Capitol Alert

The latest on California politics and government

November 19, 2013
Talking eyeglasses, Jerry Brown reflects on classroom moments


Gov. Jerry Brown has regaled audiences young and old with stories about his childhood. So he didn't have to reach deep into his repertoire Tuesday when asked to reflect on a moment he shared with an educator.

"I can tell you a lot of teacher stories," Brown told students at Jefferson Elementary in Natomas. The governor appeared alongside former Commerce Secretary Mickey Kantor and former Los Angeles Deputy Mayor Austin Beutner to discuss an expansion of Beutner's program to provide free eye exams and complimentary glasses to children in low-income neighborhoods.

"I think my ears weren't very clean and the teacher dragged me over to the sink and washed my ears out," Brown said of his time at St. Brendan's. "She thought I hadn't quite gotten ready to go to school."

He then turned to the students with a query of his own.

"Do your teachers ever do that? Do they ever say: "Your shirt isn't clean? Or, your hair isn't combed? Or maybe you didn't wash your face?'

"Good, because if you don't, the teacher may do it for you," Brown said.

November 19, 2013
California has nation's second highest job distress rate


California may be recovering from the worst recession since the Great Depression, and its official unemployment rate has dropped by a third, but by another federal measure of employment distress, the state is second only to Nevada.

The alternative number, known as U-6 in economic statistical circles, includes not only unemployment — the percentage of the labor force that's jobless — but "marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers."

In other words, it represents every worker whose aspirations are being thwarted by economic conditions.

By the U-6 measure, California's employment distress rate is 18.3 percent for the 12 months ending June 30, according to a new report by the Bureau of Labor Statistics. California's rate is second only to Nevada's 19 percent and four percentage points higher than the national rate of 14.3 percent.

California's U-6 rate is also more than twice as high as the state's 9.1 percent rate calculated by the BLS for 2006, the last year before the housing bubble burst, plunging the state into recession.

North Dakota, which is experiencing an oil boom, has the lowest rate of 6.2 percent. Texas, with whom California is often compared, has a U-6 rate of 11.6 percent.

PHOTO: Binders full of resources at the Employment Development Department office in Sacramento on Thursday February 14, 2008. The Sacramento Bee/Randall Benton

November 19, 2013
Jerry Brown meets with wardens amid prison negotiations


Facing a three-month deadline to reduce California's prison population, Gov. Jerry Brown said he plans to meet today with 34 wardens and a dozen top administrators of the prison system.

At the meetings, tentatively scheduled for 2 p.m. to 9 p.m. today, the governor said he planned to ask the wardens about overcrowding, healthcare, drug treatment, mental health and vocational learning.

Brown said the appointments demonstrate his engagement in the process and commitment to the issue as the state continues negotiations with its court-appointed mediator. He described the meetings with the mediator as "collaborative and informative" and said talks with plaintiff's lawyers have made him optimistic about reaching a resolution.

"This is a matter that I am very interested in, very committed to getting it right," Brown told reporters Tuesday at a school event in Sacramento. "So that's why we are going very carefully."

November 19, 2013
JPMorgan settlement sends $300 million to CalPERS, CalSTRS


California's retirement funds for teachers and state employees will receive nearly $300 million from a sweeping settlement between the Justice Department and financial titan JPMorgan.

The Justice Department has wrung a $13 billion settlement out of JPMorgan for misrepresenting the value of securities made up of mortgages. The widespread failure of similar financial products played a key role in triggering the 2007 financial crisis, and among the victims were public retirement funds that had invested in mortgage-backed securities.

Under the settlement, the California Public Employees' Retirement System and the California State Teachers' Retirement System - more commonly known as CalPERS and CalSTRS - will draw $298,973,000 in damages: about $261 million to CalPERS and $19.5 million plus interest to CalSTRS, with a share of the remainder going to the attorney general's office for fees.

"JP Morgan Chase profited by giving California's pension funds incomplete information about mortgage investments," Attorney General Kamala Harris said in a statement. "This settlement returns the money to California's pension funds that JP Morgan wrongfully took from them."

The settlement "helps bring closure and justice in this matter for those who were harmed and holds JPMorgan accountable for its actions," CalPERS investment committee chair Henry Jones said in a statement.

When selling securities to the massive retirement funds, JPMorgan omitted information about the quality of the mortgages the investment products contained, according to Harris's office. That echoed a broader theme of JPMorgan misleading investors by packaging risky mortgages into financial instruments they then touted as sound investments.

"JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm's behavior," U.S. Attorney General Eric Holder said in a press release accompanying the full $13 billion settlement. "The size and scope of this resolution should send a clear signal that the Justice Department's financial fraud investigations are far from over."

PHOTO: The CALPERS building in downtown Sacramento on Tuesday, November 8, 2005. The Sacramento Bee/Jay Mather.

November 19, 2013
California transportation leaders seek car tax hike for road repairs


A former Caltrans director and a member of the state's transportation panel have filed a proposed November 2014 ballot measure that would generate an estimated $3 billion a year for road improvements by more than doubling vehicle license fees.

The "California Road Repairs Act of 2014" would phase in a 1 percent surcharge to the fee, the equivalent of property tax on a home. The fee has been .65 percent of a vehicle's market value since the late 1990s, with a temporary increase to 1.15 percent from May 2009 through June 2011.

In language filed with the Attorney General's Office late Monday, proponents Will Kempton, the executive director of Transportation California who was Caltrans director from 2004 to 2009, and Jim Earp, executive director of the labor-management California Alliance for Jobs and a member of the California Transportation Commission, said "California is facing a transportation funding crisis."

The proposed constitutional amendment, they wrote, would "provide essential funding for critical road repairs, maintenance, and expansion across the state."

The proposal would be the first highway-funding ballot measure since Prop. 1B in 2006. That measure, backed by former Gov. Arnold Schwarzenegger and placed on the ballot by the Legislature, authorized about $20 billion bonds for road projects.

Prop. 1B relied on borrowing backed by general-fund revenues, with a 30-year payoff. The road repairs act, though, would have a more direct impact on motorists' wallets and involves the politically perilous vehicle license fee.

November 19, 2013
AM Alert: Special election for Los Angeles Assembly seat


One of the last Los Angeles City Council election-prompted dominoes will fall today, with voters filling one of two legislative seats left vacant by lawmakers who migrated to L.A.

Sen. Holly Mitchell, D-Los Angeles, already cruised to an easy victory in claiming the Senate seat formerly held by Curren Price, ensuring that Democrats in the Senate retain a margin of error on their supermajority.

Now the voters will select the successor to former Assemblyman Bob Blumenfield. Democrat Matt Dababneh will take on Republican Susan Shelley in 45th Assembly District, and Assembly Dems are poised to reclaim their supermajority if Dababneh prevails. If not, they'll get another shot via the special election to fill Mitchell's old seat in the 54th Assembly District - not a terribly tall order, given that all three certified candidates for the primary are Democrats.

VIDEO: California is about to undertake a grand experiment in energy production, Dan Walters says.

SEEING BROWN: Gov. Jerry Brown will be at Sacramento's Jefferson Elementary School today for a press conference heralding a nonprofit that gets needy kids free eyeglasses. Things get underway at 10 a.m.

BOOZE BOOSTERS: Liquor lovers rejoice: eagerly anticipating a new law that will soon allow craft distilleries to charge for tastings,members of the California Artisanal Distillers Guild will be kicking off a liquor-sampling special in Alameda, along with bill author Nancy Skinner.

PHOTO: An election official files vote by mail ballots to be counted by precinct in Sacramento, Calif. on Wednesday, November 7, 2012. The Sacramento Bee/Renee C. Byer.

November 19, 2013
Dan Walters Daily: California's fracking future

Could California be on the verge of an energy boom? Dan examines the landscape.

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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