Capitol Alert

The latest on California politics and government

May 1, 2013
Bill to change California's environmental review law advances

Steinberg.JPGA bill that would make changes to California's landmark environmental review law moved forward in the state Senate Wednesday, as Democrats rejected a GOP-backed proposal as "too broad and comprehensive a change."

Senate President Pro Tem Darrell Steinberg defended his Senate Bill 731, which passed the Senate Environmental Quality Committee Wednesday, as an attempt to cut down on project delays the business community has long blamed on the California Environmental Quality Act without undermining the environmental protections the 1970 law provides. He acknowledged that the current bill is a work in progress.

"I'm trying to find the middle path, not just to make a deal, because I'll walk away from it if it's just about that, but to substantively approve the statute, to modernize it and to make sure we are giving genuine streamlining incentives and priorities to the projects we want to see more of," Steinberg said.

The bill focused on changes supporters say could boost prospects for "infill projects," especially in urban areas, such as the planned arena in downtown Sacramento, though what qualifies as an infill project is expected to be the subject of continued debate. It also makes changes to the paperwork and legal filing process Steinberg says could speed up CEQA-related lawsuits.

May 1, 2013
California teacher evaluation bill fails again


Legislation that would alter how California schools judge teachers flunked another test on Tuesday, failing to advance for the second time in a week.

The Senate Education Committee decided to reconsider the bill after deadlocking last week on a 4-4 vote (it needed five to pass), with Democrats and Republicans falling on both sides. The bill's author, Sen. Ron Calderon, D-Montebello, said he had altered his legislation to try and persuade opponents to shift their stance.

Currently, districts are required only to rank teachers as satisfactory or unsatisfactory. Senate Bill 441 would create four different grades, which Calderon said is essential for allowing schools to flag the lowest-performing educators, and would increase the frequency of evaluations for veteran teachers from at least every five years to at least every three years.

Calderon said he had amended the bill to emphasize that a section calling for more parent input would not affect collectively bargained contracts. He said he had no intention of dictating how schools would implement the new four-tiered grading system.

"I am not, in this piece of legislation, prescribing what those levels should be or what they should say," Calderon said.

May 1, 2013
StudentsFirst under scrutiny from the left

Thumbnail image for MC_RHEE.02.JPG

Michelle Rhee frequently says her StudentsFirst lobbying group is a bipartisan organization that backs Democrats and Republicans who support her vision for education: charter schools, vouchers and performance pay for teachers.

But left-leaning critics of the group routinely cast StudentsFirst as a Republican outfit, out of step with the union values many Democrats hold dear. Last month, California Democrats wouldn't let StudentsFirst have a booth at the party's state convention and Dean Vogel, president of the California Teachers Association, gave a speech saying the group is "backed by moneyed interests, Republican operatives and out-of-state Wall Street billionaires dedicated to school privatization and trampling on teacher and worker rights."

Now StudentsFirst is again under attack from the left, with liberal blogs pointing out the group's support for lawmakers who have taken positions against immigrants and gay people. The Daily Kos wrote a few posts last week criticizing StudentsFirst for naming John Ragan, a member of Tennessee's state Legislature, its "reformer of the year." Ragan wrote an unsuccessful bill that would have prevented teachers from talking about homosexuality in the classroom. The Los Angeles County Democratic Party seethed in response.

StudentsFirst put out a statement saying Ragan's bill was "an ill-conceived, harmful piece of legislation" that it did not support. The group said it honored Ragan for his votes to change the teacher tenure system, expand the number of charter schools and bring in more math and science teachers.

But the criticism continued this week, with Salon writing that Rhee's group "stands by anti-gay honoree."

PHOTO CREDIT: Michelle Rhee. in 2010. The Sacramento Bee/Manny Crisostomo

May 1, 2013
California Senate committee OKs bill to block retroactive taxes

Ted_Lieu_2012_Pedroncelli.jpgLegislation that would protect thousands of Californians from paying retroactive income taxes on their sales of business investments won initial committee approval Wednesday.

The Senate Governance and Finance Committee approved the legislation, Senate Bill 209, by a 6-1 margin with the committee chair, Davis Democrat Lois Wolk, casting the lone "no" vote.

The legislation, carried by Sen. Ted Lieu, D-Torrance, and Assemblyman Jeff Gorell, R-Camarillo, would overturn a 2012 judicial decision that a 1993 tax break for those who invest in small California companies was an invalid interference in interstate commerce.

The tax break cut in half the taxes on capital gains from such investments. After the decision was rendered last year, the Franchise Tax Board declared that everyone who took advantage of the tax break after 2008 would have to repay their tax savings, plus interest and penalties. It amounted to at least $120 million.

The affected taxpayers began protesting. Lieu and Gorell introduced SB 209 to shield them from the retroactive taxes.

PHOTO CREDIT: Sen. Ted Lieu, D-Torrance, talks on the Senate floor. Rich Pedroncelli / Associated Press file, 2012

May 1, 2013
UPDATE: NYC hedge fund correcting its first quarter CA lobbying reports


UPDATE: Three hours after this story went up on Capitol Alert, the New York City hedge fund called to say it's not, after all, California's biggest spender on lobbying.

"Our first quarter filing contains a manifest error which we are working to correct," said Stephen Ellwood, chief compliance officer for Arrowgrass Capital Partners.

The company did not immediately have the correct figure for how much it spent on lobbying, but representatives said it will be significantly lower than the $2.2 million initially reported to the Secretary of State, knocking Arrowgrass Capital off the list below of the top 20 interest groups that spent the most money lobbying California government in the first three months of this year.

Ellwood also said Arrowgrass's three registered lobbyists are in-house employees, not placement agents as the Secretary of State's Office reported earlier.

The original Capitol Alert post is below:

A review of California lobbying reports from the first quarter of 2013 shows heavy spending by a lot of Sacramento's usual interest groups: the oil industry, the California Chamber of Commerce, labor unions, health care companies and utilities.

But there's a new player on the list too, one that, at first glance, appears to be outspending everyone else. Arrowgrass Capital Partners spent $2.2 million on salaries for its three in-house lobbyists during the first quarter of the year, according to its reports to the Secretary of State, which were released today. That's more than double what was spent during the same period by the Western States Petroleum Association, typically Sacramento's biggest-spending interest group.

Arrowgrass Capital is a hedge fund based in New York City. Its three registered lobbyists are actually placement agents who pitch investments to California's public pension funds, said Allie Schembra, a spokeswoman for the Secretary of State's Office. A 2010 law passed in the wake of a scandal at CalPERS requires placement agents to register with the state as lobbyists.

"We're not really lobbyists but we get caught by the California lobbyist law," said Stephen Ellwood, chief compliance officer for Arrowgrass Capital.

The chart below shows the 25 interest groups that spent the most money on lobbying during the first quarter of this year, according to fillings with the Secretary of State.

Interest group spending on lobbying Q1 2013

PHOTO CREDIT: An oil well pump jack is shown working as cars and trucks roll along a stretch of road in Coalinga. The Western States Petroleum Association ranked second in California lobbying spending for the first quarter of 2013. AP Photo/ Gary Kazanjian, 2008 file

May 1, 2013
Census Bureau charts California economy's rise and fall

RCB_20121031_NEWHOMES_0003.JPGMost California workers are payroll employees of private businesses, and the rise, fall and slow recovery of that employment during the last decade is laid out in a new Census Bureau report.

The report -- which excludes government workers and the self-employed from its calculations -- reveals that in 2001, there were 806,733 "business establishments" employing 13.2 million Californians and paying them $521.8 billion a year.

Five years later, during an historic housing boom that helped drive the state's unemployment rate below 5 percent, there were 878,128 businesses with 13.8 million workers, and payroll outlays hit $633.8 billion.

As the housing bubble burst, however, the state slid into its worst recession since the Great Depression, and the statewide unemployment rate surged over time to more than 12 percent. By 2010, the number of employers had dropped to 849,875 and business employment had declined to 12.5 million - a decline of 1.3 million workers - but payroll costs were virtually the same at $635.6 billion.

The latest employment data files for 2011 show a slight uptick from 2010 as the state's economy began to recover. In 2011, there were 849,316 employers with 12.7 million employees, and they were paying out $663.6 billion in wages and salaries.

PHOTO CREDIT: Construction workers smooth out foundations at a new housing development in Folsom. Renée C. Byer / Sacramento Bee file, 2012

May 1, 2013
Kevin McCarty to run for Dickinson's Assembly seat

mccarty.jpgSacramento City Councilman Kevin McCarty will run again for the Assembly in 2014, four years after losing a close race for a legislative seat.

McCarty, a Democrat, seeks to replace Assemblyman Roger Dickinson, who has formed a campaign committee to run for the state Senate when President Pro Tem Darrell Steinberg is termed out next year.

"Targeting absentee landlords, creating green jobs, launching anti-truancy programs and getting illegal guns off our streets are just a few of the things that I focused on as a member of the City Council," McCarty said in a written statement. "I'm running for the state Assembly because I know I can do more."

May 1, 2013
California's out-of-wedlock birth rate lower than that nationwide

AOC_Baby_Hand.JPGMaybe California is not such a wild and crazy place after all.

The Census Bureau reported Wednesday that 35.7 percent of U.S. births were to unmarried mothers in 2011, but California's rate was markedly lower at 33.9 percent.

A number of other states had higher rates than California's, including rival Texas at 35.8 percent.

Among the states, Louisiana had the highest rate of births that year to unmarried mothers, 48.7 percent, although that was surpassed by the District of Columbia at 50.8 percent.

Utah was lowest at 14.7 percent.

PHOTO CREDIT: A care-giver holds the hand of a 4-month-old baby. Autumn Payne / Sacramento Bee file, 2006

May 1, 2013
Jerry Brown signs bill to step up California gun enforcement

brownup.jpgGov. Jerry Brown has signed legislation to increase funding for a state effort to confiscate weapons from people who are prohibited from owning them because of mental illness or violent criminal pasts, Brown's office announced today.

Senate Bill 140 was one of a number of gun control proposals introduced by California Democrats following the December shooting at an elementary school in Newtown, Conn. The measure found bipartisan support in the Legislature, despite opposition from the National Rifle Association and other pro-gun groups.

The legislation directs $24 million to the state Department of Justice to improve enforcement efforts associated with the state's Armed Prohibited Persons System, a database that helps officials identify people who are no longer allowed to possess guns.

"Today, each California community is a step closer to being safer," Senate President Pro Tem Darrell Steinberg, D-Sacramento, said in a prepared statement. "This swift action by the Legislature and the Governor to enforce the laws we already have is a wise and worthy investment to reduce gun violence."

PHOTO CREDIT: Gov. Jerry Brown talks to members of the press on Tuesday, April 23, 2013. Hector Amezcua / The Sacramento Bee

May 1, 2013
GOP SOS nominee runs for Long Beach mayor as independent

HJA_5749.JPGA former California candidate for statewide office seen as a "rising star" in GOP circles is again running for office, but this time as an independent.

Damon Dunn, a former professional football player who described himself as "truly conservative" during his 2010 secretary of state run, announced earlier this year his plans to run for mayor of Long Beach. Dunn, who lost the 2010 race to Democrat Debra Bowen by 15 percentage points, said he changed his registration to decline to state ahead of joining the mayoral race.

Though he is critical of his former party's handling of issues like same-sex marriage and poverty, as well as its ability to attract women and minority voters, Dunn said his decision to shed his GOP registration ahead of this run was not intended to be a political statement.

"Local politics mandates that I stand for my own ideas," said Dunn, who was once registered as a Democrat years ago. "I've got to run as my own man. There are problems here in Long Beach and the fixes here are not ideological."

Dunn's bid for mayor is already attracting big-name support. Former U.S. Secretary of State Condoleeza Rice headlined a reception to raise money for his race in Menlo Park Tuesday. The two met years ago at Stanford, when Dunn was a student and Rice was a provost.

"We've been friends for a long time," he said.

Damon Dunn is named fellow at Stanford's Hoover Institution

PHOTO CREDIT: Damon Dunn, Secretary of State candidate, speaks at Solar Gard Window Films in San Diego on Friday, August 20, 2010. Hector Amezcua, Sacramento Bee.

May 1, 2013
California population growth remains low

MC_TRANSAMERICA_G.19.JPGThe California Department of Finance's demographic unit calculated that California gained fewer than 300,000 new residents in 2012 for a growth rate of 0.8 percent.

Numerically, that's about half the annual growth California experienced during the 1980s, when high immigration and birth rates hit the state, and proportionately it's scarcely a third of the 1980s rate.

Working off 2010 census data, state demographers estimated the state's population at 37,966,000 on January 1, up 298,000 over the previous year.

The state's still-struggling economy may have something to do with population trends, the report indicated. The San Francisco Bay Area, whose economy is booming, was the fastest growing region last year, with Santa Clara County, home of Silicon Valley, growing twice as fast as the state as a whole.

Population growth last year was lowest in rural counties, where unemployment rates are the highest, and several actually lost population - Alpine, Calaveras, Del Norte, Lassen, Modoc, Plumas and Tuolumne.

Although regionally the Bay Area saw the highest rate of population growth, Santa Clarita, a suburban enclave north of Los Angeles, was the state's fastest growing city at 15.4 percent, followed by Dublin in Alameda County at 6.8 percent.

Despite scant population growth, however, California saw a resurgence of residential construction last year, with a 27 percent increase in new housing units from the previous year. The amount of residential construction in 2012, 45,309 units, was, however, just a fifth of what California was building during the height of the housing boom in the last decade.

PHOTO CREDIT: The San Francisco Bay Area had California's highest regional growth rate in 2012. The Sacramento Bee/Manny Crisostomo 2010 file.

May 1, 2013
Bill Moyers documentary examines 'United States of ALEC'

RB_Capitol_Dome.JPGEver wonder how it is that the same bill pops up simultaneously in statehouses across the country? One way is through the work of the American Legislative Exchange Council, a group that promotes business-friendly model legislation for state lawmakers to introduce in their respective Capitols.

The organization known as ALEC gets the Bill Moyers treatment tonight during a free screening in Sacramento of the documentarian's investigation called "The United States of ALEC." The film illustrates how the group brings together corporate executives and state lawmakers to craft policies that benefit business.

"Politicians and lobbyists at the core of this clever enterprise figured out how to pull it off in an organized, camouflaged way -- covering their tracks while they put one over on an unsuspecting public," Moyers says in opening his piece.

He illustrates why ALEC has become a bogeyman for the left -- through its efforts to encourage free markets and limited government, while curbing collective bargaining.

The free screening is being put on by Common Cause, which has filed a federal complaint over ALEC's nonprofit status, alleging that it unfairly allows ALEC to avoid lobbying registration requirements. The movie shows at 7 p.m. at the Crest Theatre, 1013 K St., Sacramento. A shorter version of the documentary is available online at this link.

May 1, 2013
Dan Walters Daily: A molehill of debt, a mountain of liabilities

The budget deficits Gov. Jerry Brown is committed to erasing are minuscule compared to California's massive unfunded pension costs, Dan says.

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

See other Dan Walters Daily clips here.

May 1, 2013
AM Alert: Students First rallies troops for California teacher evaluation bill


Students First, the Sacramento-based education advocacy group headed by school reform crusader (and wife of Sacramento major Kevin Johnson) Michelle Rhee, has launched a major blitz in advance of a hearing today on Senate Bill 441, a union-opposed teacher evaluation bill that was granted reconsideration after registering a 4-4 committee vote last week, with Democrats and Republicans on both sides.

The push has included an email blast inviting supporters to organize and train ahead of the hearing, a radio spot and a full-page ad in Tuesday's edition of The Sacramento Bee. It looks unlikely that SB 441 will make it to the desk of Gov. Jerry Brown, but Students First is clearly flexing its muscle on this one. The bill goes before the Senate Education Committee at a 9 a.m. hearing in room 4203.

VIDEO: Gov. Jerry Brown talks about dismantling California's "wall of debt," but Dan Walters says the governor is ignoring a mountain of liabilities looming beyond it.

CEQA OVERHAUL: There's already been plenty of back-and-forth about the prospects of amending the California Environmental Quality Act. Today a series of CEQA bills, including one by Senate President Pro Tem Darrell Steinberg, get a hearing before the Environmental Quality Committee today, starting at 12:30 p.m.

DAIRY DIALECTIC: To the annals of fascinating Capitol interest clashes you can add a dispute between the milk and cheese industries. They're feuding over AB 31, which would alter how California prices its milk, which cheese producers say would damage their bottom line. The bill goes before the Agriculture Committee today at 1:30, in room 126.

TOBACCO TAX: Health advocates are rallying at the Capitol in support of a bill by Senator Kevin de León, D-Los Angeles, that would hike the price of cigarettes. Representatives of the American Cancer Society, the American Heart Association and the American Lung Association in California will be joining de León at 12:30 p.m. on the west steps.

LABOR PROTECTION: Labor and immigration advocates are joining Assemblyman Roger Hernández, D-West Covina, today for a press conference backing Assembly Bill 263, which would strengthen workplace protections, including for immigrant workers (Steinberg highlighted similar bills yesterday). Art Pulaski of the California Labor Federation, Gabriela Villareal of the California Immigrant Policy Center and Jeannette Zanipatin of the Mexican American Legal Defense and Educational Fund will be at the 11 a.m. press conference, in room 317.

FOSTERING ADVOCACY: The governor has drawn praise for his plan to streamline school funding by eliminating specific funding streams called "categoricals," but that doesn't mean everyone is happy. Current and former foster youth with the organization California Youth Connection are rallying on the north steps at 8 a.m. this morning to protest the fact that Brown's budget proposal would do away with Foster Youth Services programs as a categorical administered by the County Offices of Education.

On a related note: back in the 20th century, The Bee wrote about a young woman named Ida Lockett who was struggling to overcome an upbringing that shuttled her between different foster homes. Lockett went on to found California Youth Connection, and tonight she will be honored, along with Steinberg, at a celebration of CYC's 25th anniversary.

PHOTO CREDIT: Michelle Rhee during a Sacramento Press Club appearance on May 24, 2010, when Rhee was still chancellor of the Washington DC Public Schools system. By Manny Crisostomo/The Sacramento Bee.


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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