Capitol Alert

State Treasurer Bill Lockyer said this afternoon that he will vote for Gov. Jerry Brown's November ballot initiative to raise taxes, despite concerns about the measure's burden on California's highest-income earners.

Lockyer, who said last year that California had neared its reasonable limit for taxing the rich, told the Sacramento Press Club that the alternative -- billions of dollars in spending reductions, including to education -- is intolerable.

"I'm voting for the governor's tax proposal," said Lockyer, a Democrat. "The cuts to education if it doesn't pass are so severe that it will injure our ability to produce an informed citizenry and workforce that we need for the future of California, so I'm a 'yes' vote."

Brown proposes to raise the state sales tax and income taxes on California's highest earners.

"I worry a little bit about fairness," Lockyer said, "although when you look at the income distributions in the last 20 years and see that essentially 80 percent of the people in California have either stagnated or fallen backward, 20 percent are the folks that actually have more disposable income, maybe progressive income taxes are relevant and fair in that kind of environment."

"However, you do get to the top pretty quick, and the potential for out-of-state migration is substantial enough that we have to be very sensitive about those rates," he added.

In a compromise to push a more popular, competing tax measure off the November ballot, the Democratic governor changed his tax initiative in March to include a larger tax increase on the wealthiest Californians than he initially wanted.

Lockyer said Brown had little choice but to alter his measure, adding, "I think he shares the same anxiety about practical impacts of our personal income tax getting high, or higher."

Lockyer's remarks came a day after Brown's tax measure and two others officially qualified for the November ballot. Lockyer said, "I reserve judgment" on the other two, one that would raise income taxes on all but the poorest Californians and one involving changes to the state's corporate tax formula.

Lockyer remained quiet about the scandal involving his wife, Nadia, who resigned from her position as an Alameda County supervisor after revelations of an affair and substance abuse.

The treasurer declined to discuss his wife's accusation he once supplied her with drugs, a claim Bill Lockyer's spokesman has previously denied.

"With respect to the personal matter, yes, I haven't commented much and don't intend to today," Bill Lockyer said.

The treasurer would at least allude to the matter later, however, provoking laughter while discussing rating agencies and California's creditworthiness.

"Have rating agencies in the past been probably too friendly with investors and Wall Street underwriters and others?" he said. "Yes, and whether people made money because of low ratings of some issuers? Yes, and was there sort of a co-dependent enabling going on -- sorry to start answering my last question, earlier -- but was there some of that going on with respect to the financial institutions? Yeah."

The new budget deal between Gov. Jerry Brown and Democratic lawmakers involves a controversial shift of 880,000 Healthy Families children to lower-cost Medi-Cal, additional child care cuts and more stringent work requirements for welfare parents.

Senate Democratic leaders provided details today in a hastily scheduled Capitol press conference, just minutes after Brown issued a joint statement declaring a "conceptual agreement" with lawmakers.

"This is a budget that is not fundamentally different from the budget we passed on Friday," said Senate President Pro Tem Darrell Steinberg, D-Sacramento.

Steinberg said major changes focused on areas that serve low-income residents: Healthy Families medical coverage for low-income children slightly above the federal poverty line; subsidized child care; and welfare-to-work. We detail the changes after the jump:

Ten days before the start of the next fiscal year, Gov. Jerry Brown and Democratic leaders announced a budget "conceptual agreement" this morning after bridging their biggest difference over cuts to welfare-to-work.

Democrats sent Brown a $92.1 billion spending plan last week under the threat of lost pay, but without a deal with the Democratic governor in place.

Brown, Senate President Pro Tem Darrell Steinberg and Assembly Speaker John A. Pérez made the announcement in a joint statement that contained no specific details of the compromise. The announcement said their agreement "protects education, permanently reforms welfare and includes tough ongoing cuts."

The statement says final votes to seal the agreement will take place in the "coming days." Sen. Mark Leno and Capitol aides said they expect floor votes Tuesday.

"This agreement strongly positions the state to withstand the economic challenges and uncertainties ahead," Brown said in the statement. "We have restructured and downsized our prison system, moved government closer to the people, made billions in difficult cuts and now the Legislature is poised to make even more difficult cuts and permanently reform welfare."

Is this serendipitous or what?

Just as two rival tax measures, both purporting to help struggling schools, qualified for the state's November ballot, the Census Bureau today released its annual report on school finance, revealing that California ranks 35th in per-pupil spending, more than $1,200 per year under the national average.

Furthermore, the Census Bureau report said, California ranks even lower - 42nd - in school spending vis-à-vis personal income.

The report provides new ammunition for Gov. Jerry Brown and civil rights attorney Molly Munger as they peddle their rival tax measures to voters. Brown says his sales and income tax boost would shield schools from deep spending cuts and increase it sharply over time. Munger's broader income tax measure would raise per-pupil spending for the state's 6 million public school students by more than $1,500 a year, roughly to the national average.

The Census Bureau report, covering the 2009-10 fiscal year, differs from the measures of per-pupil spending that are used in California's ceaseless political debates over the issue. The report includes all sources of income, including federal funds, whereas in state budget scoring, only state and local funds are counted and about $4 billion in state payments on school construction bonds and teachers' pensions are excluded.

Thus, the Census Bureau tagged California's $58.9 billion in 2009-10 "current spending" at $9,375 per pupil, which was $1,240 less than the national average of $10,675 and placed it 35th . The District of Columbia was highest at $18,667, followed by New York, Wyoming, New Jersey and Connecticut. Utah was lowest at $6,064.

Total California spending, including $7.2 billion in capital outlay and ancillary costs, was pegged at $68.1 billion.

In terms of revenue from all sources, California's $10,581 per pupil was 40th in the nation. Its revenue, some $65 billion, was calculated at 4.25 percent of personal income, while its spending, 3.77 percent of personal income, was 42nd. In relation to personal income, Alaska was tops in both revenue and spending.

The state government supplied $34.2 billion of school revenues in 2009-10, or 52.6 percent, which was higher than the national average of 43.5 percent. The federal government's 15 percent was also higher than the national average of 12.5 percent, while local source revenues at 32.5 percent were below the national average of 44 percent, reflecting Proposition 13's limits on local property taxes.

The report also provided details on how states divvied up school spending among different categories. Relatively speaking, the only two categories in which California rose above national per-pupil averages were in support staff and school administration.

Gov. Jerry Brown and legislative Democrats plan to announce a budget deal around 11 a.m. this morning, with floor votes expected Tuesday, according to Sen. Mark Leno, D-San Francisco.

Democratic leaders and Brown reached a compromise that would reduce the amount of time welfare-to-work recipients can receive full aid without finding a job, according to sources close to negotiations. But the package contains CalWORKs exemptions designed to help welfare recipients on the verge of finding employment or struggling to find work in areas with high unemployment.

Brown rejected the Democrats' plan to bridge the state's $15.7 billion gap with $250 million in property tax dollars that counties say they are owed each year. Lawmakers and Brown found other ways to help plug the remaining hole, such as additional CalWORKs savings and using more money upfront from a multi-state mortgage settlement.

Assemblyman Roger Hernández is set to take his drunken driving case to a jury Aug. 7.

The West Covina Democrat was given a trial date Wednesday by Contra Costa County Judge Bruce Mills, said Karen Holder, senior deputy district attorney.

Hernández did not appear at Wednesday's brief pretrial hearing, Holder said. He was represented by attorney Carin Johnson.

Hernández was charged with drunken driving last month after Concord police officers said they observed him driving erratically March 27 at about 2 a.m. on a weekday. The legislator said that he had only two glasses of wine over a five-hour period.

Tests concluded that his blood-alcohol level was 0.08, the level at which a driver can be charged with drunken driving.

Hernández has denied officers' claims that he was weaving inside a lane of traffic. He also contends that he was not impaired when stopped by officers after driving into the parking lot of a lot of a Concord hotel.

Hernández was accompanied by a 29-year-old woman and was driving a state Assembly car at the time of the incident. He has voluntarily relinquished his right to drive a legislative car until the case is resolved.

* Updated at 5:53 p.m. Thursday to correct the spelling of Carin Johnson.

Dan Walters chronicles how California's history as a red state started to change around the time Bill Clinton was elected president.

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, in today's report, asks: "Are Republicans an endangered species in California?"

School's out, but middle-school and high-school students are joining a National Summer Learning Day rally on the Capitol's north steps to call for more summer learning programs, especially in science, technology, engineering and math -- so-called STEM education.

Listed speakers include State Superintendent of Public Instruction Tom Torlakson (a news release notes that he used to be a science teacher) and Jonathan Raymond, superintendent of Sacramento City Unified School District.

The list of legislator-participants is long, including Democratic Sens. Lou Correa, Mark De Saulnier, Kevin de León, Loni Hancock, Carol Liu and Michael Rubio, plus Republican Sen. Tom Berryhill.

Representing the Assembly side are Assembly Republican leader Connie Conway, Republican Assemblywoman Linda Halderman, and Democratic Assembly members Roger Dickinson, Holly Mitchell, Richard Pan and Nancy Skinner.

The rally starts at 10 a.m., followed by educational activities and a picnic on the north lawn. San Francisco-based comedy magician Robert Strong will also be on hand. Maybe he can pull the rest of the state budget out of a hat.

Meanwhile, State Treasurer Bill Lockyer will be talking to the Sacramento Press Club at noon about state finances and the budget.

Alert readers will recall that the Democrat said last week in response to a Republican request that the budget was "financeable." Click here for more information about today's luncheon.

Both the Senate and the Assembly have scheduled floor sessions for 9 a.m. Click here for the Senate's schedule, and click here for the Assembly's.