Capitol Alert

The latest on California politics and government

July 3, 2014
Undervote in California controller's race cost candidates


The ultra-tight finish in California's controller race might have been a lot different if some 422,000 voters last month had completed their ballots.

As of Friday, Board of Equalization member Betty Yee led former Assembly Speaker John A. Pérez by 481 votes for second place. Monday is the last day to request a recount.

There were 4.46 million ballots cast statewide, but only 4.04 million votes in the controllers race – a difference of almost 422,000 votes and an "undervote" rate of 10.45 percent.

More than a quarter of those ballots were in Los Angeles County, where about 111,000 voters skipped over the controller's race, an undervote of 13.5 percent.

Pérez topped Yee by 4.8 percent in Los Angeles County. In the more than 3,200 county precincts where the Los Angeles Democrat beat Yee, turnout averaged almost 16 percent – county turnout was 17 percent – and the undervote was 13.3 percent.

In the more than 1,450 precincts where Yee outpolled Pérez, turnout averaged 20 percent but the undervote was almost 14 percent.

Undervote ballots sometimes become part of the recount process, with campaigns checking if election officials missed actual votes. But Yee consultant Parke Skelton said he doubted that would happen.

"You can inspect undervotes, but there is no reason to assume they will break differently than the electorate as a whole," Skelton said in an e-mail.

PHOTO: Mike Lee marks his ballot while voting in Sacramento in the June 3 primary election. Associated Press Photo/Rich Pedroncelli

July 3, 2014
Huff, Steinberg tangle over press access to chambers


With the subject of his ire working in the press bay, Senate Republican leader Bob Huff of Diamond Bar called for the removal of a liberal documentary journalist on Thursday, saying only accredited media are allowed to access the floor of the chambers.

"I would ask that the sergeant at arms enforce the rules of the Senate," Huff said,

The office of Senate President Pro Tem Darrell Steinberg, D-Sacramento, had issued a one-day pass to James Gannon, who trekked to Sacramento from Los Angeles with the group 99Rise as part of their effort to get money out of politics.

Steinberg said Huff's concern was cloaked in the mantel of order and process, but was motivated by his displeasure with the journalist's political views. A conservative blogger like Jon Fleischman of the FlashReport would not have generated that kind of fury, he said.

Two years ago, Steinberg came under heavy criticism and later apologized after canceling television access to a hearing on a ballot measure to hike sales and income taxes.

"Whether it is the FlashReport, or a blogger which supports repeal of Citizen's United, I say as the leader of this chamber 'I welcome you all, so long as you act respectfully,'" Steinberg said, adding lawmakers have agreed to review the rules amid the changing media landscape. "In the meantime, we should err on the side of embracing freedom of the press."

Gannon, who said his background was in producing national cable news, told The Bee that he marched with the group before deciding it best to operate as independent media. Gannon said he wanted to be there to capture the spirit of the legislative process and that his final product would be a work of documentary journalism.

"The intention of my coverage is to be objective," he said.

99Rise organized the march to protest "out-of-control political spending of a small, wealthy elite." It is among the supporters of a bill that passed the Senate Thursday to place on the fall ballot an advisory measure calling for federal action to overturn Citizens United.

Huff insists the group and the reporter's politics have nothing to do with the discussion. Through a spokesman, he said he worried that the chambers were devolving into a political photo-op for groups that want to use the content obtained there to further their own agendas.

"I am ashamed," Huff said. "Change the rules; then we abide by them."

PHOTO: James Gannon, a liberal documentary journalist with ties to the group 99Rise, captures footage of the Senate floor session Thursday. The Sacramento Bee/Christopher Cadelago.

July 3, 2014
Homeowners win tax relief for 2013 mortgage debt forgiveness


After more than a year of political wrangling, the Assembly gave final approval Thursday to state income tax relief for beleaguered homeowners who sold their homes on short sales or obtained loan modifications from their lenders last year.

However, the tax exemption for "debt foregiveness" will apply only to those transactions that occurred in 2013, and homeowners who paid taxes on debt reductions they obtained last year would have to file amended tax returns to obtain refunds. The state estimates that the legislation will save taxpayers about $39 million overall.

The federal government exempts debt relief from taxation and the state followed suit in previous years, but a bill that would have extended it to 2013 became ensnarled a year ago in a complex political power play.

July 3, 2014
California Senate Democrats float smaller water bond

20140701_ha_watering0002.JPGA $10.5 billion water bond proposal having fizzled on the Senate floor, Democrats on Thursday unveiled a more modest $7.5 billion effort they hope will pass muster with Gov. Jerry Brown.

Water bond talks heated up a week ago with Gov. Jerry Brown joining the negotiations to say he would prefer a bond in the $6 billion range. A $10.5 billion plan pushed by Sen. Lois Wolk, D-Davis, stalled on the Senate floor as Republicans declined to give needed votes.

In the days since, senators have been cobbling together a compromise offer. They outlined the terms of a new, slimmed-down proposal on Thursday that would allocate $7.5 billion for new water projects, with $2 billion going to storage.

"It is certainly close to the price point that the governor put out as what he would like to see," said Senate President Pro Tem Darrell Steinberg, D-Sacramento.

Despite the diminished size, the new plan does not appear to have won over Republicans. Because any water bond bill requires a two-thirds vote at least two Republicans would need to vote in favor for a bill to advance out of the Senate. The GOP has said it wants $3 billion in storage projects included.

"It does not appear to be something our members would be inclined to support," said Peter DeMarco, a spokesman for Senate Minority Leader Bob Huff, R-Diamond Bar.

PHOTO: Sprinklers water grass at a home on Tuesday, July 1, 2014. The Sacramento Bee/Hector Amezcua.

July 3, 2014
Lawmakers approve tax credit for Boeing and Lockheed Martin


Despite late lobbying from an aerospace industry rival, lawmakers approved expedited legislation designed to give the state the upper hand in landing subcontracts for a new strategic bomber project.

The California Senate on Thursday approved a fast-tracked measure to grant $420 million in tax credits over 15 years for the production project involving veteran military contractors Boeing Co. and Lockheed Martin Corp. The measure passed 28-6.

The Assembly quickly followed suit before both houses headed off on a month-long recess.

Assembly Bill 2389 by Democratic Assemblyman Steve Fox and Republican Sen. Steve Knight, both of Palmdale, is meant to help reverse years of industry decline in California. It would provide a tax credit worth 17.5 percent of wages paid to manufacturing workers.

Knight framed the package as a seminal moment for the state to reclaim its status as the home of the aerospace industry.

"Call it an investment. There is nothing unless we get something," he said. "This is an incentive plan that we should be behind."

But critics including Ben Hueso, D-San Diego, denounced the pact as corporate welfare, morally wrong and "not the biggest priority facing California today."

"The opportunity costs in this are just too high for me," added Sen. Loni Hancock, D-Berkeley, noting lawmakers should prioritize the needs of school children and infrastructure.

July 3, 2014
Perea bill would delay California cap-and-trade for gas

Thumbnail image for pereaedd.jpgDemocratic fissures over California's cap-and-trade mandates deepened on Thursday, with a key moderate Democrat introducing a bill to push back a looming rule expected to cause a spike in prices at the pump.

Assembly Bill 69 by Assemblyman Henry Perea, D-Fresno, would delay for three years a rule requiring the energy industry to purchase permits for transportation fuels. Lawmakers and critics have been warning for months about a resulting price bump.

California's landmark emissions-reducing law, AB 32, erected a first-in-the-nation carbon permitting program. The cap-and-trade program allows industry to buy allowances offsetting the climate change-fueling greenhouse gases they pour into the air.

The new system has already begun generating millions in revenue, with this year's budget dedicating the new revenue stream to a mix of affordable housing, mass transit and the high-speed rail project championed by Gov. Jerry Brown.

But the coming inclusion of transportation fuel into the program is threatening to push gas prices up, prompting alarm from pro-business Democrats. In a show of broad discontent, 16 Democrats last week sent a letter to the Air Resources Board urging the air quality regulator to delay implementing the new rule. Despite the complaint, all but one of them voted to spend the money the rule is expected to generate.

In response, 32 Democratic lawmakers signed a letter to Gov. Jerry Brown urging the governor to stay the course and bring fuel producers under the emissions regime on schedule. Environmentalists also decried Perea's bill.

"A fundamental redesign of AB 32 that allows oil companies to play by different rules than other industries would not only unacceptably delay action to reduce climate pollution, but could also disadvantage those industries that have already made investments to comply with the law," reads the letter, which bears the signature of both senators and Assembly members.

Perea said he still supports AB 32's overarching goal of reducing emissions but does not believe consumers have been adequately prepared.

"What we're really trying to do on this is create a public discussion, because I'm not sure the public is aware of cap and trade and what it's going to do to their pocketbooks," Perea said.

Editor's note: This post was updated July 3 at 3:40 p.m. to include the letter responding to Perea's bill.

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

July 3, 2014
AM Alert: Lawmakers leave for districts and a few trips

flight.JPGAfter floor sessions today, legislators will leave for recess, marking the fourth year in a row lawmakers have been able to count on an uninterrupted break after enacting a state budget. The last extended battle over the budget came in 2010, a 100-day standoff that lasted until October. Voters responded with Proposition 25, which stripped the minority party of its power to block the annual spending plan.

With no budget battle looming, lawmakers can head home to their districts to spend the month with families and constituents. But for some, the break will not be without some official business. In past years, legislators have used the gap to travel to conferences, retreats and workshops for interest groups or political parties.

Several lawmakers have already penciled in trips for this July. Assembly GOP leader Connie Conway plans to travel to Colorado for theRepublican Legislative Campaign Committee's national meeting from July 17-19. Across the aisle, Sen. Alex Padilla, D-Los Angeles, will travel to Oakland for a mid-July speech during a lunch at the California Democratic Party Executive Meeting in Oakland.

It's also possible that some July junkets have yet to be scheduled. A Pacific Policy Research Foundation trip that brought six legislators to North Dakota in August came together last year at the last minute. Roy Ashburn, an executive for the organization, which once organized a trip to Hawaii, said its booked no July trips but did not rule out the possibility that one could still be put on the calendar.

Gov. Jerry Brown, who has been visiting family in Michigan with First Lady Anne Gust Brown, will embark on an excursion of his own in July. Brown plans to leave at the end of the month for a four-day trip to Mexico where he's expected to address climate and trade.

VIDEO: The state Senate should examine its own hiring practices before turning its focus to the state workforce, Dan Walters says.

FREQUENT FLYERS:The Senate Appropriations Committee plans to meet during today's floor session to discuss an aerospace tax break that would apparently benefit Lockheed Martin and Boeing. How the subsidies would be financed and their effect on smaller contractors has become a subject of concern for some. Dan Walters has more on the controversy in a column earlier this week. The Senate will meet at 9 a.m.

47 ARRESTS LATER: As legislators leave for July, so too might the campaign finance protesters who have camped out on the corner of L and 10th Streets for more than a week. Since they arrived on June 22, activists have been arrested nearly 50 times for refusing to leave the Capitol building, according to Kai Newkirk, co-founder of 99Rise, an organization supporting the protest. The group will decide whether to fold its tent after an expected Senate vote on a ballot measure asking voters if they favor a constitutional amendment to address election spending.

Newkirk said activists met with staff from the governor's office yesterday and have received support from several lawmakers, including Senate leader Darrell Steinberg and Sen. Ted Lieu, D-Torrance.

CELEBRATIONS: A happy birthday to Assemblyman Richard Gordon, D-Menlo Park, who turns 66 today, and to Sen. Rod Wright, D-Inglewood, who will be 62.

'HEAL OUR LAND': Religious activists plan to gather for a July 4th prayer rally protesting the federal government's overreach on moral and economic issues. The demonstration, sponsored by Operation American Spring, will begin at 2 p.m on the South Steps of the Capitol. The activists will return for a second rally on July 5th at 10 a.m.

PHOTO: Travelers check in at the United Airlines ticket counter at Terminal 1 in O'Hare International Airport in Chicago. Nam Y. Huh / Associated Press

July 3, 2014
Dan Walters Daily: Senators show hypocrisy in concern over civil service

RBCapitolDome.JPGThe Senate should examine its own hiring practices before turning its focus to those of the state workforce, 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 Capitol dome on December 11, 2006. The Sacramento Bee/Randall Benton


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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