Capitol Alert

The latest on California politics and government

June 25, 2014
Moody's raises California's bond credit rating

California Budget_signing_2014_resized.JPG

Moody's Investors Service, one of the nation's largest credit rating organizations, upgraded its rating of California's $86 billion in general obligation debt Wednesday, citing the state's "rapidly improving financial position."

The upgrade from A1 to Aa3 came just a few days after Gov. Jerry Brown signed a 2014-15 state budget whose revenues and outgo are balanced and includes a "rainy-day fund" that will, if approved by voters in November, absorb some excess revenues.

Moody's also cited the state's progress in reducing unfunded pension liabilities and its improving economy in its upgrade, but cautioned that the state's revenue structure remains volatile.

The firm also raised its ratings of other state and local debts in its report.

PHOTO: Looking on behind are, from left, state Sen. Ben Hueso, Assemblywoman Nancy Skinner, Assembly Speaker Toni Atkins, and Senate President Pro Tem Darrell Steinberg. Associated Press Photo/Gregory Bull

June 24, 2014
Jerry Brown signs teacher pension fund bill

budget_signing_2014.JPGGov. Jerry Brown signed legislation Tuesday to begin paying down an estimated shortfall of more than $74 billion in the California State Teachers' Retirement System, acting on the last of a raft of budget-related bills ahead of the July 1 start of the next fiscal year.

Brown's signature was strictly a formality. The pension fund measure was approved by lawmakers June 15 in a budget package negotiated with Brown. The Democratic governor signed the state's main budget bill and most of other legislation related to the $156.3 billion spending plan last Friday.

In a prepared statement highlighting the pension fund legislation, Brown said, "This bill will ensure a decent retirement for hundreds of thousands of teachers, both now and for decades to come."

The teacher pension bill requires increased CalSTRS contributions from school districts, teachers and the state, with much of the burden on districts. The bill had bipartisan support.

PHOTO: California Gov. Jerry Brown, center, signs the 2014-15 state budget on June 20, 2014, in San Diego. Looking on behind are, from left, state Sen. Ben Hueso, Assemblywoman Nancy Skinner, Assembly Speaker Toni Atkins, and Senate leader Darrell Steinberg. The Associated Press/Gregory Bull

June 20, 2014
Jerry Brown signs $156.3 billion state budget

brownjanbudget.jpgGov. Jerry Brown signed the state budget Friday, one of the earliest signings in recent history, his office announced.

The Democratic governor announced a relatively small number of line item vetoes to the $156.3 billion spending plan, many of which his office described as technical. The total value of the appropriations Brown eliminated or reduced was expected to be minimal.

"This on-time budget provides for today and saves for the future," Brown, who traveled to San Diego to sign the budget document, said in a prepared statement. "We're paying off the state's credit card, saving for the next rainy day and fixing the broken teachers' retirement system."

The budget for the fiscal year beginning July 1 is a compromise plan between Brown and Democratic lawmakers. It includes an expansion of child care and preschool for poor children and more money for high-speed rail, Medi-Cal and welfare-to-work. It also puts about $1.6 billion into a special rainy-day account.

For Brown, the budget represents a dramatic improvement from four years ago, when the state faced a deficit of more than $26 billion. The budget he signed that year, the first of his third term, reduced higher education and social services spending. In 2012 he signed a budget that relied on additional cuts and a multibillion-dollar tax increase.

With the economy improving and the passage of that tax measure, however, Brown's last two budget negotiations have proved relatively frictionless. Except for in 2009, when lawmakers enacted a budget in February that fell out of balance and had to be re-opened in May, the budget Brown signed Friday was the earliest on record going back nearly 30 years.

PHOTO: Gov. Jerry Brown speaks at a news conference at the California state Capitol in Sacramento on Jan. 10, 2013. The Sacramento Bee/Randall Benton.

June 19, 2014
Jerry Brown to sign budget Friday in San Diego

Brown_signing_bills.JPGGov. Jerry Brown will sign the state budget Friday in San Diego, his office announced Thursday, less than a week after both houses of the Legislature approved the spending plan.

Governors have the right to reduce or strike appropriations in budget bills before signing them, but it is unclear what line-item vetoes Brown will make to the $156.4 billion budget for the fiscal year beginning July 1. Last year, the Democratic governor made only a small number of line-item vetoes, totaling about $40 million.

This year's budget plan is a compromise between Brown and Democratic lawmakers. It includes an expansion of child care and preschool for poor children and more money for high-speed rail, Medi-Cal and welfare-to-work. It also puts about $1.6 billion into a special rainy-day account.

Brown will be joined for the budget signing by Assembly Speaker Toni Atkins, D-San Diego, and Senate President Pro Tem Darrell Steinberg, D-Sacramento. Brown is scheduled to travel to Los Angeles after signing the budget to attend a celebration with Latino lawmakers.

PHOTO: Gov. Jerry Brown signs bills in Sacramento on March 24, 2011 as Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Sen. Mark Leno, D-San Francisco look on. The Sacramento Bee/Hector Amezcua

June 15, 2014
Lawmakers approve California budget under looming deadline

budgetphoto.jpgby David Siders and Jeremy B. White

California lawmakers passed the state's main budget bill Sunday, less than six hours before the constitutional deadline.

The vote comes after Gov. Jerry Brown and legislative leaders last week reached a compromise on a $156.4 billion budget package for the fiscal year beginning July 1. The spending plan includes more money for Medi-Cal and welfare-to-work and an expansion of child care and preschool programs for poor children. It also begins to pay down an estimated shortfall of more than $74 billion in the teachers' pension fund, puts about $1.6 billion into a special rainy day fund and holds about $460 million more in reserve.

Lawmakers in both the Senate and Assembly were beginning late Sunday to take up the first of 18 related "trailer bills," legislation attached to the budget.

The Senate approved the main budget bill 25-11. Sen. Anthony Cannella, R-Ceres, broke ranks with Republicans to cast a vote for the budget.

The vote in the Assembly was 55-24.

"This is a much brighter day than what we've seen in years past," said Sen. Mark Leno, D-San Francisco, adding that only recent years have lawmakers been able to begin restoring cuts made during the recession.

Among trailer bills lawmakers took up Sunday were items inserted with little public review in recent days, including controversial language capping the amount of money school districts may set aside for economic uncertainties if state-level reserves reach certain levels.

The measure, backed by California's influential teachers unions, was opposed by school administrators, and some Democrats who supported the proposal criticized the late hour at which it appeared.

"My main concern truly is with the process," Sen. Marty Block, D-San Diego, said before the measure cleared a budget committee Sunday. "This is clearly a major policy deviation from the way we've done business, and this is something that could have been discussed over the last several months."

Sen. Hannah-Beth Jackson, D-Santa Barbara, said, "To say that this process is inconsistent, I think, is somewhat of an understatement and is the politest word I can think of."

The budget's main points, however, were settled by late last week. In a prepared statement Friday, Brown called the spending plan a "solid and sustainable budget that pays down debt, brings stability to the teachers' pension system and builds at long last a reliable Rainy Day Fund."

In debate in the Assembly on Sunday, Democrats and Republicans split on both the main budget bill and several trailer bills. Members of the majority party praised what they called a balanced approach to spending, while Republicans decried plans to spend carbon-reduction funds on high speed rail and said spending on education is inadequate.

"We do not live up to the promises of Prop 30 in this budget," said Jeff Gorell, vice chair of the Assembly Budget Committee, referring to the tax measure Brown and others promoted in 2012 as a new funding stream for schools.

The budget and it's $108 billion general fund are a product of negotiations between the Democratic governor and majority Democrats in the Legislature. Republican support was required for a two-thirds vote on a reserve fund measure in May, but the minority party was largely sidelined in budget talks.

Hours before lawmakers took up the budget, Senate Republican leader Bob Huff, R-Diamond Bar, said on Twitter, "Usually on Father's Day, I barbecue meat. I wish I could roast a few Dem priorities."

PHOTO: State Senate President Pro Tem Darrell Steinberg, D-Sacramento, right, receives congratulations from Sen. Kevin de Leon, D-Los Angeles, after the Senate approved the state budget at the Capitol Sunday. Associated Press/Rich Pedroncelli

June 13, 2014
Jerry Brown, legislative leaders tout budget agreement

Gov. Jerry Brown and legislative leaders made it clear Friday that they have reached an agreement on a new state budget.

"The leaders of the Legislature have worked very hard to build a solid and sustainable budget that pays down debt, brings stability to the teachers' pension system and builds at long last a reliable Rainy Day Fund," Brown said in the statement, which included comments from Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Assembly Speaker Toni Atkins, D-San Diego.

The statement, instead of a joint appearance that once routinely accompanied budget deals, arrived some 17 hours after the Legislature's budget-writing committee finished work on a package of spending items that reflected compromises with the administration.

The $108 billion general fund agreement contains more money for preschool, home caregivers and welfare payments, and allocates hundreds of millions in cap-and-trade revenue to high-speed rail, sustainable development, and other green causes. Lawmakers are scheduled to vote on the package Sunday afternoon.

In Friday's statement, Atkins praised the agreement as "building a foundation for the future."

"We help reduce child poverty, so every child can learn and grow to reach their greatest potential, and we improve preschool, and child care for working families," Atkins said in the statement.

Steinberg said the deal "proves once again that negotiation and cooperation can achieve a great outcome."

"We're expanding preschool for our youngest and career pathway programs for our older students," Steinberg said. "In addition, we're changing the course of our failed corrections system with better solutions to help offenders become productive citizens, and making smart investments to fight climate change with permanent funding for mass transit and affordable housing."

PHOTO: Gov. Jerry Brown leaves the podium with Senate Presdient Pro Tem Darrell Steinberg after he delivered the 2014 State of the State address to a joint session of the Legislature on Wednesday, Jan. 22, 2014 at the State Capitol.The Sacramento Bee/Hector Amezcua.

June 12, 2014
Budget includes $2.5 million to fix up governor's mansion


The next California budget will contain $2.5 million to renovate Sacramento's historic governor's mansion, which has longstanding structural and maintenance problems.

The Legislature's budget conference committee added the money Thursday afternoon, one of many items the panel acted on to flesh out a spending package still being finalized by Gov. Jerry Brown and legislative leaders.

The $2.5 million will come from the proceeds of the sale of a Carmichael home built for then-Gov. Ronald Reagan. Ronald and Nancy Reagan were the last to live at the 137-year-old downtown mansion, before decamping for a home in the Fab 40's after Nancy Reagan deemed the mansion and surrounding area to be unsafe.

Brown, when he was governor from 1975 to 1983, lived in an apartment across from the Capitol. Govs. George Deukmejian, Pete Wilson and Gray Davis lived at a modest house in Carmichael, and former Gov. Arnold Schwarzenegger lived out of a suitcase at the Hyatt Regency Sacramento or flew home to Southern California. Brown, since returning to the Capitol, has split his time between a midtown apartment and his home in the Oakland hills.

PHOTO: Gov. Jerry Brown, accompanied by his wife Ann Gust Brown, walk from the governor's mansion in midtown Sacramento to meet with reporters the evening of the June 3 primary election. The Sacramento Bee/Jose Luis Villegas

June 12, 2014
Budget deal to reject home-care overtime restrictions

brownbudgetrevise.jpgThe budget pact coming together at the state Capitol will reject limits on overtime for in-home care workers sought by Gov. Jerry Brown.

Brown's $107.8 billion general fund plan capped the number of hours for in-home workers, with the goal of preventing payments required by federal regulations set to take effect next January. The administration had warned that the rule could increase home-care costs by more than $600 million by June 2016.

But in-home care workers, the unions that represent them and many of their Democratic allies in the Legislature criticized the proposal, saying it would sharply reduce their take-home income and disrupt their clients' lives. The Assembly and Senate budgets contained $66 million for overtime payments.

It was unclear, though, if the plan would restore a 7 percent cut in home-care service hours. Assembly and Senate budgets included $140 million for the restoration.

Brown and legislative leaders continued to meet Thursday to iron out details of the final package, with the Legislature's budget-writing committee expected to convene later to take up items dealing with resources, health, welfare and other issues.

Lawmakers have been getting briefed on the deal, with a planned vote Sunday, the constitutional deadline to pass a budget for the fiscal year that begins July 1.

Other parts of the agreement address growth in Medi-Cal caseloads and costs as a result of the federal Affordable Care Act. Brown's revised budget pegged the unanticipated cost at $1.2 billion, but it looked increasingly likely that the final pact will reflect the viewpoint of the nonpartisan Legislative Analyst's Office, which has said the administration overstates the expense by some $300 million.

The overtime issue has been among the main outstanding budget sticking points, along with how to spend cap-and-trade revenue. The agreement allocates 25 percent of cap-and-trade money to high-speed rail in 2015-16 and beyond. That is roughly comparable to the project's share of the estimated $870 million in cap-and-trade money forecast for 2014-15.

Other recipients include affordable housing projects, which would be eligible for about $130 million of cap-and-trade money in the coming fiscal year. "We think this is a great step," said Shamus Roller, executive director of Housing California.

PHOTO: Gov. Jerry Brown discusses his revised budget plan at a news conference at the Capitol on May 14, 2013. The Sacramento Bee/Renée C. Byer

June 12, 2014
Budget deal gives 25 percent of cap-and-trade money to high-speed rail

jerrybrownprisons.jpgGov. Jerry Brown and Democratic legislative leaders have agreed to a proposal to use 25 percent of future cap-and-trade revenue - money polluters pay to offset carbon emissions - to provide ongoing funding for construction of California's high-speed rail project, according to part of a budget deal legislators will consider Thursday, sources said.

The amount falls short of the 33 percent Brown originally sought but is more than the Senate Democrats proposed.

The use of cap-and-trade money is one of the most controversial elements remaining in a spending plan Brown and lawmakers are finalizing this week. Lawmakers are expected to finish committee work on the budget Thursday, with floor votes Sunday, the constitutional deadline.

Cap-and-trade auctions could generate as much as $1 billion in 2014-15. The deal lawmakers are considering for the $68 billion high-speed rail calls for ongoing funding beginning in the 2015-16 budget year.

In addition to high-speed rail, the deal calls for 15 percent of cap-and-trade revenue to go to other transportation projects and 20 percent to go to affordable housing projects and other programs that help reduce greenhouse gases.

The remaining 40 percent of cap-and-trade revenue would go to various transportation, natural resources, energy and other projects.

PHOTO: Gov. Jerry Brown speaks to reporters at a news conference at the Capitol on Sept. 9, 2013. The Sacramento Bee/Hector Amezcua

June 11, 2014
Education officials rip draft budget language limiting district reserves

Thumbnail image for brownbudget.JPGSchool officials are raising opposition to last-minute budget language that would cap the amount of money California school districts may set aside for economic uncertainties.

The draft trailer bill language, which education lobbyists distributed Wednesday, would limit districts' fund balances in most cases to two or three times the minimum required, a potential victory for public employee unions resistant to tying money up in reserves.

In a letter to Brown administration officials and lawmakers Wednesday, the Education Management Group, which represents school boards, administrators and superintendents, said the bill language is "fiscally irresponsible" and inconsistent with principles of local control.

"For most of the last two decades, California has focused on preventing school district bankruptcies by enacting laws that require multiyear projections, enforcement of strict fiscal standards by county offices of education, early intervention, and even the authority to override the spending decisions of local governing boards," the letter said. "It is therefore ironic that, at the very time an initiative has been placed on the statewide ballot to strengthen the state's rainy day fund, that the Legislature and Governor would consider statutory changes that eviscerate provisions at the local school district level that are based on the same premise of fiscal prudence and responsibility."

The Education Management Group also objected to the last-minute insertion of the language in a months-long budget process.

"People's jaws are still agape," said Bob Blattner, an education lobbyist. "At the very last second, it's such a significant policy issue to drop."

The trailer bill language comes as lawmakers and Gov. Jerry Brown move closer to a deal in this year's budget negotiations, with the Legislature expected to vote Sunday on the main budget bill. Brown and lawmakers last month agreed to a major component of the spending plan, a rainy-day fund measure that, if approved by voters, would increase statewide reserves.

Public employee unions had objected to a rainy day fund measure previously scheduled for the ballot. Kevin Gordon, a longtime education lobbyist, said he suspects "some linkage here to the rainy day fund and the fact that the California Teachers Association didn't object" to the new rainy day fund measure. Jeff Vaca, one of the Education Management Group letter's authors and deputy executive director for governmental relations at the California Association of School Business Officials, said the bill language is "probably as much political as it is policy."

The Brown administration did not immediately respond to a request for comment Wednesday.

Mike Myslinski, a spokesman for CTA, said he was unaware of any link between the rainy day fund measure and the trailer bill, but he said his organization supports the trailer bill language.

"This is all about understanding that school districts really must spend the taxpayers' dollars that they receive in the classroom," he said.

Fred Glass, of the California Federation of Teachers, said the organization is supportive of limiting reserves, too.

While a prudent reserve account is responsible, Glass said, "there are some districts that have 15, 20, 25 percent ending balances."

He said that "may translate into fiscal security for administrators, but it means limiting programs for students."

Editor's note: This post was updated at 3:28 p.m. to include Myslinski's remarks

PHOTO: Senate President Pro Tem Darrell Steinberg, left, Gov. Jerry Brown, center, and Assembly Speaker John A. Pérez, right, celebrate a budget deal with a formal announcement at the Capitol on Tuesday, June 11, 2013. The Sacramento Bee/Randy Pench

June 9, 2014
California Legislature split on local ethics-training mandate


The suspension of three state senators and a six-figure penalty against a prominent lobbyist have made political ethics a dominant issue at the California Capitol this year, prompting special ethics training in the state Senate.

The next state budget, though, could allow some local governments to opt out of ethics training for their officials.

Gov. Jerry Brown's revised budget calls for suspending dozens of mandates on local government – including for the first time a mandate that requires ethics training for officials in some general law cities and counties and certain special districts.

Without the mandate suspension, the state would be on the hook to reimburse eligible local governments for travel, meals and other ethics training expenses, at an estimated $35,000 cost.

The Legislative Analyst's Office has said the mandate is inconsistent, because it only applies to local governments that are required to compensate their elected officials, and not others.

The two houses have split on the issue. The Assembly rejected the governor's proposal, noting in a subcommittee report that the mandate's cost "is minimal and the risk may be significant that local governments could decrease transparency because of the statute being deleted."

The Senate, though, accepted the governor's proposal. Now it's up to the Legislature's budget conference committee to reconcile the different versions. The conference committee has yet to act on the local ethics training mandate.

Last year, Brown called for suspending the mandate on local governments to comply with parts of the California Public Records Act. The Senate accepted it and the Assembly rejected it.

The suspension later became part of the budget package that passed the Legislature – but not before triggering an outcry from open-records advocates who feared that some local agencies would use the suspension as an excuse to cut off public access to government records. Lawmakers later rescinded the mandate suspension and put the issue before voters.

Proposition 42, which requires local governments to comply with the open-records law without state reimbursement, passed with 62 percent of the vote.

PHOTO: Senate President Pro Tem Darrell Steinberg and Senate Republican Leader Bob Huff discuss ethics training for members of the Legislature on April 23, 2014 in Sacramento. The Sacramento Bee/Paul Kitagaki Jr.

May 29, 2014
California legislative leaders appoint budget conferees


Leaders of the Assembly and Senate on Thursday appointed eight lawmakers to serve on the Legislature's budget-writing panel.

The budget conference committee will reconcile differences between the spending plans adopted in each house and produce a final package to go before lawmakers by the June 15 constitutional deadline.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, named Sens. Mark Leno, D-San Francisco, Jim Nielsen, R-Gerber, Ricardo Lara, D-Bell Gardens, and Loni Hancock, D-Berkeley to the conference committee. Leno leads the Senate budget committee and Nielsen is vice-chairman. Hancock leads the panel's public safety subcommittee.

Assembly Speaker Toni G. Atkins, D-San Diego, named Asembly members Nancy Skinner, D-Berkeley, Jeff Gorrell, R-Camarillo, Shirley N. Weber, D-San Diego, and Richard Bloom, D-Santa Monica, to the conference committee. Skinner leads the Assembly budget committee and Gorrell is its top Republican. Bloom leads the panel's resources and transportation subcommittee and Weber chairs its health and human services subcommittee.

Skinner will chair the conference committee.

PHOTO: Gov. Jerry Brown speaks to state Sen. Mark Leno, D-San Francisco, and then-Assemblyman Bob Blumenfield, D-Los Angeles, during a budget conference committee meeting in February 2011. The Sacramento Bee/Hector Amezcua

May 28, 2014
Senate Dems push for spending on mentally ill criminals


As budget negotiations reach their final weeks in the state Capitol, state Senate leader Darrell Steinberg is pressing for more spending to treat mental illness among inmates and people being released from prison, arguing that the proposals will reduce prison crowding and promote public safety.

The proposals by Senate Democrats to spend $132 million on reducing recidivism among mentally ill offenders are based on suggestions by professors at Stanford Law School, who studied the proliferation of mental illness within California's prison population. Gov. Jerry Brown has proposed $91 million in spending.

The Senate Democrats' package comes as lawmakers respond to Friday's rampage near UC Santa Barbara in which a disturbed student killed six people and injured 13 in a spree of stabbing and shooting.

"These proposals finalized earlier this month are now cast under a different light than any of us had originally planned," Steinberg said during a press conference Wednesday. "It's a cruel and of course sad coincidence that the significance of one proposal – to improve training among front line law enforcement to recognize the warning signs of mental illness – was illustrated by a gun rampage in Santa Barbara County."

The proposals from Senate Democrats include:

* $12 million to train law enforcement officers and $24 million to train prison employees in dealing with people who are mentally ill
* $25 million to expand re-entry programs for mentally ill offenders
* $20 million to help parolees by providing case managers to make sure they get treatment for mental health issues and substance abuse
* $20 million to expand so-called mental health courts that manage offenders who are mentally ill or addicted to drugs
* $50 million to re-establish a grant program for counties offering substance abuse treatment, job training or other programs to help mentally ill offenders after they're released from prison

Steinberg touted the $50 million grant program back in December – this video describes the proposal.

PHOTO: Senate President Pro Tem Darrell Steinberg, D-Sacramento, gestures during session in the Senate chambers in Sacramento on March 11, 2013. The Sacramento Bee/Hector Amezcua

VIDEO: The Sacramento Bee/Daniel Rothberg

May 23, 2014
Three competing plans emerge for spending cap-and-trade fees

Thumbnail image for California_Greenhouse_Gases.jpg
And now there are three competing plans for spending about $1 billion in cap-and-trade fees on businesses that emit greenhouse gases, with three weeks to resolve the differences before the June 15 deadline for enacting a state budget.

The fees are, by law, supposed to be used to reduce carbon dioxide and other greenhouse gases to meet state goals.

Gov. Jerry Brown's 2014-15 budget would spend $870 million in fees, with the largest single piece being $250 million to bolster financial underpinnings of the state's bullet train project. Plus, Brown wants the Legislature to permanently commit a third of future cap-and-trade revenues to the project.

The Assembly's leadership, in a plan unveiled on Thursday, wants to raise cap-and-trade spending to just over $1 billion with two pots of $400 million each, one of which could go to the bullet train if the state's Strategic Growth Council – an agency of the governor's top appointees – agrees.

Moreover, the Assembly's plan would give Brown the authority to seek a $20 billion federal loan and issue a $20 billion revenue bond for the high-speed rail project, both of which would rely on future cap-and-trade fees to repay.

On Friday, the Senate Budget and Fiscal Review Committee adopted another version that would allocate $450 million for mass transit and intercity rail, including the bullet train, plus appropriations for smaller programs.

There are some other differences as well, including how much money, if any, should be spent on subsidies for buyers of low-emission vehicles and various programs to reduce solid waste, restoring wetlands and support "sustainable communities," however they may be defined.

The differences will be resolved – if they can be – during negotiations among Brown and Democratic legislative leaders.

PHOTO: A tanker truck passes the Chevron oil refinery in Richmond on March 9, 2010. Associated Press/Paul Sakuma

May 23, 2014
Legislature scales back Brown's teacher pension rescue plan

State legislators heard a heavy litany of complaints from school officials this week about Gov. Jerry Brown's plan to make the State Teachers Retirement System solvent and in response temporarily toned down the bite on their budgets.

The Brown plan aims to close a $70-plus billion unfunded liability by eventually raising contributions to $5-plus billion a year, with the lion's share coming from the budgets of local school districts.

But school officials told a joint legislative hearing that the sharp increases would wipe out much of the gains in state aid they are scheduled to receive during the remainder of the decade.

In response, the chairs of the two legislative committees involved asked for a modification and on Friday, the Legislative Analyst's Office released a revised chart that would reach the same level of financing sought by Brown by 2020, but lower the increase in the early years and raise it later.

Brown wanted districts to raise contributions from 8.25 percent of payroll in 2014-15 to 9.5 percent, for instance, but the legislative plan scales it back to 8.88 percent. Districts' payments would ramp up gradually thereafter and surpass Brown's plan in 2018-19 at 17.75 percent, markedly higher than the 15.9 percent in Brown's plan for that year.

Both plans would top out at 19.1 percent in 2020-21, with school districts paying $3.8 billion that year into the pension system, over 70 percent of the $5.3 billion annual increase in revenue for STRS.

The state's contributions and those of teachers would remain virtually the same as Brown's plan, although the increase for teachers hired after Jan. 1, 2013, would be slightly lower for one year.

PHOTO: Joined by school officials, California Gov. Jerry Brown speaks at an April 2013 news conference in Sacramento. The Sacramento Bee/Renee. C. Byer

May 22, 2014
S&P warns California Legislature on increasing budget spending

brownbudget.JPGStandard & Poor's, a major credit rating organization, praised Gov. Jerry Brown's revised 2014-15 budget Thursday, but warned the Legislature not to go beyond the budget and spend higher revenue estimates from its budget analyst.

Using the Legislative Analyst's Office revenue projections that are several billion dollars higher than Brown's "for the purposes of increasing ongoing spending", S&P said in a report, "could endanger our current and positive rating outlook."

The Legislature, however, appears to be doing exactly that this week as its budget subcommittees vote to increase spending on education and health and welfare services, based on the LAO's projection. However, the final budget will be negotiated by Brown and legislative leaders.

Overall, S&P said, Brown's budget "is continued good news for California's credit quality" and praises Brown and the Legislature for asking voters to create a "rainy-day fund" to absorb some revenues and save them for revenue downturns.

However, it notes that the budget does not address some major issues, such as unfunded liabilities for state retiree health care.

PHOTO: Gov. Jerry Brown holds up poster boards with graphic information regarding revisions to his budget, specifically related to his projected increase in spending on health care and teacher pensions during a press conference at the state Capitol on Tuesday, May 13, 2014 in Sacramento, Calif. The Sacramento Bee/Randy Pench

May 20, 2014
Women's caucus seeks more money for early education, child care


State-supported child care and education topped the list of budget priorities the California Legislative Women's Caucus laid out on Tuesday.

The emphasis on more programs for California's youngest residents offered the latest evidence that early education will be a priority for Democrats, and potentially a key sticking point as they try to break through Gov. Jerry Brown's reluctance to aggressively spend a budget surplus.

"As our economy rebounds, we cannot leave women and families behind," said Assemblywoman Bonnie Lowenthal, D-Long Beach. "The evidence is clear. Access to quality early childhood education contributes to children's well-being, brain development and school readiness."

Those remarks echoed Senate President Pro Tem Darrell Steinberg, D-Sacramento, focusing on universal pre-kindergarten for four-year-olds. The Democratic leader has made clear he believes investing more in early education programs is a crucial tool to bridge school achievement gaps.

Members of the women's caucus said they back Steinberg's proposal. But a letter they circulated to legislative leadership and the governor took aim more specifically at a range of state-sponsored childcare and preschool programs to support low-income Californians who are working or seeking employment, many of them single mothers.

"We've had conversations about pre-school, about transitional kindergarten," said Assemblywoman Sharon Quirk-Silva, D-Fullerton. "But when we look at the family in the holistic model we know it's those investments from the time they're born."

Among the budget spending they are urging: $300 million to fund 40,000 new early care slots to reverse recession-fueled cutbacks, increased reimbursement rates for providers and broader access to state preschool programs.

PHOTO: Members of the California Legislative Women's Caucus discuss their budget priorities at the State Capitol on May 20, 2014. The Sacramento Bee/Jeremy B. White.

May 19, 2014
Source of money to help California tribes, other programs almost empty

The state fund that helps provide a lifeline to dozens of poor tribes is almost tapped out, the Legislative Analyst's Office said in a new report, which notes that the state has no plan to cover the costs.

Created by the law that legalized Las Vegas-style gambling on tribal lands, the special distribution fund has paid for gambling regulators, problem gambling programs and local grants to help communities deal with casino impacts. It also subsidizes a separate fund that pays tribes who only have small casinos or no casinos at all.

But after running large surpluses a decade ago, the fund has spent much more than it's taken in since the late 2000's. That's when several large tribes started making revenue-sharing payments to California's general fund instead of paying into the distribution fund.

The distribution fund is on track to be empty by the end of June 2015, the LAO reported. There are no easy fixes — ultimately, the analyst said, lawmakers might have to tap the state's general fund to pay for programs now covered by the distribution fund.

Other possible solutions include crafting future tribal casino deals that provide more money for poor tribes and requiring tribes to negotiate casino-mitigation agreements with surrounding communities, the analyst said.

PHOTO: Dealers practice before the opening of the 340,000-square-foot Graton Casino & Resort in October 2013. The Sacramento Bee/Paul Kitagaki Jr.

May 19, 2014
Moody's praises California for rainy-day fund proposal


Lawmakers' passage of "rainy-day fund" legislation championed by Gov. Jerry Brown won plaudits Monday from Moody's Investors Service, a major credit rating house.

"This credit positive development reflects the new emphasis that California...places on building reserve to cushion its finances from economic downturns," Moody's says in its periodic bulletin on credit trends.

The bulletin, echoing Brown's words, notes that California has had many more deficit budgets in recent years than positively balanced ones, citing the state's historic tendency to spend windfall revenues rather than save them.

The reserve fund would absorb some state revenues and make them available during an economic downturn. Last week's measure, ACA 1 in the second extraordinary session, was approved overwhelmingly by the Legislature, but still must be ratified by voters in November. Moody's current credit rating for California is A1 stable.

PHOTO: California Gov. Jerry Brown and then-Assembly Speaker John A. Pérez appear before the Assembly Budget Committee on April 28 to talk about ACA 1 in the second extraordinary session.

May 16, 2014
VIDEO: Fiscal analyst predicts more revenue than Brown's plan


The Legislature's nonpartisan fiscal analyst estimated Friday that state revenue through June 2015 would be $2.5 billion higher than what is in Gov. Jerry Brown's revised budget plan, including $2.2 billion in additional money during the coming budget year.

But the Legislative Analyst's Office cautions that much of the additional revenue it forecasts would be consumed by larger obligations under the state's constitutional school-funding guarantee. It also acknowledges that its revenue numbers might turn out to be wrong.

"While our best estimates right now are for general fund revenues to be over $2 billion higher than the administration's projections in 2014-15, changes in asset markets and the economy could materialize that would result in less or more tax collections than our office now projects," it wrote in Friday's report.

Friday's review comes three days after Brown released a revised $156.2 billion spending plan that reflects $2.4 billion in extra revenue compared to his January proposal. It allocates most of the money to higher-than-expected Medi-Cal costs.

The plan features a rainy-day reserve he negotiated with legislative leaders and which would receive $1.6 billion in 2014-15. Also, the plan includes an extra payment to finally pay off $15 billion in deficit borrowing approved a decade ago.

The LAO offers warm words for the administration. "Overall, his plan takes a careful approach to state finances, and he deserves much credit for that," it said. "Under this approach, the state would improve its chances of managing the next significant state revenue downturn with little in the way of the drastic budget cuts required during the last few recessions."

Liberal advocacy groups, though, have said the governor's proposal fails to begin restoring billions of dollars in cuts during the recession. Senate President Pro Tem Darrell Steinberg, D-Sacramento, this week challenged the governor to "do a little lifting" to meet the concerns of his caucus members, suggesting that funding for the governor's prized high-speed rail project could otherwise be a tough sell.

The analyst's office earlier voiced support for the revised plan's proposal to spend $100 million toward paying off the $900 million the state owes local governments for complying with state mandates before 2004. It would be the first payment in almost a decade.

PHOTO: Legislative Analyst Mac Taylor. The Sacramento Bee/Hector Amezcua

May 15, 2014
Rainy-day measure headed to November ballot

Connie_Conway_SOTS.jpgLegislation to place a rainy-day reserve constitutional amendment on the November ballot won easy bipartisan approval Thursday morning.

The measure, negotiated by Gov. Jerry Brown and legislative leaders last week, would transfer 1.5 percent of general fund revenue to a reserve, along with capital gains revenue that exceeds 8 percent of general fund taxes. One-half of the money would go to pay down state debt.

Lawmakers said the measure would bring some control to a state budget marked by booms and busts since the dot-com windfall 15 years ago. It passed both houses unanimously.

"This is one of the most important measures we will vote on this year," Assembly Republican Leader Connie Conway said. Recalling harrowing budget fights of past years, the Tulare Republican said, "A rainy day fund, had it been in place, would not have eliminated all of the painful cuts and issues we had to deal with. But it certainly would have softened the blow."

The measure, ACA 1 of the second extraordinary session, will replace ACA 4 that is already on the November ballot. It was the product of a 2010 budget deal between legislative leaders and then-Gov. Arnold Schwarzenegger.

"If you graph the budget and tax revenue of other states you would have something that went up and down a bit based on business cycles," Assemblyman Mike Gatto, D-Silver Lake, the author of ACA 4, said Thursday before voting for ACA 1. "If you were to graph California's tax revenue, you would have something that looks like a seismograph."

The measure passed the Senate after similar bipartisan praise.

"It follows that very fine between fiscal responsibility and allowing for some flexibility for our opportunity to restore funding for the needs of the people of California," state Sen. Mark Leno, D-San Francisco said.

— Jeremy B. White, Laurel Rosenhall and Jim Miller

PHOTO: Assembly Republican leader Connie Conway, R-Tulare, talks with reporters after Gov. Jerry Brown's State of the State address at the Capitol in Sacramento on Jan. 23, 2013. Associated Press Photo/Rich Pedroncelli

May 14, 2014
Steinberg pushes for more spending in budget negotiations


Senate leader Darrell Steinberg said Wednesday that Gov. Jerry Brown's revised state budget doesn't do enough to acknowledge the Californians who have been damaged by years of program cuts and suggested the state could divert more money to them by taking a different approach to setting aside money for the rainy-day fund.

The Sacramento Democrat said he will continue to push for expanding California's public preschool program as the Legislature negotiates the state budget with Brown in the coming weeks. He also called out funding for courts, universities and Medi-Cal reimbursement as areas he thinks are inadequate in the budget proposal Brown released Tuesday.

"We have more than lifted to meet the governor's agenda, and his top priority on this. It's time that he do a little lifting as well to help meet our priorities," Steinberg said to reporters.

"It's a two-way street."

Brown's budget sets aside $3.7 billion in reserves and debt payments, Steinberg said. But California could instead set aside $2.4 billion for those purposes, he said, by applying the formula laid out in the rainy-day fund agreement legislative leaders have negotiated with Brown. That approach, if it passes the Legislature, will go before voters this November.

"So when the question gets asked, 'Where are you going to find the money?' Here is a place to start," Steinberg said of the $1.3 billion difference.

Proposition 58, approved by voters in March 2004, requires an annual transfer of 3 percent of general fund revenue to the Budget Stabilization Account. The requirement has been suspended in all but one year, though.

Brown's budget sets aside 3 percent of revenue — half of the money would go to paying off debt-refinancing bonds approved along with Prop. 58 and the other half would be saved.

"What it appears the Pro Tem is suggesting is that instead of a 3 percent deposit, a deposit of 1.5 percent of general fund revenues be made into the Budget Stabilization Account," Department of Finance spokesman H.D. Palmer said. "The governor's budget — both in January and as revised in May — makes that 3 percent deposit as required by Proposition 58, and does not reflect a suspension of that transfer."

PHOTO: Senate leader Darrell Steinberg presents his idea for a rainy-day fund approach to reporters on May 14, 2014.

May 13, 2014
VIDEO: Jerry Brown downplays additional revenue in budget revision

capital_gains.JPGReporter David Siders explains the changes in Gov. Jerry Brown's May Revision and how they'll affect final budget discussions.

PHOTO: Gov. Jerry Brown holds up poster boards with graphic information regarding revisions to his budget during a press conference at the state Capitol on May 13, 2014. The Sacramento Bee/Randy Pench

May 13, 2014
California drags down nation's pre-kindergarten enrollment


A new survey shows that spending on pre-kindergarten programs barely budged nationwide in 2012-13, with drops in California offsetting gains in some of the 40 other states that offer pre-kindergarten.

This morning's report from the National Institute for Early Education Research at Rutgers University in New Jersey comes as Gov. Jerry Brown releases a revised version of his January spending plan. Like the January plan, the revised plan does not include money for pre-kindergarten. That sets the stage for negotiations on the issue — a priority for legislative Democrats — over the coming weeks.

Speaking to reporters Tuesday, Brown did not rule out signing a budget that included money for the program. Referring to the program's supporters, the governor said they believe the extra year of education would make everything "hunky dory."

The institute's report finds that pre-kindergarten programs around the country are just beginning to emerge from years of recessionary budget cuts. Total state funding nationwide increased by $30 million during 2012-13, to $5.4 billion, about a 1 percent increase.

In California, though, enrollment dropped by almost 15,000 spots. Another four states had decreases of more than 1,000 students, according to the report.

"While more states increased enrollment than decreased it, the size of the decrease in large states such as California and Pennsylvania pulled the national total down," the report reads.

The study also judged pre-K programs on their meeting the institute's quality standards, such as teachers having university degrees, receiving at least 15 hours in-service training, and other benchmarks. California was among the five states that met fewer than one-half of the 10 benchmarks in 2012-13, according to the report.

"Our nation has emerged from the recession, but preschool-age children are being left to suffer its effects," NIEER director Steve Barnett said in a statement.

California's transitional kindergarten program, when fully phased in, will cover only one-third of four-year-olds. Democrats in the Senate and Assembly want to expand transitional kindergarten to cover all four-year-olds. In addition, Senate Bill 1123 would create "Strong Start" early learning services for children from birth to three years old.

"I think we have a real opportunity to transfer California from one of the nation's biggest under-performers" to a national leader in early childhood development, said Deborah Kong, president of Early Edge California, which backs the proposals. "We still have a lot of work to do."

Editor's note: This post was updated at 9:15 a.m. May 13 to include comments from Gov. Jerry Brown.

PHOTO: Kindergarten teacher Katherine Hoffmore, 48, left, works on a bead project with McKayla Parker, 6, right, where they learn to repeat patterns at Greer Elementary School in Sacramento on Jan. 17, 2013.

May 8, 2014
California state tax revenues running $2.2 billion above estimates

jchiang.jpgTax revenues are running $2.2 billion above assumptions in the 2013-14 state budget, setting the stage for final negotiations on a 2014-15 budget in the next month.

The higher revenues, contained in a
report from the State Controller's Office, are expected to be reflected in Gov. Jerry Brown's revised budget which will be released in a few days.

Brown has said he wants extra money to be placed in a "rainy-day fund" and/or be used to retire state debts, but many of his fellow Democrats in the Legislature are seeking higher spending on health, welfare and education services, including universal pre-kindergarten.

Controller John Chiang said that through April - the first 10 months of the fiscal year - revenues were 102.8 percent of assumptions in the current budget. April is the state's most important revenue months because personal income taxes, by far the largest source of revenues, were due on April 15.

However, corporate income taxes, 11.3 percent above estimates, showed the largest increase over budget assumptions.

"California saw about $300 million more in its bank account at the end of April than expected after tax collections were tabulated for the pivotal month," Chiang's report said. "Total revenues (for April) reached $13.9 billion, beating estimates made in conjunction with the governor's budget released in January by 2.2 percent."

Meanwhile, Chiang said, state spending has tracked the budget's assumptions very closely, so virtually all of the extra money remains in the treasury.

PHOTO: State Controller John Chiang, in 2011. The Sacramento Bee/Hector Amezcua.

May 7, 2014
Report says California owes $340.7 billion, some being ignored

The state of California is $340.7 billion in debt and while it is on track to repay much of the sum, it's not doing anything about unfunded liabilities for teacher pensions and state retiree health care, the Legislature's budget analyst said Wednesday.

Legislative Analyst Mac Taylor issued a comprehensive report on all state debts, including the "Wall of Debt" that Gov. Jerry Brown has cited.

The Wall of Debt, which was more than $30 billion when Brown resumed the governorship in 2011, is borrowing that predecessor Arnold Schwarzenegger and the Legislature approved to cover operating deficits. It is, however, only about 10 percent of what the state owes.

Brown has pledged to repay the deficit debt — most of it money owed to school districts — but has not yet addressed other unfunded liabilities, such as those in the State Teachers Retirement System and retiree health care obligations.

The $340.7 billion figure cited in the report also could be larger because there is sharp disagreement on how the state's retirement funds have calculated their liabilities. Critics say that the funds use estimates of future earnings that are too high and were they to be adjusted downward, the debts would increase.

Taylor's report divides the $340.7 billion in debt into two categories — $200-plus billion "that merit further legislative attention" and $140.6 billion "that the state is addressing."

The biggest chunk of the first category is $73.7 billion in unfunded liabilities for teacher pensions. STRS has said it needs $4.5 billion a year in additional financing to keep the fund solvent. It also includes an estimated $64.6 billion in projected retiree health care.

PHOTO: Legislative Analyst Mac Taylor. The Sacramento Bee/Hector Amezcua

May 5, 2014
VIDEO: Jerry Brown warns against spending, throwing cigarettes out car windows

browncalfire.jpgGov. Jerry Brown, moving to tamp down expectations for increased spending ahead of his revised budget plan this month, said Monday he is "very wary" of funding new programs and discounted entirely the idea of extending tax increases approved by voters in 2012.

Asked at a news conference about Proposition 30, the sales tax increase he championed, the Democratic governor said, "That's a temporary tax and, to the extent that I have anything to do with it, will remain temporary."

Brown's remarks came after the San Francisco Chronicle reported over the weekend that state Sen. Mark Leno, D-San Francisco, had suggested the possibility of an extension.

Brown in January proposed a $154.9 billion spending plan that includes modest increases for social service programs, but also billions of dollars to address long-term debt. As he prepares to revise his budget proposal this month, social service advocates and some Democrats are pressing him to expand spending in some areas, including for pre-kindergarten education.

"I'm going to err on the side of prudence and a sense of the past, which has, you know, taken two governors down to a very low level of popularity because they spent too much money too soon," Brown said at a news conference to mark Wildfire Awareness Week. "We're going to be careful, that's the goal, and I urge my colleagues in the Legislature to look out not just for June or July, but for the next several years. California's fiscal integrity is crucial to investment, to well-being and to the public confidence in their government."

As he has previously, Brown used the state's ongoing drought and expectation of a dismal fire season to frame his budget remarks.

"While there's always new desires and needs that seek validation through new spending, there are old responsibilities, like fighting fires, like fixing up the roads that are deficient," Brown said. "So, we have a lot of challenges just to do what the current set of laws tell us to do, so I'm going to be very wary of any expensive new ideas that people may want to put forward, however worthy they are in themselves."

According to state fire officials, 1,108 wildfires have burned more than 2,500 acres in California from Jan. 1 through late last month, far more than the 697 fires and 1,793 acres burned in the same period last year.

"We are heading into a fire season that may be unprecedented," Natural Resource Secretary John Laird said.

Intense fires in recent years have strained the state's budget for wildfire fighting, but Laird said, "We're ready. Regardless of what's in the budget, there will be money to fight the fires."

Brown said the state "is going to have to spend more money" to fight fires. When asked how much might be required this year, he said he is reviewing the budget now. Brown also urged residents to avoid starting fires in the first place.

"The message is pretty simple," he said. "Be careful, watch it, don't throw cigarette butts out the car window, assuming anybody smokes anymore. And don't do anything else stupid."

PHOTO: Gov. Jerry Brown speaks to reporters at a Wildfire Awareness Week event in McClellan on May 5, 2014. The Sacramento Bee/David Siders

April 28, 2014
Jerry Brown urges committee support for reserve plan


Gov. Jerry Brown urged members of the Assembly's budget panel Monday to support his plan for a new rainy-day reserve before voters in November.

Making a rare appearance before a legislative committee, Brown received a friendly reception from Democrats and Republicans alike during an informational hearing on reserve legislation put forward by Assembly Speaker John A. Pérez, D-Los Angeles.

Brown said his plan would provide "protective restraint."

"When the rain comes we have to store it," Brown told the Assembly Budget Committee. "It will pinch to a certain degree, and that is what the goal is."

The proposal would divert capital gains revenue into a rainy-day reserve when it exceeds 6.5 percent of revenue. It would allow the money to be spent to pay down debt as well as setting aside money to fulfill the state's constitutional school-funding guarantee. Brown called a special legislative session on the subject earlier this month.

The Pérez legislation would replace a reserve measure already on the November ballot, ACA 4, the product of a 2010 deal. It will take Republican votes to make the switch, but Republicans on the committee Tuesday seemed to support the outlines of the Brown/Pérez plan.

Details will be worked out in the coming weeks, Brown and Pérez said. Afterward, Pérez said he wants to bring a reserve measure to the Assembly floor in two weeks, before the budget process gets underway. Brown will release his revised budget in mid-May.

"This is something that has to be done before we pass the next budget," Perez said.

Earlier Monday, though, Senate President Pro Tem Darrell Steinberg, D-Sacramento, said, "We ought to take this up as part of the overall budget, which is only weeks away."

PHOTO: Gov. Jerry Brown speaks at a news conference at the Capitol on Jan. 10, 2013. Randall Benton / Sacramento Bee

April 16, 2014
Jerry Brown calls special legislative session on rainy day fund

jerrybrownprisons.jpgGov. Jerry Brown on Wednesday called a special session of the Legislature for next week to address his effort to put a rainy-day fund constitutional amendment on the November ballot.

The proposed amendment would eliminate some provisions of a rainy day reserve measure already on the ballot. The original measure, ACA 4, was opposed by some of the Democratic governor's liberal allies, who complained it would collect too much money and make it too difficult to increase spending.

Brown has said the measure fails to address the volatility of capital gains revenue and didn't allow lawmakers to pay down debt, among other shortcomings.

"We simply must prevent the massive deficits of the last decade and we can only do that by paying down our debts and creating a solid Rainy Day Fund," Brown said in a prepared statement Wednesday.

The original measure, ACA 4, was part of a 2010 budget deal between Democrats, Republicans and then-Gov. Arnold Schwarzenegger and originally scheduled to go before voters in 2012, but lawmakers postponed it to 2014.

Republicans reacted skeptically to Brown's proposal when he first announced it, in January, saying they were happy with ACA 4. Brown's ability to push it through a special session will test Democrats' diminished standing in the Legislature. Democrats have lost their two-thirds majority in the Senate, with three senators suspended.

In calling a special session, Brown raises the profile of the issue but still must get supermajority support.

Brown's proposal, contained in his January budget plan, includes a $1.6 billion allocation to a new rainy-day fund. He proposes to increase deposits during years when capital gains revenue is high, to raise the maximum size of the fund to 10 percent of general fund revenue and to create a special reserve for school funding.

PHOTO: Gov. Jerry Brown speaks to reporters at a news conference at the Capitol on Sept. 9, 2013. The Sacramento Bee/Hector Amezcua

April 15, 2014
State tax revenue continues to outpace estimates

brownbudget.JPGState tax revenue continued to outpace budget estimates last month, with year-to-date revenue now $1.4 billion more than the Brown administration projected, the state Department of Finance reported Tuesday.

The report is the last benchmark ahead of April, a heavy month for income tax revenue. Last month, personal income tax revenues to the general fund came in $274 million above estimates, while corporate tax revenues exceeded estimates by $110 million, according to the Department of Finance.

Sales and use tax receipts were $12 million below the forecast for the month of $1.6 billion.

If revenue remains higher than projected in coming months, Gov. Jerry Brown is likely to face increased pressure from Democratic lawmakers and social service advocates to free up spending. Brown has proposed a $154.9 billion spending plan for next fiscal year that includes modest increases for social services and schools, but also billions of dollars to address long-term debt. A surplus also makes it likely the administration would implement contract provisions to increase pay for state employees.

The governor will release a revised budget proposal in May.

PHOTO: Senate President Pro Tem Darrell Steinberg, left, Gov. Jerry Brown, center, and Assembly Speaker John A. Pérez, right, celebrate a budget deal with a formal announcement at the Capitol on Tuesday, June 11, 2013. The Sacramento Bee/Randy Pench

April 8, 2014
California's tax collections jumped by $18.2 billion in 2013

PROP30.JPGCalifornia's tax revenues jumped by $18.2 billion in 2013, thanks to an improving economy and the impact of a temporary sales and income tax increase approved by voters, a new Census Bureau report shows.

All tax collections, including those for special purposes as well as the state general fund, increased from $115 billion in 2012 to $133.2 billion last year, with virtually of the increase generated by sales and income taxes. The general fund received about 75 percent of the taxes.

California's 15.6 percent increase was more than twice the 6.1 percent increase recorded by all states, the Census Bureau reported, Total state collections were $846.2 billion last year, with California's $133.2 billion being 15.7 percent of all state taxes, even though the state has just 12.2 percent of the nation's population.

The latter data bolster a new calculation by the Tax Foundation that Californians had the nation's fourth highest state and local tax burden in 2011, 11.4 percent of personal income.

Personal and corporate income taxes, the state's largest sources of revenue at $74.3 billion, jumped by $12 billion from 2012 while sales and other excise taxes, including fuel taxes, $48.1 billion last year, were up by nearly $7 billion. Personal income taxes alone totaled $66.8 billion while sales taxes alone were $33.9 billion.

In 2012, voters approved Proposition 30, which increased the state sales tax fractionally but sharply boosted income taxes on the state's most affluent families. It was estimated that those increases would add about $6 billion a year to the state's revenue stream but total revenues, including those from the tax hike, jumped by $18.2 billion, three times as much.

Editor's note: Calculation updated at 4:15 p.m.

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 in 2012. The Sacramento Bee/Randy Pench

April 7, 2014
California still holds 4th place in state-local tax burdens


Californians carried the nation's fourth highest state and local tax burden in 2011, the Tax Foundation says in a new report, largely because its personal incomes are markedly lower than those of other high-tax states.

The Washington-based Tax Foundation annually calculates state and local tax burdens as a percentage of personal incomes and California has traditionally been in the top tier. But the data are always several years old and 2011 was the last year before a temporary, voter-approved increase in sales and personal income taxes went into effect. Therefore, the 2012 rankings a year from now could push California higher.

For 2011, the Tax Foundation calculated that California's tax burden was 11.4 percent of its average per capita income of $45,354, or $5,136. New York was the highest at 12.6 percent, followed by New Jersey at 12.3 percent and Connecticut at 11.9 percent. Wyoming residents had the lowest tax burden, 6.9 percent, and the national average was 9.8 percent.

One reason for California's high rank was that while its per capita tax burden was, indeed, relatively high, its per capita personal income was only slightly above the national average of $42,473, while other high-tax states also had markedly higher incomes.

Connecticut had the highest per capita income at $60,287 while California's was 15th highest. Texas, with which California is often compared, had the nation's fourth lowest tax burden of 7.5 percent of personal income which, at $41,269 per capita, was 23rd highest.

New York, New Jersey and Connecticut have occupied the top three places for a number of years. California was fourth in 2010 and fifth in 2009.

The state's 2011 tax burden of 11.4 percent was slightly lower than 2010's percentage but has been fairly consistent for decades, ranging from a high of 12 percent in 1977 to a low of 10.4 percent in 2005.

In 2012, voters approved a fractional increase in the state sales tax and a sharp boost income taxes on the state's highest-income families, raising about $6 billion more a year temporarily to balance the state's budget.

With Californians' personal income totaling about $1.7 trillion a year and state and local taxes approximating $200 billion, that would add perhaps a third of a percentage point to the overall burden. And it means California could challenge Connecticut for third place — especially if a spate of recent local sales tax increases continues.

PHOTO: Yolanda Odell of Sacramento dances to get the attention of last minute tax filers on the corner of Truxel Road and W. El Camino Ave. for Liberty Tax Service in 2011. The Sacramento Bee/Renee C. Byer

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 17, 2014
California chief justice warns of 'civil rights crisis'

state_of_judiciary_2013.JPGCalifornia faces a "civil rights crisis" because of years of funding reductions for the judicial branch, Chief Justice Tani Cantil-Sakauye said Monday afternoon during her third State of the Judiciary Address.

Speaking to a joint legislative session in the Assembly Chamber at the Capitol, Cantil-Sakauye asked for partnership across the government to address what has been nearly half a billion dollars in cumulative budget cuts since 2008. She said the reductions have deprived more than two million Californians of access to a local court and have had a particularly negative effect on civil cases, which cede precedence to criminal justice.

"We face astonishing and harmful delays in urgent family matters, in business contracts, wrongful termination, discrimination cases, personal injury cases across the board," she said. "We want to be a partner in fair and collaborative solutions."

Cantil-Sakauye tied her comments to the 50th anniversary of the federal Civil Rights Act. She called the landmark legislation, which outlawed discrimination on the basis of race, color, religion, sex or national origin, "the fair thing and the right thing to do."

"But it also took collaboration" to create and enforce, she added. "That's how an effective democracy works--all three branches in collaboration."

She pointed to recent efforts within the California judiciary, including the creation of problem-solving courts, which emphasize rehabilitative programs over punitive solutions, and a push to address disparities in the juvenile justice system, where African-American, American Indian, disabled and foster youth are over-represented.

At the top of the speech, lawmakers gave a standing ovation to Justice Joyce L. Kennard, who will retire in April after 25 years on the California Supreme Court. Honoring her rise from immigrant to judge, Cantil-Sakauye saluted Kennard's "uncommon intellect, integrity and courage."

PHOTO: Chief Justice Tani Cantil-Sakauye delivers her State of the Judiciary address to a joint session of the Legislature in the Assembly chambers on March 11, 2013. The Sacramento Bee/Hector Amezcua

March 13, 2014
Audit finds California's unemployment agency skipped chance to recover $500 million

A new state audit blasts California's Employment Development Department for ignoring an offer of federal help to recover hundreds of millions of dollars in overpaid unemployment benefits.

Thursday's report by the Bureau of State Audits estimates that EDD will have missed out on an estimated $516 million in overpayments from February 2011, when the federal program took effect, to September of this year, when the EDD expects to belatedly begin to participate in it.

About $99 million of that would offset the department's administrative costs, saving the state money amid a time of deep budget reductions. The other $417 million would have paid down the $10 billion debt — with interest — that California owes on federal loans to its insolvent unemployment fund.

EDD officials told auditors that they lacked the staffing needed to compile the necessary computer records to participate in the federal program. Yet the audit, triggered by a whistleblower, found that the EDD estimated in 2012 that it would require only about $323,000 in staff time.

"EDD did not even attempt to hire any contractors to perform the work, so Official B's conclusion that EDD could not hire anyone with the appropriate skills to perform the work was pure speculation at best," the audit reads, referring to an unnamed "high-ranking EDD official," who it described as retired.

March 10, 2014
Two decades of budget expenditures, revenue


Legislative budget subcommittee hearings on Gov. Jerry Brown's January spending plan are in full swing, with lawmakers, administration officials, the Legislative Analyst's Office and others debating the proposal's finer points.

And then there are the numbers themselves. Democrats and Republicans debate what is the most accurate way to depict the changes in state expenditures and revenues over the years.

Below are charts showing California expenditures and revenue since 1992-93. The top chart summarizes general fund, special fund, and bond spending and includes adjustments for inflation based on the Bureau of Labor Statistics. It does not reflect the federal money that runs through the state.

The bottom chart shows the pieces of the state's revenue stream during the same time period.

Click on the legend to highlight a category.

Source: Governor's January budget, schedule 6 and schedule 3. Revenue numbers for 2012-13 are preliminary and are estimates for 2013-14 and 2014-15.

PHOTO: Gov. Jerry Brown discusses his revised budget plan at a news conference at the Capitol on Tuesday, May 14, 2013. Renée C. Byer / Sacramento Bee

March 8, 2014
Darrell Steinberg pushes Jerry Brown on pre-kindergarten expansion

steinbergconvention.jpgLOS ANGELES - Senate President Pro Tem Darrell Steinberg said Saturday that Senate Democrats will make pre-kindergarten a priority in budget negotiations with Gov. Jerry Brown this spring, calling last year's school funding overhaul inadequate to address shortcomings in public education.

"No funding formula will prevent a 16-year-old from dropping out of high school because she fell behind years earlier," Steinberg told delegates at the California Democratic Party's annual convention. "And no funding formula addresses the reality that the achievement gap is formed well before, well before children arrive in kindergarten."

Steinberg's remarks constituted a glancing response to Gov. Jerry Brown's continued focus on a school funding overhaul that shifts more money to low-income and English language learners. Brown has said he will consider any proposals by legislative Democrats to expand the state's pre-kindergarten program, but he did not propose funding for any such measure in his January budget plan.

Steinberg, D-Sacramento, and other legislative Democrats have proposed allowing every 4-year-old in the state to attend pre-kindergarten classes, at a potential cost of about $1 billion to the state general fund.

The pre-kindergarten proposal is one of several points of contention Brown is likely to have with members of his own party in the Legislature this year, with social service advocates and their liberal allies pushing him to approve increased spending.

Steinberg, who is terming out, said "there is plenty of unfinished business to take care of" at the Capitol this year.

He said, "This is our time."

PHOTO: Senate President Pro Tem Darrell Steinberg, D-Sacramento, addresses the California Democratic Party convention in Los Angeles on March 8, 2014. The Sacramento Bee/David Siders

February 28, 2014
Analyst says Jerry Brown's prison plan is short-term fix


Gov. Jerry Brown's plan to reduce prison overcrowding may satisfy a looming federal deadline but it does not represent a durable long-term solution, according to the nonpartisan Legislative Analyst's Office.

In a victory for the Brown administration, the federal panel adjudicating the struggle over California's prison overcrowdingrecently gave the state two more years to reduce its population to constitutional levels.

While the LAO concludes that California is on pace to slip under the federal cap, the nonpartisan analyst faulted Brown's plan for relying too much on the use of county jails and private prisons. Brown's budget would spend $481 million to place just under 17,000 inmates in so-called contract beds .

A strategy combining contract beds with other changes, such as increasing good time credits and expanding parole for the elderly, inmates with serious medical conditions and second-strikers, will likely get California under a federally-mandated cap by the new 2016 deadline, the LAO found.

But the state's prison population is projected to climb again in subsequent years. Relying on contract beds will also place a costly burden on the state, the LAO argues, to the tune of about $500 million annually.

"The plan contains relatively few measures that would help the state maintain long-term compliance other than relying indefinitely on costly contract beds," the report concludes.

Given those risks, the LAO urged the Legislature to craft some longer-term policy solutions. Its recommendations include reducing certain sentences and converting some crimes to "wobblers" that can be charged either as misdemeanors or felonies -- an approach Brown vetoed last year - allowing inmates to earn more early release credits for good behavior, and expanding programs that allow adult men to serve part of their sentences outside of state prison.

January 13, 2014
VIDEO: Jerry Brown defends cap-and-trade for high-speed rail

jerrybrownfresno.jpgFRESNO - Gov. Jerry Brown, touching off a two-day swing through inland California on Monday, defended his proposal to use fees paid by carbon producers to help finance high-speed rail and suggested he is close to declaring a drought emergency.

Brown is proposing to use $250 million in proceeds from the state's cap-and-trade program to help fund California's $68 billion high-speed rail project. The nonpartisan Legislative Analyst's Office said earlier Monday the proposal "likely would not maximize the reduction" of greenhouse gas emissions and is "legally risky."

"I've looked at the law surrounding AB 32 and the cap-and-trade," the Democratic governor told reporters in Fresno. "I believe it's legal, my lawyers believe it's lawful. It's a very appropriate source of funding."

Some environmentalists have criticized the use of cap-and-trade money for rail, saying other projects could reduce greenhouse gas emissions more immediately.

"Yes, it's long-term," Brown said. "But we aren't all, you know, Twitter-holics that have to have instant gratification after 140 characters. We can take a few years and build for the future, and that's my sense here, that I'm coming back to be governor after all these years. ... It's been on my list for a long time, and I think we've got to get it done. And we do need that funding, and it's legal, and I hope the Legislature will support it."

Brown spent the day in Fresno meeting with law enforcement, agriculture, education and other interests and touring a downtown pedestrian mall. He was pressed at a meeting with water officials to declare a drought emergency, which could accelerate some federal relief measures.

Asked if he would declare a drought, Brown said, "Not today, but we're certainly getting ready."

Brown, who is preparing for a likely re-election bid this year, was scheduled to hold meetings in Bakersfield and Riverside on Tuesday, before returning to the Capitol.

PHOTO: Gov. Jerry Brown speaks with reporters in Fresno on Jan. 13, 2014. The Sacramento Bee/David Siders

January 13, 2014
Fiscal analyst issues early praise for Jerry Brown's budget

brownbudget.JPGThe Legislature's nonpartisan fiscal analyst said Monday that Gov. Jerry Brown's new spending plan "would place California on an even stronger fiscal footing," broadly praising the budget plan in the office's initial review.

"The governor's emphasis on debt repayment is a prudent one," the Legislative Analyst's Office said. "Overall, the governor's proposal would place California on an even stronger fiscal footing, continuing California's budgetary progress."

Still, the LAO expressed reservations about the proposal's lack of strings attached to higher education funding and the use of fees paid by carbon producers for high-speed rail.

Brown last week released a $154.9 billion budget that includes modest increases for social services and schools, but also billions of dollars to pay down long-term debt.

The LAO praised Brown for proposing a rainy-day fund, saying that "in general, setting aside money for a rainy day is exactly what the state should be doing when revenues are soaring, as they are now." However, the analyst suggested the fund proposed by Brown may be too unwieldy, and it recommended considering simpler reserve plans.

The LAO also recommended putting some money aside to address the struggling state teachers' retirement fund. Brown's budget plan does not commit money to the fund but pledges to "begin working" on way to stabilize the fund.

Brown's proposal to use $250 million in proceeds from the state's cap-and-trade program to help finance California's $68 billion high-speed rail project is one of the more controversial elements of his plan. The LAO said the proposal "likely would not maximize the reduction" of greenhouse gas emissions, as the project will not be finished by 2020. It called the proposal "legally risky."

On higher education, the analyst criticized Brown for including broad goals for higher education — including reducing costs and increasingly timely degree completion — but tying funding only to keeping tuition rates flat.

"This approach diminishes the Legislature's role in key policy decisions and allows the universities to pursue their own interests rather than the broader public interest," the analyst said.

Brown released his annual spending plan last week, setting the stage for months of budget talks at the Capitol. The LAO said there is "a significant possibility" that revenue estimates "will rise by a few billion dollars" by the time Brown releases his budget revision in May.

PHOTO: Senate President Pro Tem Darrell Steinberg, left, Gov. Jerry Brown, center, and Assembly Speaker John A. Pérez, right, celebrate a budget deal with a formal announcement at the California Capitol on Tuesday, June 11, 2013. The Sacramento Bee/Randy Pench

January 13, 2014
Live chat: David Siders breaks down Brown's budget proposal

brownjanbudget.jpgThe Sacramento Bee's state budget expert, reporter David Siders, takes reader questions about Jerry Brown's budget proposal.


View this post from any device

PHOTO: Gov. Jerry Brown speaks at a news conference at the California state Capitol in Sacramento on Jan. 10, 2013. The Sacramento Bee/Randall Benton

January 10, 2014
California schools rank low - again - in Education Week report

Thumbnail image for HA_SCHOOL_BUS2565.JPG

California's public education system — not for the first time — has been given a low grade in Education Week's annual state-by-state evaluation of school finances, teacher preparedness, academic achievement and other benchmarks.

The magazine gives California a "D" with a cumulative score of 72.4 on a 100-point scale, 10th lowest among the states. Subpar financing — the lowest in the nation — and poor academic achievement weighed heavily on the state's evaluation.

But the data are not up-to-date, especially the financial data, and a $10 billion boost in state aid to schools proposed this week by Gov. Jerry Brown could improve its standing.

The Education Week finance information, published Friday, is three years old. It pegs per-pupil spending from state and local sources on California's six million students at $8,341 in 2011, a few hundred dollars less than what the state calculated because Education Week adjusts the number downward for California's relatively high cost of living.

That number is the lowest among the 50 states, about $3,500 under the national average of $11,864.

Brown's proposed 2014-15 budget would, he says, raise per-pupil spending to $9,194, but whether it would increase California's standing vis-à-vis other states depends on what they do this year as well.

Clearly, however, it would still leave California well below the national average, whatever it might be. Reaching the national average, California authorities have calculated, would cost at least $18 billion more a year.

California students' performance on achievement tests also drags down the state's standing vis-à-vis other states. It consistently ranks near the bottom in elementary and middle-school reading and mathematics tests and mediocre in high school graduation rates.

Brown, citing the particularly low achievement of poor and "English-learner" students, persuaded the Legislature last year to direct more state aid to districts with large numbers of those kids.

Massachusetts scored the highest in the Education Week evaluation with 91.4 while Nevada was lowest at 65.7.

PHOTO: Pleasant Grove High School students get off their bus on Friday, Feb. 20, 2009. The Sacramento Bee/Hector Amezcua

January 9, 2014
Rainy-day proposal pulls back from 2010 California budget deal

michael_cohen_blog.jpgThe proposed rainy-day fund that is a central part of Gov. Jerry Brown's budget plan would scrap some of the provisions in a measure already on the November ballot.

That measure, ACA 4, was part of a 2010 budget deal between Democrats, Republicans and then-Gov. Arnold Schwarzenegger and was originally scheduled to go before voters in 2012. But lawmakers that year moved the initiative to 2014, and unions and some advocates for programs for low-income residents have voiced concerns that the proposed fund is too strict.

Speaking to reporters Thursday, Brown said the details of his proposed rainy-day fund remain to be worked out. But he said it would ease boom-and-bust budget cycles, while providing more flexibility than ACA 4.

"The reason for that rainy day fund is the volatility. With that zig-zag, up and down, in capital gains and spending, the only way to offset that is to have money in reserve, and that's what I intend to do," Brown said.

"The measure will be on the ballot, unless it's changed. And so I think that provides a lot of incentive to come up with some better alternatives," he added.

School and other budget interests reacted cautiously to the governor's proposed reserve.

"What's better, parking money or using it for one-time purposes?" said Dennis Meyers, assistant executive director for governmental relations of the California School Boards Association, one of the members of the influential Education Coalition that includes the California Teachers Association.

"There are just a lot of needs. You just have to weigh those needs versus softening the funding swings," Meyers said.

Replacing ACA 4 on the ballot with Brown's plan would require a two-thirds vote. Democrats have slim two-thirds majorities. Republicans, meanwhile, said they would oppose anything they deem weaker than ACA 4.

"We await details on the proposal announced today. However if it is stronger than Assembly Constitutional Amendment 4 — which will be on the ballot in November - then we'd be happy to take it under consideration," Assembly Republican Leader Connie Conway, R-Tulare, said in a statement.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, who voted for ACA 4 to help end a three-month budget standoff, on Thursday called the measure "flawed, and flawed significantly."

"I think the governor's proposal will undoubtedly be better, but we have to analyze it," Steinberg said.

Under ACA 4, the state would divert money into a rainy-day reserve based on 20 years of historical revenue. The money would be off-limits except after earthquakes and other emergencies and when revenue comes in less than expenses for the previous year.

Brown's proposal includes three main differences from ACA 4:

  • The proposed reserve would collect capital-gains revenue that exceeds 6.5 percent of the general fund.
  • It would create a special pot within the reserve for the state's constitutional school-funding guarantee, Prop. 98. "Instead of immediately allocating it to schools, some of that money gets allocated into a reserve, so that when Prop. 98 drops...that money can get allocated from that account," the Department of Finance's Nick Schweizer said.
  • Lastly, it would allow lawmakers to tap the fund to pay down state debts. "What we've done to date and what we want to continue to do is balance saving money for the future as well as chipping away at all of these huge liabilities," Finance Director Michael Cohen said.

PHOTO: Michael Cohen, director of the California Department of Finance, testifies to the Senate budget committee in 2011. The Sacramento Bee/Hector Amezcua

January 9, 2014
Fun with numbers - details of Jerry Brown's proposed budget

Brownbudget.pngIt's time for some fun with numbers -- state budget numbers -- as found in the summary of Gov. Jerry Brown's proposed 2014-15 budget:

-- Brown's proposed budget for 2014-15 is about 15 times as large as the first one he managed for the 1975-76 fiscal year.

-- The governor pegs the total 2014-15 budget of the general fund, special funds and bond funds at $154.9 billion, but the real number is well over $200 billion, when federal funds are included. That's the equivalent of more than 10 percent of California's entire economic output.

-- Most of the federal money underwrites health and welfare services and K-12 education. The "health and human services" budget, for instance, is $118 billion, but the state's general fund would contribute only $28.8 billion of that total, with most of the rest coming from the feds.

-- Spending on elementary and high schools would top $76 billion, with $45.3 billion from the general fund, another $16 billion from local property taxes and the final $15 billion mostly from the federal government. That translates into $12,833 for each of the state's six million K-12 students.

-- During the 2007-8 fiscal year, the state pumped $3.3 billion of general fund money into the University of California's $12 billion general purpose spending, but during 2014-15, the state's contribution would be $2.8 billion while revenue from tuition and student fees would have climbed from $6.6 billion in 2007-08 to $12.2 billion in 2014-15.

-- During that same period, the state's share of running the state university and college system would shrink less dramatically, from $3 billion to $2.5 billion while student fees would increase from $2.8 billion to $5.5 billion.

-- Although the state's prison population has dropped by about 30,000 inmates in recent years, thanks to pressure from federal judges about overcrowding, the state's spending on "corrections and rehabilitation" hasn't shrunk and, in fact, appears to have grown.

The 2014-15 budget pegs corrections at just under $12 billion, including sales taxes that the state gives counties to handle felons that have been diverted into local jails and supervision under "realignment." Spending on inmate health and dental care alone - another source of federal judicial pressure - has risen from an average of $7,580 per inmate in 2005-06 to a projected $18,415 in 2014-15.

-- During Brown's first stint as governor nearly four decades ago, the sales tax was the No. 1 generator of general fund revenues at 41 percent in 1975-76, with income taxes trailing at 34 percent. The 2014-15 budget projects income taxes to be almost 66 percent of the state's revenues and sales taxes just 23 percent.

--The proposed budget, if enacted, would spend the equivalent of 8.17 percent of Californians' personal incomes, by no means the highest level, but also not the lowest, since 1950, according to a chart in the budget.

The highest relative level of spending, 8.83 percent, occurred during the 1980-81 fiscal year, when Brown was serving his first stint as governor, and again in 2007-08 during Arnold Schwarzenegger's governorship. The lowest level, 4.62 percent, occurred in 1951-52, when Earl Warren was governor. Since 1975, the lowest has been 7.28 percent in 1983-84. the first budget for then-Gov. George Deukmejian.

Updated at 2:30 p.m. to include more historic data.

PHOTO: Gov. Jerry Brown presents his proposed budget at the state Capitol on Jan. 9, 2014. The Sacramento Bee/Alexei Koseff

January 8, 2014
Jerry Brown's $154.9 billion budget will propose repaying school funds, bolstering reserves

brownjanbudget.jpgGov. Jerry Brown will propose reducing the state's long-term debt by more than $11 billion next budget year and fully eliminating it by 2017-18, according to a copy of the budget document obtained by The Sacramento Bee.

He also will propose repaying about $6 billion in deferred payments to schools and contributing $1.6 billion to a rainy day fund.

Brown wants to restore some of the money cut from social service programs in recent years, and will propose a 5 percent increase in welfare grants.

The Democratic governor, who was scheduled to propose the budget plan Friday, shifted course after the document's leak, announcing he will introduce the proposal on Thursday, instead.

In the budget document, Brown calls for "fiscal restraint," saying "economic expansions do not last forever."

The budget projects $217.8 billion in unfunded retirement mandate and total state unfunded liabilities of $354 billion.

The budget calls for spending $154.9 billion from all funds, including $106.8 billion from the General Fund.

The plan's summary projects that spending on K-12 schools will grow to almost $70 billion by 2017-18, an increase of $22 billion from 2011-12.

The summary makes no mention of transitional kindergarten, something championed by Democrats in both the Assembly and Senate in recent days.

Brown proposes $670 million in new general fund spending to pay for the expansion of Medi-Cal benefits, including mental health, substance use disorder, adult dental and specialized nutrition services.

Several health-related programs would receive funding boosts. In-home supportive services, which saw dramatic reductions over recent years, will get a 6.4 percent increase over the current budget, bringing its general fund allotment to about $2 billion. Part of the increase stems from U.S. Department of Labor regulations that take effect Jan. 1, 2015 and require overtime pay for domestic workers.

Brown's budget proposal assumes that the state's finances will be sound enough to include $173.1 million for state employee pay increases to kick in July 1, although it doesn't firmly commit to it. About half that money will come from the general fund.

"A final determination will be made at the May Revision based on the latest revenue projections and updated expenditure information available," according to the draft document.

State managers and supervisors will receive similar pay hikes to avoid salary compaction, which occurs when rank-and-file wages exceed management's.

Brown's budget summary doesn't commit 2014-15 money to the struggling state teachers' retirement fund. Instead, "the Administration will begin working with the Legislature, school districts, teachers and the pension system," aiming to enact a plan in 2015-16 that will fully fund the system within 30 years.

Current obligations to CalSTRS' current and future retirees total $80.4 billion more than it has assets to cover. Stabilizing the system would require more than $4.5 billion per year for many years.

Unlike like other public pension systems, the California Teachers' Retirement System doesn't have the authority to charge employers more money to make up for investment losses. The Legislature has the power to raise employer rates or kick in money from state coffers.

Brown's summary suggests whatever plan emerges should phase in contribution increases over time and cautions that "school districts and community colleges should
anticipate absorbing much of any new CalSTRS funding requirement."

Lawmakers have advanced the notion of safeguarding extra revenue in a rainy day fund, including placing a measure on the 2014 ballot to fortify the state's fund.

Saying that proposed measure does not go far enough, the budget proposes an alternate constitutional amendment that would regulate the flow of money into and out of the state's budget reserve.

Deposits into the fund would be tied to revenue from capital gains, triggering when such revenue accounts for more than 6.5 percent of the General Fund. Brown and others have warned about becoming overly reliant volatile sources of income like capital gains, and the proposal notes that California's heavy use on taxes on the wealthy means revenue can "swing both up and down quickly."

Payments to schools under Proposition 98, the voter-approved constitutional amendment setting a minimum baseline of education spending, would be managed through a reserve that would absorb funding bumps to be used in down years.

The fund's maximum size would also double, from five to ten percent of the General Fund. Safeguarding against depleting the fund too quickly during future downturns, the amendment would allow at most half of the fund's balance to be spent in the first year of a recession.

Under the proposed amendment, California could fulfill its obligation to deposit money into the fund by allocating money to pay down the so-called Wall of Debt.

For schools, the plan proposes $61.6 billion toward the constitutional school-funding guarantee in 2014-15, up from $6.3 billion above the current budget year.

The plan also includes a $6.4 billion payoff of school deferrals. Those involuntary loans from school districts to the state forced districts to borrow billions of dollars with interest from private lenders or else absorb the cost from reserves or cutting programs.

With school-construction bonds from 2002, 2004 and 2006 all but exhausted, Brown wants to revisit what role, if any, the state should play in helping districts build new schools or modernize existing classrooms.

Any future school-construction programs, the plan reads, should "avoid an unsustainable reliance on state debt issuance that characterizes the current school facilities program."

The budget, though, taps $188 million from the general fund for emergency school repairs.

To help carry out the first year of the Brown-championed Local Control Funding Formula, the budget increases general fund money for schools by $4.5 billion in 2014-15.

In addition, the plan would allocate $26.3 billion for higher education and repeats calls for major changes in how the system operates.

Instead of focusing on enrollment targets that increase costs, the University of California, California State University and community college systems need to do a better job ensuring that students complete their degrees in a timely manner, according to the budget summary.

The budget includes a funding increase of $142.2 million apiece for the UC and CSU systems. The increases reflect the second year of a four-year pact with the administration that trades more money for the systems' holding tuition at existing levels and making changes meant to "improve student success and to realize institutional efficiencies."

State funding for community colleges, meanwhile, would increase 11.4 percent in 2014-15.

Editor's note: This post was updated at 5:20 p.m., 5:37 p.m. and 5:46 p.m. to include additional information about the budget. It was changed at 11:40 on Jan. 9 to clarify that the proposed increase in K-12 spending to nearly $70 billion would occur by the 2017-18 fiscal year.

Jim Miller, Jeremy White, Christopher Cadelago and Jon Ortiz of The Bee Capitol Bureau contributed to this report.

January 7, 2014
State income tax revenues stay up, beat projections in December

brownbudget.JPGCalifornia income tax collections came in $1.6 billion, or 20 percent, above projections in December, the Legislative Analyst's Office said Tuesday, just days before the Brown administration releases its annual spending plan.

December is a significant month for personal income tax payments by California's wealthiest taxpayers. Including that month, the nonpartisan analyst's office said revenue from personal income and corporation taxes were running $2.1 billion above projections so far this budget year.

Gov. Jerry Brown is scheduled to release his annual budget proposal at the Capitol on Friday, before traveling to San Diego and Los Angeles to promote it in big media markets later in the day.

The Democratic governor has approached improving budget indicators with caution, urging lawmakers to bolster reserves. In his budget plan, he is expected to support a proposal by Assembly Speaker John A. Pérez to put a rainy-day fund constitutional amendment on the November ballot.

The Legislative Analyst's Office projected last fall that the state could post a $5.6 billion surplus by June 2015, with annual surpluses reaching $8.3 billion by the 2016-17 budget year.

PHOTO: Senate President Pro Tem Darrell Steinberg, left, Gov. Jerry Brown, center, and Assembly Speaker John A. Pérez, right, celebrate a budget deal with a formal announcement at the California Capitol on Tuesday, June 11, 2013. The Sacramento Bee/Randy Pench

January 7, 2014
California Senate Democrats call for universal pre-kindergarten


Declaring it a caucus priority for coming budget talks, Senate Democrats have introduced legislation that would make all four-year-olds eligible for pre-kindergarten classes.

The proposal builds upon a transitional kindergarten program that was part of a 2010 law requiring children to be older when they enroll in kindergarten. That program, though, covers only one-quarter of four-year-olds, about 120,000 children, whose birthdays fall within the last three months of the year.

Tuesday's proposal would phase in all four-year-olds over five years, at an estimated cost of $198 million annually. The total cost for 350,000 pre-kindergarten students would reach almost $1 billion annually by 2019-2020, Senate President Pro Tem Darrell Steinberg, D-Sacramento, said at a news conference at Harkness Elementary School in south Sacramento.

Steinberg acknowledged the expense, but said universal pre-kindergarten was an appropriate way to spend some of California's expected budget surplus because students would benefit greatly.

"I am proud to call this wise spending in California," Steinberg said.

Elk Grove Police Chief Robert Lehner added that students who do well in school are less likely to commit crimes.

Assembly Democrats included universal pre-kindergarten for four-year-olds in a blueprint of budget priorities released last month. Their plan's phase-in is similar to Tuesday's proposal.

January 6, 2014
Jerry Brown's cap-and-trade proposal for high-speed rail said to be $250 million

High Speed Rail Station (1).JPGGov. Jerry Brown's proposal to use fees paid by carbon producers to help finance the state's high-speed rail project is expected to amount to $250 million next budget year, a sum that could provide a significant lift to the project but frustrate environmentalists already upset about the diversion of fees.

Brown is expected to include the proposal in the annual budget plan he will release Friday, sources told The Sacramento Bee. The amount is included in about $750 million in total cap-and-trade funds the governor is expected to propose allocating among transportation, green energy and other programs to reduce greenhouse gas emissions.

In addition, Brown is expected to propose paying back part of a $500 million loan from the cap-and-trade program to the state general fund included in this year's budget. The amount of the repayment is expected to be $100 million.

Many environmentalists criticized the loan last year and have bristled at the idea of using cap-and-trade money for high-speed rail, saying other projects could have a more immediate impact on greenhouse gas reduction.

Brown's office has declined to discuss the budget ahead of its release.

PHOTO: A view of the interior of a station in the proposed high speed rail network. Rendering by Newlands and Company Inc., 2008.

January 5, 2014
Jerry Brown eyes cap-and-trade money for high-speed rail

Brown_signing_bills.JPGGov. Jerry Brown plans to propose spending millions of dollars in fees paid by carbon producers to aid the state's controversial high-speed rail project.

The proposal - and the prospect of additional funding from the state's cap-and-trade program in future years - could provide a significant lift to a $68 billion rail project beleaguered by uncertainty about long-term financing.

Brown plans to propose allocating several hundred million dollars this year, sources told The Sacramento Bee.

Though the state has acquired $3.4 billion in federal funding to start construction of the rail project in the Central Valley, legal challenges have left state bond funding in question.

Brown is expected to include the proposal in the annual budget plan he will release Friday. Brown has made high-speed rail a priority of his administration, and he suggested two years ago that cap-and-trade revenue, which is designed to reduce greenhouse gas emissions, would be a future source of funding for the project.

But the use of cap-and-trade money for high-speed rail could be problematic. The nonpartisan Legislative Analyst's Office said in 2012 that while the rail project could eventually help reduce greenhouse gas emissions, benefits would not be seen until after 2020, the year by which California is seeking to meet its greenhouse gas reduction goals.

Moreover, the Democratic governor and lawmakers infuriated environmentalists last year by approving a $500 million loan from the cap-and-trade program to the state general fund.

Brown said at the time that the state was not "quite ready yet" to start allocating money. The administration said state agencies needed more time to develop greenhouse gas-reduction programs and that the loan would be repaid with interest when those programs needed the money.

Brown's budget plans also include using general fund money to pay back part, but not all, of the loan, a source said.

The rail project, which is proposed to connect Los Angeles and San Francisco through the Central Valley, has been beset by legal challenges and opposition from Congressional Republicans. A Sacramento Superior Court judge in November ordered the California High-Speed Rail Authority to rescind its original funding plan, saying officials failed to comply with provisions of Proposition 1A, the initiative in which voters approved initial funding for the project in 2008.

Rail officials have been acquiring property in the Central Valley for the project. Construction, which was once expected to start last summer, is now expected to begin this year.

Brown's office declined to discuss the budget proposal ahead of its release.

Brown is also expected in his budget plan to support a proposal by Assembly Speaker John A. Pérez to put a rainy-day fund constitutional amendment on the November ballot. The measure would restrict spending in good years and offset cuts in bad years, with a goal of building billions of dollars in reserve.

In advance of his budget release, Brown has urged the Legislature to bolster reserves, cautioning that the budget's reliance on capital gains leaves it vulnerable to large revenue peaks and valleys.

"The question is, 'When do we get the next valley?'" he said at the Milken Institute California Summit in November. "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."

Brown may face resistance to the creation of a rainy-day fund by labor unions and other allies of the governor and Democratic-controlled Legislature. Liberal groups already are calling for increased spending after years of budget cuts in the recession.

The nonpartisan Legislative Analyst's Office projected last fall that the state could post a $5.6 billion surplus by June 2015, with annual surpluses reaching $8.3 billion by the 2016-17 budget year.

PHOTO: Gov. Jerry Brown signs bills in Sacramento on March 24, 2011 as Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Sen. Mark Leno, D-San Francisco look on. The Sacramento Bee/Hector Amezcua

December 27, 2013
California once again the nation's top municipal bond issuer

market.jpgA multi-billion-dollar surge of bond issues by state and local governments is making California, once again, the nation's top issuer of municipal debt, the Bloomberg financial news service calculates.

Bloomberg said that California governments have issued $46.2 billion in new debt so far in 2013, a 13 percent increase from 2012, pushing the state ahead of New York for the first time since 2010. Bloomberg calculates that New York has sold $36.4 billion in municipal debt this year, down 18 percent from 2012.

The news service credits the state's improving economy and better fiscal health, especially at the state level, with sparking the uptick in new government debt.

"They've really gotten their fiscal house in order," Bloomberg quotes Peter Hayes, who heads municipal bonds at New York-based BlackRock Inc.. "Now that the economy is stronger, they feel more confident that strength is sustainable, and that gives them the confidence to borrow."

As the state's financial indices have improved, so have its credit ratings, and bond buyers have demanded as little as three-tenths of one percent in extra yield, the lowest margin in years.

The largest California bond sale this year was a $2.3 billion offering by the Foothill/Eastern Transportation Authority in Orange County, an operator of toll roads. The state, meanwhile, is planning to sell about $3 billion in new general obligation bonds by mid-year, plus another $7 billion in general obligation and lease-revenue bonds in the following fiscal year.

PHOTO: Trader Kevin Colter, left, works on the floor of the New York Stock Exchange on June 28, 2013. Associated Press/Richard Drew

December 19, 2013
Steinberg proposes $50 million for treating mentally ill criminals


Democratic state Senate leader Darrell Steinberg wants California to spend $50 million on programs that try to keep mentally ill criminals from re-offending.

The proposed legislation calls for bringing back a program that existed for about 10 years in California. The "Mentally Ill Offender Crime Reduction Grant" program allows counties to apply for funding to support mental health courts, substance abuse treatment, and employment training programs. Those efforts would reduce recidivism and crowding in California jails, Steinberg said, and help mentally ill people become more stable.

"We are trying to bring back something that was a great success in the late 90s early 2000s that went away as a result of the budget cuts," Steinberg said during a press conference this morning, where he was backed by law enforcement and mental health care leaders.

"We do not have a specific funding stream dedicated to providing mental health services to people in jail that continue once they leave jail and get into the community... We had that before, prior to 2008. We want to reinstate that and make it part of our overall approach."

Steinberg said lawmakers should treat California's projected budget surplus with an approach that dedicates one-third to paying down debt, one-third to reserves and one-third to spending.

"We shouldn't be shy about saying that there are areas of public investment that we must make, that are important," he said.

Speaking in support of Steinberg's proposal today were Stanislaus County Sheriff Adam Christianson; Sacramento County's Chief Probation Officer Lee Seale; Sacramento County's mental health director Dorian Kittrel and Sacramento County Supervisor Phil Serna.

PHOTO: Senate President Pro Tem Darrell Steinberg, D-Sacramento, in March 2013. The Sacramento Bee/Hector Amezcua

December 11, 2013
Assembly Democrats seeking to spend most of California surplus

ha_perez_III.JPGAssembly Speaker John A. Pérez unveiled a "blueprint for a responsible budget" Wednesday that appears to spend most, if not all, of the state's projected surplus in the 2014-15 fiscal year and may conflict with Gov. Jerry Brown's priorities.

Pérez didn't place a price tag on the new spending, which he termed "investment," but said he and his fellow Assembly Democrats want to boost state aid to colleges and expand safety net services to the poor, including a boost in welfare grants.

Speaking to reporters at the Capitol, Pérez and Assemblywoman Nancy Skinner, D-Berkeley, chair of the Assembly Budget Committee, said they want to end the 2014-15 fiscal year with a $2 billion reserve and build that to as much as $10 billion over the next several years.

Mac Taylor, the Legislature's budget analyst, forecasts that without new spending, the state would end the year with a $5.6 billion surplus, thus indicating that the price tag for the Assembly's expansion plans would be at least several billion dollars.

Pérez and Skinner said they want to restore money to some programs that were slashed during recession-induced budget deficits, especially those in education and safety net services.

The new spending would include a expansion of the earned income tax credit, expanded eligibility for welfare payments to low-income workers, expanding the "CalFresh" program of food benefits, raising Medi-Cal reimbursement rates, expanding child care, and making transitional kindergarten universally available to all four-year-old children.

PHOTO: Assemblyman John Perez, D-Los Angeles, speaks during a press conference on Friday, December, 11, 2009. 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 20, 2013
California fiscal analyst projects large surpluses

HA_budget11248 mac taylor.JPGCalifornia's budget is on track for multibillion dollar surpluses in the coming years, the Legislature's nonpartisan fiscal analyst said Wednesday in an upbeat assessment of the state's fiscal picture.

An improving economy and continuing revenue from voter-approved tax increases in 2012 have left state finances in strong shape, Legislative Analyst Mac Taylor wrote in his office's five-year fiscal outlook released this morning.

The state is projected to have a $5.6 billion reserve by June 2015. Taylor, though, offered a note of caution in the report, the second-straight rosy review of state finances after years of red-ink warnings.

"Despite the large surplus that we project over the forecast period, the state's continued fiscal recovery is dependent on a number of assumptions that may not come to pass," he wrote.

Taylor projected annual surpluses to grow more slowly after the 2016-17 budget year, as tax increases from Proposition 30, Gov. Jerry Brown's ballot initiative last year to raise taxes, phase out. The impact will be felt over several years, however, and Taylor told reporters "you don't have one really dramatic year in which revenues fall off."

The revenue forecast remains highly dependent on capital gains. Taylor said the market "is not out of line like it was in the dot com boom."

Brown has taken steps in recent weeks to temper spending expectations ahead of the release of his annual spending plan in January, and his administration continued to urge caution Wednesday.

"Recent history reminds us painfully of what happens when the state makes ongoing spending commitments based on what turn out to be one-time spikes in capital gains," Michael Cohen, Brown's director of finance, said in a prepared statement. "We're pleased that the analyst's report shares the governor's view that discipline remains the right course of action. The focus must continue to be on paying down the state's accumulated budgetary debt and maintaining a prudent reserve to ensure that we do not return to the days of $26 billion deficits."

Fiscal Outlook 112013

Editor's note: This post was updated at 1 p.m. to include video and comments from Taylor and Cohen.

October 28, 2013
Steinberg: Making high school relevant is 'top focus'


California high schools could see an infusion of new programs that link academics with career exposure to provide students a richer learning experience. That's the goal of a competitive $250 million grant process Senate leader Darrell Steinberg is promoting to schools and businesses.

The Sacramento Democrat joined several local education and business leaders at Health Professions High School today to highlight a piece of the 2013-14 state budget that he hopes will give high school a boost of relevancy by connecting students to the world of work. Steinberg encouraged schools and community colleges to collaborate with employers in their region and apply together for grants to create more opportunities for applied learning.

"We want business, we want lead industries to step up and see this not just as a philanthropic add-on or something that would be nice to do for kids, but to see this opportunity as the beginning of a change in our American culture," Steinberg said. "For business, helping educate and train the next century work force is an indispensable part of the bottom line."

High schools could use the grants, for example, to hire someone to serve as an internship coordinator to match students with businesses, or to train teachers to teach academic subjects in a more hands-on way that shows how they relate to careers.

Educators bill the approach as "linked learning," and hold up Sacramento's Arthur A. Benjamin Health Professions High School as an example. The school teaches a college-prep academic curriculum but blends it with preparation for careers in health care. During a tour, Steinberg visited an English class where students had read "The Hot Zone," a book about the Ebola virus, and were doing a project about its symptoms.

"Linked Learning students understand how their high school education relates to their next step and beyond," said Deborah Bettencourt, superintendent of the Folsom Cordova Unified School District.

October 2, 2013
California's debt service level drops below projections

lockyer.jpgFour years ago, state Treasurer Bill Lockyer projected that servicing California's bonded indebtedness would approach 10 percent of the state's general fund revenues by 2014 and suggested that the state needed a master plan to prioritize its borrowing.

Since then, Lockyer says in his latest "debt affordability report," improving state finances, lower interest rates and tight management of new borrowing have reduced debt service to under 8 percent.

"In the market," Lockyer said, "the state's general obligation bonds have become more competitive with higher-rated bonds, and investors have reduced the interest-rate premium they demand to buy our bonds.

"At the same time, the state refinanced billions of dollars of bonds at lower interest rates and reduced taxpayers' debt service payments by hundreds of millions of dollars. In part because of these steps, debt service now consumes less of the state budget. The 2009 DAR projected debt service payments would equal 9.8 percent of general fund revenues in 2013-14. This report estimates that ratio will be 7.7 percent."

As of June 30, the state had $86.28 billion in general obligation and lease-revenue bonds supported by the general fund outstanding, plus another $36.54 billion authorized by the Legislature and/or voters but not yet issued.

In relative terms, California is a high-debt state, the report reveals. Among the 10 most populous states, California ranks second only to New York in debt compared to personal income (5.8 percent), debt per capita ($2,565) and debt compared to total economic output (4.98 percent). Texas is the lowest-debt state among the 10.

The state plans to issue $12.5 billion in new general obligation and lease-revenue bonds during the 2013-14 and 2014-15 fiscal years, including some of the $9.95 billion in bonds authorized for a bullet train system. Gov. Jerry Brown and legislators are also trying to write a new water bond issue for the 2014 ballot to replace an $11.1 billion measure now scheduled for a vote. The new water bond, if successful, is likely to be much smaller.

PHOTO: State Treasurer Bill Lockyer speaks at the Sacramento Press Club luncheon on June 21, 2012. The Sacramento Bee/Randy Pench.

September 18, 2013
California school aid change already enmeshed in controversy

lunch.jpgA brand-new overhaul of how state aid is distributed to California schools - focusing more money on districts with large numbers of poor and/or English learner students - is already generating controversy.

Big school districts that would be in line for much of the extra money are chafing at new requirements from the state Department of Education on counting eligible students. The law says that children who qualify for free or reduced meals are considered to be poor for purposes of calculating the extra money.

"Never has school lunch meant so much for California education," writer Jane Meredith Adams comments in her article on the dustup on the EdSource website devoted to California public education.

Adams says officials in Los Angeles Unified and Fresno Unified, which stand to benefit greatly from Gov. Jerry Brown's new distribution system, are angry "over a last-minute change in how children who receive free means are counted."

More than half of LA Unified's 650,000 students would be considered poor by qualifying for reduced price meals under federal guidelines. But the Department of Education now wants school systems to re-certify that eligibility.

Local and state education officials have been squabbling over the new requirement for several weeks with John Deasy, LA Unified's superintendent, beating the drums of protest the loudest.

"People will become unglued" if the new requirement makes a significant difference in the money flow, Adams quotes Deasy.

State officials say that recertification is necessary to avoid double- or even triple- counting of students as poor, English-learner or foster children, a third category of qualification for the extra aid.

PHOTO: Fourth-grader Isidro Vasquez, 10, eats a breakfast provided by the school district at Woodbine Elementary School in south Sacramento on Wednesday, June 19, 2013. The Sacramento Bee/Randy Pench

August 29, 2013
California Assembly committee OKs prison expansion bill

jerrybrown.jpgThe Assembly Budget Committee has approved an emergency measure that would send $315 million to move roughly 9,000 inmates to out-of-state facilities and leased prison spaces run by state employees by years' end.

The measure, Assembly Bill 105, doesn't cover costs for fiscal 2014-15 -- an estimated $415 million -- or beyond.

The Brown administration's proposal enjoyed support today from a number of law-and-order groups. They noted that the state has already responded to federal court orders to reduce the prison population by sentencing more convicts to local jails.

"We've reached critical mass," said Ron Cottingham, president of Peace Officers Research Association of California.

Opponents, including the ACLU and inmates' rights organizations, blasted Brown's plan for spending money on more prison beds that could go to education, rehabilitation and programs for the poor.

Jim Lundberg of Friends Committee on Legislation in California, a Quaker-based group, said Brown's plan "is not a balanced approach" that ignores early release and parole options. He feared a plan sold as a temporary fix would become a permanent fixture instead of a temporary fix.

"Why, once given this money, Lundberg said, "what would be the administration's motivation for giving it back?"

The budget committee approved the measure 21-0.

August 22, 2013
With new money, California schools report less stress

.SCHOOLS_0154.JPGWith billions more dollars to spend, California's school districts are exhibiting fewer signs of financial stress, a new survey from EdSource, a California public education research organization, concludes.

EdSource surveyed officials in California's 30 largest districts, which together account for a third of California's 6 million students.

"Our 2013 survey shows that these school districts are experiencing fewer stresses this year compared to last," the report concluded. "Most notably, there has been a dramatic reduction in teacher layoffs. In addition, many districts have been able to restore some or all of their instructional days trimmed in the prior three years because of budget cuts.

"The foreclosure crisis has eased significantly, and unemployment is lower than it has been in five years, which means some students are likely to be experiencing less stress at home. That should relieve at least some of the pressures on schools to provide a range of support services to ensure that students succeed."

The 2013-14 budget enacted in June provided enough money to keep school spending roughly flat, in comparison to the cuts that had been enacted in previous years, when the state faced severe deficits. The new money came from a temporary sales and income tax increase approved by voters in 2012, along with revenues from a slowly improving economy.

August 5, 2013
Ratings agency cites California's spending restraint, upgrades credit

budgetsign.jpgFitch Ratings upgraded California's general obligation bond rating from A-minus to A on Monday, citing restrained spending in recent budget cycles and a reduction in budgetary debt.

Fitch's action follows a similar upgrade by the ratings house Standard & Poor's earlier this year.

"The upgrade is based on institutionalized changes to fiscal management in recent years, which combined with the ongoing economic and revenue recovery have enabled the state to materially improve its overall fiscal standing," Fitch said in a statement. "Notable progress includes timely, more structurally sound budgets, spending restraint, and sizable reductions in budgetary debt."

Fitch cheered deep spending cuts in recent budgets and "a restrained approach to restoring past cuts." However, the agency said California remains vulnerable to swings in personal income tax revenue and a lack of reserves.

August 5, 2013
Legislative analyst charts decline of California sales tax revenue

Dramatic changes in Californians' consumer spending have sharply eroded the sales tax as a source of state revenue, a new report by the Legislature's budget analyst concludes.

Spending on taxable goods such as cars and clothes hit a high point of 53 percent of personal income in 1979 and has been declining ever since to 33 percent currently, Legislative Analyst Mac Taylor's report found.

The relative decline of taxable sales has been only partially offset by increases in the sales tax rate, so it has been supplanted as the state's largest revenue source by the personal income tax, which now generates nearly twice as much revenue.

July 10, 2013
California tax revenue beats projections, Chiang says

brownsigns.jpgThe state collected about $1.2 billion more in tax revenue last month than Gov. Jerry Brown projected, ending the fiscal year about $2 billion ahead of expectations, the state controller reported today.

Controller John Chiang put tax revenue in June, the last month of the budget year, about 10 percent higher than Brown estimated the previous month, with revenue for the full year up about 2 percent.

Brown persuaded lawmakers in budget negotiations this summer to accept relatively modest revenue estimates for the fiscal year beginning July 1, resulting in a budget that increased spending on social services far less than many Democratic lawmakers hoped.

"Rising employment, economic expansion and voter-approved tax increases have generated revenues outperforming even the rosiest of projections," Chiang said in a prepared statement. "However, California's history of boom or bust revenue cycles should be a cautionary tale that informs our spending decisions and incentivizes policymakers to prudently pay down accumulated debt."

July 2, 2013
Muni bond industry betting on better California credit rating

Standard_Poor_2011.jpgThe multi-trillion-dollar municipal bond industry appears to be betting that California's balanced state budget and improving economy will pay off in an improved credit rating.

The Bloomberg financial news service reported Tuesday, in the wake of a generally positive appraisal by Standard & Poor's, that bond investors are demanding lower premiums for California bonds.

"The perception of California from an investor's perspective is that it's on an upswing," said Robert Miller, an executive at Wells Capital Management in Menomonee Falls, Wisc., told Bloomberg. "I don't think there is anybody out there who doesn't think that they are going to receive an upgrade at some point."

The state's credit plummeted to one of the nations lowest during years of deep recession and chronic budget deficits, but has been rising slowly.

An index of economic health devised by Bloomberg says that California's growth in the first quarter of 2013 was faster than the four next largest states, Texas, New York, Florida and Illinois. Among the factors were rising home prices and lower unemployment rates.

The state budget situation is also improving with revenues during the just-concluded 2012-13 fiscal year running about $1 billion above the level assumed by the 2013-14 budget.

PHOTO: Tourists drive past Standard & Poor's headquarters in New York's financial district on Aug. 6, 2011. Associated Press/ Karly Domb Sadof

July 1, 2013
Jerry Brown says UC, CSU leaders pledged to pursue online ed 'vigorously'

brownlcff.jpgGov. Jerry Brown said today that he vetoed his own budget proposal to earmark $20 million for online education at the University of California and California State University systems only after leaders of those institutions assured him they would pursue online course offerings on their own.

"I had an agreement from both the segments that they would carry out online vigorously," Brown told reporters at an event in Sacramento. "As the leader of both governing boards, I'm actively engaged with both the University of California and the Cal State."

One of a relatively small number of line-item vetoes made by Brown to the state's $96.3 billion spending plan last week, Brown left the $20 million in funding for the UC and CSU systems intact, but without tying it to online education. He said he is "completely confident" the UC and CSU systems will expand their online course offerings without a budget requirement.

Brown's tone was different last fall, when he started regularly attending UC meetings to call for spending reductions and increased efficiency.

"We are going to have to restrain this system in many, many of its elements," the Democratic governor said in November, "and this will come with great resistance."

This afternoon, Brown said of the university systems, "I didn't want them to be too tightly constrained."

Brown's remarks came during an event celebrating the passage of his proposal to shift more K-12 education money to poor and English-learning students, a priority of the governor's this year. A modified version of Brown's proposal was approved in budget negotiations last month, and Brown traveled to Los Angeles earlier today to sign legislation required to implement the overhaul.

The school funding bill also eliminates most of California's categorical funds - money that can be used only for certain purposes.

At California Middle School in Sacramento's Land Park neighborhood, Brown called the legislation a "step forward for local control."

PHOTO: Gov. Jerry Brown poses for photographs at an event in Sacramento to celebrate the enactment of a school funding overhaul on July 1, 2013. The Sacramento Bee/David Siders

July 1, 2013
Ratings agency: California finances better, but debt issues linger

brownsigns.jpgThe Wall Street credit rating agency Standard & Poor's said today that California is in a better financial position than it has been in years, but it criticized the politicization of state revenue estimates and warned long-term spending commitments could frustrate efforts to pay down debt.

"Overall, we believe the state ... begins its fiscal year in a stronger position than it has in several years," the rating agency said in a report on the first day of the new fiscal year. "Its liquidity and structural budget positions both reflect materially better conditions."

Gov. Jerry Brown signed the main budget bill last week after persuading legislative Democrats to accept his relatively modest revenue estimates. In a concession to lawmakers, however, Brown reduced by about $650 million the amount of money he originally proposed to pay down debt owed schools under Proposition 98, California's school-funding guarantee.

"Standard & Poor's Ratings Services believes the higher-than-expected cash receipts presented the state an opportunity to accelerate its plans for retiring the $26.9 billion in budget liabilities that remain leftover from prior years' deficits," S&P said. "Compared with what the governor recommended in May, however, the final budget agreement moves in the other direction, decelerating somewhat the repayment of a portion (of) these debts."

That Brown and lawmakers could negotiate at all about the amount of tax revenue they expect the state to collect this year troubled S&P. More than half of states rely on independent revenue bodies, the ratings house said, and it criticized the budget process in California for highlighting "what we view as one of the weaker elements of California's fiscal institutions - that of allowing political negotiation to influence the revenue estimates used in the budget."

California's $96.3 billion spending plan includes additional money for the state's welfare-to-work program, college scholarships and dental care for poor adults - with commitments to spend an increasing amount in future years.

S&P expressed concern about revenue volatility. By enacting even a modest expansion of ongoing spending commitments, the agency said, "we detect a softening of resolve when it comes to paying down the internal debts."

The report said, "We believe that by opening the door to new programs while waiting for future (uncertain) revenue to repay some internal debts, the state delays, or jeopardizes altogether, its ability to confront the long-term liabilities."

PHOTO: Assemblyman Bob Blumenfield, D-Woodland Hills, chairman of the Assembly Budget Committee, far left, celebrates after being presented one of the pens that Gov. Jerry Brown, seated, used to sign a copy of the state budget at the Capitol in Sacramento on Thursday, June 27, 2013. Associated Press/ Rich Pedroncelli

June 28, 2013
Finance chief Ana Matosantos leaving Brown administration


Some job shuffle news on a Friday afternoon: Ana Matosantos, the Department of Finance director whom Gov. Jerry Brown retained from the Schwarzenegger administration, is leaving.

The governor's office announced that Matosantos will be stepping down in September. Her deputy, Michael Cohen, will fill the vacancy.

"During very tough economic times, Ana carried out her duties as finance director with insight, boundless energy and uncommon effectiveness," Brown said in a statement. "Michael has been an excellent chief deputy director and I'm confident that he's fully up to the task of leading the department in the years ahead."

Matosantos' tenure has spanned some fiscally turbulent years, but she is stepping down after relatively smooth budget negotiations that accompanied an influx of new revenue this year. She referenced California's recently established fiscal stability in a statement accompanying her departure.

"It has been a privilege to serve the people of California during very difficult fiscal times, and now the state's economy is recovering and its budget balanced," Matosantos said in the statement.

It's unclear what her next move will be. H.D. Palmer, a spokesman for the Department of Finance, said Matosantos had been planning to depart but hasn't talked with potential future employers.

Palmer added that the decision to leave the grind of heading the finance department isn't surprising.

"Being the director of finance and overseeing the largest state budget in the country is a tough job on its own," Palmer said, "but being the finance director in the greatest recession since the great depression makes that job exponentially more challenging."

PHOTO: Finance Director Ana Matosantos talks about Gov. Jerry Brown's budget proposal in Sacramento on Monday, May 14, 2012. The Sacramento Bee/Hector Amezcua.

June 27, 2013
Jerry Brown vetoes own budget proposal on online education

brownsigns.jpgGov. Jerry Brown, who pressed California colleges and universities earlier this year to expand their online offerings, backed off Thursday, vetoing his own budget proposal to earmark $20 million in funding for online education.

Brown, who proposed in January to provide $10 million each to the University of California and California State University systems to expand the number of courses available online, will include that money in the college systems' annual allocation, but without requiring it to be spent on online education.

The action was one of a relatively small number of line item vetoes that the Democratic governor made as he signed the state budget Thursday for the fiscal year starting Monday.

June 27, 2013
Jerry Brown signs California budget bill

brownmics.jpgGov. Jerry Brown this morning signed a $96.3 billion spending plan that will shift more education money to poor and English-learning students and expand Medi-Cal coverage to more than 1 million low-income Californians under the federal healthcare overhaul.

The signing of the main budget bill, in a celebratory event with Democratic legislative leaders, followed a relatively frictionless budget negotiation ahead of the start of the new fiscal year Monday.

Brown used his line-item veto authority to cut $40 million from the spending plan.

Legislative Democrats initially urged about $2 billion more in discretionary, general fund spending than Brown proposed. They settled for about one-tenth of that amount, however, and accepted the governor's more conservative revenue estimates. After reaching agreement with the governor two weeks ago, they said the budget represented a significant step forward following years of budget cuts.

Republican lawmakers have said the budget does too little to reduce state debt, and they objected during the budget process to late-hour changes made to the budget and related legislation.

As Brown signed the budget, one piece of his initial proposal remains unsettled - an effort to overhaul California's enterprise zone program. After the state Senate on Tuesday approved a modified version of his plan, the matter is pending before the Assembly. It would significantly change a program that has provided tax breaks to employers in 40 locally-designated areas for years.

PHOTO: Gov. Jerry Brown talks to members of the press on Tuesday, April 23, 2013. The Sacramento Bee/Hector Amezcua

June 24, 2013
Jerry Brown, Senate Democrats push enterprise zone plan forward

brownenterprise.jpgAfter Gov. Jerry Brown's proposal to eliminate the state's enterprise zone program appeared to stall earlier this month, the Brown administration and Democratic legislative leaders rushed forward Monday with a slightly modified version of the plan, anticipating a floor vote in the Senate on Tuesday afternoon.

The modified proposal would largely retain the geographic boundaries of California's 40 enterprise zones, but with significantly scaled back hiring credits for companies in those areas.

The proposal released Monday would provide hiring credits only to employers paying between 150 percent and 350 percent of the minimum wage, currently between $12 and $28 per hour. Except for small businesses, the program would generally not apply to temporary worker agencies, retailers, restaurants or drinking establishments

The proposal also includes about $30 million in the budget year beginning July 1 for tax credits negotiated on a case-by-case basis with the administration's economic development arm. The proposal maintains Brown's original bid to create a sales tax exemption for manufacturing and biotech research companies.

The Senate Committee on Budget and Fiscal Review voted 9-5 in favor of the measure on Monday, with Democratic lawmakers in support and Republicans opposed. Brown and labor groups have lobbied intensely against the enterprise zone program, saying it is wasteful and ineffective. They have pointed, among other things, to the use of enterprise zone tax credits by strip clubs.

Following the committee vote, H.D. Palmer, a spokesman for Brown's Department of Finance, said in an email, "We're encouraged by the vote in Senate Budget Committee to reform what business leaders, workers and others agree is a broken tax incentive system."

The League of California Cities and the California Chamber of Commerce opposed the measure, and Republican lawmakers objected to receiving the bill in print only hours before the hearing.

They said eliminating enterprise zone hiring credits could harm businesses, particularly in the Central Valley, where wages are relatively low and unemployment high.

While the tax credits Brown proposed may benefit companies in the Silicon Valley and San Diego, said Sen. Tom Berryhill, R-Modesto, it would only hurt small companies in the Central Valley.

"For my area, it's a back-breaker," he said.

The nonpartisan Legislative Analyst's Office has estimated the enterprise zone program will cost state taxpayers $750 million this fiscal year and will exceed $1 billion within several years.

According to a legislative analysis, Brown's revised proposal would cost the state about $73 million more than under the existing enterprise zone program in the upcoming fiscal year, but result in a savings by 2016-17.

PHOTO: Gov. Jerry Brown speaks at a news conference at the Capitol on Jan. 10, 2013. The Sacramento Bee/Randall Benton

June 15, 2013
California Democrats wrap up budget, flex supermajority power


As the state Senate finished voting today on a bill to extend a tax on managed care plans, Senate President Pro Tem Darrell Steinberg told reporters at the back of the room, "That is what's called a supermajority."

The measure was a relatively modest part of the annual budget package wrapped up by the Legislature today, but it required a two-thirds vote and afforded Democrats an opportunity to flex the supermajority power they gained in November elections.

Democrats in the Assembly mustered two-thirds not only for the managed care tax, but also for a bill that would ask voters to lower from two-thirds to 55 percent the voter-approval threshold for a local government to incur bonded indebtedness for certain public improvements. It is one of several Democratic proposals to lower the voter-approval threshold on local tax and revenue measures.

Assemblyman Bob Blumenfield, D-Woodland Hills, said the measure would give local agencies "tools so that they can make the choices and the investments in the infrastructure that they need to grow their economics and make their cities livable."

Assemblyman Don Wagner, R-Irvine, said, "You know and I know that bond is just a four-letter word for tax."

After every Assembly Democrat voted for the bill, Assembly Constitutional Amendment No. 8, Jon Coupal, president of the Howard Jarvis Taxpayers Association, said on Twitter, "All Dems went up on ACA 8. Let's just say that, for a few of them, the targets on their backs just got a little larger."

Steinberg called the Assembly's vote a "good sign" and said he personally supports the measure. However, he said the upper house will not consider voter threshold issues until early next year, which is still in time to place them on the 2014 ballot.

After voting Friday for the state's main, $96.3 billion budget bill, lawmakers today finished voting on all but one of the numerous trailer bills required to implement the annual spending plan. Senators were expected in committee Monday to discuss the final measure, involving a coordinated care program for "dual eligibles" - people enrolled in both Medi-Cal and Medicare.

For the most part, however, the budget is done.

"I'm just very pleased," Steinberg said.

Gov. Jerry Brown is expected to sign the spending plan before the next fiscal year begins July 1. After the Senate and Assembly adjourned for the day, he issued a statement on Twitter.

"After two and a half years of struggle and difficult times," Brown said, "California's budget is balanced and sustainable into the future."

The Bee's Jim Sanders contributed to this report.

PHOTO: State Senate President Pro Tem Darrell Steinberg, D-Sacramento, right, pumps his fist after one of the state budget bills was passed by the Senate on Friday, June 14, 2013. Associated Press/Rich Pedroncelli

June 15, 2013
With budget foregone conclusion, lobbyists quiet for day at Capitol

lobby.jpgA handful of lobbyists sat before a television in a Capitol hallway as the Legislature convened this morning for final budget debates, where 10 times as many might have minded the goings-on in previous, more contentious years.

One casualty of a frictionless budget, it would seem, is any drama on the constitutional deadline to pass a spending plan.

Lawmakers approved the state's main, $96.3 billion budget bill on Friday, four days after Democratic leaders reached agreement with Gov. Jerry Brown. Lawmakers were casting final votes today on trailer bills required to implement the plan.

With a lack of remaining controversy about the budget - only Republicans, a super-minority, raised significant objections - lawmakers were trying to move quickly to start their abbreviated weekends.

Among the lobbyists in the hallway was Vanessa Cajina, of the Western Center on Law and Poverty. She said she likes to be present when votes happen, and the number of lobbyists around her increased to about a dozen by the time the Senate convened.

Still, a budget debate just isn't the same when it occurs at 11 a.m. on a Saturday.

For one thing, "Chops isn't open," Cajina said, referring to the popular restaurant/watering hole across from the Capitol.

PHOTO: Lobbyists watch Assembly proceedings on a television in a Capitol hallway on Saturday, June 15, 2013. The Sacramento Bee/David Siders

June 14, 2013
California lawmakers pass state budget bill

California Budget.jpgBoth houses of the Legislature passed the main budget bill today, four days after Gov. Jerry Brown and legislative leaders reached a compromise on the state's annual spending plan.

Lawmakers in both the Senate and Assembly were beginning to take up more than 20 trailer bills associated with the budget and were expected to return for final votes on Saturday.

The $96.3 billion budget includes a modified version of the Democratic governor's proposal to shift more education money to poor and English-learning students, as well as commitments to spend money in the future on mental health services, college student aid and other programs.

The Senate approved the budget 28-10 along party lines. Democratic lawmakers hailed the plan for its reinvestment - however limited - in social programs cut during the recession.

"California's back," said Sen. Hannah-Beth Jackson, D-Santa Barbara. "I think this budget is a reflection of that fact."

The vote in the Assembly was 54-25

Republican lawmakers, a super-minority all but irrelevant in budget talks this year, complained the budget failed to sufficiently address debt.

"We're not addressing the bigger financial issues that challenge California," said Sen. Ted Gaines, R-Rocklin.

The Republicans said they were shut out of budget talks and that the compromise was done without public vetting.

Assemblyman Bob Blumenfield, chairman of the Assembly Budget Committee, disagreed.

"All of us have a vote," Blumenfield said. "No one was excluded from the meetings."

The Bee's Jon Ortiz and Melody Gutierrez contributed to this report

PHOTO: State Sen. Mark Leno, D-San Francisco, chair of the Senate Budget committee, urges lawmakers to approve the state budget, Friday, June 14, 2013 in Sacramento, Calif. Associated Press/ Rich Pedroncelli

June 14, 2013
Proposed court records fees pulled from state budget

RCB_20130514 BUDGET_0118.JPGWhile open government advocates are celebrating part of California's budget, they are lamenting another.

Gov. Jerry Brown's proposal to allow courts to charge a search fee for access to public records fell short of making it into the spending plan. But his move to suspend a state mandate that requires local governments to follow the Public Records Act is included in the plan lawmakers are considering today.

The court fee proposal would have attempted to boost court revenues by placing a $10 price tag on any public records search requested by businesses, journalists and members of the public. Parties involved in the case would have been the only group exempt from the fee.

June 13, 2013
Delayed release of budget bills angers Republican senators

20120104_PK_LEGISLATURE 0602.JPGWhen Sen. Mark Leno, D-San Francisco, introduced a motion in the Senate on Thursday to move the budget trailer bills to the floor, it sparked heated debate from several Republican senators.

Senate Republican leader Bob Huff, Sen. Bill Emmerson, R-Hemet, and Sen. Jim Nielsen, R-Gerber, all urged the Senate not to send the bills out of committee without a public hearing.

Huff accused Senate Democrats of wanting "to skip another step" and questioned the fairness of the process. Without public debate, Huff said, the budget would not be a fair representation of the people's needs.

"Colleagues, ask yourself how comfortable you are with a final product produced by three people in a closed room that neither you, nor your constituents, have had a chance to review," Huff said.

Emmerson voiced similar concerns about what he called a "shameful" process, telling his colleagues that "the people of California deserve better."

Nevertheless, the motion passed 23-9. Links to the trailer bills were later posted online and are listed here. The Senate is expected to take up the budget Friday morning.

RELATED POST: Help us examine California's budget bills

PHOTO: Sen. Bob Huff, R-Diamond Bar, and then state Sen. Doug LaMalfa, R-Richvale, talk during a Senate session in Sacramento in January 2012. The Sacramento Bee/Paul Kitagaki Jr.

June 11, 2013
Cap-and-trade loan in state budget deal irks environmentalists

California-Greenhouse Gases(2).jpgGov. Jerry Brown and California lawmakers have cleared the air by announcing a budget accord, but environmental groups are choking on a piece of the deal that would borrow half a billion dollars intended for programs to curtail greenhouse gases.

California's fledgling cap-and-trade program auctioned off its first permits in November, following through on a landmark 2006 law, and has raised about $236 million to date, according to the Air Resources Board. Those proceeds are supposed to flow into programs to reduce emissions.

But the governor wants to shift $500 million generated by the auctions into the general fund. Brown defended the move Tuesday at a news conference by saying "we don't think we're quite ready yet" to start allocating the money.

"We're the most aggressive in the western hemisphere in terms of our clean energy goals," Brown said.

That has drawn the ire of environmental groups and questions from lawmakers who worry the governor is undercutting the greenhouse gas law's intent, or at least unnecessarily delaying implementation.


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

More Capitol Alert

Capitol Alert on Twitter

Popular Categories

Now on


June 2014

Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30          

Monthly Archives

Latest California Clips