Capitol Alert

The latest on California politics and government

November 6, 2013
California lawmakers grill officials over jobless check delays

pereaedd.jpgCalifornia lawmakers blasted state officials for their oversight of a computer problem that delayed jobless benefits for nearly 150,000 Californians, while front-line employees testified Wednesday that problems persist.

"This whole situation put a big black eye on how our constituents see the state of California," Assemblywoman Lorena Gonzalez, D-San Diego, told Employment Development Department officials at an Assembly Insurance Committee oversight hearing, the first on the troubled project.

A miscalculation converting old unemployment claims into a new processing system over the Labor Day weekend resulted in a massive backlog of unemployment claims. The problem became so severe it skewed reporting of initial jobless claims by the U.S. Department of Labor, and it provided another example of the state's information-technology shortcomings.

"I think the fundamental issue for the state is we are the home of Silicon Valley, we are seen as the most technologically adept state in the nation," said Assemblyman Ken Cooley, D-Rancho Cordova. "To have this sort of thing happening is a colossal problem."

While EDD administrators said backlog claims have largely been resolved, Irene Livingston, an employment program representative for EDD in San Jose, testified that it remains "nearly impossible" for unemployed California to reach front-line employees. She said the system is overwhelmed with telephone calls and an email system that remains backlogged.

"There's literally hundreds of thousands of messages that have yet to receive a response," she said.

EDD administrators lamented staffing shortages at the department, but EDD Chief Deputy Director Sharon Hilliard told the committee that staffing levels were not responsible for the computer problem. The department greatly underestimated how many claimants would be affected by a glitch in data conversion done over the Labor Day weekend, as well as how long it would take employees to address the problem.

"For this, we are very sorry," Hilliard said.

Hilliard and a representative of Deloitte Consulting, the contractor on the project, both said the department should have done a more thorough test on the amount of time required to address "stop pay" flags associated with a portion of claims being converted.

Nicholas Lee, 33, of Sacramento, told lawmakers he lost his job as a merchandiser in September and has yet to receive help with unemployment benefits despite repeated calls and visits to a local office.

"I have two autistic kids, I have a wife, I have a house, and I am barely making it right now," he said, his voice quivering. "And this system is not working. ... I don't understand what they're doing, what's wrong, but maybe they should go back to the old system, because the old system was working."

EDD has been working for months to upgrade its 30-year-old unemployment insurance processing system, part of a multiyear, nearly $188 million system upgrade.
"The system is working, and a majority of our customers are receiving benefits without interruption," Hilliard told lawmakers.

But after Hilliard said the new system was paying a "majority of the continued claims on the same day as they are received" and that the department has resolved its major issues, Assemblyman Curt Hagman, R-Chino Hills, suggested she was minimizing the problem. Hagman, vice chairman of the insurance committee, asked her to "please refrain from using" words like "most," "majority," and "few."

"I don't think we, you know, minimize that," Hagman said. "We have to say that is really impacting these people when they need the money the most."

Representatives of the National Employment Law Project and California Rural Legal Assistance both urged the creation of an independent panel to oversee the state's unemployment benefits program, while members of Service Employees International Union Local 1000 said management dismissed employees' concerns about the project.

"This has been an enormous tragedy, and it could have been prevented," the union's Margarita Maldonado said.

Gonzalez challenged the claim by EDD administrators that they only discovered the severity of the problem the second week after Labor Day. Employees in elevators were talking about problems earlier than that, she said.

"I think the frustration that we got from our constituents were just the lack of answers," Gonzalez said. "It wasn't until we got an onslaught of calls that we started getting explanations."

Photo: Assemblyman Henry Perea, D-Fresno, chairman of the Assembly Insurance Committee, speaks with reporters after a committee hearing at the Capitol on Nov. 6, 2013. The Sacramento Bee/David Siders

November 6, 2013
Energy-efficiency group gives California high marks

green_home.jpgCalifornia energy officials Wednesday touted the state's strong showing in a new nationwide survey of energy efficiency.

The state finished second in the scorecard compiled by the American Council for an Energy-Efficient Economy, a Washington, D.C.-based group that pushes energy efficiency efforts around the country.

Massachusetts topped the council's efficiency list for the third year in a row.

"We have a healthy competition going and that's a good thing," Andrew McAllister, a member of the California Energy Commission, said of the Bay State during a conference call.

McAllister attributed California's high ranking to its standards on home appliances and new construction, utility rebate programs that encourage people to turn in inefficient appliances, and the increasing number of zero-emission and electric vehicles.

"The future energy grid is really upon us in California," McAllister said.

PHOTO: This two-story home in Folsom, shown here in January 2009, won top honors from green building and energy efficiency, a designation as LEED Platinum from the US. Green Building Council. The Sacramento Bee/Anne Chadwick Williams.

November 6, 2013
Labor secretary Marty Morgenstern retires; Brown names David Lanier to post

morgensternreporters.jpgMarty Morgenstern, a longtime adviser to Gov. Jerry Brown, has retired as secretary of the state Labor and Workforce Development Agency, Brown's office announced Wednesday.

The Democratic governor appointed David Lanier, Brown's chief deputy legislative affairs secretary, to fill the post.

Morgenstern had been an adviser to Brown since he was governor before, from 1975 to 1983, serving as chief labor negotiator in Brown's first administration. He returned to the Capitol as labor secretary when Brown began his third term in 2011, and Brown on Wednesday named him an unpaid senior adviser.

"Marty is a man steeped in the ways of politics and the practices of labor management relations," Brown said in a prepared statement. "He has provided invaluable advice for decades and will continue to do so."

Brown called Lanier "more than ready" to become labor secretary. The 46-year-old Democrat has been an adviser to Brown since 2011. He was previously a special adviser to the California State Assembly Speaker's Office of Member Services.

Lanier is to be paid $180,250 a year. The position requires Senate confirmation.

Morgenstern, 78, said in a prepared statement that working for Brown "has been a great honor."

"Keeping up with the governor has been sometimes difficult, but never dull," he said.

The appointment was announced as lawmakers opened a hearing into a computer problem at the Employment Development Department that delayed jobless benefits for nearly 150,000 Californians earlier this year.

Editor's note: This post was changed at 1:55 p.m. Wednesday to include the correct salary for Lanier. The number originally provided by the governor's office was incorrect.

PHOTO: Marty Morgenstern speaks with reporters in Oakland on Sept. 25, 2013. The Sacramento Bee/David Siders

November 6, 2013
Steinberg seeks to remove Ron Calderon as Insurance chair

MC_CALDERON_02.JPGSenate President Pro Tem Darrell Steinberg, D-Sacramento, has asked the Senate Rules Committee to strip besieged Sen. Ron Calderon, D-Montebello, of his Insurance Committee chairmanship.

Fresh revelations of a federal investigation into Calderon surfaced last week with the publication of an affidavit, obtained by Al Jazeera America, charging that Calderon accepted bribes from an undercover FBI agent posing as a film executive seeking legislation that would favor his business.

Steinberg reacted by removing Calderon from the California Film Commission. When asked whether Calderon should retain public office, Steinberg replied, "I certainly have my doubts."

Those doubts about Calderon's fitness have apparently solidified into the certainty that the Montebello Democrat should not be allowed to lead the Insurance Committee until the federal investigation is concluded. Steinberg announced Wednedsay that he was asking the Senate Rules Committee to nix Calderon's Insurance Committee chairmanship and remove him from his other committee assignments.

"I do not make this request lightly, nor do I judge the truth of the publicly reported allegations," Steinberg said in a statement accompanying the announcement. "I am concerned, however, about keeping Senator Calderon in his positions. The allegations, though yet unproven, are serious enough to cloud any interactions the Senator might have with colleagues, advocates, and the public on issues within his jurisdiction."

The Rules Committee is scheduled to consider Steinberg's request at a meeting next Tuesday. Since Steinberg oversees that committee, the decision to remove Calderon's committee assignments is likely a foregone conclusion.

Through a spokesman, Calderon declined to comment.

"Senator Calderon has no comment on that matter at this moment," said Mario Beltran, Calderon's communications director.

Editor's note: This post was changed at 3:05 p.m. Wednesday to include the comment from Calderon's spokesman.

PHOTO: Sen. Ron Calderon, D-Montebello, speaks at a news conference at the Capitol in Sacramento on Monday June 10, 2013. The Sacramento Bee/Manny Crisostomo.

November 6, 2013
California still has highest poverty rate under new method

California still has - by a huge margin - the highest poverty rate of any state under an alternative Census Bureau calculation that includes the cost of living.

The Census Bureau report, issued Wednesday, says that nearly a quarter of California's 38 million residents live in poverty by the alternative method - almost 9 million - and the state's 23.8 percent rate is approached only by Washington, D.C.'s 22.7 percent.

Among other states, the second highest alternative poverty rate is found in Nevada at 19.8 percent while the lowest rates are found in Iowa (8.6 percent) and Wyoming (9.2 percent). Nationally, the alternative rate is 16 percent.

California's official poverty rate is 16.5 percent and while higher than the national official rate of 15.1 percent, it is surpassed by those of many other states.

The official rate is based on half-century-old criteria that have been criticized as being obsolete, leading the Census Bureau to develop the alternative method that uses broader indices, including the cost of living. The official rate assumes, in essence, that the cost of living is the same nationwide.

California scored the highest rate during the Census Bureau's first report on the alternative method and continues with that dubious title. A few weeks ago, the Public Policy Institute of California released a report using methodology similar to the Census Bureau's alternative and came up with similar results.

The official rate is used for a wide variety of federal and state programs. Were the alternative method to become the official one, there would be huge upheavals in those programs, possibly meaning a big jump in federal aid to California.

PHOTO: Kazoo Yang, 31, spent most of the day packing up her possessions as Sacramento police officers evict 150 homeless people from an illegal campground along the American River. The Sacramento Bee/Manny Crisostomo

November 6, 2013
AM Alert: Lag in California unemployment benefits gets scrutiny

EDDOffice.JPGFeeling fatigued by all those stories about issues undermining Obamacare's new federal health insurance website? Good news: Today you get a distraction in the form of a hearing reminding us that California, too, struggles to surmount computer glitches that separate citizens from benefits.

We're talking, of course, about the recent delay in processing unemployment insurance payments, which turned out to have unfolded despite officials knowing ahead of time of potential tech issues. Gov. Jerry Brown has since flagged "multiple screw-ups" being behind the snafu. While the governor didn't elaborate, an Assembly Insurance Committee hearing today promises to illuminate what went wrong.

Several officials from the Employment Development Department have been summoned to testify, including its chief deputy director Sharon Hilliard; the chief of the Unemployment Branch, Sabrina Reed; and the chief of Information Technology, Gail Overhouse. Others listed include executives from the contractor, Deloitte Consulting, that managed the computer upgrade preceding the flareup, as well as representatives of SEIU Local 1000, California Rural Legal Assistance, Inc. and the California Labor Federation. The hearing starts at 11 a.m. in the Capitol's room 437.

VIDEO: Dan Walters looks at the true motives of the two Republicans who have announced that they're challenging Gov. Jerry Brown.

November 6, 2013
Dan Walters Daily: Why Maldonado, Donnelly are really running

Republican gubernatorial candidates Tim Donnelly and Abel Maldonado don't really stand a chance of unseating Gov. Jerry Brown, Dan says. Instead, their campaigns will reflect internal Republican Party dynamics.

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

See other Dan Walters Daily clips here.


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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