds county courts based on the number of judicial officers, not population.

Riverside County has 76 judicial positions, including judges and commissioners, but a recent workload assessment report that was assigned by the state Judicial Council said it should have 150.

San Bernardino has 86 judges and commissioners combined, and likewise needs 150. The two courts have the highest caseloads-per-judge in the state for large population counties.

Another round of deep cuts could overwhelm their systems.

‘KEEP THE COURTS OPEN’

“The goal is to keep the courts open,” Riverside County Court Executive Officer Sherri Carter said. “We really want to do that without furloughs or layoffs because we don’t have the staff to do the work we have now.”

Riverside County officials fear a return to the backlogged court struggles of a few years ago, when civil cases sat unheard and a strike force of 12 judges was dispatched to the county to handle its longest-pending criminal cases.

Riverside County has depended for years on assigned judges — retired jurists sent by the state Administrative Office of the Courts to counties that need extra help with their case workload.

While the state pays the assigned judges’ salaries, the local courts have to pay for their courtroom personnel. And there is no extra staff in the clerk’s office to handle the work generated by the assigned judges.

Carter said the cost to the courts is “in the millions.”

Riverside County Superior Court has already reduced the number of assigned judges from 22 a day to 15, “and that just keeps our heads above water,” Riverside County Presiding Judge Sherrill Ellsworth said.

But “if we are looking under rocks” to save money, further cuts in the assigned judges program would have to be considered, she said.

Also threatened are the collaborative courts, in which prosecutors, defense attorneys, probation officers and social workers cooperate in programs designed to help selected defendants return to productive roles in society.

Veterans, domestic violence cases, and drug offenders are among the specialized courts.

“We have done a good job addressing those issues and being a full-service court,” Ellsworth said, but all of it is threatened by further substantial cuts, she said.

To read entire story, click here.

Hoping to restore jail funding to San Bernardino County, an Inland Empire assemblyman introduced a bill on Friday that could potentially bring $16 million to county coffers.

Assemblyman Paul Cook, R-Yucaipa, introduced AB 1556, which would direct jail funding to the county – funding that was not made available when the Adelanto Detention Center expansion project broke ground last year.

Cook was optimistic about the bill while acknowledging the uphill battle against other Sacramento leaders.

“We’ll do the best we can,” Cook said. “And if I get a bloody nose, so be it.”

In 2007, lawmakers allocated $1.2 billion for county jail construction projects. According to Joshua Candelario, deputy legislative director for San Bernardino County, Adelanto was at the top of the list to receive funding for its $111 million expansion project.

At the time, the local match, or the county’s contribution to the project, was 25 percent. However, lawmakers last year modified the local match requirement and signed a law that calls on counties to contribute 10 percent.

The new law does not apply to county jail projects already under way. In other words, Adelanto does not benefit from the lower match.

“Because the county played by the rules of the game, we should not be punished,” Cook said. “It’s just not right. We’re going to make a ruckus about it.”

To read entire story, click here.

By Howard Mintz hmintz@mercurynews.com
Posted: 01/30/2012 06:56:26 AM PST
Updated: 01/30/2012 07:31:17 AM PST

With a crucial vote looming Monday, a conflict that has shaken California’s judiciary reaches a critical stage when the Assembly considers legislation that would strip control of most of the court system’s purse strings from a central bureaucracy and turn it over to the Legislature and local trial judges.

The yearlong battle over control of the court system’s $3 billion budget reached a boiling point this week as Chief Justice Tani Cantil-Sakauye began a campaign to kill the legislation sponsored by Charles Calderon, D-Whittier, the Assembly’s ranking Democrat.

The Assembly must vote on Monday, otherwise the legislation will die for at least the remainder of this year.

Calderon’s bill, backed by labor groups and a splinter organization of the state’s judges, would largely scrap a 15-year-old state law that centralized court supervision and budget authority among California’s 58 trial courts.

The struggle for power over local court budgets could shape how judges deal with everything from how they pay for legal services for the poor to setting filing fees for lawsuits for years to come.

The legislation exposes a rare public rift within California’s sprawling judiciary, which has been rife with infighting over how hundreds of millions of dollars in budget cuts are being spread through the nation’s largest state court system.

The primary target of critics of the current system has been the Administrative Office of the Courts, the court bureaucracy, and the Judicial Council, chaired by the chief justice and the policy arm of the court system.

The Bay Area’s trial courts are an example of the division.

The presiding judges of 44 of the trial courts signed onto a letter this month opposing the legislation, but there was a mix in the Bay Area.

Santa Clara, Contra Costa, Santa Cruz and Monterey counties signed the letter, but Alameda, San Mateo and San Francisco did not. The latter counties are among those forced to shrink staff dramatically and shorten public hours at clerk’s offices to close budget gaps.

In an interview this week with the Mercury News editorial board, Cantil-Sakauye warned that Calderon’s legislation would be a disaster for most trial courts, producing unfair results for many counties and injecting politics into funding for the judiciary. She noted that Los Angeles Superior Court, which backs the change, would be able to veto important statewide legal programs with scant support from other counties.

“What we lose is uniformity,” the chief justice said. “We abdicate decision making about the policies of the judicial branch, the nonpolitical branch, to the Legislature.”

To read entire story, click here.

Capitol Alert
The latest on California politics and government
January 29, 2012

The California Teachers Association officially agreed Sunday to back Gov. Jerry Brown’s multibillion-dollar tax plan, which should provide the governor hefty financial support for his fall campaign.

The union represents 325,000 teachers and education workers, and it is a heavy hitter in state politics. Brown is gathering signatures for a November initiative to raise sales taxes by a half-cent and income taxes on high income earners. He has structured his budget so that schools would face a $2.4 billion program cut in 2012-13 if voters reject his proposal, which he says is equal to three weeks off the school year.

The Democratic governor now has support from the state’s two most powerful public employee unions in CTA and the Service Employees International Union State Council. SEIU has not made its support public, but CTA President Dean E. Vogel told his members on Saturday that “SEIU State Council has already taken a support position,” according to a text of his speech.

SEIU spokesman Michael Cox said Sunday his organization has not taken a public position. But sources besides Vogel confirmed SEIU has privately agreed to support Brown. The governor has been working for weeks to convince other tax proponents to step aside, knowing that voters are less inclined to support any tax plan if faced with multiple options.

To read entire story, click here.

Monday, January 30, 2012
By Ed Mendel

The nation’s two largest public pension funds last week reported slim annual investment earnings, CalPERS 1.1 percent and CalSTRS 2.3 percent, as experts continue to say hitting their long-term earnings target, 7.75 percent, will be difficult.

While CalPERS reported weak earnings in 2011, a prominent private-sector investment manager, Robert Arnott of Research Affiliates, told the board last week he thinks the most they can expect from stocks and bonds next decade is 4 percent.

Another major investor, Laurence Fink of BlackRock, told the CalPERS board during a similar educational session in 2009 that during the next 15 years: “You’ll be lucky to get 6 percent on your portfolios, maybe 5 percent.”

A Wall Street Journal columnist, Jason Zweig, said last week Warren Buffet’s Berkshire Hathaway pension fund projects a return of 7.1 percent. He said William Bernstein of Efficient Frontier Advisors expects roughly 6.5 percent from stocks.

Consultant Girard Miller said in Governing magazine this month, while discussing 12 basic public pension issues, that earnings “closer to 7 percent” are more realistic until global debt is reduced.

The California Public Employees Retirement System board decided last March to leave its earning assumption unchanged at 7.75 percent, despite a recommendation by actuaries to lower the forecast to 7.5 percent.

Even a small drop in the earnings forecast could boost the annual employer payment to the pension fund. CalPERS, which may revisit the forecast in March, is not turning a deaf ear to the experts.

“Like all talented investment managers, and Rob Arnott is one of the most talented, he laid out a problem—in a low return environment conventional approaches to asset management are likely to disappoint—and a solution—invest unconventionally,” the CalPERS chief investment officer, Joe Dear, said by e-mail when asked for a comment.

“He did not say we can’t earn our target rate of return. He said to do that we’ll have to have an investment strategy that is different. Much of what he suggested, such as fundamental indexing, and higher exposures to emerging markets, we are already doing. The low return environment makes achieving our return objective more difficult, but not impossible.”

Why experts think this is a “low return environment” was explained by Pension Consulting Alliance, a CalPERS and CalSTRS adviser, in a report in October to the Rhode Island state pension fund, which was overhauled by legislation in November.

“Factors that provided a tailwind in the past are expected to present a headwind,” said the PCA report by Allan Emkin.

Low interest rates (the 10-year U.S. Treasury bond yield dropped from more than 8 percent in 1990 to about 2 percent now) means that the bond portion of investment portfolios will have lower yields.

Large government and private-sector debts run up in recent years means debt repayment can crowd out purchases and projects, limiting economic growth and potentially lowering stock returns.

Population trends in developed economies such as the United States, Europe and Japan (getting older and growing slower) mean their economic growth is likely to be slower, potentially lowering stock returns.

Under Rhode Island investment policy, the report shows a 50.3 percent probability of exceeding a 6.75 percent annual return during the next decade, the highest in a range decreasing to a low of a 36.9 percent chance of exceeding 8 percent.

To read entire story, click here.

Executive Editor Frank Pine
Posted: 01/28/2012 05:38:39 PM PST

San Bernardino County’s Board of Supervisors asked county lawyers last week to draft language for a ballot measure that would give voters the final say on increases to pension benefits for public employees.

Supervisors Janice Rutherford, Gary Ovitt and Josie Gonzales voted yea with supervisors Brad Mitzelfelt and Neil Derry voting nay.

Gonzales and Mitzelfelt both expressed at least a little ambivalence, saying they wanted to wait and see the final language of the ballot measure before committing.

We didn’t quote Derry in our story, but he was the first person to comment on it once it was posted on our website, and the nuance of his nay is significant.

Derry: “This wasn’t pension reform. It was a feel-good measure that would have had zero impact on current employee pensions and would create a significant roadblock to negotiating pension reductions in the future. How is it `reform’ if the pensions aren’t being changed?”

Mere hours after the board made its decision Tuesday, the head of the county’s most powerful union – the Safety Employees Benefit Association – announced it would fund an initiative to cut supervisors’ pay by reducing their employment status to part time.

Union president Laren Leichliter said the SEBA announcement was not intended to intimidate supervisors and noted that signature gatherers were collecting names the Thursday before the pension item was placed on the supervisors’ agenda.

His quote: “All our elected officials, according to them they’re all overpaid, so we’re just trying to assist them in their progression of trying to save county residents money,” Leichliter said.

Maybe that’s the case, but the timing is pretty suspect and it’s hard to see this as anything other than the latest example of the rough-and-tumble politics of San Bernardino County in particular and California in general.

The real issue here, however, appears to be the county’s ongoing contract negotiations with SEBA. As the county struggles to close daunting budget shortfalls, those negotiations have been anything but smooth.

In December, the county threatened to impose a 14 percent reduction in pay and benefits on SEBA’s Specialized Peace Officers bargaining unit, which includes probation officers, coroner investigators and welfare-fraud investigators.

To avoid that, the unit approved a contract with a 7 percent cut in benefits and a reduction in annual merit raises from 5 percent to 2.5 percent.

To read entire column, click here.

Canan Tasci, Staff Writer
Created: 01/27/2012 09:31:09 AM PST

CHINO – The Chino Valley Unified School District has about two weeks to find $20 million to cut from its budget for next year.

That’s the bad news coming from last week’s Board of Education budget study session.

During that time, board members will again revisit a 33-item list of possible cuts prepared last year by Superintendent Wayne Joseph, which may have to be considered to keep the district fiscally solvent.

The list of potential items on the block cut deep into Chino Valley’s educational processes, from possible elimination or cutbacks of nurses to elementary music programs, librarians and several assistant principals, among other items.

Board member David Black points the finger to the annual cutbacks from Sacramento as the cause.

“The government,” he said, “is holding education hostage.”

Districts across the state are dealing with similar issues now that the governor has released his budget recommendations.

Some of Gov. Jerry Brown’s state budget proposals for education include the elimination of home-to-school and special education busing funding, the requirement and funding of transitional kindergarten, and eliminating half of the existing requirements of some educational programs.

Also on the governor’s list is to reduce the “interyear apportionment deferrals,” or the percentage of money that is owed to schools. This proposal would only happen if California’s voters pass Brown’s $6.9 billion tax initiative in November, raising the state sales tax as well as income taxes on California’s highest earners.

Deferrals are money owed to schools in this fiscal year but because the governor doesn’t have money he defers release of that money to a later date, said Sandra Chen, district assistant superintendent of business services.

“Right now 38 percent of our current year funding is deferred by the governor until the following year,” she said. “He’s trying to buy down that 38 percent to a lower percentage so we can actually receive the money this year, and that’s a good thing.

“That’s the only proposal on his list that is contingent upon the passage of the taxes. Whether or not the taxes pass, the rest of these are still going forward on his proposal, with the exception of the deferral,” Chen said.

The state is $9.2 billion in the red. All of the governor’s proposed financial solutions add up to $10.3 billion.

Chen said the bottom line is the governor’s proposal is predicated on the passage of the tax-hike initiative.

“We have to plan our budget on what we know right now, and I can tell you right now is that if the taxes pass the best news for our school district is that we will receive the same level of funding as the current year. However, we will still receive 100 percent elimination of regular and special education transportation funding for the 2012-13 school year and beyond,” Chen said.

When it comes to eliminating busing, that sticker price is about $1.5 million for the two school years in Chino Valley.

If the governor’s tax increase does not pass, the district’s revenue funding will be reduced by $10.7 million in 2012-13 school year and $10.5 million in 2013-14.

To read entire story, click here.