Capitol Alert

The latest on California politics and government

February 20, 2014
Steinberg: Predictable gas tax better than swinging pump prices


Californians gassing up their cars would pay a carbon tax — starting at 15 cents per gallon next year and rising to 43 cents per gallon in 2030 — under a proposal Senate leader Darrell Steinberg introduced Thursday.

He touted the plan as a better alternative to the rising gas prices drivers would otherwise see under California's existing law to reduce greenhouse gas emissions. Under that 2006 law, known as Assembly Bill 32, oil companies will have to buy carbon credits for all the fuel they sell starting next year. Experts expect that will lead to a rise in gas prices that could fluctuate unpredictably.

Steinberg said his plan would provide more stability.

"We must reduce the amount of carbon we put into the air, and that will come with a price.
Nothing is free. A carbon tax is not free and cap and trade is not free," Steinberg said while unveiling the proposal to the Sacramento Press Club.

"Under either, applied to fuel, consumers will undoubtedly pay more at the pump. It may not be popular to say, but that's necessary. Higher prices discourage demand. if carbon pricing doesn't sting, at least a little bit, we won't change our habits."

Steinberg's plan calls for spending the taxes generated — estimated at more than $3 billion in the first year — to improve public transportation and give income tax credits to California families making up to $75,000 a year. That would give about $600 back to the average qualifying household, Steinberg said.

"How many more Californians could we lift from the reach of poverty while healing our climate at the same time?" Steinberg said.

He compared his proposed tax break to the federal Earned Income Tax Credit, which he said has helped millions of poor people.

February 20, 2014
Moody's warns bankrupt cities they must cut pension debts

Moodys1.jpgMoody's Investors Services, a major bond rating house, warned Thursday that if bankrupt California cities don't reduce their pension obligations, they risk returning to insolvency.

The warning was aimed directly at two bankrupt cities, Stockton and San Bernardino, but Moody's cited the experience of Vallejo, which emerged from an earlier bankruptcy without reducing its pension debt and is once again facing fiscal turmoil.

"In California, particularly for municipalities with pensions under the California Public Employees Retiree System, or CalPERS, bondholders will likely continue to pay a steep price if bankruptcies remain venues for restructuring debt obligations but pension liabilities remain untouched," Moody's Vice President Gregory Lipitz said in a special report on the California situation.

Stockton did not seek to reduce its pension obligations, despite pressure from other creditors, and has nearly concluded a deal with creditors on a recovery plan.

San Bernardino is still in the mediation process with creditors, but has indicated that it may seek pension modification.

February 20, 2014
California chamber appeals ruling on cap-and-trade fees

California_Greenhouse_Gases.jpgThe California Chamber of Commerce is appealing a local judge's ruling that California's "cap-and-trade" fees on business to curb greenhouse gas emissions are legal.

The business organization maintains that when the Air Resources Board adopted the fee program, which is expected to raise billions of dollars, it violated a constitutional provision, passed in 1978 as part of Proposition 13, that requires two-thirds legislative vote on new taxes.

It maintains that fee revenue in excess of that needed to administer the state's greenhouse gas reduction program are illegal taxes and is taking that contention to the 3rd District Court of Appeal in response to Sacramento County Judge Timothy Frawley's ruling in November. He declared that Assembly Bill 32, California's anti-greenhouse gas law, was sufficient authority for the fees.

"We stand by our belief that the Legislature in passing AB 32 did not authorize the ARB to raise revenue for the state beyond those costs necessary to administer the program," said Allan Zaremberg, the chamber's president, said in a statement. "We also believe the ARB's auction violates Proposition 13, because it imposes a new tax that did not receive two-thirds approval by the Legislature."

Gov. Jerry Brown is counting on the fees for variety of spending, including drought relief and a proposed bullet train system linking the northern and southern halves of the state.

"We believe that the judge inappropriately created a new category of regulatory fees," said Zaremberg, "in order to avoid ruling that the revenues came from an illegal tax -- not approved by two-thirds of the Legislature. The judge himself called this a close question.'"

February 20, 2014
Darrell Steinberg expected to introduce new tax on buying gas

gasprices.JPGSenate leader Darrell Steinberg is expected to introduce a controversial proposal today to place a new tax on drivers buying gas at the pump and divert the money to transit projects and tax credits for low- and middle-income Californians.

The proposal would remove an upcoming requirement that oil companies buy carbon credits for the fuels that they sell to consumers, while leaving in place the requirement that they enter the cap-and-trade market for pollution they produce at their refineries. That would be a change to California's landmark greenhouse gas reduction law known as Assembly Bill 32, written by Sen. Fran Pavley.

"This proposal will say, 'OK fuel sector, you don't have to... reduce your greenhouse gas emissions anymore,'" Pavley said.

"It pokes a big hole in the whole policy of AB 32, of treating all the major polluters equally."

Steinberg declined to talk about details of his proposal before his noon appearance at the Sacramento Press Club. This morning, he said only that he would be making an announcement concerning "climate change and poverty," and that he expected his proposal to spark a vigorous debate inside the Capitol.

Editor's note: This post was updated at 3:12 p.m. to clarify the impact of the proposal on oil companies.

February 20, 2014
Norma Torres wades into 35th Congressional District race


Let the musical chairs begin again — Inland Empire style.

When San Bernardino County Supervisor Gary Ovitt decided not to seek another term, Democratic Rep. Gloria Negrete McLeod of Chino slid into the race, setting up a clash with Republican Assemblyman Curt Hagman of Chino Hills.

The maneuvering has provided yet another opening for Sen. Norma Torres of Pomona, who just last year won a special election to fill the seat left vacant by Negrete McLeod's elevation. In a statement, Torres talked about moving up the ranks of local politics, from serving on the city council to becoming mayor and then being elected to the Assembly.

"In Congress I will continue my fight for better jobs, to protect families from the fallout from the housing crisis, to improve local transportation infrastructure, protect Medicare and Social Security and to help Ontario Airport regain its footing as a hub of regional economic activity," Torres said.

Her election to the 35th district would set off a mad dash for the redrawn 20th Senate District, which mostly overlaps the expiring 32nd Senate District that Torres represents. Possible contenders are Democratic Assemblywoman Cheryl Brown of San Bernardino and Democratic Assemblyman Freddie Rodriguez of Pomona, who won a special election to succeed Torres. Ontario Mayor Paul Leon, who ran as an independent when he lost to Rodriguez last summer — after falling to Torres as a Republican — may also give it another go. Another possibility is former Assemblywoman Wilmer Amina Carter, D-Rialto.

PHOTO: Sen. Norma Torres, D-Pomona

February 20, 2014
Assembly passes bill requiring more nonprofit campaign disclosures


A bill requiring greater transparency from electioneering nonprofits is one step away from Gov. Jerry Brown.

Lawmakers have sought to fortify campaign spending rules since out-of-state nonprofit groups poured $11 million into the 2012 election cycle, a flexing of financial muscle that eventually earned the entities a $1 million California Fair Political Practices Commission fine.

"Simply put, our law needs to catch up with the way in which nonprofits found to skirt reporting requirements," Assemblyman Rich Gordon, D-Menlo Park, said in bringing to the floor a bill designed to force more disclosures.

Unlike donations to political action committees, contributions to nonprofit groups do not require disclosure. Advocates of tougher laws say the current system enables a shell game, with donors able to influence elections but cloak their identity. (Here is a good depiction of how it works).

Senate Bill 27, by Sen. Lou Correa, D-Santa Ana, seeks to address the situation by laying out circumstances in which politically active nonprofits must announce donor lists.

In a show of their supermajority might, Assembly Democrats mustered 55 votes -- one more than the two thirds required to pass the measure and send it back to the Senate for a concurrence vote. The bill has an urgency clause that would make it take effect prior to the 2014 election.

"If you're going to give money to a nonprofit and you know it's going to be used for campaign purposes, just disclose it," Correa said after the vote. "It's a very simple concept, which is that people need to know who is supporting what causes or which candidates."

The measure drew opposition from Republicans, who argued that donors should be allowed to remain unidentified to protect themselves from retaliation. Assemblyman Don Wagner, R-Irvine, cited a a 1958 U.S. Supreme Court decision allowing donors to the National Association for the Advancement of Colored People to remain anonymous for fear of reprisal.

"You have a right to participate in this democracy. You have to a right do it anonymously," Wagner said.

As the Assembly was acting on Correa's bill, the Senate approved a bill by Gordon that also seeks broader campaign finance disclosures.

PHOTO: Assemblyman Richard Gordon, D-Menlo Park, seen here during session in the Assembly on Monday, March 11, 2013, said the bill would give voters needed information. Hector Amezcua/The Sacramento Bee.

February 20, 2014
Gun owner Kashkari says he's not running on Second Amendment agenda

kashkarisacstate.jpgNeel Kashkari said Wednesday that he owns four guns and supports gun rights but is "not running on an agenda of the Second Amendment," highlighting a contrast with Tim Donnelly, the other main Republican running for governor.

"If you're a single issue voter, and you just want someone to give you a full capacity assault rifle magazine, God bless you, you can go vote for somebody else," Kashkari told a group of college Republicans at California State University, Sacramento. "I'm not your guy."

Donnelly, a Twin Peaks assemblyman, is the Legislature's most outspoken gun rights advocate. He pleaded no contest in 2012 to two misdemeanor gun charges related to the discovery of a loaded firearm in his carry-on bag at a Southern California airport, and he has used publicity around the incident to promote himself to conservative audiences.

Kashkari, the more moderate Republican challenging Democratic Gov. Jerry Brown, said the most common questions he gets on Facebook are about the Second Amendment.

"I do know philosophically that I deeply believe in protecting my own gun rights, and that means protecting your gun rights," Kashkari said. "But I also believe that, you know, we need to be reasonable about things."

Kashkari spoke broadly against "layering more gun rules on me, on responsible gun owners," saying additional restrictions will not prevent gun violence or make people safer. But the former U.S. Treasury Department official said he does not oppose waiting periods or background checks, which he said "didn't inconvenience me in the slightest" when he has purchased guns.

Kashkari also said, "I'm not fearful of the Army coming and marching on my home, so I don't have guns to try to defend myself against the Army. I have guns for my own sport, for my own personal protection, etcetera."

Kashkari said after the event that he owns two 9mm Glock 17 pistols, one Weatherby rifle and one shotgun, a Remington 870 Express.

When a student suggested the purpose of the Second Amendment is to ensure citizens can overthrow a tyrannical government, if necessary, Kashkari said, "I understand that, and I hear you on that, but if the Army decides to come in with an M1 tank, good luck."

PHOTO: Neel Kashkari speaks to college Republicans at California State University, Sacramento, on Feb. 19, 2014. The Sacramento Bee/David Siders

February 20, 2014
AM Alert: FPPC rules on record Kevin Sloat fine

wine_bottles.JPGWhen the Fair Political Practices Commission cracked down on lobbyist Kevin Sloat earlier this month for hosting lavish political fundraisers at his home, it sent a shockwave through the Capitol.

Long accepted by Sacramento insiders as part of doing business, the FPPC determined that the events exceeded strict limits placed on lobbyists and amounted to illegal campaign contributions. Sloat was hit with a $133,500 fine, the largest ever for a violation of state laws regulating lobbyists.

The commission will consider whether to finalize that deal during its meeting at 10 a.m. at the FPPC building on J Street. Though this is likely the culmination of the process, it is possible the commission could reject the fine and order its staff to negotiate a new agreement with Sloat.

VIDEO: Progress has been slow, but at least California is finally confronting its massive pension problem, Dan Walters says.

WATER CONFERENCE: Between the proposed Delta tunnels and the drought, water issues have been dominating the headlines in Sacramento for months. For those who need to brush up on this complex topic, Capitol Weekly and the UC Center Sacramento host an all-day conference on the future of California's water, starting at 9 a.m. at the Sacramento Masonic Temple on J Street. State and local water officials and politicians including state Sen. Lois Wolk, D-Davis, and Assemblywoman Connie Conway, R-Tulare, are slated to offer their expertise.

EARLY EDUCATION: Calling for greater access to early childhood education to close the achievement gap, Assembly Speaker John A. Pérez and advocates from Raising California Together rally on the north steps of the Capitol at 12:15 p.m. Joining them is 8-year-old "Kid Governor" Celeste Umaña, with corgi by her side. (Hmm, remind you of someone else around these parts?)

PRO TEM INSIGHTS: As he enters his final year in office, state Senate President Pro Tem Darrell Steinberg has made a strong push for several new policy initiatives, including universal pre-kindergarten. Addressing the Sacramento Press Club at noon at the Capitol Plaza Ballroom on 9th Street, he outlines his remaining goals and how he believes the state should spend its budget surplus.

WORKPLACE VIOLENCE: Nurses and healthcare workers will appear before the Occupational Health and Safety Standards Board today to ask for the adoption of comprehensive violence prevention standards in their workplaces. The groups say that they regularly face violent assaults on the job. The meeting takes place at 10 a.m. at the State Resources Building on 9th Street.

CELEBRATIONS: Happy birthday to Assemblyman Matt Dababneh, D-Sherman Oaks, who turns 33 today.

PHOTO: Aji Japanese Bistro in El Dorado Hills offers 17 wines and champagne by the glass on January 21, 2014. The Sacramento Bee/Jose Luis Villegas

February 20, 2014
Dan Walters Daily: California coming to grips with pension problems

CalPERS_building.JPGThe state has been slow with solutions, but at least it's finally addressing the massive unfunded liabilities of its employee retirement systems, Dan says.

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

See other Dan Walters Daily clips here.

PHOTO: The CalPERS building in Sacramento.The Sacramento Bee/Anne Chadwick William


Capitol Alert Staff

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. Twitter: @DanielSnowSmith

Jim Miller Jim Miller covers California policy and politics and edits Capitol Alert. Twitter: @jimmiller2

David Siders David Siders covers the Brown administration. Twitter: @davidsiders

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

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

Jeremy White Jeremy B. White covers the Legislature. Twitter: @capitolalert

Koseff Alexei Koseff edits Capitol Alert's mobile Insider Edition. Twitter: @akoseff

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

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