Capitol Alert

The latest on California politics and government

November 16, 2011
California finance director says mid-year budget cuts likely

Thumbnail image for ha_MATOSANTOS6317.JPGGov. Jerry Brown's finance director said Wednesday that some mid-year cuts are "likely," increasing the possibility the state will slash education and social services in the coming months.

Finance Director Ana Matosantos issued her statement just as nonpartisan Legislative Analyst Mac Taylor presented his report projecting that California will fall $3.7 billion short in revenues this fiscal year.

Under the June budget deal, the state must impose "trigger" cuts to a variety of education and social services programs if it falls more than $1 billion shy in revenues. To determine the state's revenue picture, Matosantos will use either her own department's forecast or the analyst's, whichever is rosier.

"The LAO report acknowledges the tough work that has been done to cut the state's deficit in half, but that there is more tough work ahead," Matosantos said in a statement. "The budget the Governor signed recognized that economic uncertainty could force the trigger cuts to take effect. Some level of trigger cuts will likely occur, but the exact amount will be known in December."

Matosantos will release her department's forecast by December 15, but her statement today serves as an early acknowledgment that the state is heading toward mid-year cuts. Legislative Analyst Mac Taylor said Wednesday that it remains possible that Finance could project as much as $2 billion more or less in revenues than he did.

At his press conference Wednesday, Taylor seemed to discourage lawmakers from taking action to avoid trigger cuts in light of a nearly $13 billion hole staring at them in 2012-13.

PHOTO CREDIT: Ana Matosantos. The Sacramento Bee/Hector Amezcua

November 16, 2011
New California budget report triggers old partisan arguments

It didn't take long Wednesday for the state's partisan budget battle to reignite.

Fresh off a new Legislative Analyst's Office report that paves the way for mid-year cuts in education and social services, Democrats called for additional taxes and Republicans said lawmakers must rein in spending. The report also pegs the state's deficit at nearly $13 billion through June 2013.

The Assembly's Democratic budget chairman, Bob Blumenfield, said in a statement that the analyst's report "acknowledges that we made great progress last year but validates the need to raise revenues to finish what we started."

"We need solutions that protect education, create jobs and put California on the path to stability," he added. "That can't be achieved through cuts alone or by one party governing alone. New revenues can prevent cuts that shock the conscience, hurt our economy and compromise our morals as a civilized society."

His GOP budget counterpart, Assemblyman Jim Nielsen, R-Gerber, countered by saying taxes are unnecessary.

"The Legislative Analyst's Office report indicates, as predicted, that the budget passed by Democrats with only a majority vote was overly optimistic and based on shaky assumptions," Nielsen said in a statement.

"It indicates that a lot more needs to be done to get California's budget under control, and that does not happen through tax increases," he added.

On the Senate side, Majority Leader Ellen Corbett, D-San Leandro, called for reopening budget talks to avoid additional cuts to K-12 schools and higher education. Absent legislative action, the state could impose up to $2 billion in auto-pilot cuts because revenues have fallen short of expectations.

"The Legislature and governor should explore all of our available options, and do everything we can, to prevent mid-year cuts," Corbett said in a statement.

November 16, 2011
CSU approves 9% fee hike amid raucous protests

Cal State Tuition.JPEG-0615.JPGCalifornia State University trustees today approved a 9 percent tuition increase to take effect this fall, university spokeswoman Claudia Keith said, increasing the cost of attending a state college by $498 a year.

The vote came after trustees reconvened their meeting in a different room following an outburst of protests in the normal meeting room at the CSU Chancellor's Office in Long Beach. Protesters broke a glass door, injuring three police officers, said CSU spokesman Erik Fallis. One of the officers has been transported for medical care, he said.

Four people were arrested, Fallis said. One is a Cal State Long Beach student, two are San Diego State students. Fallis did not identify the fourth person, but said he was arrested for breaking the glass door.

The California Faculty Association -- the union that represents CSU professors -- sent an email report saying:

Police pepper sprayed the front door of Chancellor Reed's HQ, where the trustees were meeting to push the students out. Faculty members are trying to leave the building now as riot police are marching toward the protest.

A group called ReFund California, which is backed by several large labor unions, had pledged to protest at today's trustees meeting. Many members of the group spoke before the chaos erupted, calling on Cal State leaders to support higher taxes on corporations and the wealthy to fund public education and other services that have been reduced as the state has struggled with ongoing budget deficits.

Check back for continued updates to this story.

PHOTO CREDIT: An injured California State University police officer stands with other police near the entrance to the California State University Board of Trustees meeting in Long Beach. A struggle erupted between demonstrators and police Wednesday as trustees of the huge CSU system met to vote for another tuition hike. Associated Press/Nick Ut

November 16, 2011
California Supreme Court to make key Proposition 8 ruling Thursday

The California Supreme Court has announced it will release its opinion Thursday on whether supporters of California's ban on same-sex marriage have legal standing to defend the measure in federal court.

The court will release the opinion at 10 a.m. on Thursday at the court website.

Passed by voters in 2008, Proposition 8 is under legal review by the 9th U.S. Circuit Court of Appeals. Justices asked the state high court to consider the question of whether proponents of the measure have legal standing to defend it under the California constitution.

The question became important after then-Gov. Arnold Schwarzenegger and then-Attorney General Jerry Brown declined to defend the measure.

November 16, 2011
VIDEO: University of California students protest tuition hikes

Angry about tuition increases and budget cuts in California's poor financial state, about 100 University of California students protested at the Capitol this morning and flooded elected officials' offices with phone calls.

The protest came after the University of California, fearing student protests could turn violent, canceled governing board meetings scheduled for today and Thursday in San Francisco.

"We wanted to let them know that canceling a meeting will not impede upon our efforts to protect and defend higher education," Joey Freeman, a student organizer from UC Berkeley, said at a news conference on Capitol's north steps.

The students came on buses from UC Berkeley and UC Davis. A bus that was scheduled to pick up students in Merced failed to show up at that campus, said Jonathan Stein, an organizer.

"Student activism is consistently hampered by logistical problems," he said.

Before the news conference, Stein distributed scripts to students, and they spent about 30 minutes calling the offices of Gov. Jerry Brown and legislative leaders from their cellphones.

November 16, 2011
Backers of California auto rate initiatives submit signatures

By Torey Van Oot

Backers of a proposed initiative on auto insurance rates say they have collected more than 800,000 signatures in hopes of placing their measure on next year's ballot.

The proposal, backed by a leading auto insurance industry group, would allow companies to consider coverage history when determining rates for new customers. Supporters argue the change would give companies the option of offering motorists who want to switch providers so-called "loyalty" discounts now available only to current customers.

The proposed initiative is similar to insurance industry-backed Proposition 17, last year's failed ballot measure. Supporters have updated the text of this version to address concerns about the effect such a change would have on members of the military and young drivers.

Mike D'Arelli, American Agents Alliance's executive director who submitted the initiative, said the measure would fix a currently broken system.

"It is ridiculous that the consumer loses the discount they have earned if they go to a new insurance company," D'Arelli said in a statement. "We strongly believe that allowing the consumers to control their discount will create a more competitive and cost-effective insurance market."

Opponents have argued that the change would actually increase rates for more consumers, allowing companies to hike premiums for motorists who went through a period of no coverage. A group opposing the change has countered with its own proposed initiative that includes a provision prohibiting insurers considering a lapse in coverage when determining rates.

Election officials will conduct a raw count and check the validity of submitted signatures. Backers need to submit 504,760 valid voter signatures for the proposal to quality for the November 2012 ballot.

Prop. 17 supporters submit new auto insurance rate initiative
California group files health insurance regulation initiative

November 16, 2011
Assembly GOP leader Connie Conway picks new chief of staff

Conway8351.JPGAssembly Republican leader Connie Conway announced the selection of a new chief of staff today, meaning that both leaders of the lower house will begin 2012 with a new right-hand man.

Ivan Altamura will serve as Conway's new chief of staff, replacing Dillon Gibbons, who will transfer to the upper house to oversee the staff of Sen. Anthony Cannella, R-Ceres.

Conway's announcement came just two days after Assembly Speaker John A. Pérez announced a key aide, Greg Campbell, will be his chief of staff. Campbell replaces Sara Ramirez Giroux, who will remain in Pérez's office as a chief consultant.

Altamura, an attorney, had been serving as senior director of the GOP caucus. He previously was chief of staff to Assembly Republican leader Mike Villines, who was termed out last year.

Conway, in a written statement, noted that Altamura had substantial experience as a Republican caucus chief of staff so "this will be a seamless transition within my leadership team."

Gibbons fills a position in Cannella's office that was vacated by Erin Guerrero, who was named member services director for the Assembly Republican Caucus.

Altamura's previous salary of $160,000 annually will not change with his new title. Guerrero will be paid $114,996 per year, an increase of $10,692 over her Senate salary.

Gibbons' Senate salary will be $126,480, an increase of $1,476 over his pay in the lower house.

PHOTO CREDIT: Assembly GOP leader Connie Conway appears on the Assembly floor in late 2010. Hector Amezcua, Sacramento Bee.

* Updated at 10:40 a.m. and at 10:55 a.m. Wednesday to expand upon salary information. Also updated at 5:15 p.m. Friday to insert Gibbons' salary.

November 16, 2011
Analyst puts California's deficit at nearly $13 billion

California would impose $2 billion in mid-year "trigger" cuts next month, mostly through K-12 school reductions, under a new revenue forecast issued this morning by the nonpartisan Legislative Analyst's Office. The LAO also said the deficit for the year beginning July 1, 2012 would be nearly $13 billion.

The analyst's report is not the sole determinant of whether the state will impose those cuts, but it is one of two tools the Department of Finance must rely upon before deciding whether to slash spending. The finance department will issue its own forecast in December.

The Analyst said the state will not receive $3.7 billion of the $4 billion revenue bump that Gov. Jerry Brown and lawmakers optimistically relied upon to help close the budget in June. The enacted budget projected the state would receive $88.5 billion in revenues and transfers; the analyst says it will only get $84.8 billion.

The Department of Finance said this week that California was running $1.3 billion behind revenue projections for the first four months of the fiscal year, from July to October. State Controller John Chiang pegged the revenue shortfall at $1.5 billion.

November 16, 2011
AM Alert: Legislative Analyst's Office releases revenue forecast

Today's another red letter day in state budget news, with the Legislative Analyst's Office releasing its revenue forecast for the current fiscal year.

Previous numbers from the state Finance Department and from Controller John Chiang haven't been good, with Finance saying Monday that the state is almost $1.3 billion behind estimates and Chiang pegging the gap last week at $1.5 billion for the first four months of 2011-2012.

Legislative Analyst Mac Taylor holds a news conference at 1:30 p.m. to discuss the forecast, which the LAO says will be posted on its website by 11:30 a.m.

Meanwhile, University of California student regents and student leaders from UC Berkeley and UC Davis have scheduled a presser in Sacramento calling on state lawmakers to invest in public higher education and demanding new state revenue sources. That news conference, which follows protests Tuesday at UC Davis and UC Berkeley, starts at 10:30 a.m. in the Capitol's Room 444.

Lt. Gov. Gavin Newsom, meanwhile, will be in the south state at the California State University trustees meeting, where they're expected to vote sometime this morning on a proposal to raise tuition 9 percent. It's no secret which way Newsom will vote. He turned thumbs down on to the tuition hike that CSU trustees approved in July, and he put out a statement late Tuesday saying he would ask his colleagues to join him in rejecting the latest increase.

The CSU meeting starts at 8:30 a.m. in Long Beach. Live audio will be available online during the open sessions at this link. You can read the agenda here.

HEARINGS: A select committee looks at opportunities for clean energy manufacturing in the state starting at 10 a.m. in the Capitol's Room 127. Farther afield, a joint Senate and Assembly committee looks at intelligent transportation systems at a hearing from 1 to 4 p.m. in Long Beach City Council Chambers.

RECESS: Sen. Lou Correa, D-Santa Ana, joins Controller John Chiang at a small business seminar in Anaheim. Assemblyman Das Williams, D-Santa Barbara, kicks off a fundraiser at a Ventura charter school. Sen. Sam Blakeslee, R-San Luis Obispo, talks to the Silicon Valley Association of Republican Women in Los Gatos. Assemblyman Richard Pan, D-Sacramento, helps cut a ribbon at a new CVS Pharmacy in the capital city. Assemblyman Mike Eng, D-Monterey Park, hosts a turkey giveaway in El Monte. And Assemblywoman Shannon Grove, R-Bakersfield, is in Orinda addressing a Lamorinda Republican Women luncheon.


Capitol Alert Staff

Jeremy White Jeremy B. White covers California politics and edits Capitol Alert's mobile Insider Edition. Twitter: @capitolalert

Amy Chance Amy Chance is political editor for The Sacramento Bee. Twitter: @Amy_Chance

Dan Smith Dan Smith is Capitol bureau chief for The Sacramento Bee.

Christopher Cadelago Christopher Cadelago covers California politics and health care. Twitter: @ccadelago

Micaela Massimino Micaela Massimino edits Capitol Alert.

Laurel Rosenhall Laurel Rosenhall covers the Legislature, the lobbying community and higher education. Twitter: @LaurelRosenhall

David Siders David Siders covers the Brown administration. Twitter: @davidsiders

Dan Walters Dan Walters is a columnist for The Sacramento Bee. Twitter: @WaltersBee

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