Capitol Alert

The latest on California politics and government

June 26, 2014
Measure to reduce sentences for theft, drugs on California ballot

An initiative to reduce crimes such as drug possession and receiving stolen property from felonies to misdemeanors - and to use the savings for mental health and drug treatment programs - has qualified for the ballot in November, the secretary of state announced Thursday.

The push by San Francisco District Attorney George Gascón and former San Diego Police Chief William Lansdowne would require misdemeanor sentences for petty theft and writing bad checks of $950 or less. It would require resentencing for those serving time for such nonviolent felonies unless the court finds it a risk to public safety.

Through March, proponents' "Californians for Safe Neighborhoods and Schools" committee had raised $1.3 million and spent just over $1 million, including $938,000 on signature gathering.

The top contributors through March were the Atlantic Advocacy Fund, a New York-based charity established by billionaire Charles Feeney that gave $600,000, and businessman B. Wayne Hughes Jr., who gave $250,000.

The initiative comes two years after voters passed a measure to roll back the three strikes law by imposing life sentences only when new felony convictions are serious or violent. The latest effort still allows for felony sentences if the person was previously convicted of rape, murder or child molestation, or was required to register as a sex offender.

Budget analysts predict the measure could save hundreds of millions in annual court and criminal justice costs that could go to truancy prevention, mental health and substance abuse treatment and victim services.

PHOTO: San Francisco District Attorney George Gascon, right and Alameda County District Attorney Nancy O'Malley, left, smile during a news conference in front of the San Francisco-Oakland Bay Bridge in San Francisco on May 9, 2012. (AP Photo/Paul Sakuma)

June 26, 2014
California school bond measure advances


A multibillion dollar water bond isn't the only borrowing measure that could show up on voters' ballots this fall.

This week, legislation that would place a state school bond before voters Nov. 4 cleared another legislative committee with support from both sides of the aisle.

Yet there remain multiple unknowns about Assembly Bill 2235: the amount of the bond, whether it will get the backing of Gov. Jerry Brown, and if it can be approved in time to make it onto the November ballot. Today is the official deadline for the Legislature to place a measure on the fall ballot, but lawmakers previously have approved November ballot measures much later in the summer.

"Obviously it's not going to be put on the ballot without a dollar amount," Assemblywoman Joan Buchanan, D-Alamo, the author of AB 2235, told the Senate Governance and Finance Committee on Wednesday. "Ultimately, just like with all bonds, we're going to have to have that big pow-wow where everyone comes to an agreement."

Voters have approved about $35 billion in school-construction and modernization bonds since 1998, most recently in 2006, when voters passed $10.4 billion in Proposition 1D. But the pot of construction money set aside for K-12 schools was tapped out about two years ago, and higher education has been without new construction money for even longer.

The State Allocation Board, which oversees the state's school construction and modernization programs, estimated earlier this year that California needs as much as $12 billion in additional school-building money and almost $5 billion in modernization money.

June 19, 2014
California health exchange wants to analyze rate initiative


California's health insurance exchange pressed for answers Thursday to how an initiative slated for the November ballot would affect its operations.

Covered California board members said they want an expedited analysis of the measure, including its influence on the exchange and its consumers. The as-yet-unnumbered initiative, advanced by Consumer Watchdog and Democratic Insurance Commissioner Dave Jones, would allow the insurance commissioner to reject excessive health insurance rate hikes.

The measure and a separate initiative to raise the $250,000 cap on pain and suffering damages in malpractice cases are expected to produce two of the most contentious and expensive ballot-box fights this fall.

Susan Kennedy, a former aide to Govs. Gray Davis, a Democrat, and Arnold Schwarzenegger, a Republican, said she was "painfully aware" of the agency's hesitation in weighing into the fierce political clash. But she urged officials to act aggressively so voters have time to sort out the findings.

"I am a little afraid that we are tiptoeing around this when the impact from my perspective could be really huge and very negative on our ability to function," Kennedy said. "And that inability to function will trickle down to the risk being padded into the rates on consumers."

June 3, 2014
California hospital fee measure won't make November ballot


A ballot measure aimed at protecting a multi-billion-dollar stream of federal revenue for California hospitals from legislative interference apparently won't appear on the November ballot.

The California Hospital Association said Tuesday that random sampling of signatures for its ballot measure by election officials indicate that it would require a full signature count to qualify – if it does – and "based on this information, it is not likely that the ballot measure will qualify by the June 26 deadline to appear on the November 4, 2014 general election ballot."

The organization submitted 1.2 million signatures and needs 807,615 valid registered voter names to make the ballot, but the random sampling indicates it won't meet the threshold without a full count.

The proposed measure is a constitutional amendment that would require voter approval of any change in a special fee that's been levied on hospitals since 2009 to provide matching funds for about $2 billion year in federal funds to treat low-income patients.

The hospitals agreed to the fee as the state struggled to balance its budget each year and want it to continue indefinitely because they receive much more in extra revenue than the fee costs them.

If a full signature count qualifies the measure, it would appear on the ballot in 2016. Meanwhile, the fee is likely to continue.

Through March, proponents' campaign committee had raised more than $51 million and spent $27.1 million – including $1.6 million for signature gatherers and $25 million to reserve advertising time for a planned fall campaign. The committee had $24 million on hand as of March 31.

PHOTO: Angela Torrens of Rocklin signs a petition in front of the Bel Air grocery store in Rocklin in September 2007 to qualify a tribal-casino referendum for the ballot. The Sacramento Bee/Randall Benton

May 8, 2014
Report: Rate-regulation measure would shake up Covered California


A California ballot initiative allowing the state insurance commissioner to reject health insurance rate increases would disrupt the new health care overhaul, destabilizing negotiations between the exchange and insurance companies and inviting costly legal challenges by outside organizations, according to an analysis released Thursday.

The report, commissioned by Californians Against Higher Healthcare Costs - a group of doctors, hospitals and health plans opposing the measure - concludes it would undercut new authority afforded to Covered California. It was performed by Wakely Consulting Group's Dr. Jon Kingsdale, an expert on health care funding and the former head of the Commonwealth Health Insurance Connector Authority in Massachusetts.

Kingsdale said the state exchange should be given time to work.

"One could decide three, four years into health reform that competition is not working, so let's take a different approach," said Kingsdale, an adviser to the Obama administration on the health care law. "This would be asking the voters to decide less than one year into a whole new approach. We don't even know until the end of this year what kind of rate increases we are going to see for next year. It feels like it's absolutely the wrong time."

The initiative on the Nov. 4 ballot is being advanced by Santa Monica-based Consumer Watchdog and Insurance Commissioner Dave Jones. It seeks to provide the commissioner's office similar regulatory authority that it wields over property, casualty and automobile insurance.

Jamie Court, president of Consumer Watchdog, took issue with the figures analyzed in the report (the authors say they got them from the Department of Insurance). He said the study dramatically overstates the delays resulting from outside rate challenges.

Since 2002, the group successfully intervened in 71 non health insurance cases for a savings of $2.9 billion. But he said most the savings resulted from an "informal deterrent effect."

"We have saved huge amounts of money for (consumers) because insurers know better than to raise rates," Court said.

What's more, challenged rates remain in effect until there's a resolution - so there's reason for the insurers not intervenes, to draw out the process, he said.

He said health insurance companies that helped fund the study don't want public scrutiny of the process. The real purpose of the study is to scare the public by influencing the nonpartisan Legislative Analyst's Office's fiscal analysis of the measure, Court said.

May 6, 2014
Hospital pricing, executive pay ballot measures nixed as union, hospital strike deal


Averting a costly ballot fight, a prominent labor union has agreed to pull a pair of measures that would limit how California hospitals price medical care and compensate their executives.

The union dropped the effort after reaching what officials described as a sweeping labor agreement with the California Hospital Association, an organization that had been poised to battle the union over its ballot campaign. Officials from the two organizations described the agreement only n vague terms.

Service Employees International Union-United Healthcare Workers had described wildly inflated hospital prices as a burden on the healthcare system, pointing to hefty price tags on everything from medical procedures to bandages. The union also argued for caps on executive compensation at nonprofit hospitals.

All along, medical industry critics depicted the two-pronged campaign as a union ploy to put more pressure on hospitals and win more concessions for workers. Money had already started flowing for the ballot push, with SEIU reporting having raised $5.7 million through March of this year.

Now the two sides have found a compromise. The California Hospital Association and SEIU-UHW announced they struck a deal on Monday night to enshrine a new labor agreement and to launch a $100 million campaign for changes to Medi-Cal, the state's insurance program for the poor and indigent.

"We have continuously been striving to find a non-initiative solution," C. Duane Dauner, president of the California Hospital Association, said in a conference call on Tuesday morning.

In a deal that will run through the end of 2017, the two sides have agreed to what SEIU-UHW president Dave Regan called a "set of reciprocal commitments." He offered no concrete details about what those commitments entail, saying only that they surpass what the National Labor Relations Act requires.

"There's a lot of different segments to it but the commitments are substantial and clearly cover a majority of the industry," Regan said.

Without elaborating on the specifics, Regan suggested the that the deal effects sweeping changes to the relationship between hospitals and their employees. He portrayed the new configuration as a way to keep unions relevant.

"I think it's obvious that unions in America are in steep decline. That's just an obvious truth," Regan said, adding that "we don't want to look at unionism in the way its traditionally been, which is a zero-sum game between unions and employers."

A centerpiece of the new relationship will surround deploying a $100 million joint advocacy fund in an attempt to address Medi-Cal issues, although the specific area of advocacy remains undecided. If a legislative or regulatory fix hasn't yet emerged, Regan said, the effort could go to to the November 2016 ballot.

Dauner declined to elaborate on who will pay what into the fund but said the political effort could encompass everything from helping California do a better job of obtaining federal matching funds to dealing with reimbursement rates.

"It's broader than just saying we are going to go and try and get a lot of money out of the general fund to increase payments," Dauner said. "It is a broad and comprehensive approach to fitting Medi-Cal into the changing health care system."

This is the second consecutive year the union had pitched a pair of similar ballot initiatives. Last year, SEIU pushed measures to harness excessive billing and increase health care for the indigent, but withdrew the proposals after reaching an agreement that enlisted the hospital industry in various organizing efforts. Both Dauner and Regan described the new deal as stronger.

"We had disagreements and there were disappointments in the way we accomplished things under the first agreement," Dauner said.

Christopher Cadelago of The Bee Capitol Bureau contributed to this report.

PHOTO: A registered nurse at Kaiser Permanente Roseville Medical Center with some of the blue polypropylene wraps used to package surgical kits on July 26, 2010. The Sacramento Bee/Manny Crisostomo.

April 2, 2014
Website allows tracking of Prop. 30 money to schools

PROP30.JPGProposition 30, enacted by voters in 2012 to temporarily raise sales taxes and income taxes on the wealthy, was touted by Gov. Jerry Brown and other proponents as an alternative to making billions of dollars in cuts to state school spending due to state budget deficits.

Since its enactment, state Controller John Chiang reported Wednesday, Proposition 30 has pumped about $13 billion into local school district coffers. Chiang unveiled a new website, entitled Track Prop. 30, that allows users to plug in their local school districts and see their total budgets and the portions being financed through Prop. 30.

As large as the $13 billion may be, it's still a relatively small portion of K-12 and community college finances, which approach $70 billion a year from all sources. The website reveals, for instance, that during the 2012-13 fiscal year, the latest for which complete data are available, Los Angeles Unified, the state's largest district, had $5.7 billion in revenues from all sources, but Proposition 30 provided just $659.4 million or 12 percent.

Proposition 30, which raised sales taxes fractionally and imposed surtaxes on high-income taxpayers, generates about $6 billion a year and by long-standing constitutional law, a large chunk of the revenue stream must go to schools.

The tax hikes will begin expiring in 2017-18, however, and whether - and how - their revenues to schools will be replaced is still uncertain. Tom Torlakson, the state superintendent of public instruction, has called for making the tax increases permanent, but that would take another ballot measure or two-thirds votes in both houses of the Legislature, plus Brown's signature.

PHOTO: Students, dignitaries and supporters cheer on Gov. Jerry Brown who holds up a campaign sign and encourages students to vote yes for Proposition 30 at Sacramento City College. Thursday, October 18, 2012. The Sacramento Bee/Randy Pench

March 24, 2014
Big California ballot battle looms over malpractice limit


Consumer Watchdog submitted more than 800,000 signatures Monday for a ballot measure that would modify the state's $250,000 cap on pain and suffering injuries in medical malpractice cases, touching off what promises to be a fierce battle with medical providers and their insurers.

The cap (known as MICRA) was signed by Gov. Jerry Brown in 1975, during the first year of his first governorship, and has been the subject of political maneuvering ever since between the medical industry and Consumer Attorneys of California, whose members file and pursue personal injury cases.

Most recently, with signatures being collected for the measure, Senate President Pro Tem Darrell Steinberg has been trying to work out a legislative compromise on the long-burning issue, but that effort apparently failed. And once the 830,000 signatures were submitted, the measure, if qualified, could not be removed from the November ballot.

"My suggested compromise was to raise the MICRA cap on damages due to medical malpractice from $250,000 to $500,000," Steinberg said in a statement. "A cap of $500,000 is far below the rate of inflation since MICRA became law 39 years ago. That number is a reasonable compromise that fairly compensates injured patients without significant increases in medical costs.

"If one side says no, it's a terrible missed opportunity. An initiative battle is costly and uncertain, and will damage the reputation of two fine professions. This issue cries out for a legislative solution, and what I'm offering is a conservative increase that's fair to injured patients as well as the medical and legal communities."

Consumer Watchdog, a Southern California organization that has long been allied with the trial lawyers, submitted the petitions in Los Angeles and staged a news conference at which families of malpractice victims decried the limit. One was Robert Pack, a Bay Area businessman whose two children were run over and killed by a driver who had been overprescribed with drugs by doctors.

Pack, who is the out-front spokesman for the measure, said not only should the cap be lifted as a deterrent to malpractice but the proposal's other provisions, requiring drug testing of doctors and compelling them to check a registry of drug addicts to curb over-prescription of drugs, are needed to stop what was called a "patient safety crisis."

The medical and insurance industries have been gearing up to oppose the Consumer Watchdog-Pack measure and say they are ready to spend more than $30 million on a campaign against it. They contend that the cap has held down malpractice insurance rates, which also hold down medical costs, and that the drug-testing provisions of the measure are unneeded and mask a measure that would put more money in the pockets of lawyers.

Update: Amended at 11:50 to include Steinberg statement.

PHOTO: A West Sacramento billboard highlights the looming ballot fight to overturn the state law capping pain-and-suffering damages in medical negligence cases. Photo courtesy of Consumer Watchdog.

January 28, 2014
Backers put brakes on proposed California car-tax hike


Proponents of a proposed ballot measure to more than double the vehicle-license fee to pay for road improvements have decided to drop efforts to put it on the November ballot.

The "California Road Repairs Act of 2014" would have phased in a 1 percent hike in the license fee -- the equivalent of property tax on a home -- to raise from $3 billion to $4 billion annually. 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.

But Monday, Will Kempton, the executive director of Transportation California, said his group and the California Alliance for Jobs "have decided to put our initiative on hold."

"We'll continue to work with stakeholders, the Legislature, the administration and the public to identify and implement a solution to our transportation infrastructure problems," Kempton, a former Caltrans director, said in an e-mail.

The measure had been cleared earlier this month to begin collecting signatures to qualify for the ballot.

Kempton and other supporters point to a huge backlog of road improvement projects in California, with little new money to pay for them. Yet supporters also were well aware of the difficulty in getting the public to back an increase in the license fee, which has a prominent place in the mindset of the state's car-centric culture.

Past increases have not been popular. In mid-2003, then-Gov. Gray Davis raised the fee to 2 percent, what it had been before lawmakers began reducing it in the late 1990s. The increase contributed to his defeat in the recall election that October and the victory of Arnold Schwarzenegger.

PHOTO: Will Kempton, the then-director of the California Department of Transportation, testifies before the Assembly Transportation Committee in 2005. The Sacramento Bee/John Decker

December 17, 2013
Michelle Rhee's consultant introduces California ballot measure

A ballot measure submitted by a political consultant for education advocate Michelle Rhee seeks to remove seniority as a factor when California school districts lay off teachers, requiring that they instead base decisions on performance ratings. Performance, under the proposal, would be determined in part based on student test scores.

Those policy proposals have been at the core of Rhee's advocacy efforts as head of StudentsFirst, a national group headquartered in Sacramento. Rhee, who is married to Sacramento Mayor Kevin Johnson, has said she established the group to try to counter the influence that teachers unions have in decisions about public education. Unions generally reject the idea that teachers should be rated based on their students' test scores, and prefer contracts that call for the most recently hired teachers to be the first let go during layoffs.

The California ballot initiative was submitted Monday by Matt David, a political consultant to StudentsFirst. David was communications director to Republican Gov. Arnold Schwarzenegger and worked on the presidential campaigns of Republican Senator John McCain and former Utah governor Jon Huntsman Jr.

David said he submitted the measure on his own behalf and that StudentsFirst has not yet endorsed it.

"I would hope to get their support on this, assuming the language isn't changed (by the attorney general)," David said. "But they haven't taken a position yet and I've advised other groups not to take a position until we get the language finalized."

StudentsFirst spokesman Francisco Castillo said the group has been in talks about advancing a ballot measure in California next year, but hasn't yet decided if this will be it.

"We're currently reviewing the language for this one, and we generally support the concepts behind it, but it's premature to say whether we will take a position on it right now," Castillo said.

The proposed initiative for California's 2014 ballot must receive a title and summary from the Attorney General's Office before proponents can begin gathering signatures from the public to qualify for the ballot.

The measure also would streamline the firing procedures for teachers convicted of sex crimes, setting up a possible conflict with another ballot measure recently proposed by an advocacy group called EdVoice, which generally shares StudentsFirst's anti-union approach to education.

StudentsFirst has been active in several states but has made little headway so far in California, where public employee unions hold big clout in the state Capitol. The organization recently hired labor lobbyist Jovan Agee, who previously represented the AFSCME union, to head up its California operation.

Students First pushed for a bill to add student test scores to teachers' performance evaluations earlier this year, but Senate Bill 441 died in its first committee.

The bill was carried by Sen. Ron Calderon, the Montebello Democrat whose office was raided this summer by the FBI. A sealed FBI affidavit made public by Al Jazeera America alleges Calderon accepted $88,000 in bribes from a hospital executive and an undercover agent posing as a movie studio owner.

In 2012, StudentsFirst pitched a bill in California that sought to remove seniority as a factor in teacher layoff procedures, instead basing layoffs largely on job performance, according to a confidential draft The Bee obtained last year. The bill also would have changed the teacher evaluation system so that at least half the ratings were based on student test scores.

Calderon's brother, Charles Calderon, who was an assemblyman at the time, said he was interested in introducing the bill, but ran out of time during the 2012 session.

StudentsFirst poured more than $1 million into legislative races in 2012, including support for Ian Calderon — the son of Charles Calderon and nephew of Ron Calderon — as well as Assembly candidates Cheryl Brown and Brian Johnson. All are Democrats who faced opponents backed by the California Teachers Association.

Ian Calderon and Brown won their races and now serve in the state Assembly.

Michelle Rhee at Sacramento Mayor Kevin Johnson's State of the City address in January 2011. The Sacramento Bee/Bryan Patrick

October 30, 2013
Hannah-Beth Jackson, advocates tout car sale ballot push


Add buying a car to the growing list of consumer transactions California voters could be asked to regulate during the 2014 election.

In a Wednesday morning conference call, Sen. Hannah-Beth Jackson, D-Santa Barbara, and the president of proponent Consumers for Auto Reliability and Safety announce the filing of a proposed ballot measure that would impose new restrictions on automotive sales.

Car sale safety has already been a focus for Jackson, who last session authored a stalled bill that would bar dealers from selling or leasing cars that have been targeted by safety recalls unless they've repaired the cars.

"We should be able to rely on these vehicles as being safe, particularly when they're purchased from a car dealer," Jackson said during Wednesday's call.

The proposed ballot initiative includes similar provisions on selling calls under safety recalls. It would also tighten the rules around car purchases, prohibiting dealers from charging markups on loans and from altering contracts after a sale has been made, and eliminate the New Motor Vehicle Board's ability to overrule California Department of Motor Vehicle decisions disciplining dealers for consumer fraud.

"We need the DMV to be the cop on the beat for us," Rosemary Shahan, president of Consumers for Auto Reliability and Safety, said on Wednesday.

Protections against identity theft also play a role, including language prohibiting dealerships from hiring employees with past convictions for identity theft or forgery.

"The auto dealers hold the keys to the kingdom when it comes to identity theft" given their access to rich troves of personal data, Beth Givens of the San Diego-based Privacy Rights Clearinghouse said on the conference call.

Consumers for Auto Reliability and Safety spent just over $65,000 on lobbying during the 2013 legislative session, according to filings with the California Secretary of State. Shahan said the organization has so far funded the polling and legal work surrounding the proposed initiative but is still recruiting potential funders for a signature-gathering campaign. Voicing support during the conference call was Boysen Anderson of the International Association of Machinists and Aerospace Workers.

PHOTO: New Honda automobiles are displayed at Mel Rapton Honda on December 10, 2012 in Sacramento, Calif. The Sacramento Bee/Paul Kitagaki Jr.


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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