Capitol Alert

A political committee that Service Employees International Union California created to support moderate Republican candidates for the Legislature reported its first expenditure of the 2012 election Wednesday, dropping more than $15,000 on mail pieces opposing Republican Assemblyman Tim Donnelly's bid for re-election.

Donnelly, a conservative first-term assemblyman known for his vocal opposition to illegal immigration, is facing Republican Bill Jahn, the mayor of Big Bear Lake, and Democrat John Coffey on the June 5 ballot in the 33rd Assembly District.

The mailers were reported in a campaign filing posted on the secretary of state's website.The committee also reported spending about $20,000 on a survey in the safe Republican district.

SEIU California launched the Golden California Committee last year as part of an effort to elect more moderate Republicans to the Legislature. Leaders said the new district lines and top-two primary system allow more opportunities to influence the outcome in conservative districts.

The union says 87,000 of its 700,000 members are registered Republicans.

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SEIU California launches Republican PAC to back moderates

Against Gov. Jerry Brown's wishes, the California Public Employees' Retirement System board voted today to phase in a higher cost to the state over two years rather than bill the state immediately in full.

In a letter to the board, Brown called that "not a prudent decision."

The disagreement was over the pace at which PERS is lowering its assumptions about future investment returns from 7.75 percent to 7.5 percent, called the discount rate. Such changes are intended to compensate for lower market returns. When the rate of return assumption goes down, governments must contribute more.

The PERS board agreed to phase in the change over two years at a onetime $137 million savings ($78 million general fund), but Brown had wanted the board to drop the discount rate immediately. In a letter he sent to the board today, Brown reasoned that despite the onetime savings, the delay would actually cost the state general fund $145.9 million over 20 years in higher interest costs.

A political advocacy group funded largely by wealthy Stanford physicist Charles T. Munger Jr. has poured $83,000 this week into an independent push to re-elect Republican Assemblywoman Beth Gaines.

Gaines, of Rocklin, is running against attorney and fellow Republican Andy Pugno in the 6th Assembly District, a newly drawn district based in Placer County but extending into Sacramento and El Dorado counties. Democrat Reginald Bronner of Lincoln rounds out the field.

A radio advertisement and campaign literature supporting Gaines was funded by Spirit of Democracy, whose coffers consist of $727,000 from Munger and $150,000 from the California Dental Association, records show.

Of the money spent to benefit Gaines, $54,000 was for radio airtime and production costs, $15,000 for campaign consultants, and $14,170 for printing and mailing campaign literature.

Spirit of Democracy was created for the purpose of supporting and opposing candidates for state office. The group also is backing Republican Leslie Daigle against incumbent GOP Assemblyman Allan Mansoor of Costa Mesa in the 74th Assembly District race.

Munger is a major GOP donor and was a key financial backer of redistricting reform. He has pushed to moderate the Republican Party by downplaying divisive issues such as abortion, gun rights and same-sex marriage.

By supporting Gaines, Munger is taking aim at Pugno, the author of and chief counsel for Proposition 8, the initiative passed by voters in 2008 to limit marriage to a man and woman.

Munger's sister, civil rights attorney and Democrat Molly Munger, is pushing a measure for the November ballot that would generate about $10 billion annually by raising income taxes on a sliding scale for all but the poorest California workers for 12 years.

Senate President Pro Tem Darrell Steinberg today repeated a pledge to look for budget solutions that would allow lawmakers to preserve some services targeted with steep cuts under Gov. Jerry Brown's revised budget plan.

"I said on Monday, I'm not looking for a public fight here," the Sacramento Democrat said this morning. "We're looking to work collaboratively and yet not be afraid to have our differences or air our differences with the other stakeholders, the other parties, but come to a resolution where we can in fact buy out some of the worst cuts."

The revised budget proposal released by the Democratic governor Monday calls for roughly $8 billion in cuts to close a projected deficit that has grown to $15.7 billion since his January budget was unveiled. Those cuts include reductions to health and welfare programs and Cal Grants for low-income students.

Steinberg said he doesn't like many aspects of the proposal, including using money won in the mortgage settlement with major banks and reducing funding for the courts, but added that cuts with the most severe effect on the state's neediest constituencies will be the first to come off the chopping block.

"To me a cut that, you know, will result in the difference between life and death and a cut that will increase homelessness by definition, it's our obligation it seems that we do everything we can to avoid those cuts," he said.

Steinberg again floated the idea of using the state's planned $1.05 billion reserve to plug some of the cuts. Ratings agency Standard & Poor's warned lawmakers against that approach Tuesday, writing that the reserve "is low but important considering that the potential Facebook initial public offering-related income tax revenue is especially difficult to forecast."

"I respect the rating agencies, but the rating agencies don't represent a hungry kid who can't do well in school because his family has suffered a big cut in his CalWORKs grant," Steinberg said, referring to the state's welfare-to-work program.

He declined to specify other routes that majority Democrats may take to balance the budget without making all of the cuts proposed by Brown.

Here's a video of Steinberg's previous comments on Monday on how he views the cuts and how he hopes to plug the deficit:

University of California students disrupted a meeting of the UC regents in Sacramento this morning, protesting tuition increases in a sustained chant that forced regents to break early for a closed session meeting.

The regents were about to discuss the impact of Gov. Jerry Brown's May budget revision on the university system when about 18 students dressed in orange prison garb and complaining they were "sentenced to debt" began marching in a circle in the audience.

Regents were expected to return to open session before noon to discuss the budget. The protest died down about 30 minutes after it began.

"The UC regents are closer to Wall Street than they are to the people of California," UC Berkeley student Charlie Eaton said.

The UC system last year raised tuition by about 18 percent over the previous year, and administrators are considering further increases. Brown's May budget revision, released Monday, did not include an additional $125 million for the college system that administrators said they need to avert a potential 6 percent tuition hike.

The crowd included students from UC Davis, where last year's pepper-spraying incident still resonates.

Students in the audience hissed when Nathan Brostrom, a UC vice president, said administrators have "full, unequivocal confidence" in UC Davis Chancellor Linda Katehi.

A member of the audience yelled, "Is that a joke?"

The regents are meeting in Sacramento for the first time since 1993, as administrators lobby lawmakers at the Capitol for additional funding.

The Federal Election Commission has formally advised Democratic Sen. Dianne Feinstein that she can ask for replacement contributions from past donors so long as their prior checks were never deposited in a campaign account.

The ruling does not give Feinstein what she really wanted, which was to seek replacement donations totaling some $4.5 million -- the amount campaign officials estimate was embezzled by former treasurer Kinde Durkee. Durkee is now awaiting sentencing, after pleading guilty to charges of mail fraud.

In an advisory opinion issued Tuesday, the FEC reasoned that if "the initial funds were never received by the committee, they would not count towards the attempted contributors' contribution limit."

The five voting FEC members, though they could not reach an official consensus on the broader question, did note that "the Commission has never applied the same reasoning to contributions that were actually deposited in the intended recipient committee's account as it has to circumstances where a committee lost a contribution check."

VIDEO: Dan Walters says Democrats and Republicans are both unhappy with Gov. Jerry Brown's budget.

Have a question you'd like Dan to answer? Post it on our Facebook page.

See other Dan Walters Daily clips here.

VIDEO: Dan Walters says in today's video report that even though California legislators have a month to pass a budget, the real action won't start until June 6.

Neither house has a floor session scheduled today, and many budget panels have yet to gear up.

The Assembly Appropriations Committee keeps working through dozens of fiscal measures, including Assembly Bill 1501, one of Assembly Speaker John A. Pérez's "middle-class scholarship" measures, and Assembly Bill 1616, Assemblyman Mike Gatto's proposal to lift restrictions on homemade prepared food. That hearing starts at 9 a.m. in the Capitol's room 4202.

The Senate Rules Committee considers the governor's appointments starting at 1:30 p.m. in Room 113, with Askia Abdulmajeed of the Juvenile Parole Board and three commissioners on the Board of Parole Hearings -- Dan Figueroa, Jack Garner and Peter LaBahn -- required to appear.

Democratic Sen. Michael Rubio is holding a presser at 1 p.m. in the Capitol's Room 2040 to talk up his Senate Constitutional Amendment 22, which would bar the University of California from enrolling more than 10 percent of out-of-state students in the first-year class on each campus as well as across the system.

Meanwhile, the Assembly has welcomed a new member. Robin Swanson, spokeswoman for Assembly Speaker John A. Pérez, added to her and her husband Michael's family Tuesday with the birth of son Logan Michael Kanotz.

"Appropriately, Robin's labor began on Mother's Day," Pérez said in a statement announcing Logan's arrival. "Typically, she had some of her hardest labor during the May Revise. The LAO has not yet commented on how long recovery will take."

Click here for the Senate's daily agenda, and click here for the Assembly's.

SOLAR: Solar industry officials and workers will be on the Capitol's north steps at 10 a.m. to urge legislators not to approve any new fees on solar energy users.

GREEN FAIR: SAGE, which works to improve recycling and sustainability efforts in state agencies, is hosting a "green fair" from 11 a.m. to 2 p.m. on the Capitol's west steps.

BARBECUE: The California Beer and Beverage Distributors are hosting a barbecue lunch for legislators and staff as part of the group's annual legislative day starting at 11:30 a.m. on the south steps. Bring ID.