Joe Nelson, Staff Writer
Posted: 05/22/2012 04:00:23 PM PDT

SAN BERNARDINO – High unemployment and a staggering number of people underwater on their mortgages continues to vex San Bernardino County, with no relief expected until late 2015, according to a budget report approved by the Board of Supervisors on Tuesday.

The county added 15,600 jobs in the first three months of 2012, but its unemployment rate, as of March, was still hovering at 12.7 percent, higher than the national unemployment rate of 8.4 percent and California’s unemployment rate of 11.5 percent.

Roughly 264,122 of the 488,422 single family homes in the county have been underwater on their mortgages – in which owners owe more than the home is worth – at some point in the last four years.

Of the underwater homes, 63.7 percent of the homeowners had received notices of default. As a result, a housing recovery is not likely until late 2015, according to the budget report.

“It is clearly my opinion and the opinion of the Board of Supervisors that our economy is still struggling,” said Greg Devereaux, the county’s chief executive officer.

He said the local economy will not rebound until developers start building homes again and more businesses set up shop.

But before that can happen, the county must first get its arms around the foreclosure problem and the high number of people underwater on their mortgages.

“Hence the desire for the board to form a JPA (joint powers authority) with some of our cities and explore what’s out there,” said Devereaux.

The county is pushing to form a JPA that would create a program to assist these troubled homeowners. The cities of Fontana and Ontario have agreed to join the county in the plan.

Hesperia Mayor Russell Blewett has also expressed a strong interest in the program, but his city has yet to embrace the proposal.

County spokesman David Wert said a number of private companies and/or organizations are developing or have developed programs targeting underwater homeowners. The federal Home Affordable Refinance Program (HARP) is another option, he said.

Despite the projected delay in the recovery of the housing market, it’s not all bad news. The median home price in the county has leveled out at $150,000, and for March that median price was 9.5 percent above the April 2009 low, an affordable price for 77 percent of local families.

David Mlynarski, chief financial officer for the Inland Empire Economic Recovery Corp., a public-private partnership that purchases foreclosed homes, refurbishes them and sells them to first-time homebuyers, said the county must become more business friendly if it wants to attract business to the region and spur job growth.

“We are at the bottom of the list when it comes to being business-friendly and job-friendly,” Mlynarski said.

To read entire story, click here.

BY ALICIA ROBINSON
STAFF WRITER
arobinson@pe.com

Published: 22 May 2012 05:09 PM

Riverside officials say they expect to recover only a portion of the $49.44 million that the former redevelopment agency spent to buy 80 pieces of land that are now up for sale.

Some residents are frustrated by the predicted loss and critical of the former redevelopment agency for buying parcels and letting them sit idle, in some cases for six or seven years.

But redevelopment supporters argue that buying the properties allowed the agency to eliminate crime-ridden or rundown houses and businesses, benefits it’s hard to put a price on.

Under the state law that ended redevelopment, the city is required to put the bulk of its former redevelopment agency’s assets up for sale. Now officials are trying to sell 80 properties, broken into 26 groups of one or more parcels.

The city made a deal earlier this month to sell a parcel on Magnolia Avenue for $550,000. The redevelopment agency had paid $1.82 million to buy the land in 2007.

The sale price of other properties likely won’t be known until the city has them appraised.

“There will be an economic loss, there is no question, to the taxpayers of Riverside,” Councilman Mike Gardner said at a May 8 council meeting.

Of the remaining groups of properties, among the most costly were three groups on different corners of the Five Points intersection in La Sierra that cost a total of $10.2 million, and six parcels on Merrill Avenue across from Riverside Plaza that the agency paid $6.2 million to acquire.

The properties aren’t likely to fetch as much as they cost when the agency bought them partly because most had something on them — a business or a house, for example — that increased their value, Gardner said by phone Tuesday. There may also have been costs to relocate businesses or residents and demolish whatever was on the site.

To read entire story, click here.

Neil Derry

Point of View

Supervisor Neil Derry
Posted: 05/22/2012 02:44:33 PM PDT

The people of San Bernardino County are tired of being unemployed or underemployed. They are tired of feeling like they just can’t get ahead. And they are tired of feeling like nothing is ever going to change.

There is a limit to what a county government can do to improve an economy that is subject to state, national and global pressures. But that doesn’t absolve us from working hard to make a positive impact in areas where we can make a difference.

The seeds of economic recovery and sustained vibrancy begin to sprout when communities evaluate their strengths and weakness, assess the landscape for opportunities, and leverage available assets and resources to maximize growth and create jobs.

Understanding who we are as a community is essential to developing a strategy to achieve economic renewal. Communities that competently take inventory of these factors possess the confidence and patience to chart the long-term course to achieve these objectives.

The county of San Bernardino is preparing to embark upon this journey.

Our economic development agency recently entered into a collaborative partnership with Loma Linda University that we believe will mark the beginning of a multi-decade development of a biotech and life science industry complex. Loma Linda University owns many patents and innovations as a result of its vaunted research programs and decades of innovative practices and applications. To date, the value of these incredibly marketable assets has not been fully extracted.

Through our ability to apply for special tax credits from the federal government under the New Market Tax Credit fund, we believe we can entice firms to relocate or establish themselves here and facilitate the introduction of these intellectual assets owned by the university to the marketplace. These tax credits are designed to promote investment in low-income communities by permitting individual and corporate investors to receive the tax credit spread out over seven years in exchange for making equity investments through a community development entity controlled by the county. Areas surrounding LLU qualify under this program. Investors receive a 39 percent credit against the original investment amount. Obviously, this is an enticing carrot given to investors that engage in a very high-risk investment with a long-term horizon.

To read entire story, click here.

Nestande

By PE Politics
May 22, 2012 12:15 PM

Calling for an “honest conversation” about spending cuts, Assemblyman Brian Nestande and others Tuesday proposed a constitutional amendment to prohibit lawmakers from deferring scheduled payments to schools from one fiscal year to another.

The state has built up more than $10 billion in school-funding deferrals as lawmakers try to avoid permanent general-fund cuts.

But critics say the deferred money has scrambled district finances and costs them hundreds of millions of dollars in interest on borrowed money to pay their bills until the state money arrives.

“It’s really the largest shell in the shell game” of a state budget, Nestande, R-Palm Desert, said at a Capitol news conference. “Deferrals are just avoiding the tough decisions.”

Joining Nestande was Assemblywoman Kristin Olsen, R-Modesto, and other deferral critics, including Sharon Scott Dow, a representative of the Advancement Project. The group is led by wealthy civil rights attorney Molly Munger, who has spent more than $8.2 million to qualify an initiative that would raise income taxes to increase funding for schools..

Nestande and Olson did not say what should be cut to pay down the school deferrals. They ruled out raising taxes to generate more money for schools, notwithstanding their co-press conferee.

To read entire story, click here.

Sacramento — California’s public schools could see as much as a month of classroom time slashed from the calendar if voters reject a plan to raise taxes in November.

Gov. Jerry Brown has proposed giving school districts the option of cutting up to 15 days from the school year if voters reject his proposed income and sales tax initiative. The significantly shortened year would help offset a multibillion-dollar automatic midyear cut that would be implemented upon rejection of the taxes.

Districts statewide already have the option of cutting five days from the 180-day school calendar in order to reduce costs, and the proposal for three more weeks would be in addition to that. Public schools would take the biggest hit if the taxes fail, as nearly $5.5 billion out of the $6 billion in automatic cuts would come from their budgets under the governor’s plan.

Brown on Tuesday noted that the Legislature would ultimately decide what the so-called “trigger cuts” would entail, but he said that giving schools such an option is the only way to deal with the uncertainty.

“I’m doing the only thing that can be done, and that is assume the taxes and put in the trigger cuts,” Brown said after making a pitch for his tax plan to a gathering of the California Chamber of Commerce. “Is it the best way? It’s the only way that I can see going forward.”
Opposition to cuts

Polls of state voters in recent months have shown overwhelming opposition to the governor’s proposal for automatic spending cuts.

Education leaders said there are myriad problems with the proposal, including that Brown would want school districts to bargain with teachers unions to make such a reduction. That would result in districts having to make vast concessions for the unions to agree to what essentially would be a one-month reduction in pay, said Jill Wynns, president of the California School Boards Association.

“I don’t know what we would have to give, but … I guarantee in the future people would say, ‘How could that have gotten into the contract?’ ” Wynns said.

Shortening the school year any more would put the state and its students at a significant disadvantage for learning, and Californians would be fooling themselves to think otherwise, she said.

“From my point of view this is a huge game of pretend. We’re pretending you can have a world-class public school system without paying for it, and that’s just wrong. It’s a lie,” she said.

The Legislature first allowed school districts to shorten the 180-day year by five days as part of the February 2009 budget agreement, when the state was on the brink of financial collapse. Districts have the option of doing that until the 2014-15 school year.

In the current school year, 35 percent of school districts statewide have reduced their calendars between one and five days, according to a report by the Legislative Analyst’s Office. As part of the budget deal last year, the Legislature gave districts the option of reducing this school year by an additional seven days, but no districts took that option, according to the analyst.

To read entire story, click here.

Dan Walters

By Dan Walters
dwalters@sacbee.com
Published: Wednesday, May. 23, 2012 – 12:00 am | Page 3A

As the state budget’s deficit widens, Gov. Jerry Brown is being thrust into a three-front political battle.

He must not only persuade voters to pass his sales and income tax package, but, implicitly, persuade them to reject a rival tax measure just for schools.

Meanwhile, Brown is pressing liberal Democratic legislators to ignore their political DNA by making deeper cuts in health and welfare programs, not only to close the deficit but to bolster appeals to voters for new taxes.

“It’s not easy,” Brown told hundreds of business and civic figures gathered Tuesday in Sacramento for the annual Host Breakfast.

“We’re getting there,” Brown continued. “We’re making the cuts. But we also need the revenues.”

Brown had been cultivating business groups to support his original tax plan, but they cooled when he shifted gears to satisfy rivals on the left, reducing the sales tax element and sharply boosting income taxes on high-income taxpayers, including many attendees at Tuesday’s event.

Despite Brown’s assertion, cuts in welfare benefits, medical care for the poor, child care, developmental disability services, and in-home care for the aged and disabled are a tough sell among liberal legislators who support those services.

Brown’s new budget counts on those reductions to narrow the deficit by more than $1.5 billion but legislative leaders have said that softening their impact is their highest priority, characterizing them as “life-and-death” issues.

Past efforts to make cuts in those areas have been difficult. Most involve federal funds as well as the state’s money, and some have run afoul of Washington’s unwillingness to grant waivers, while others have been blocked in court.

To read entire column, click here.

BY MICHELLE L. KLAMPE
STAFF WRITER
mklampe@pe.com

Published: 21 May 2012 10:14 PM

A record number of California schools, including 31 in the Inland Empire, may not be able to pay their bills in the next couple of years, the California Department of Education announced Monday, May 20.

Nearly 20 percent of California school districts and other local education agencies such as county education offices are in financial jeopardy, according to a list compiled by state officials using financial reports from March. The list includes 18 of 23 school districts in Riverside County and 13 of 33 school districts in San Bernardino County.

Twelve districts — none in the Inland Empire — have indicated they cannot meet their financial obligations this fiscal year or next, a budget status known as negative certification. Another 176 districts indicated they may not be able to pay their bills this year or in 2012-13 or 2013-14, a qualified certification.

Districts with a qualified budget could become insolvent within two years unless they make additional cuts or bring in more revenue. Districts with a negative budget cannot pay their bills this year or in 2012-13. Under both conditions, districts face increased supervision and sometimes intervention from the county office of education to ensure they don’t become insolvent.

The number of agencies on the financial edge has increased by 61 since the list was last released in February and up 45 over the previous year’s list, state officials said. In 2006-07, just 24 school districts had a negative or qualified certification, and none were in the Inland region.

“Having 13 is crazy,” said Dan Evans, a spokesman for the San Bernardino County office of education. “That is a stunning number that should give everybody pause to say, ‘What’s going on here?’”

State and local education officials said the dramatic increase is a by-product of the prolonged state budget crisis and the unknowns surrounding tax measures being proposed to help fund schools. Paul Jessup, deputy superintendent of the Riverside County office of education, said moving school districts back onto solid financial footing will be difficult as long as the state’s financial woes continue.

“We’re in desperate need of an honest state spending plan,” he said. “We keep on getting budgets built on hope. Hope is not a plan.”

Districts have been required since the 1990s to file two financial reports, known as interim reports, one each by Dec. 15 and March 15. Districts review their fiscal health for the current year and two subsequent years. The reports look at cash flow, reserves, deficit spending, enrollment and attendance, status of labor agreements and more.

The county office of education reviews the reports and submits them to the state Department of Education. When districts have qualified or negative certification, they face additional oversight from the county office, which can step in to veto decisions on spending. In the worst case scenarios, a school district that has run out of money can seek an emergency loan from the state Department of Education.

To read entire story, click here.

By Jim Sanders
jsanders@sacbee.com
Published: Tuesday, May. 22, 2012 – 12:00 am | Page 1A

One week after Gov. Jerry Brown proposed slicing state workers’ pay by 5 percent, the Democratic governor and legislators find themselves targeted for a “share the pain” salary cut.

Members of California’s Citizens Compensation Commission said Monday that a pay-cut proposal for statewide officeholders will be on the table when the panel meets May 31.

Commissioner John Stites II said he supports a 5 percent cut for elected officeholders, from the governor to lawmakers.

“I definitely think they should take the same hit – at least,” Stites said. “Whatever happens to the people who work for you, whatever conditions they live under, it’s incumbent upon you to live under those same conditions.”

Brown projects a $15.7 billion budget shortfall for the fiscal year that begins July 1, and has proposed to bridge the gap with tax increases and program cuts, including a shift to a 38-hour, four-day workweek for state workers.

When he unveiled his revised proposal last week, Brown said his administration “would do more than what we ask state employees to do,” suggesting he and others would voluntarily take pay cuts.

Stites and other commissioners said they have no idea whether a pay cut would pass the seven-member panel of gubernatorial appointees.

Commission Chairman Tom Dalzell said he supports the notion of shared sacrifice, but that it would be premature to cut elected officials’ pay this year when the fate of Brown’s 5 percent wage cut for state workers has not been decided.

“It’s putting the cart before the horse,” Dalzell said.

The pay commission, created by voter passage of Proposition 112 in 1990, is responsible for determining compensation for all statewide elected officials. Salaries for California’s elected officials range from $173,987 for Brown to $95,291 for legislators.

The panel chopped officeholders’ pay and state contributions to their medical, dental and other benefits by 18 percent in 2009.

Legislators have taken additional hits to their compensation the past three years, with elimination of a Capitol car-lease program and a cut in lawmakers’ living expenses from $173 to $142 per day.

Commissioner Charles Murray stopped short Monday of committing himself to a new pay cut for officeholders. But they, too, should feel pain from this year’s belt-tightening, he said.

“Even though the legislators don’t consider themselves state workers, we do,” Murray said.

Commissioner Scott Somers was noncommittal about whether he would vote yes at the panel’s meeting next week at Sacramento City Hall. Somers said he supports the concept of shared pain but does not think elected officials should automatically be slapped with an equal cut any time state worker pay is reduced.

To read entire story, click here.

Sacramento– Gov. Jerry Brown’s latest budget proposal attempts to close a formidable $15.7 billion deficit, but the real debate at the Capitol in the next few weeks probably will be over how to cut just a fraction of the big amount.

That’s because about $2 billion in the governor’s budget represents permanent reductions in spending on state welfare, child care and other programs that Democratic leaders in the Senate and Assembly have pledged to protect.

Brown’s other budget proposals might be more controversial with the Legislature if the state weren’t facing such a large shortfall. Those include one-time solutions such as his proposal to seize almost $300 million from the national mortgage settlement that Attorney General Kamala Harris hoped to use to help distressed mortgage payers stay in their homes.

Some of Brown’s other reductions, like delaying the repayment of some loans, won’t cause a stir at all. The Legislature, which can pass a budget by a majority vote, has just under four weeks to approve a spending plan to cover the deficit by the June 15 deadline.

The scope of the dilemma faced by Democratic lawmakers and the governor was reflected in comments made by Senate President Pro Tem Darrell Steinberg, D-Sacramento, last week as he sought to reframe the situation by comparing it with the huge deficits of the past several years.

“I’m going to stop referring to this as a crisis,” Steinberg said. “It’s a problem.”

Not that the haggling on the relatively small permanent cuts will be easy. Both Brown and Steinberg predicted difficult negotiations, though Steinberg said, “I’m not looking for a big public fight here.”
4 touchy proposals

There are four main proposals over which Democrats and the governor are most likely to butt heads.

Those include proposed cuts to CalWORKS, the state’s welfare-to-work program; cuts to Cal Grants, which provides financial aid for low-income college students; reductions in state support for child care; and reductions to the In-Home Supportive Services program for the blind, elderly and disabled.

Brown has proposed $1.85 billion in reductions to those programs, including:

– An $880 million cut to CalWORKS by reducing from four years to two years the amount of time adults can receive welfare payments if they do not meet specific requirements for work activities.

– A $292 million cut to Cal Grants by increasing the minimum grade point average for students to qualify and reducing grants for students attending private or for-profit colleges and universities.

– A $425.5 million cut in the funding the state gives families to subsidize child care expenses, resulting in the loss of 29,600 child care slots.

– A $224.5 million cut to In-Home Supportive Services through a 7 percent reduction in hours for providers and by eliminating some services for people who are in a shared living arrangement.

To read entire story, click here.

Legislative Democrats aren’t organizing a bake sale just yet, but they say they will desperately search for cash in the coming weeks to avoid the most severe cuts proposed by Gov. Jerry Brown.

Saying the state’s budget deficit has risen from $9.2 billion to $15.7 billion, the Democratic governor has proposed more cuts to programs that serve the state’s poorest residents.

Brown has described it as a “day of reckoning” and wants his fellow Democrats to slash as much as possible before he asks voters to hike taxes on sales and high-income earners in November.

But Democrats signaled immediately that they plan to block some of the deepest cuts to welfare, child care and college scholarships for low-income students.

“We will scour the cupboards, look behind the pots and underneath the cushions, doing everything we can do to see if there’s some opportunity to reduce the extent to which we have to make these cuts,” said Assemblyman Roger Dickinson, D-Sacramento.

Democratic lawmakers say they have cut enough in the wake of the recession and that Brown’s proposals would result in homelessness, even death.

“To me, a cut that you know may result in the difference between life and death, and a cut that will increase homelessness, it’s our obligation to avoid those cuts,” said Senate President Pro Tem Darrell Steinberg, referring to proposed cuts in welfare grants.

Several Democrats said they want to “buy out” Brown’s cuts with creative ideas but offered few specifics. In the past, that has meant one-time accounting maneuvers, fund shifts and inventive changes that often fall short.

The governor insists the cuts are necessary to solve California’s budget problem not just this year, but in future years. Told that Democrats want to “buy out” his cuts, Brown responded, “With other cuts?”

“The key to true budget balance (is) ongoing cuts, and they are the most difficult, but also absolutely indispensable,” Brown said.

Besides his need to balance the budget, the governor has ample political motivation to persuade Democrats to approve as many cuts as possible, said Dan Schnur, a former GOP consultant who serves as director of the University of Southern California’s Jesse M. Unruh Institute of Politics.

“Brown seems to understand the voters don’t trust state government with their money, so he’s been trying to find a way, whether through pension reform or cuts in these areas, to regain some fiscal credibility with them,” he said.

Since 2007-08, lawmakers have cut monthly grants and reduced the time limit in the state’s welfare-to-work program, CalWORKs. The maximum grant for a family of three fell from $723 to $638 a month. Adults cannot receive benefits after four years, rather than five.

The state has slashed child care for low-income parents by imposing stricter income-eligibility requirements and cutting funding to child care providers.

California still has a disproportionate share of the nation’s welfare cases, because of the state’s demographics – a large share of younger, poorer residents – and the state provides aid for children after their parents exhaust eligibility.

But Democrats say cuts have been too fast and too severe. Brown now proposes to revamp the CalWORKs program by cutting off aid after two years rather than four for parents who do not seek work, training or education. The plan would save $880 million.

“We recognize that we’re going to have to make some cuts,” said Sen. Curren Price, D-Inglewood. “But we think these areas have already been cut to the bone. And so we’re going to be looking for ways to increase revenues. Taxes are certainly one way. Taking a look at some other loopholes, seeing how we can shift funds around.”

To read entire story, click here.

Saturday, May 19, 2012 – 11:00 a.m.

USPS delivery of campaign mail improves

Something must have happened at the USPS earlier this week.

The delivery of campaign mail changed from roughly five to six days to a much improved time frame of two to three days.

Hotly contested congressional races likely caused the change in mindset.

Facebook IPO not so hot after all

The long awaited initial stock offering of Facebook was a flop Friday. The shares had to be support by the offerings underwriters to keep the price from falling below the initial sale price of $38.

The weak reception is not a good sign for markets going forward.

Some candidates mustering up campaign mail in CD 8

8th Congressional District candidates Phil Liberatore, Brad Mitzelfelt, Ryan McEachron and Paul Cook have managed to get out campaign mail in the race to head to Washington D.C.

Nothing from the remainder of the vast field of candidates.

Cook might want to have a word with his consultant though.

His mail is being addressed to individual voters instead of households. A much costlier approach.

Andrew Edwards, Staff Writer
Created: 05/18/2012 10:23:47 AM PDT

A reported drop in the Inland Empire’s unemployment rate to 11.7 percent would seem to signal an improving job market, but a closer look at the numbers shows the jobless rate dropped not because of a surge in hiring, but because the region’s work force shrunk.

San Bernardino and Riverside counties somehow lost some 24,000 people from their combined work force from March to April, according to government numbers released Friday.

That oddity – a 1.3 percent decline in the estimated size of the Inland Empire’s labor force – made it possible for the region’s unemployment rate to fall a full percentage point even though nonfarm employment decreased.

But whether the sudden drop in the reported labor force is a result of a statistical glitch or a mass exodus of discouraged workers from the Inland Empire’s labor force is unknown.

“I don’t think you can find anyone who realizes what’s going on,” said University of Redlands economist Johannes Moenius.

Los Angeles County numbers showed a pattern similar to the Inland Empire’s.

In the state’s most populous county, the unemployment rate fell from 11.8 percent to 11.6 percent in April.

Los Angeles County numbers also show, however, that the area lost 7,100 nonfarm jobs and the labor force declined by 16,000 people.

For the state as a whole, California’s official unemployment rate ticked down to 10.9percent in April. California had an 11percent unemployment rate in March.

California’s nonfarm employment, however, declined by 4,200 jobs and the state’s labor force was reduced by 4,900 jobs. April was the first time in nine months the state lost nonfarm jobs.

Looking at employment trends instead of the March-to-April shifts in job numbers, current employment levels are above 2011 levels, although job growth has slowed in the spring.

“April was not encouraging, but we remain certainly optimistic,” said Jordan Levine of the Los Angeles-based Beacon Economics.

Beacon analysts have tended to be bullish in recent months, saying long-term trends favor growth and predicting the U.S. economy can withstand any fallout if the feared collapse of the Greek economy happens.

California’s overall nonfarm employment level in April was 1.2percent greater than it was one year prior.

To read entire story, click here.

Congressman Joe Baca

Liset Marquez, Staff Writer
Created: 05/18/2012 12:01:03 PM PDT

Rep. Joe Baca has introduced a bill to expedite the transfer of L.A./Ontario International Airport to local control.

The Transfer Control of Ontario Airport Now Act gives Los Angeles World Airports, which manages ONT, 60 days to turn over operations and ownership.

It also calls on the Federal Aviation Administration to withhold all funding from LAWA if no action is taken within the first 60 days after the bill’s enactment.

“If LAWA is not going to give our airport a fair shot at success, then we must do everything in our power to return Ontario to local control,” said Baca, D-San Bernardino.

A commission also would be created to determine a fair market value for the sale of ONT.

LAWA would then be forced to sell the airport to Ontario at the commission’s determined, fair market price, according to the bill.

“LAWA’s continued mismanagement of Ontario airport has led to exorbitant operating costs, large reductions in flight traffic, weakened security, and a significant loss of jobs and revenue for our local Inland economies,” Baca said.

Earlier in the week, speaking to a group in the Inland Empire, LAWA Executive Director Gina Marie warned those pushing for Ontario to regain operations of the airport.

“Local control, in and of itself, is not going to be a panacea,” she said.

ONT saw about 4.2 million passengers in 2011, figures not seen since the late 1980s. It’s a drastic decline from the peak traffic of 7.2 million in 2007.

Addressing the continued decline in ONT passenger traffic figures, Lindsey said airlines are retreating from smaller hub facilities like ONT.

Introduction of the legislation was news to Ontario Councilman Alan Wapner, who has been the city’s liaison on the issue.

“We’ve very supportive of what the congressmen is trying to do,” he said.

Wapner noted that Baca has backed Ontario throughout the entire process but said he looks forward to speaking to the congressman and updating him on Ontario’s latest efforts.

To read entire story, click here.

By Chris Megerian, Los Angeles Times
May 19, 2012

SACRAMENTO — California’s budget deficit may be more than $1 billion larger than even Gov. Jerry Brown’s latest estimate, the Legislature’s financial advisor said Friday.

Brown announced last weekend that the deficit had swelled from $9.2 billion to almost $16 billion. But the nonpartisan legislative analyst’s office said there may be less money available than the governor assumed, possibly increasing the budget gap to at least $17 billion.

The bulk of the difference lies in questions over money from defunct local redevelopment agencies. Brown wants to use $1.4 billion in leftover assets to help plug the budget gap, and the state expects to collect property tax money that used to fund the agencies.

However, Legislative Analyst Mac Taylor’s review said there’s “considerable uncertainty” about that sum and expects it to be much lower, raising the deficit by $900 million.

Taylor said money may be siphoned off before it reaches the state because of the defunct redevelopment agencies’ previous obligations, such as construction projects or bond payments. Lawsuits over the dissolution of the agencies could further complicate the problem.

Before the state knows exactly how much money is available, Taylor said, “we have to do audits and checks.”

H.D. Palmer, a spokesman for Brown’s Department of Finance, said the administration is crafting legislation that would allow the state to collect the redevelopment money it wants to balance the budget. The legislation will be considered by lawmakers along with the rest of the budget.

The budget gap could widen further if Taylor’s estimates about tax revenue are correct. He expects the state to collect $392 million less in taxes in the upcoming fiscal year than Brown predicts.

Taylor called that a “rounding error” — just 4% less than Brown’s $95.7-billion estimate — and said the governor’s proposal appears reasonable otherwise.

Still, the usual vagaries of California’s economy make it difficult to map out a spending plan. The state relies heavily on income tax revenue to fill its coffers, and tax receipts have been unpredictable.

To read entire story, click here.

The pile-on was in full effect within hours of Gov. Jerry Brown’s announcement this week that California’s budget deficit had grown to $15.7 billion, with The Week giving its national audience a summary of the Golden State’s financial affairs.

“California’s financial apocalypse,” the magazine offered. “A concise guide.”

Fox News played the Red Hot Chili Peppers’ “Californication,” and host Greg Gutfeld proclaimed Brown captain of “the Titanic that is California, a state so broke it may ask Greece for a loan.”

On Friday, the Democratic governor slapped back on national TV.

“This is not Europe,” Brown told Charlie Rose on “CBS This Morning.” “This is still the Wild West, and we’re going to prove to the rest of this country and the world that we know how to do it.”

For Brown – and California – it may be a tough sell.

Though no part of the country was immune from the effects of the recession, California’s latest deficit projection comes as many other states begin to climb out of their own budget sloughs.

Fewer state budget deficits are being projected than in recent years, the National Conference of State Legislatures said in a report this month, with revenue in most states meeting or exceeding expectations.

“This is good news for state lawmakers who have closed more than $500 billion in budget gaps over the previous four fiscal years,” the report said.

As budget officials elsewhere were describing their financial situations as “cautiously optimistic” or “stable,” the Conference of State Legislatures said, California lawmakers “continue to cope with the state’s multibillion (dollar) gap between projected revenues and anticipated expenditures.”

On Friday, the nonpartisan Legislative Analyst’s Office said California’s deficit may be even larger than Brown’s latest projection, perhaps higher than $17 billion. Though state revenue is growing, the amount is less than officials hoped.

Brown’s revised deficit estimate, released Monday, already was 70 percent greater than he projected in January. In an interview taped Thursday, Rose asked him, “What happened?”

“Very simple,” Brown said. “We’re not fortunetellers. We don’t have clairvoyance.”

On the East Coast, pundits noticed.

The Wall Street Journal chided with the headline “California Ugly.” Even with state tax collections ticking up nationally last year, the newspaper scolded, “California can’t seem to keep up despite one of the highest tax rates in the land.”

In a fall survey of states, the National Governors Association and National Association of State Budget Officers found the overall condition of states improving since the height of the recession. Even so, spending nationwide remains hampered by rising health care and education expenses, among other costs, the report said.

To read entire story, click here.

Sandra Emerson, Staff Writer
Created: 05/17/2012 07:23:12 PM PDT

UPLAND – The City Council has been updated on the condition of the city’s budget and will meet next week to decide where to make cuts.

City Manager Stephen Dunn presented the council with an update on the city’s fiscal condition during a special meeting on Wednesday, asking it to set its priorities so staff could find a way to absorb $3.4 million in obligated expenses.

“I have $400,000 in new revenues I can apply to services in the general fund. I have $3.8 million in what we call obligated expenditures, so I am saying that I am already short $3.4 million from where we are right now,” Dunn said.

The council asked Dunn for more information on the impact of the cuts and scheduled another special meeting at 7 p.m. Wednesday.

Dunn asked the council to consider reallocating resources, which would take money from selected departments to give to others. Or, make each department absorb its own obligated expenditures, which would result in a higher service level reduction in public safety.

Councilman Ken Willis asked Dunn to have staff prepare two budget scenarios for the next meeting.

“My recommendation is that we share across the board. It’s not fair for one individual group to take the brunt of it,” said Councilwoman Debbie Stone. “This is something we need to look at and figure out a way to make it work.”

The city expects to see about $2.2 million increase in its general fund revenues – $400,000 in new revenues and $1.8 million in budgetary accounting changes.

The city has identified about $3.8 million in obligated expenditures that will need to be absorbed moving into the 2012-13 fiscal year. The $400,000 in new revenue makes the shortfall from the current fiscal year $3.4 million.

Of the $3.8 million, $2.3 million is in labor costs, $400,000 is in operational costs and $1.1 million is in legal costs.

The police contract is estimated to cost the city about $700,000. However, police unions Wednesday presented Dunn with a list of concessions they are willing to make that will reduce their impact on the budget.

“I will be in the process of analyzing those concessions,” Dunn said. “They realized what’s happening with us, and they stepped up to the plate, so I really appreciate that.”

Contractual merit increases add up to $400,000, but Dunn said he will be asking employee groups to forego the increases.

The city is obligated by the Public Employees Retirement System to pay $1.2 million in the next fiscal year.

The rest of the shortfall is in operational expenses as well as legal expenses.

About $1 million of the $1.1 million in increased legal costs is for the San Bernardino County Flood Control’s lawsuit against the city.

To read entire story, click here.

San Bernardino County Supervisor Brad Mitzelfelt

Supervisor: Attracting out-of-state business vital to the county’s growth
May 17, 2012 9:37 AM
RENE DE LA CRUZ, Special to the Daily Press

While it was billed as a State of County presentation, San Bernardino County 1st District Supervisor Brad Mitzelfelt said his address Wednesday should have been titled “county of the state” because of Sacramento’s insistence on passing its responsibilities down to the county level.

“We’ve now been put in the prison business,” Mitzelfelt said during the Apple Valley Chamber of Commerce luncheon. “We have someone in county jail serving an eightyear sentence right now. A country jail is not built to hold people for eight years. I guess the Legislature didn’t get the memo.”

Unless there is a change of course in the state’s prison realignment plan that releases low-level offenders to county facilities or parole, an additional 17,000 stateheld felons will be released to county control over the next three years, Mitzelfelt said.

“That is not a pretty picture, and that is an understatement,” said Mitzelfelt, who is working on county programs to help with the crisis. “We’re already full, and under court order not to get any more full.”

The county will receive $27 million from the state for costs associated with the implementation of the realignment plan through June 30, according to a country report, but Mitzelfelt said the county has asked for constitutional guarantees on those funds.

“The governor has added that to his tax increase initiative, so its fate is now tied to the tax measure,” Mitzelfelt said.

Community leader Bob Tinsley asked if the county could copy Maricopa County Sheriff Joe Arpaio’s tent city concept, to save money and add additional space for the incarcerated.

“We would if we could, but the California Department of Corrections and Rehabilitation sets the standards for county jails,” Mitzelfelt said. “We tried to do tents with our juvenile population, but the state required wood frames in the tents, air conditioning and heating.”

The elimination of the state’s redevelopment program, which helped finance infrastructure to attract out-of-state business, was another stake in the heart to municipalities across the county.

“Partnerships and cooperation are critical in this post-redevelopment time,” Mitzelfelt said. “We have to find another path toward something other than redevelopment. We can’t accept it when the state comes and takes our dollars, we have to fight.”

In an effort to fight housing sprawl and change growth to “smart growth,” Senate Bill 375 was passed in 2008, with one of its goals to do away with single-family, detached, large lot residential construction.

“The state views Apple Valley as sprawl. I view it as elbow-room,” Mitzelfelt said. “The state planners are telling the board of directors at the Southern California Association of Governments that we have enough detached housing.”

The bill, which targets greenhouse gas emission reduction tied to land use, requires regional planning agencies to create strategies to meet those reduction requirements.

To read entire story, click here.

From the Southland to the Bay Area, California’s housing market showed strength last month as median prices rose and sales outperformed the same month last year.

The Golden State’s median home price popped 6% in April to $264,000, according to real estate information firm DataQuick of San Diego. The median is the point at which half the homes in the state sold for more and half for less.

In Southern California and the Bay Area, the share of home sales that were foreclosures declined significantly, which economists see as key because sales of those homes tend to drag prices down.

“It appears that the market is taking a step in the direction of normalization, but only a step,” DataQuick President John Walsh said. “The mortgage market is critical, as is market mix and the receding importance of foreclosure resales.”

To read entire story, click here.

Friday, May 18, 2012 – 07:30 a.m.

Shares for the long awaited initial public offering of the social networking site Facebook were priced at $38 per share to investors able to subscribe to the intial shares.

The shares have yet to trade on the Nasdaq market this morning.

LAX/Ontario International Airport Terminal (Courtesy: The P-E)

By Liset Marquez
Created: 05/16/2012 03:23:20 PM PDT

DIAMOND BAR – A lively discussion about LA/Ontario International Airport, which was supposed to focus on the medium-hub facility’s importance to the region’s economy, quickly turned into a debate on the merits of local control.

For more than an hour Wednesday, a five-member panel discussed a bevy of issues and circumstances facing ONT at the Four Corners Coalition 2012 Economic Summit at the Diamond Bar Center.

The discussion pitted Gina Marie Lindsey, executive director of Los Angeles World Airports – which manages ONT – against proponents of local control, including Ontario Councilman Alan Wapner. Riverside Mayor Ron Loveridge, Michael Armstrong with Southern California Association of Governments, and Denny Schneider, whose group Alliance for a Regional Solution to Airport Congestion has long battled LAWA over Los Angeles International Airport’s growth, also participated.

“It is silly that we are fighting with each other over who owns the airport, we ought to be leaning in together and figuring a path forward on how to make this airport thrive in a very challenging economy,” Lindsey said in a stern voice.

But Lindsey went on to warn those pushing for Ontario to regain operations of the airports.

“Local control, in and out of itself, is not going to be a panacea,” she said.

For this year, month-over-month, ONT has lost between 4 and 7 percent in air traffic, Lindsey said. The economy, however, is not a reflection of that drop, rather it’s a shift in the way airlines do business, she said.

Addressing the continued decline in ONT passenger traffic figures, Lindsey said airlines are retreating from smaller hub facilities like ONT.

“So what is it that we should be doing different together? Let the local versus L.A. control of the airport, let that battle fight itself out, but, in the meantime, we ought to be working together to see what we can do to stem exodus,” she said.

Wapner, who met Lindsey for the first time at the spirited discussion, said he saw it differently. Calling LAWA an absentee landlord, Wapner argued Ontario’s motives in getting involved in the local control effort.

The interest that the city has isn’t about any financial gain, it’s in the region which could have seen a $20 million economic boost if passenger traffic was up, Wapner said.

“I want to commend Gina Marie because I think she is doing an excellent job as the executive director of Los Angeles World Airport,” he said, adding that she is doing her job, given to her by the policymakers in Los Angeles, which is to get the expansion completed of Tom Bradley Terminal International at LAX.

“Unfortunately, it’s been at the expense of Ontario.”

ONT has long been viewed by officials in Ontario as the region’s largest economic engine.

City officials said they are fighting to regain control not only to stop the hemorrhaging of passenger traffic but to control their economic destiny.

Michael Armstrong, who handles the transportation and aviation issues for Southern California Association of Governments, presented figures in Ontario’s favor.

Using factors developed by a regional economic impact study completed for SCAG in 2004, Armstrong said ONT was on pace to reach 31 million annual passengers by 2030. It’s also a figure the agency is continuing to forecast for the airport in its latest study.

“It would no doubt be a tremendous economic boom to the Inland Empire,” he said.

According to the forecast, had Ontario continued to grow, it would have generated a projected 134,000 of direct and indirect jobs and injected about $20 billion into the local economy, he said.

Calling ONT an important piece of the overall aviation puzzle for Southern California, Lindsey said it also remains a very important and long-term strategic asset for LAWA.

“I understand the sentiment and concern, and I think we are the easy target – we may have even done some things that made us an easy target. Our intent is absolutely to see this airport thrive,” Lindsey said.

Officials in Los Angeles are focusing on airlines, and trying to provide more seats and more routes but have not been successful, she said.

To read entire story, click here.

By Ed Mendel
Thursday, May 17, 2012

The CalPERS board yesterday raised the annual state payment for state worker pensions $213 million to a total of $3.7 billion, rejecting Gov. Brown’s request for a bigger increase to avoid a “loan” costing “$145.9 million over the next 20 years.”

Unions asked the board to spread out higher pension costs mainly caused by a lower investment earnings forecast. Paying part of the new rate over two decades, instead of the full amount now, makes an extra $149 million available for worker pay and other programs next fiscal year.

Although the amount of money may be relatively small, compared to the $16 billion state budget deficit revealed this week, the issue is the big one facing public pensions.

Like former Gov. Arnold Schwarzenegger, who also unsuccessfully urged CalPERS to adopt higher state rates, Brown is asking the Legislature to enact cost-cutting pension reforms.

Painful increases in annual employer pension costs might increase public pressure for pension reform. But paying more now to avoid higher costs later also reflects the view that pensions are seriously underfunded.

Most pension funds expect to get about two-thirds of their revenue from investment earnings, not annual employer or employee contributions, and critics say the earnings forecasts are too optimistic.

Alarm grew when a deep economic recession, and a stock market crash in 2008, punched a big hole in pension investment funds. The CalPERS investment portfolio, still well below its peak of $260 million in 2007, was valued at $229.4 billion Tuesday.

CalPERS state worker plans were on average 70 percent funded last June 30 with an “unfunded liability” of $38.5 billion. That’s the shortfall in projected assets needed to pay for pensions over the next 30 years.

The state has a much larger debt for retiree health care promised current state workers over the next 30 years — $62 billion according to an actuarial report done for state Controller John Chiang.

There is no dispute about whether strong investment returns will help close the retiree health care funding gap. Legislation by former Assemblyman Dave Elder, D-Long Beach, created a retiree health care fund two decades ago.

But lawmakers chose not to put money in the fund. Now state worker retiree health care is a pay-as-you-go plan, up more than 60 percent in the last five years and costing the state general fund about $1.5 billion in the current fiscal year ending June 30.

Pension and other retirement costs are still a relatively small part of the current state budget, which is expected to spend $87 billion from the general fund and $34 billion from special funds for health, transportation and other programs.

The state is paying CalPERS $3.5 billion ($1.9 billion general fund), retiree health care $1.5 billion, California State Teachers Retirement System $1.3 billion, Social Security $500 million and Medicare $240 million.

In contrast, cities spend most of their budget on personnel, not on a range of programs like the state, and some cities are already overwhelmed. San Jose spends 20 percent of its general fund on retirement, an argument for a pension reform on its June ballot.

The state could have a much bigger pension problem if CalSTRS was properly funded, not to mention retiree health. Officials estimate that CalSTRS needs an additional $3.25 billion a year to be fully funded in 30 years.

Unlike the California Public Employees Retirement System and most public pensions, CalSTRS lacks the power to set annual contribution rates that must be paid by employers, needing legislation instead.

CalSTRS, about 69 percent funded, has been seeking a rate increase for five years. It’s offered legislators a half dozen scenarios that begin to phase in a rate increase in 2016, only one of which is projected to get CalSTRS to 100 percent funding.

The power of CalPERS to give the governor and the Legislature an annual bill that must be paid can be a friction point. In the dispute over paying off part of the new rate increase over 20 years, board members said they were giving lawmakers an option.

To read entire column, click here.

Capitol Alert
The latest on California politics and government
May 15, 2012

As Standard & Poors urged lawmakers Tuesday to pursue “credible” budget solutions to bridge the state’s $16 billion deficit, the ratings agency did not approve of Senate leader Darrell Steinberg’s idea to forego a reserve this year.

In the report, S&P suggested it could lower the state’s ratings outlook or even impose a downgrade if lawmakers and Gov. Jerry Brown don’t pursue real solutions that bolster the state’s cash situation this summer. The state still has a “positive” outlook but an A- credit rating, which rates lowest in the nation.

Brown built a $1.05 billion reserve into his $91.4 billion general fund budget for 2012-13. Steinberg said yesterday that one idea was to use that money instead on public programs.

To read entire story, click here.

By Jon Ortiz
jortiz@sacbee.com
Published: Wednesday, May. 16, 2012 – 12:00 am | Page 1A
Last Modified: Wednesday, May. 16, 2012 – 6:26 am

One day after Gov. Jerry Brown proposed sweeping changes to state government work schedules, many employees were still deciphering what it means for them.

Brown wants to move most of California’s 214,000 workers to four-day workweeks and 9.5-hour shifts starting July 1. The change would reduce state workers’ hours and pay by 5 percent each month and cut state payroll by about $839 million, $401 million of it from the deficit-ridden general fund. Many departments would be closed on Fridays, some on Mondays.

Here are some of the most frequently asked questions from reader emails and comments on sacbee.com:

>So now what?

Marty Morgenstern, the Brown administration’s Labor and Economic Development Agency secretary, said the state will meet with departments and labor union officials to hammer out the particulars.

Look for those talks to heat up immediately, because Brown wants the new arrangements in place in time for the July 1 start of the 2012-13 fiscal year.

>Are the unions going for it?

It’s difficult to make a blanket characterization: A dozen unions represent 181,000 state workers divided into 21 bargaining units who perform thousands of different jobs.

But it’s clear that labor had a hand in shaping the proposal. For example, Brown’s budget also calls for cutting back on outside contracts for services such as janitorial and security work and computer technology consultants.

SEIU Local 1000, the largest state worker union, has argued for years that California pays too much for those kinds of vendor service contracts. Of course, ending that outsourcing would mean more jobs for state employees who are covered by the union.

By giving SEIU what it wants, it raises the likelihood that the 95,000-member union will go along with Brown’s furlough plan and make it harder for the other smaller unions to resist.

>State workers are all under contract right now. Doesn’t this violate those agreements?

Brown says he wants to honor the bargaining process, but that doesn’t mean that the contracts would need to be reopened. The changes could be enacted through short side-letter agreements that focus on the scheduling changes and nothing else.

>How long would the state run on the four-day schedule and cut employees’ pay?

Finance Department spokesman H.D. Palmer said the arrangement “could extend beyond the 2012-13 year.” That’s a detail that the administration needs to hammer out with the unions.

>What leverage does Brown have?

The governor could lay off employees, but that seems a stretch, given that the state already has shed 15,000 positions in 2012-13 and Brown anticipates cutting another 11,000 in the coming fiscal year. The layoff process is cumbersome, too, and Brown needs savings quickly to plug a $15.7 billion deficit.

Brown’s hand could be strengthened if Democratic legislators signal they’re willing to use their authority to circumvent labor contracts and impose pay cuts or furloughs if the unions don’t cooperate.

>Would Democrats really do that to their friends in organized labor?

Under severe budget pressure in 2009, the Legislature erased two paid state holidays and changed overtime rules without the unions’ consent. Nearly two years ago, the threat of legislative action on pension reform prodded labor leaders to compromise with then-Gov. Arnold Schwarzenegger.

>Would union members vote on the schedule changes? What’s the Legislature’s role?

To read entire story, click here.

Dan Walters

By Dan Walters
Published: Wednesday, May. 16, 2012 – 12:00 am | Page 3A

Poker players often use the phrase “betting on the come” to describe a willingness, if instincts and odds indicate, to wager big on the hope that they will draw winning cards.

That’s a perfectly valid tactic when one is playing with one’s own money and therefore bearing the risk.

But is it appropriate for California politicians to bet on the come by approving many billions of dollars in spending on very shaky assumptions that the money will be there when it’s needed to pay the bills?

Risk was the underlying theme of two hearings in the Capitol on Tuesday.

One dealt with Gov. Jerry Brown’s newly revised budget, which assumes that voters will approve new taxes, and the other with the Brown-sponsored bullet train project, which assumes that the federal government will finance completion once it’s started.

Brown and his minions respond to doubts about those assumptions with assurances that if the taxes are not approved or the feds don’t provide bullet train money, they’ll have coping mechanisms that mitigate the risk.

He proposes “triggers” that would automatically cut spending if taxes are rejected, and to simply halt construction if the bullet train lacks financing. But those are fail-safe mechanisms only on paper, not in realpolitik terms.

Under Brown’s budget, the schools would suffer nearly all of the spending cuts were taxes to be rejected. He’s clearly doing that to push voters toward his tax plan, since schools are the single most popular category of state spending, but it’s very unclear that the very powerful education lobby and Democratic legislators would be willing to make that gamble.

To read entire story, click here.

By Judy Lin, Associated Press Writer
Posted: 05/15/2012 09:21:09 PM PDT
Updated: 05/15/2012 09:22:38 PM PDT

SACRAMENTO – Gov. Jerry Brown is pleading with Californians to raise their taxes as part of his solution for solving the state’s budget deficit, but it’s uncertain whether voters will be in an accepting mood come November.

Polls show voters want more money for schools but don’t want to tax themselves to pay for it. They continue to be pessimistic about the economy in a state with one of the highest jobless rates in the nation. And they distrust the Legislature, which oversees the budget.

Brown is facing a tough environment after announcing over the weekend that the state’s deficit had risen to $15.7 billion, much larger than he said a few months ago, said Jack Pitney, a political science professor at Claremont McKenna College in Pomona.

“When the governor says devastating things are going to happen, people will say, `Look, you said the shortfall was going to be a lot smaller than it was. You were wrong then; why should we believe you now?”‘ Pitney said. “The governor is facing a trust deficit as well as a fiscal deficit.”

On Tuesday, the Democratic governor defended his plan to raise the statewide sales tax and seek higher income taxes on the wealthy, warning of deep cuts that include a school year shortened by as much as three weeks if voters reject his taxes.

He said it was not a scare tactic but rather the stark reality of a state that is not taking in enough tax revenue to cover its expenses. His administration projected that California’s economy will continue to recover at a modest pace but housing and unemployment continue to be a drag.

To read entire story, click here.

Molly Munger talks about her tax proposal earlier this year. (Rich Pedroncelli / Associated Press)

By Steve Lopez
May 16, 2012

In March, when I wrote that the tax increase proposals by Gov. Jerry Brown and civil rights attorney Molly Munger were unimaginative if not doomed, I got an email from Munger.

She did not agree, at least with regard to her initiative.

“Unimaginative?” she wrote, inviting me to meet with her.

This week, I decided to take her up on her offer after watching Brown admit that the financial mess he told us about in January was nothing compared to the mess we’re in now. Frankly, I don’t know how the January estimates were so far off the mark, with a $9-billion hole turning into a $16-billion hole in less time than it takes to grow tomatoes. Why should we trust the next set of numbers Brown throws at us?

The governor’s latest proposal is for $11 billion in cuts, and they would come with a warning that if we don’t pass his temporary sales and income tax hike in November — which would raise as much as $6 billion — the suffering will intensify and public schools will be hit even harder.

Look, I know this mess isn’t Brown’s fault, but I’m getting tired of his threats and his shortsighted “fixes.” It’s like having the foundation of your house flooded by a broken water main, and the plumber suggests you spend $75 to fix the leaky bathtub faucet.

And as Munger points out, even if the public backs Brown’s plan, schools are still going to be in big, big trouble.

“We’re bleeding, and it’s a tiny Band-Aid,” she said when we met Monday afternoon at Buster’s in South Pasadena, not far from where she lives.

Her plan would raise $10 billion a year by increasing income taxes on a sliding scale, all of it to retire school bonds and support education.

Brown on the other hand would temporarily raise income taxes on the wealthy and sales taxes on everyone, but only some of it would go to schools and the rest to various other services.

Does either have a chance?

I’m not terribly optimistic, but for all the parrots out there who do nothing but chirp about how California has a spending rather than a revenue problem, the fact is that Brown’s proposed $91-billion general fund budget would be roughly 10% smaller than the budget just five years ago. And as my colleague George Skelton has pointed out, general fund spending per $100 of income is lower today than it was in Ronald Reagan’s last year as governor.

So it’s at least possible that Californians would be willing to bite the bullet and raise taxes on themselves if they thought schools would benefit. But which bullet? It’s hard to believe that having two proposals on the ballot won’t lower the odds of either one passing.

Munger told me she and Brown have chatted, and the governor “talked about how campaigns can get very tough.”

Whoa! Was the governor threatening her to back off and clear the way for him or he’d wage a nasty campaign against her?

Munger keeps her cards close. She wouldn’t answer me directly, but said rather than one of them backing off, or waging a kickboxing competition, she’d rather see a scenario in which she supports the governor’s proposal and he supports hers. Even though if his got more votes, hers would be null and void.

And?

To read entire story, click here.

By Marc Lifsher
May 15, 2012, 9:05 p.m.

SACRAMENTO — The state government’s contribution to employee pensions is expected to jump to $3.7 billion from $3.5 billion in the fiscal year that starts July 1.

On Tuesday, a committee of the board of the California Public Employees’ Retirement System recommended the increase as well as a $29-million drop to $1.2 billion for non-teaching school and community college district workers.

Even with the increase, the state’s contribution is lower than the $3.9 billion paid in fiscal 2010-2011, CalPERS said.

The biggest factor in next spending year’s rise was a board decision in March to lower the fund’s expected average annual rate of return on investments to 7.5% from 7.75%, CalPERS said.

To read entire brief, click here.

Watching the sad spectacle of Governor Gandalf yet again expounding on California’s budget horrors Monday was like going to see one of those dreadful, anemic sequels to a long-ago tapped-out blockbuster franchise.

“Jaws 5: Devouring the Poor,” maybe, or “Die Hard Drowning in Red Ink” or even, “Groundhog Day 2: Punxsutawney Phil’s May Revise.”

The only thing worse was reading the inane Back East commentary, written by the usual assortment of Romney-sniffing blowhards, ill-informed thumbsuckers and right-wing mantra-chanters whose knowledge and understanding of California politics seems proscribed by the collected rantings of Flashreport freelancers and the world’s shortest book, viz. The Wit and Wisdom of Jon Coupal.

By far the day’s dumbest offering was submitted by the Wall Street Journal’s William McGurn, who must have spent at least 10 or 15 minutes after lunch coughing up his hairball analysis comparing Jerry Brown to Chris “Two Man” Christie without mentioning what you might call some of your Key Differences between California and New Jersey like, oh say Prop. 13, Prop. 98 or the two-thirds vote. But we digress.

The funniest comment came from the governor his own self, who put a new entry into Krusty’s Collected Coinages by characterizing the maze of interlocking and convoluted political and financial entanglements that define the chronic budget mess as “a pretzel palace of incredible complexity.”

Spurred by that fine phrase, utterly exhausted by watching the wheezy old Lakers vainly try to run with the OKC Thunder and certain that, as past is prologue, everything worth saying about the budget plague has long ago been said, we burrowed deeply into our incomparable Dustbin of History Archive, returning to the surface with three Calbuzz Classics that frame the issue for all time:

Why California is still broke(n). Once upon a time, before anyone had heard of Tanning Mom, Instagram or Dubstep, we proved with geometric logic that the state’s fiscal woes, far more than a simple matter of budgetary arithmetic, in fact result from a confluence of mind-numbing political calculus.

Since then, some incremental progress has been made in addressing the utterly dysfunctional structure of state government, most notably the terrific job done by the Citizen’s Redistricting Commission and the electorate’s willingness to throw down a bet on the new top-two primary system as a way to send at least a few more pragmatic pols and a few less ideological hacks to the swampland of Sacramento. Sadly, the bottom line remains the same:

As state and local officials struggle to weather a fiscal crisis that threatens to drive California into insolvency, they wield power with the damaged machinery of a patchwork government system that lacks accountability, encourages stalemate and drifts but cannot be steered.

Friends make the worst enemies. Of all the budgetary idiocy that’s unfolded since Gandalf took office, not least of it the Department of Finance’s blue-sky, rosy scenario revenue projections last summer, the single lamest move may be the legislative leadership’s delay of previously agreed-to cuts that made the current awful problem worse, a shining example of a political dynamic we described with a major assist from Calbuzz Poet Laureate William Butler Yeats.

But for a governor of California in recent years – at least since the days of Pete Wilson and Willie Brown, when leaders had power and deals could be made and enforced — finding that one’s most difficult challenge is the opposition party is actually an anomaly. For Gray Davis, Arnold Schwarzenegger — and this year Jerry Brown — the most debilitating opposition force in Sacramento is the extreme wing of his own party…

Jerry Brown is a centrist. Like Wilson, Davis, Schwarzenegger, he is trying to hold the center while those filled with passionate intensity flap and swirl around him. It is no service to the civic good for those on his left to set loose mere anarchy…

To read entire story, click here.

Tuesday, May 15, 2012 – 04:50 p.m.

Here is some news reverberating across the transom this week.

Brown wants portion of Harris foreclosure settlement

You gotta love it.

California Governor Jerry Brown, in an effort to cobble together more money to blow, wants to steal hundreds of millions of dollars meant to help distressed homeowners. The dough, a part of a national foreclosure settlement obtained by Attorney General Kamala Harris, is meant for distressed homeowners.

Harris has objected to Brown’s position.

And Brown appears as if he could care less.

One can only image what Harris is saying behind closed doors.

Issa endorses Cook

Stop the presses!

Congressman Darrel Issa (R-Vista) has endorsed Assemblyman Paul Cook in his quest to represent the 8th Congressional District.

Now this nod is definitely a scale tipper.

Laugh out loud.

CD 8 -  The Marine factor?

The battle of the Marines.

Yes, in the full out war in the 8th Congressional District, Assemblyman Paul Cook, a retired Marine colonel, and San Bernardino County Supervisor Brad Mitzelfelt, a former Marine Non-Commissioned Officer, are pressing those credentials hard.

The latest mailers has Cook displaying his medals, while Mitzelfelt is in full dress uniform.

It was Cook’s ballot title of Retired Marine Colonel that swept him into the 65th Assembly District six years ago.

A title now unavailable to him this go around.

U.S. Postal Service slow with campaign mail deluge

The U.S. Postal Service is struggling to deliver campaign mail this go around.

The combination of heavily contested races along with San Bernardino County’s new rocket scientist registrar of voters has buried mail carriers.

Registrar Michael Scarpello decided to hold off on the early mailing of sample ballots this year.

Scarpello decided voters were irresponsible in keeping the pamphlet available.

This year the sample ballots were mailed at virtually the same time as actual absentee ballots.

The only addressee’s receiving political mail in a timely manner?

Voters using P.O. Boxes!

Tuesday, May 15, 2012 – 08:30 a.m.

Was it the plan all along or just plain incompetence?

Governor Jerry Brown’s screwing over of the California budget that is.

Did Brown feel he needed a forest fire to brainwash voters into passing his November tax increase?

We may never know. But it sure looks like he’s capitalizing on the state’s budget buffoonery, when it comes to budgeting.

For the past five months, all we have been hearing from Brown is how we need more taxes so he and state democrat lawmakers can keep spending at current outrageous levels.

But, Brown has never really addressed shrinking the size of the bloated state government in any meaningful way.

The number of state workers on active payroll really hasn’t fallen.

After all, that would upset his labor union support.

Now Brown wants to play the furlough game.

Yes, Brown wants to have state workers switch to four, nine and one-half hour, days per week.

And that temporary sales tax an income tax increase? Try seven years.

Can you say permanent?

At this point, with three measures on the ballot, it’s questionable whether voters will approve any tax hike.

Brown should worry.