Capitol Alert

The latest on California politics and government

November 21, 2013
GOP's gubernatorial hopefuls off to Arizona, Central America

maldonadopresser.jpgWhile Gov. Jerry Brown enjoys a projected state budget surplus and raises money for his re-election effort in Los Angeles on Thursday, his Republican challengers are looking for stimulation farther afield.

Former Lt. Gov. Abel Maldonado will fly on Friday to Honduras, where he will participate as an international observer in that country's presidential election. He will then travel to Guatemala for meetings with elected officials before returning to California on Wednesday, adviser Ron Nehring said.

The candidate is interested in "human trafficking, the drug trade and associated violence, confronting corruption and promoting economic growth and trade," his campaign said in a release.

Meanwhile, Tim Donnelly announced Thursday he is in Scottsdale, Ariz., for a meeting of the Republican Governors Association. The Twin Peaks assemblyman said he is meeting with governors, but he declined to say which ones.

Donnelly said "every state that has a Republican governor seems to be doing really well."

Among other factors, Donnelly cited unemployment rates, job creation efforts and tax policies in Republican-led states.

Such comparisons are fraught with difficulties. Of the 10 states with the lowest unemployment rates, for example, six are governed by Republicans. But they also govern all but three of the 10 states where the unemployment rate is highest.

New Jersey Gov. Chris Christie, whose state is in the latter group, was elected chairman of the Republican Governors Association on Thursday. Donnelly, a tea party favorite, said despite disagreeing with the more moderate Christie on any number of policy issues, "I think he does have some insights that I can learn from."

Asked what those might be, Donnelly said, "How he won in a state that's completely dominated by the other party."

PHOTO: Abel Maldonado speaks to reporters in Sacramento on May 8, 2013. The Sacramento Bee/Hector Amezcua

November 21, 2013
Jerry Brown urges caution on California budget outlook

brownnga.jpgOne day after the Legislature's fiscal analyst projected years of multibillion-dollar budget surpluses, Gov. Jerry Brown urged caution Thursday, calling on the Legislature to bolster reserves.

"It turns out, according to the legislative analyst, we have billions of dollars in surplus," Brown said at an event in Santa Monica. "So there will be a great effort to spend it as quickly as possible."

The Democratic governor, speaking at the Milken Institute California Summit, said the budget's reliance on capital gains - a traditionally volatile source of revenue - makes financial peaks and valleys more pronounced.

"The question is, 'When do we get the next valley?'" he said. "And the only way to avoid that is to put it in a rainy day fund, to say no when necessary, along with saying yes when that's appropriate."

The nonpartisan Legislative Analyst's Office projected Wednesday that the state will enjoy a $5.6 billion surplus by June 2015, with annual surpluses reaching $8.3 billion by the 2016-17 budget year. The office urged lawmakers to hold much of any excess in reserve, warning that even a moderate economic downturn could knock the state back into deficit.

Brown and the Democratic-controlled Legislature are under pressure from social service advocates to restore or expand programs cut during the recession, and calls for increased spending are likely to intensify in budget talks next year.

Brown said he has a "lot of optimism about this state. I mean, I would have never thought we could go from financial instability to stability and surplus, and we can do that."
But he said significant financial concerns remain.

"We have deferred maintenance on our roads, that is serious, we have unfunded and growing liabilities in our pension and retiree health - state, university and local level," Brown said. "That's real."

Brown was scheduled to remain in Los Angeles on Thursday evening to attend a fundraiser hosted by movie industry executives. The third-term governor has not yet said if he will seek re-election, but he is widely expected to run.

"It will be a successful event," Brown said when asked about the fundraiser earlier this week. "As you know, raising funds for any potential campaign takes a good deal of time and I don't jump into these things lightly."

The Bee's Christopher Cadelago contributed to this report.

PHOTO: Gov. Jerry Brown at a meeting of the National Governors Association in Washington on Feb. 24, 2013. AP Photo/Manuel Balce Ceneta

November 21, 2013
California OKs rule to remove flame-fighting furniture chemicals

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California has approved rules to curtail the presence of hazardous flame-retardant chemicals in furniture, Gov. Jerry Brown announced on Thursday.

"Today, California is curbing toxic chemicals found in everything from high chairs to sofas," Brown said in a release. "These new standards will keep the furniture in our homes fire-safe and limit unnecessary exposure to toxic flame retardants."

Health advocates have pushed for a rule change that would limit the sale of furniture containing chemically treated, flame-resistant foam. The new guidelines require furniture to be capable of withstanding smoldering fires, rather than the stricter open flame standard that had strengthened the case for using flame-resistant chemicals.

"We don't specify how manufacturers manufacture, we tell them they have to meet a standard," Department of Consumer Affairs spokesman Russ Heimerich said. Now that the open-flame safeguard is no longer required, Heimerich added, "most of them have said it doesn't make sense to spend that extra money."

The new rules take effect Jan. 1, which will open a one-year window in which furniture makers can build to either the old or the incoming standard. Compliance with the new rules will become mandatory on Jan. 1, 2015.

Advocates pushing for the change have warned that the flame-repelling chemicals carry serious health risks, both for firefighters breathing in the smoke released in blazes and for children who are exposed to the chemical dust that filters out of furniture. They say most fires begin with smoldering fires, not open blazes.

Opposing the rules have been chemical companies arguing that the downgraded standards expose people to a higher risk of fire.

"Families in California should have serious concerns that state officials are lowering fire standards and removing an important layer of fire protection that has benefited Californians for more than 35 years," Steve Risotto of the industry-backed North American Flame Retardant Alliance said in a statement.

PHOTO: Members of the Elk Grove Community Services District Fire Department clean up the remains of a house fire on December 7, 2005. The Sacramento Bee/Autumn Cruz.

November 21, 2013
California staying the course on expiring health plans

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California's health insurance exchange has declined a presidential invitation permitting insurers to grant extensions to more than 1 million customers with policies set to terminate at year's end.

Covered California officials said they were leery of giving insurance companies more time to terminate individual policies that don't conform to the federal heathcare overhaul, or were obtained after its passage in March 2010.

Chairwoman Diana Dooley said she was troubled by the impact of the cancellations, "But fundamental mitigation is not possible," she said.

"If I thought for a minute that by delaying it we could solve some of the problems I would delay it," added Susan Kennedy.

Any decision at the exchange's board meeting Thursday would have been conditioned on working out separate agreements with 11 health plans.

In a retreat, President Barack Obama announced last week that states could extend millions of canceled insurance policies for another year amid uproar over his broken pledge that those who like their plans would be able to keep them.

Several states, including Washington, Minnesota and Vermont, have rebuffed calls to alter their courses. About 600,000 Californians with canceled plans could expect to pay more for coverage.

Covered California Executive Director Peter V. Lee advocated maintaining the status quo while joining with the insurers to expand outreach. He and exchange officials argued that any extension could cause broad instability.

They said customers eligible for subsidies would be unnecessarily paying rates anywhere from 1.7-to-3.3 times higher than what is available through the exchange. They also warned about insurers offering "last-minute" renewals in an effort to outmaneuver competitors, destabilizing the the viability of the health law. The state also described meeting noticing deadlines as "a mess."

Other critics of extending non-compliant polices worried about increased rates because fewer younger and healthier people would be in the exchange risk pool.

But Insurance Commissioner Dave Jones rejected the argument that releasing insurers from the contract would harm the exchange or the state's implementation of the healthcare law.

Jones over the last two weeks has already negotiated two- and three-month extensions for some customers with two of the state's largest insurers.

In a letter to the state exchange Wednesday, Jones argued that many of the concerns were misplaced. The federal health law has a robust set of mechanisms to protect health insurers and offset impacts to the risk pool, Jones wrote.

Nearly 80,000 people enrolled in exchange plans through Tuesday.

Darcel Lee, executive director of the California Black Health Network, applauded the exchange's outreach efforts and said any delays would only add to her challenges to enroll new customers.

"This is one hot mess," Lee said. "We are going to be so challenged with explaining this to our constituents, who we already know are confused."

PHOTO: Kristy Farrington, a student at Sacramento State University, looks at a pamphlet with information on Covered California on Oct. 16, 2013.

November 21, 2013
Obama to push for immigration changes in San Francisco speech

Thumbnail image for Obama.jpgPresident Barack Obama will continue to press his case for immigration law changes in a speech Monday in San Francisco, a White House official said.

Obama, who is visiting the Bay Area for a fundraiser, will visit the Betty Ong Recreation Center to "deliver remarks on the importance of taking action to pass commonsense immigration reform," the White House said.

It provided no other details about the visit.

Obama is pushing ahead on immigration despite resistance in the House and the distraction of his bungled rollout of the federal healthcare overhaul.

The U.S. Senate in June approved legislation that would pay for increased border security and create a guest-worker program and a path to citizenship for undocumented immigrants. The measure is stalled in the House, with many Republicans resistant.

Obama, speaking in Washington on Tuesday, said he is "actually optimistic that we're going to get this done."

Obama will be in San Francisco for a previously announced fundraiser at the SFJazz Center. The Bay Area has been a lucrative fundraising location for the president, and he is likely to find the state receptive to his immigration views.

In recent years Gov. Jerry Brown and the Legislature have enacted laws allowing undocumented immigrant college students to receive public financial aid and granting driver's licenses to undocumented immigrants, among other measures.

PHOTO: President Barack Obama waves to the media as he walks on the South Lawn of the White House in Washington after returning on Marine One from Camp David, Md., where he spent his birthday Sunday, Aug. 4, 2013. Associated Press/Jacquelyn Martin.

November 21, 2013
California auditor raises concerns about Salton Sea strategy

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California officials need to start focusing on restoring the ailing Salton Sea or else the state faces hundreds of millions of dollars in new costs as early as 2025, according to a new state audit.

The sea, the state's largest body of water, has been steadily shrinking, exposing the polluted seabed to desert winds. Experts say air-quality risks will increase beginning in 2017, when the sea stops receiving extra water as part of a landmark 2003 pact that reduces the flow the state receives from the Colorado River.

The state, though, has taken only small steps to fix the sea. Today's report by the Bureau of State Audits found that the Salton Sea Restoration Fund — the account created by the Legislature in 2003 to pay for mitigation projects and other work at the sea — is projected to have received $81.8 million through 2047. That is only a fraction of the lowest cost estimates for restoring the sea, which range from $2.3 billion to $8.9 billion.

The state will be on the hook for all sea-related costs as early as 2025, according to the audit. The bureau recommends that the Legislature and the state Resources Agency better define the components of a study lawmakers approved looking at possible restoration work — and how to pay for it.

"It is imperative that the feasibility study also include viable funding options for hte proposed restoration activities," the audit recommended.

In his response to the audit, Secretary of Resources John Laird said his agency has no concerns with the auditors' recommendations "and looks forward to working with the Legislature on this very important issue."

PHOTO A man and his son enjoy a morning along the Salton Sea State Recreation Area, along the sea's northeast shore, in 2002. The Salton Sea, located in Imperial and Riverside counties, is the largest body of water within California. The Sacramento Bee / Dick Schmidt

November 21, 2013
National Republican outfit backs all three Ami Bera challengers

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The National Republican Congressional Committee doesn't want to pick sides — not yet at least.

In three identically worded emails, the organization announced that Elizabeth Emken, Doug Ose and Igor Berman had been selected for the candidate-boosting "On the Radar" program. Each of them, according to the emails, is "certain" to be "a strong contender this election cycle."

But all three candidates are vying to unseat freshman Rep. Ami Bera, D-Elk Grove, in California's 7th Congressional District. Emken, Berman and Ose may share a party affiliation, but for the purposes of the 2014 election they remain rivals.

The program is intended to provide advice and guidance to promising candidates without elevating one Republican over the others, NRCC spokeswoman Alleigh Marre said. Candidates must provide regular updates on whether they are meeting benchmarks in areas like finances and media planning.

"We don't endorse a candidate in the primary, but if we have someone that is meeting these thresholds we are helpful to them," Marre said.

Bera's district represents a competitive target for both parties, with all three of the Republican contenders already stocking their war chests. Bera's district is one of a few California seats getting attention from the national parties.

PHOTO: Democratic congressional candidate Ami Bera with campaign supporters at the Elks Lodge in Carmichael on Nov. 6, 2012. The Sacramento Bee/Manny Crisostomo.

November 21, 2013
California Controller Chiang sues firm over failed payroll project

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After months of finger-pointing over who is to blame for a failed payroll system upgrade, California Controller John Chiang is taking global tech firm SAP Public Services Inc. to court for breach of contract.

Andy Kendzie, spokesman for SAP, said this morning that the company wouldn't comment on the specific of the lawsuit, which its lawyers are reviewing.

"SAP software is not the culprit here. Our software works exactly as its designed to work," he said. "We stand behind our software and our actions."

The complaint filed in Sacramento County Superior Court seeks an unspecified amount of money for damages incurred by the state. It opens a new round in the months-long fight between Chiang and the Pennsylvania-based company over a $89.7 million contract to implement the MyCalPays/21st Century project software SAP developed,

Glitches plagued test runs of the program. Chiang finally ended the effort in February after a small roll-out of its payroll program failed — and government officials learned of the failures from affected employees, not SAP. The mistakes included everything from child-support payments incorrectly withheld to outright pay miscalculations.

The lawsuit contends that, among other things, SAP failed to transfer knowledge to state employees, failed to adequately test the system, concealed problems, and when bidding on the project, "overstated its track record and the talent, abilities and experience of its team on the ground to deliver a functioning system."

Editors note, 10:35 a.m.: This story was changed to include a comment from SAP.

PHOTO: California Controller John Chiang speaks at the Bee Capitol Bureau in 2011. The Sacramento Bee/Hector Amezcua

November 21, 2013
AM Alert: California's government overhaul examined

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Who says railing against government inefficiency is a partisan issue? You may remember that, citing government redundancy and bloat, Gov. Jerry Brown successfully pushed a plan in 2012 to reduce the number of state agencies and consolidate other parts of the vast state bureaucracy.

Today the Little Hoover Commission will assess how things are going, summoning a list of state agency representatives who can describe what's getting streamlined and how things will operate in coming years.

Those speakers are expected to include Marybel Batjer, secretary of the California Government Operations Agency; Julie Chapman and Stacie Abbott of the California Department of Human Resources; Tina Campbell of the Employment Development Department and Patricia Clarey and Suzanne Ambrose of the State Personnel Board. Starting at 9:30 a.m. in State Capitol room 437.

VIDEO: Tuesday's elections offer some warning signs for California Democrats, Dan Walters says.

MILKEN IT: Gov. Jerry Brown will be in Santa Monica today, giving remarks at a Milken Institute-sponsored California Summit. The governor is expected to address the state's economy and the policy path ahead.

DUKE'S COURT: An event today dedicating a gleaming new Long Beach courthouse will officially christen the building as the Gov. George Deukmejian Courthouse. Guests at the 3:30 p.m. event will include Deukmejian and California Supreme Court Associate Justice Marvin Baxter.

RECALL MADNESS: As long as we're on the topic of governors past and present, Sacramento State University will be looking back at the 2003 electoral circus today. "Born to Run," apparently also known as "Gubernatorious," is a documentary following five political neophytes who a decade ago joined the fray of candidates vying to replace Gov. Gray Davis. The screening starts at 6 p.m. in Sac State's Mendocino Hall.

TY-FUNDS: Some people who orbit in Sacramento's legislative galaxy will be gathering at Chops tonight to raise money for the victims of Typhoon Haiyan. The charity event, organized by Dan Jacobson of Environment California, will run from 4 p.m. to 7 p.m.

November 21, 2013
Dan Walters Daily: California Dems face ballot backlash

Dan finds some signs that the Democratic grip on California politics is loosening a bit.

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

See other Dan Walters Daily clips here.



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Capitol Alert Staff


Jeremy White Jeremy B. White covers California politics and edits Capitol Alert's mobile Insider Edition. jwhite@sacbee.com. Twitter: @capitolalert

Amy Chance Amy Chance is political editor for The Sacramento Bee. achance@sacbee.com. Twitter: @Amy_Chance

Dan Smith Dan Smith is Capitol bureau chief for The Sacramento Bee. smith@sacbee.com

Christopher Cadelago Christopher Cadelago covers California politics and health care. ccadelago@sacbee.com. Twitter: @ccadelago

Micaela Massimino Micaela Massimino edits Capitol Alert. mmassimino@sacbee.com

Laurel Rosenhall Laurel Rosenhall covers the Legislature, the lobbying community and higher education. lrosenhall@sacbee.com. Twitter: @LaurelRosenhall

David Siders David Siders covers the Brown administration. dsiders@sacbee.com. Twitter: @davidsiders

Dan Walters Dan Walters is a columnist for The Sacramento Bee. dwalters@sacbee.com. Twitter: @WaltersBee

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