Capitol Alert

The latest on California politics and government

June 25, 2014
Agreement on California business property tax bill blows up

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It wasn't exactly a chorus of Kumbaya, but a few weeks ago, two lobbyists who have battled each other for decades over property tax policy sat together at a legislative hearing to praise a compromise bill.

Lenny Goldberg, who represents the California Tax Reform Association, praised the bill, which would alter the circumstances under which commercial property could be reassessed for tax purposes, as a "step forward."

"I get a little nervous sitting here with Rex Hime," Goldberg told the Assembly committee considering Assembly Bill 2372, referring to the president of the California Business Properties Association. "He and I have been at it for many, many years." Hime nodded in agreement.

However, when the bill, having passed the Assembly, reached the Senate Governance and Finance Committee on Wednesday, Goldberg pulled his support, saying in a letter to the measure's author, Assemblyman Tom Ammiano, D-San Francisco, that it "does not provide real reform" and would allow business owners to escape reassessment with "slightly more sophisticated steps."

Under current law, adopted after Proposition 13 passed in 1978, business property is reassessed only when it changes ownership in one transaction. Goldberg and other critics have argued that it allows business deals to be structured in ways that avoid reassessment, mostly by never having more than 50 percent to be changed in any one transaction.

AB 2372, hammered out in weeks of private negotiations, says that property can be revalued for taxation when 90 percent changes ownership in a three-year period. It's backed by many business organizations as a way of staving off a long-threatened ballot measure that would create a complete "split roll" that treats business and residential property differently for tax purposes.

"We supported it as a means of opening up the discussion which we have always sought," Goldberg said in an email after Wednesday's hearing and committee approval, "but not as meaningful reform.

"Our concern is that, like many bills in the legislature, it projects the image of reform, allowing business to say, 'we closed the loopholes,' rather than the substance, since it in effect grandfathers in the thousands of properties which have changed ownership without reassessment."

Goldberg complained in his letter to Ammiano that his bill's change should apply retroactively to previous transactions that met its qualifications for reassessment. He also complained about amendments on the Assembly floor made after the hearing at which he appeared with Hime.

Goldberg's pullback drives a wedge between him and Ammiano, who has also been a long-standing champion of changing tax assessments on business property. Whether the split is fatal will depend on what happens when the bill hits the Senate Appropriations Committee and, perhaps, the Senate floor.

Were it to fail in those two venues, back in the Assembly or at Gov. Jerry Brown's hands, the long-pending issue might, indeed, find its way onto the ballot in a split roll initiative.

In a related action, the Assembly Revenue and Tax Committee rejected another business property tax bill, one aimed at making it easier to impose higher parcel taxes on commercial property.

The measure, Senate Bill 1021, would allow local school districts to impose higher parcel taxes on business than it did on residential property. Under current law, parcel taxes must be equal amounts on each parcel regardless of size or value.

SB 1021, carried by Sen. Lois Wolk, D-Davis, won Senate approval but faced stiff opposition from the California Chamber of Commerce, which labeled it a "job killer," and other business groups, leading to rejection in the Assembly committee.

Wolk introduced the bill after a court ruled a differential parcel tax imposed by one school district to be illegal.

PHOTO: Lenny Goldberg is the executive director of the California Tax Reform Association. Photo courtesy of Lenny Goldberg

June 10, 2014
Brown administration recommends tax breaks for companies

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From e-commerce to pet cremation, 31 companies from around the state would get almost $30 million in tax breaks under recommendations by Gov. Jerry Brown's office of business development.

The "California Competes" income and franchise tax benefits would generate almost 6,100 jobs and more than $2.3 billion in investment, according to the recommended companies' application paperwork.

California Competes is part of a package of economic development programs that replaced enterprise zones, a 30-year-old program that the Legislature voted to shut down a year ago with Brown's backing. Demand for the $30 million in available credits for the program's first year far exceeded supply, with almost $560 million in applications. Next year, $150 million in credits will be available.

The California Competes Tax Credit Program committee will consider the awards when it meets June 19 in West Sacramento.

The largest recommended tax credit – $6 million – would go to San Jose-based Samsung Semiconductor, Inc., which promises that the credits would generate almost $358 million in investment and 400 jobs. That translates into about $60 in investment for every dollar of tax credit, and $15,000 in credits for every job to be created.

The smallest recommended tax credit – $20,000 – would go to Novato-based XCell Science, Inc., which promises $213,103 in investment and eight jobs created. That translates into $11 in investment for every tax credit and $2,500 in credits for every job to be created.

Here is the full list of recommended California Competes awards:

NameIndustryPrimary locationNet increase of full-time employeesInvestmentsAmount of tax creditsLink to agreement
The Sacramento Bee
Samsung Semiconductor, Inc.Semiconductor Research & DevelopmentSan Jose400$357,764,000$6,000,000http://bit.lv/1hKoEkp
CE&P Imperial Valley 1, LLCEthanol / Biofuel ManufacturingBrawley222$526,700,398$3,100,000 http://bit.ly/TBxupB
Petco Animal Supplies, Inc.Retail and Corporate ManagementSan Diego263$84,000,000$2,600,000http://bit.lyhih4rxa
Ultragenyx Pharmaceutical Inc.Pharmaceutical Research & DevelopmentNovato180$16,331,892$2,100,000 http://bit.ly/1hKwQ1(0
Samsung Information Systems America, Inc.Electronic Device Research & DevelopmentMountain View210$128,333,935$2,000,000http://bit.ly/1o6pfQ2
Amazon Fulfillment Services, Inc.Online Retail Warehouse & DistributionMoreno Valley, Tracy, Newark & San Bernardino1,550$225,000,000$1,575,000http://bit. ly/1pdnksy
Iso Nano International LLC dba BST NanoCarbon LLCHigh-Tech Commercial Fiber Design & ManufacturingSan Diego, Temecula632$22,825,000$1,450,000 http://bit.ly/1n2CSuu
A2Z Development Center, Inc.Electronic Device Research & DevelopmentSunnyvale, Cupertino798$55,000,000$1,200,000http://bit.ly/1uM.19zc
Graphic Packaging International, Inc.Food and Beverage Packaging Design & ManufacturingOroville, Irvine, Santa Clara138$54,228,200$1,150,000http://bit.ly/111rYSK
Macy's.com, Inc.E-Commerce TechnologySan Francisco193$206,307,830$1,000,000httP://bit.ly/SsQbKY
Novartis Pharmaceuticals Corp.Pharmaceutical ManufacturingSan Carlos28$104,800,000$1,000,000http://bit.lvAtZgRPN
Weber Metals, Inc.Aerospace Metal ForgingLong Beach60$170,703,000$1,000,000http:Hbit.ly/1nuCF4X
Hyundai Capital AmericaAutomobile Consumer Financial ServicesIrvine120$0.00$885,000http://bit.ly/1kLaoY2
iHerb, Inc.Online Retail Warehouse & DistributionRiverside County150$15,000,000$815,000http://bitiviSsXFh7
Deckers Outdoor CorporationFootwear Design, Marketing & DistributionMoreno Valley, Goleta125$149,475,624$800,000http://bit.ly/1kLaSNO
Al California, LLCGrocery Regional Headquarters, Distribution & Retail StoresMoreno Valley & Counties of Orange, San Diego, Los Angeles, Riverside, San Bernardino, Ventura182$150,000,000$700,000http://bit.ly/1hKtk9V
Fresh Select, LLCLarge Scale Produce Refrigeration & DistributionDinuba341$5,923,906$500,000http://bit.ly/StOi2m
Flowers Baking Co. of Modesto, LLCProduction of Packaged Bakery GoodsModesto121$25,000,000$300,000http://bit.ly/lihplfK
Duarte Nursery, Inc.NurseryHughson33$33,082,533$250,000http://bit.lyhuNcoBZ
Sparsha USA, Inc.Transdermal Patch Development & ManufacturingOceanside21$4,400,000$250,000 http://bit.ly/1keZULw
CTP Transportation Products, LLCCommercial Vehicle Wheel & Component ManufacturingOntario33$1,000,000$150,000 http://bit.lyhxzlRxP
Matheson Tri-Gas, Inc.Industrial Gas SupplierRancho Cucamonga, Santa Rosa, Newark, Los Nietos53$5,923,906$100,000http://bit.ly/1hBHpGp
Professional Asbestos and Lead Services, Inc.Hazardous Materials Remediation & RemovalStockton71$650,000$100,000http://bit.ly/lpxdQ91
Systena America, Inc.Information Technology & Communication Device Software Engineering & TestingSan Carlos42$789,600$100,000http://bit.ly/1nuJIA7
Salient IT, Inc.Information Technology Consulting & Data Center ManagementSacramento, Oakland21$460,000$77,500http://bit.ly/11i7bi4
Lynam Industries, Inc.Sheet Metal ManufacturingFontana69$6,512,552$68,000http://bit.ly/111y1a3
Technical Engineered Coatings, Inc.Commercial Concrete TreatmentFolsom13$239,000$55,000http://bit.ly/St4vmw
Health One Pharmaceutical Inc.Health Supplement ManufacturingCity of Industry10$5,643,008$50,000http://bit.ly/1uN1hch
Animal Memorial Service, Inc.Pet Cremation ServicesGilroy5$370,000$40,000http://bit.ly/1pxmdBI
American Marine Abatement Services, LLCUS Navy Ship Maintenance & Repair ServicesNational City6$110,000$30,000http://bit.ly/1hKytid
XCell Science, Inc.Stem Cell Biotechnology Research & DevelopmentNovato8$213,103$20,000http://bit.ly/1jgC9TW

PHOTO: California Gov. Jerry Brown visits Takeda, a biotech firm, in San Diego, where he signed signed legislation phasing out enterprise zones and replacing the program with California Competes and other incentives. U-T San Diego/Carolyne Corelis

May 13, 2014
Compromise reached on Prop. 13 treatment of business property

JarvisGann.jpgDecades of political wrangling over how Proposition 13, the iconic property tax limit passed by voters in 1978, is applied to commercial property reached a climax of sorts Tuesday in a Capitol hearing room.

During a hearing of the Assembly Revenue and Taxation Committee, long-warring business groups and tax reformers agreed on modest change of law governing the reassessment of commercial property when it changes hands.

The committee chairman and co-author of the revised bill, Assemblyman Raul Bocanegra, D-Pacoima, announced during the hearing that a vote would be postponed, but later, the committee approved it and sent it to the Assembly Appropriations Committee.

The compromise, written into Assembly Bill 2372, would trigger reassessment when at least 90 percent of a property's ownership changes in any three-year period. It would not apply, however, to incremental changes of ownership through stock market trades.

Currently, any property is reassessed to market value when a single buyer acquires at least 50 percent ownership in a single transaction. Critics say that's a loophole that allows businesses to avoid reassessment by clever structuring of sales.

Assemblyman Tom Ammiano, D-San Francisco, had been pushing AB 2372 to tighten up the change of ownership provision of state tax law, but faced stiff opposition from business groups.

The compromise falls somewhere between current law and Ammiano's original measure and wins support from opposing groups such as the California Chamber of Commerce and the California Tax Reform Association.

It's less than the latter wanted, and also falls well short of a full "split roll" which would completely remove Proposition 13's limits from business property, long a goal of liberal groups. A split roll would require a constitutional amendment.

A full split roll would have, it's believed, multi-billion-dollar impacts, while the change that surfaced Tuesday is, those involved said, likely to have much smaller impacts on both business tax bills and local government revenues.

Ammiano said in a statement the revised measure would "bring back some fairness to the tax system in a way that will benefit all Californians."

Updated at 6:12 p.m. to reflect committee approval.

PHOTO: Paul Gann, left, and Howard Jarvis, hold up their hands on the night of June 7, 1978, as their co-authored initiative Proposition 13, took a commanding lead in the California primary. Associated Press file.

May 5, 2014
As California property values rise, owners see big tax bill hikes

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The revival of California's economy and a rising housing market mean some hefty property tax increases for homeowners, the Legislature's budget analyst believes.

When property values were dropping sharply during recession, county tax assessors adjusted tax rolls downward, which then lowered property tax bills. Many property owners also applied for reductions.

The average homeowner saw a $1,600 property tax cut while those for commercial property averaged $7,500. "In total, temporary property tax reductions depressed local government property tax revenues by an estimated $7 billion in 2013-14, amounting to a 15 percent reduction statewide," the Legislative Analyst's Office (LAO) says in a new report.

But with a rising market, the LAO says those cuts are being rescinded, as state law allows, and some property owners may see tax increases as high as 20 percent. It notes that home values rose statewide by 12 percent in 2012, but those increases were not immediately reflected in property tax bills.

Proposition 13, passed by voters in 1978, limits annual increases in taxable values to 2 percent, but state tax law also allows temporary decreases in those values to be fully recovered later if the market increases. Increases of up to 20 percent were reported during the 2013-14 fiscal year, based on the 2012 market rise.

"Looking ahead, property tax payments for many owners that received temporary property tax reductions during the real estate crisis could increase by more than 10 percent annually for the next several years," the LAO said. "These increases likely will cause local property tax revenues to grow swiftly over the next several years as well."

The taxable value decreases were heaviest in communities — mostly in inland areas — that had felt the sharpest effect of the housing industry meltdown. Stanislaus County saw the steepest decline in home sale prices, 65 percent, and tax assessments were reduced for 51 percent of the county's properties, so it could see the one of the biggest upticks.

The $7 billion reduction in local property tax revenues also affected the state budget because the state was required to make up the schools' losses of about $3.2 billion. Therefore, the increases in property values and property taxes not only are increasing revenues to local governments but reducing the state's constitutionally required level of education spending.

PHOTO: Real estate agent Pat Quan, of Coldwell Banker, puts flyers in front of one of his home listings in El Dorado Hills on Oct. 9, 2013. The Sacramento Bee/Manny Crisostomo

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

October 1, 2013
Would moving from California to another state save on taxes?

Alaska_PIPELINE_LEASE.jpgWhen California voters approved temporary sales and income tax increases last year, they rekindled a perennial debate over whether the state's tax burden has become high enough to persuade residents to move elsewhere.

There have been anecdotal accounts of Californians relocating elsewhere, or residents of other states turning down jobs in California because of its taxes, mostly involving highly paid professional athletes. But there are no hard data yet of significant trends in those directions.

A Texas-based conservative think tank, the National Center for Policy Analysis, has entered the debate by launching an interactive website that allows users to calculate the tax effects of moving from one state to another.

Users plug in their personal economic and other data to determine how much they would gain or lose. "The tax burden in a new state can make a huge difference in your retirement plans," NCPA fellow Pamela Villarreal said in a statement accompanying the announcement this week.

As a high-tax state - fifth in the nation in total state-local tax burden as a percentage personal income - California obviously doesn't fare well in the tax-effect comparisons.

The NCPA cites one hypothetical example of a 40-year-old man making $100,000 a year and moving from California to Alaska, saying "he will have an additional $4,213 a year to spend every year for the rest of his life."

The website does not calculate differences in cost of living.

PHOTO: The Trans-Alaska Oil Pipeline snakes across the Alaska tundra under the Brooks Range about 150 miles from Prudhoe Bay, Alaska, on Aug. 28, 2001. Associated Press/Al Grillo

September 17, 2013
Parcel tax vote change may not change much, PPIC concludes

school.jpgParcel taxes are applied evenly to property parcels regardless of value, unlike regular property taxes, and thus don't run afoul of Proposition 13's constitutional limit.

Some affluent school districts have gained voter approval for parcel taxes. However, they require two-thirds approval and there's been a movement in the Legislature to lower that threshold to either a simple majority or the 55 percent level required of school bonds, saying it would provide much-needed funds for schools.

Legislative leaders have postponed any consideration of a constitutional amendment on parcel taxes at least until next year because changing the vote margin would itself require a two-thirds legislative vote and then statewide voter approval.

Anti-tax groups are geared up for a battle on parcel taxes in the Legislature and, if necessary, at the ballot, while school employee unions and their allies would finance a campaign for change.

It may be much ado about nothing, a new study by the Public Policy Institute of California indicates.

PPIC's researchers studied parcel tax and school bond election results and concluded that even with a lower vote threshold, it's unlikely that many new taxes would be imposed in poor communities, where the need is greatest.

Parcel taxes have been approved in relatively small, affluent districts, mostly in the San Francisco Bay Area but tend to be rejected by strong margins in poorer communities, whose residents are less willing to tax themselves.

"A lower vote threshold for parcel tax passage is unlikely to do much to bridge these basic inequalities," PPIC's study team said.

"It is hard to say that lowering the vote threshold for parcel tax passage would expand their reach into new areas of the state or to more disadvantaged students," researcher Eric McGhee said. "This change would likely make it easier for more of the same kind of districts to pass parcel taxes and for districts that already have them to pass more."

PHOTO: At right, Maiya Miller, 8, hugs Principal Shana Henry on the first day of school at Pacific Elementary school in Sacramento on Tuesday, September 3, 2013. The Sacramento Bee/Renee C. Byer

August 5, 2013
Business uses digital media, but not in its California campaigns

Big money ballot measure campaigns in California spend the vast preponderance of their money on fairly traditional forms of voter outreach, such as television and radio ads and direct mail, but that will have to change as voters' habits evolve, a new study suggests.

The statistical study of how business-backed ballot measure campaigns spend their funds - contrasting with how commercial business now operates - was produced by Forward Observer, a Sacramento-based political consulting firm headed by Joe Rodota, a one-time top aide to Republican Govs. Pete Wilson and Arnold Schwarzenegger, as well as the Reagan White House.

It analyzed five 2012 business-supported ballot measure campaigns and found that they spent 78.5 percent of their funds on traditional media, and another 12.5 percent on direct mail appeals, with the remaining 9 percent distributed among consultants' fees, polling, legal services and miscellaneous costs.

Less than 1 percent was spent on digital messages, even though voters increasingly rely on the Internet and social media for news and discussion about political issues, even though business is increasingly oriented toward digital commerce and even though business groups provided much of the money spent by the ballot measure campaigns.

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.

June 6, 2013
California politicians still wrangling over Proposition 39 funds

RP_MATH_TEACHER_AND_STUDENT.JPGCalifornia voters last year passed Proposition 39, which changed the way multistate corporations are taxed, creating a big pot of money - about a billion dollars a year - with half required to be spent on energy-saving projects in schools, colleges and other public buildings.

Seven months later, the Capitol's politicians are still wrangling over how to divvy up the more than $400 million going to schools. It's one of the stickiest of several high-dollar issues still in limbo with scarcely a week remaining before the June 15 constitutional deadline to pass a budget.

Just before the Legislature's budget conference committee recessed indefinitely late Wednesday, Sen. Kevin de León, D-Los Angeles, a co-sponsor of Proposition 39, engaged in a pointed exchange with Gov. Jerry Brown's budget point man, Michael Cohen, over Brown's plan to distribute the school money widely, based on attendance, with every school in the state getting at least a token amount.

That runs counter to plans by de León and other Democratic legislators to concentrate the money on fewer schools with, they say, the largest potential to achieve greater energy savings and create jobs in low-income areas.

June 5, 2013
Debate over California's Prop. 13 still hot 35 years later

howardjarvis.jpgProposition 13, Howard Jarvis' iconic property tax limit measure, was passed by California voters 35 years ago this week - but the debate over its provisions is just as heated now as it was then.

Just last month, the Assembly Appropriations Committee stalled action on a bill that would have indirectly changed the measure by redefining when property transfers trigger reassessment for taxes. Assembly Bill 188 by Assemblyman Tom Ammiano, D-San Francisco, was aimed at raising assessments of business-owned property when more than 100 percent of the ownership entity changed hands in a series of transactions. Current law triggers reassessment only when more than 50 percent changes ownership in one transaction.

AB 188 was a partial movement toward what tax mavens call a "split roll" - one that taxes different kinds of property differently. A full split roll, however, would require a constitutional amendment, approved by voters, to change Proposition 13's limits. Some liberal groups, especially labor unions, have proposed such an amendment, saying that it would counteract a shift of property tax burden from business property to residential property, but have not yet attempted to place one on the ballot via initiative.

Recently, a poll by the Public Policy Institute of California asked a sample of voters whether they would support basing commercial property taxes on "current market value" and 56 percent said they would. However, the California Taxpayers Association, a business-backed organization, criticized the poll's methodology, saying that using the phrase "current market value" did not "state that the proposal in question would be a massive tax increase on businesses, and did not include any context that would let respondents know that such a tax increase would result in job losses, higher consumer costs for goods and services, and higher rents for many Californians."

Cal-Tax followed up on that criticism Wednesday with a report contending that since Proposition 13's passage in 1978, there has not been, as critics allege, a shift of tax burden from business property to homes, which change hands more frequently.

March 28, 2013
State auditor: California's net worth at negative $127.2 billion

RB_Prison_Construction_2009.JPGWere California's state government a business, it would be a candidate for insolvency with a negative net worth of $127.2 billion, according to an annual financial report issued by State Auditor Elaine Howle and the Bureau of State Audits.

The report, which covers the fiscal year ending June 30, 2012, says that the state's negative status -- all of its assets minus all of its liabilities -- increased that year, largely because it spent more than it received in revenue.

During the 2011-12 fiscal year, the state's general fund spent $1.7 billion more than it received in revenues and wound up with an accumulated deficit of just under $23 billion from several years of red ink. Gov. Jerry Brown has referred to that and other budget gaps, mostly money owed to schools, as a "wall of debt" totaling more than $30 billion.

March 20, 2013
California was No. 4 in tax burden before Proposition 30 passed

RP GOVERNOR PROP 30 SIGN.JPGCalifornians carried the nation's fourth highest state and local tax burden as a proportion of their personal incomes in 2010 - and that was before voters increased sales and income taxes last year - according to the latest national tax survey by the Tax Foundation.

California's state and local tax burden in 2010 was 11.2 percent of personal income, putting the state behind only No. 1 New York (12.8 percent), New Jersey (12.4 percent) and Connecticut (12.3 percent).

On a per capita basis, California's state-local tax burden in 2010 was sixth highest at $4,934.

Last year, voters passed Proposition 30, which raises the state's sales tax rate by a half-cent and imposes additional income taxes on the highest-income Californians. It is supposed to raise about $6 billion a year to close the state budget deficit, and that would add less than a half-percent to the tax burden, leaving it still below Connecticut's proportion.

Proposition 30 did, however, give California the nation's highest marginal income tax rate at 13.3 percent for those with taxable incomes of $1 million and above, jumping over Hawaii's 11 percent, the Tax Foundation reported.

December 31, 2012
Capitol Alert's top 10 posts of 2012

California's state budget. Public-sector pensions. Taxes.

The Sacramento Bee's Capitol Alert readers avidly followed those issues this year, as the blog's top 10 posts of 2012 show. Here's the list, in reverse order:

MC_BERA_07.JPGNo. 10: "Rep. Dennis Cardoza announces resignation" (Aug. 14). In a surprise move citing his family's needs, the Merced Democrat said he was resigning from Congress.

No. 9: "FPPC says Arizona nonprofit laundered money to California campaign" (Nov. 5). "At $11 million, this is the largest contribution ever disclosed as campaign money laundering in California history," the Fair Political Practices Commission said in a news release.

No. 8: "Bera lead over Lungren wider in Sacramento County House race" (Nov. 9). Democrat Ami Bera wound up besting Republican Rep. Dan Lungren and will be sworn into Congress this week.

December 5, 2012
High-income Californians may pay nation's highest tax rate

Thanks to passage of Proposition 30 last month, high-income Californians would pay the nation's highest marginal income tax rates -- nearly 52 percent -- if President Barack Obama and Congress fail to make a deal to avoid the so-called "fiscal cliff," according to a new study.

Without a fiscal cliff deal to the contrary, the Bush era tax cuts on high-income taxpayers would expire next year and rates would return to their previous levels.

Gerald Prante, an economics professor at Lynchburg College in Virginia, and Austin John, a Lynchburg economics student, calculated marginal tax rates -- the highest rates on the highest levels of income -- for all 50 states. They combined state, federal and, where applicable, local income taxes, plus payroll taxes for Social Security and Medicare and included the deductibility of some taxes.

Proposition 30 added three percentage points to the marginal state income tax rate for California's highest-income taxpayers, bringing it to 13.3 percent. That action raised California over other high-tax jurisdictions to a marginal rate of 51.9 percent, slightly higher than New York City's level. Hawaii was the only other place with a calculated rate above 50 percent.

Their report was published by the Social Science Research Network.

November 19, 2012
California senator drops plan to ask voters for a car tax increase

Lieu.jpgDemocratic Sen. Ted Lieu is dropping a push to ask voters to triple the state's vehicle license fee rates.

The Torrance Democrat told the editorial board of the Los Angeles Daily News last week that he planned to introduce legislation to put a measure on the 2014 ballot asking voters to raise the state's vehicle license fee. He said increasing the rate from .65 percent to 2 percent -- the level it was before former GOP Gov. Arnold Schwarzenegger slashed the fee in 2004 -- could generate up to $4 billion a year for roads, public transit and other projects.

Lieu called his proposal at the time "a test to see what the two-thirds (majority) Legislature means," a reference to the supermajority vote required for lawmakers to place measures in front of the people.

But today he scrapped the plan, saying in a statement that "over the last few weeks California's political landscape has changed."

"I have listened carefully to those who have contacted my office or me. Additionally, more stakeholders weighed in on this important issue," Lieu said in a statement. "As a result, I will not be introducing the proposal. Instead, I will work with transportation stakeholders and the public next year on alternative ways to mitigate the transportation infrastructure problem."

PHOTO CREDIT: State Sen. Ted Lieu, D-Torrance, during a hearing at the Capitol in Sacramento, Calif., Tuesday, May 8, 2012. AP Photo/Rich Pedroncelli.

November 14, 2012
California's poverty rate highest in U.S. by new federal measure

Nearly nine million Californians - almost a quarter of the state's residents - live in poverty under a newly devised federal standard, making the state's rate by far the highest in the nation.

The stunning number will fuel California's perpetual political debate over the state's "safety net" of health and welfare services, which have been reduced sharply due to budget deficits. With voter approval of new taxes, advocates for the poor are demanding that some of the benefit cuts be rescinded.

California's 23.5 percent poverty rate under the "supplemental poverty measure" (SPM) developed by the Census Bureau is approached only by the 23.2 percent rate in the District of Columbia. The highest SPM rate in any other state is Florida's 19.5 percent.

The state-by-state comparison is found in a Census Bureau report on the SPM, which is being tested as a replacement for the current way of measuring poverty, which is a half-century old.

The new, and still experimental, system includes broader data of income and outgo that have emerged since the system was created in the early 1960s, such as payroll taxes that reduce disposable income and government benefits that increase income.The new system also takes into account cost-of-living variations from state to state.

The steep climb in California's poverty rate under SPM, adding nearly 3 million to the poverty rolls, is apparently driven largely by the state's high cost of living.

Under the old - and still official - system, California's poverty rate is 16.3 percent, which translates into slightly over 6 million of the state's 38 million residents. That rate is somewhat higher than the national rate of 15 percent, but by no means the highest in the nation.

The national SPM rate is 15.8 percent, a fractional increase from the official rate, and California's SPM rate of 23.5 percent represents not only the highest in the nation, but the largest of any state's jump from the official rate to the SPM rate. In some states, the SPM rate actually is lower than the official rate.

November 8, 2012
Democrats' hard feelings over Arizona donor persist

For all the worry about the $11 million donation that conservative donors routed through an obscure Arizona nonprofit, Democrats scored huge wins Tuesday with a Proposition 30 victory and Proposition 32 defeat.

But Democrats remain angry over the contribution, whose true source has yet to be definitively known.

In a post-election conference Thursday in Sacramento, Democratic strategist Gale Kaufman made clear several times that she resents the October money infusion that helped fuel ads for Proposition 32, the anti-labor measure she worked against.

Kaufman said Democrats still intend to push for sanctions against people involved in the donation, at one point saying they will "fight to get the $11 million back." That was an apparent reference a state penalty for cloaking donors through an intermediary, which is a payment to the state general fund equal to the amount of the contribution.

November 6, 2012
Proposition 38 rejected by voters

Voters on Tuesday handily rejected Proposition 38, an initiative raising income taxes on middle- and upper-class households for education.

Wealthy activist Molly Munger and her husband spent more than $47 million on the initiative this year, mostly on statewide advertising that tried to convince voters her measure was most beneficial for California schools.

In mid-October, Munger incurred the wrath of advocates for Gov. Jerry Brown's Proposition 30 when she ran a week of ads criticizing his campaign as "misleading" and for allowing lawmakers to tap the money.

Though Munger had a well-funded campaign, she lacked the institutional support that Brown's enjoyed, plus her measure faced an uphill battle trying to convince middle-class voters to raise their own income taxes.

With about 18 percent of the vote counted, the measure was trailing, 74.5 percent to 25.5 percent.

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November 6, 2012
Students vote for two proposed tax increases in landslide in mock election

By Jim Sanders

jsanders@sacbee.com

While Californians were flocking to the polls this morning, the two proposed tax increases on this year's statewide ballot already had passed by a landslide in a mock election at one Sacramento-area high school.

Gov. Jerry Brown's Proposition 30 and the Proposition 38 income tax measure pushed by Molly Munger captured 82 percent and 62 percent of the vote, respectively, in voting by about 1,100 students at Florin High School in the Elk Grove school district.

President Barack Obama defeated Republican challenger Mitt Romney almost as handily as the San Francisco Giants dumped the Detroit Tigers in the World Series. Nearly nine of every 10 voters gave Obama thumbs-up.

November 5, 2012
California officials consider civil, criminal action in mystery donation case

California regulators and attorneys said today they are seriously weighing next steps - including criminal charges - against parties involved in the $11 million contribution whose known trail leads through three different out-of-state nonprofits.

A lawyer for Americans for Responsible Leadership, the Arizona-based donor at the center of the controversy, appeared to acknowledge the possibility of future legal action in a letter he filed this morning with the state Fair Political Practices Commission.

Attorney Michael D. Bopp wrote that while new disclosures from Americans for Responsible Leadership and The Center to Protect Patient Rights may relate to state codes banning hidden intermediary contributions, the groups do not admit wrongdoing.

"While these letters relate to Cal. Gov. Code § 84302 and 2 CA ADC § 18432.5, we want to make it clear that they have been sent pursuant to a settlement agreement with the California Fair Political Practices Commission and that neither ARL nor CPPR admit any wrongdoing or that the letters are required by applicable law," Bopp wrote. "Further, ARL and CPPR reserve the right to contest any further proceedings that relate to the contributions discussed in the aforementioned letters."

Both FPPC Chairwoman Ann Ravel and state Attorney General Kamala Harris said today they are reviewing the matter to see whether further civil or criminal action is warranted. The state previously filed a lawsuit asking Americans for Responsible Leadership to submit records.

"What this committee agreed it had done is a clear violation of the state's money laundering prohibition," said Ravel, a Gov. Jerry Brown appointee.

Ravel said one civil penalty is that the recipient committee pay to the state general fund an amount equal to the contribution - in this case, $11 million. The party liable would be the Small Business Action Committee No on 30/Yes on 32.

SBAC spokeswoman Beth Miller said her group never was told that Americans for Responsible Leadership received its $11 million by way of two other nonprofits. Failing to disclose that information to a recipient committee is a potential violation of California Government Code § 84302.

SBAC immediately updated its campaign disclosure forms this morning to acknowledge contributions from The Center to Protect Patient Rights and Americans for Job Security.

"SBAC PAC had no knowledge that the contribution was from an intermediary," Miller said in a written statement. "As it does with all its donors, upon accepting the donation from Americans for Responsible Leadership SBAC PAC sent a donor advice letter explaining the organization's filing responsibilities. When SBAC PAC was informed this morning by the FPPC it amended its disclosure reports immediately."

November 4, 2012
California Supreme Court orders nonprofit to face audit

Update (8:24 p.m.) After the state court declined to extend the deadline, Americans for Responsible Leadership said it was attempting to contact the FPPC to comply with the order, while continuing to seek a stay from the U.S. Supreme Court.

Update (5:08 p.m.): Americans for Responsible Leadership did not submit information to the FPPC by 4 p.m. as ordered and instead has asked the state court to extend its compliance window to 9 a.m. Monday as it seeks a stay from the U.S. Supreme Court, according to FPPC chairwoman Ann Ravel.

The California Supreme Court this afternoon ordered an obscure Arizona nonprofit to submit donation records immediately to state regulators related to an $11 million contribution the group gave in October.

The state's highest court issued its unanimous 7-0 decision at 3 p.m. after a telephone conference and gave Phoenix-based Americans for Responsible Leadership until 4 p.m. to comply.

The state Fair Political Practices Commission had asked the Supreme Court to force ARL to turn over e-mails and transactions data behind the donation, whose specific donors the group has never disclosed. The group gave $11 million to a business campaign committee established to oppose Gov. Jerry Brown's tax initiative, Proposition 30, and support a measure that would restrict union dues collection, Proposition 32.

The FPPC wants to review the information to determine before Tuesday's election whether ARL violated state rules requiring nonprofits to disclose donors if their money was earmarked for a specific initiative. If the FPPC finds a violation, it remains to be seen whether there is enough time to invoke administrative or legal procedures that would force ARL to disclose its donors by Tuesday.

ARL is directed by lesser-known Arizona GOP activists, and the group hired attorneys from a Virginia-based law firm with longstanding Republican National Committee ties.

November 3, 2012
Video: Tax measure draws financial support from unions, corporations

Capitol Alert's Torey Van Oot sat down this week with a few of her colleagues in the The Bee Capitol Bureau to go over the basics of some of the statewide ballot measures facing voters on Tuesday.

In this installment, she talks to Kevin Yamamura about Propositions 30 and 38.

Torey's chat with Jon Ortiz about Proposition 32 can be viewed here.

Torey's chat with Laurel Rosenhall on Proposition 37 can be viewed here.

November 2, 2012
Appeals court denies California's attempt at Arizona donor audit

California's 3rd District Court of Appeal today denied the state's emergency request to force an Arizona nonprofit to submit information related to its recent $11 million political contribution.

The decision makes it even less likely that Americans for Responsible Leadership will disclose its donors before Tuesday's election.

Ann Ravel, who heads the state Fair Political Practices Commission, said her agency will now ask the state Supreme Court to force ARL to comply. FPPC has requested emails, texts and financial transactions data related to the $11 million check the group gave a business committee last month. Funds have gone toward fighting Gov. Jerry Brown's tax initiative, Proposition 30, and to support a measure restricting union dues collection, Proposition 32.

November 1, 2012
Arizona donor appeals, forestalling FPPC audit

An Arizona nonprofit that spent $11 million last month on two high-profile California initiative battles appealed an unfavorable trial court decision today, for now blocking the state from obtaining transaction records as requested.

Americans for Responsible Leadership believes the state Fair Political Practices Commission has no authority to audit organizations before an election, said Matt Ross, a spokesman for the group's attorneys. A Sacramento Superior Court judge ruled Wednesday for the FPPC, but her order allowed ARL to avoid submitting data for an audit by appealing the decision.

The state responded today by filing an "emergency petition" with the Sacramento-based Third District Court of Appeal asking that it change the order to force ARL to supply information to the FPPC while the issue undergoes legal review.

"The people of the State of California, via initiative, have determined that the disclosure of campaign contributions prior to the election is of great importance in making electoral decisions," the state wrote. "This information is, by its very nature, only relevant before the election."

The FPPC last week filed suit against ARL seeking emails, text messages and financial transaction records related to the $11 million contribution the group made to a business committee last month. The recipient, Small Business Action Committee, is fighting Gov. Jerry Brown's tax initiative, Proposition 30, and supporting a measure that would restrict union dues collection, Proposition 32.

The state watchdog agency is trying to audit the group's activities to determine if ARL violated campaign disclosure rules by shielding its donors. Under state rules, an organization must report its individual contributors if money was earmarked for a particular campaign in California.

November 1, 2012
Brown debates economy long distance with manufacturers

It was just a a semi-coincidence that as Gov. Jerry Brown was touting California on Thursday as an engine of economic growth, the California Manufacturers and Technology Association was declaring the state to be falling behind the rest of the country.

Both have data on their sides.

During an appearance before the Commonwealth Club in San Francisco -- mostly to campaign for passage of his tax measure, Proposition 30 -- Brown skewered the "declinists" who believe that California is faltering.

The state has its flaws, he said, but "California ... has made some fabulous decisions, and our collective will ... will not be slowed by the skeptics, the declinists and those fearful individuals who can't see where they are: the greatest place in the world."

November 1, 2012
Jerry Brown not 'that stupid' to defend politicians, but does so

SAN FRANCISCO -- The Legislature's unpopularity is such that a standard practice of political campaigns is to distance oneself from "Sacramento politicians" while tying one's opponents to them.

Gov. Jerry Brown's ballot measure to raise taxes has suffered from the association, and he has asserted in his campaign advertising - however disingenuously - that "Sacramento politicians can't touch the money" his initiative would raise.

If it is the kind of rhetoric a third-term governor and lifelong politician might find uncomfortable, and it gave Brown pause this afternoon.

"I'm not going to give a defense of politicians. I'm not that stupid," the Democratic governor said when asked at The Commonwealth Club in San Francisco if politicians wouldn't waste the tax revenue promised by Proposition 30. "But I will say the word politician comes from "politeia," which means the pulse, the community, the city state. In ancient Greece, the politician unfortunately has the work of trying to mesh all these totally discordant, contradictory opinions and identities, and they clash.

"And that's why sometimes people get a little tired of democracy, and representative democracy, because it is strenuous. And it does take sustained courage to keep at it, even when you see things you don't like or you get disappointed. Now, if I were going to be cynical or get disappointed, I would have checked out a long time ago. But I've come back."

Brown, 74, later recounted all the offices he has held or run for over the decades, and he was asked about his political future.

"Do I have more offices in mind?" he said. "I'm not telling."

October 31, 2012
Judge confirms ruling against mystery donor to ballot campaigns

A Sacramento Superior Court judge confirmed tonight her ruling against an obscure Arizona campaign group, saying the failure to investigate the source of its funds would cause irreparable harm to California voters.

Judge Shelleyanne W.L. Chang's final ruling ordered Phoenix-based Americans for Responsible Leadership, which donated $11 million to kill Gov. Jerry Brown's tax increase in Proposition 30 and support the campaign finance measure Prop. 32, to turn over information to state regulators on Thursday.

It's still far from certain, however, that voters will learn of the group's donors before Tuesday's election. The group said it will appeal, and it is unclear whether the courts can sort out the issues in expedited fashion or, even if they do, whether the state Fair Political Practices Commission will determine that donor disclosure is warranted..

"We are disappointed in the today's court ruling," Matt Ross, the Sacramento-based spokesman for the group's Virginia legal team, said in a prepared statement. "We have asserted all along that the FPPC does not have the authority to issue an audit in advance of the election. We continue to believe so and will appeal this case."

October 31, 2012
Final decision delayed in $11 million donor disclosure case

A Sacramento Superior Court judge withheld her final ruling this afternoon after listening to attorneys debate whether an out-of-state group must subject itself to an audit of its donors.

Judge Shelleyanne W.L. Chang could issue her decision later today.

Attorneys for the state's campaign watchdog agency and Phoenix-based Americans for Responsible Leadership debated whether the state could immediately audit the obscure group.

October 31, 2012
Gavin Newsom criticizes Jerry Brown in KGO Radio interview

Lt. Gov. Gavin Newsom two weeks ago criticized Gov. Jerry Brown's tax initiative approach, suggesting to KGO Radio in San Francisco that the governor was slow to hit the campaign trail and that he was telling college students "something that's not true."

Newsom spoke to KGO on Oct. 17, a day after Brown appeared at UCLA in the first of several appearances at state colleges and universities. But the interview got little statewide notice until Bee columnist Dan Morain referenced Newsom's caustic words for Brown in today's Bee. Though both Democrats who support Proposition 30, Newsom and Brown have endured a difficult relationship.

Newsom, who sits on the University of California Board of Regents and the California State University Board of Trustees, emphasized several times in a four-minute interview that Brown was misleading college students by suggesting Prop. 30 would avert tuition increases. That has since become a central part of Brown's campaign message.

"My big concern is, we went down yesterday and said there will be no tuition increase if you support this," Newsom said. "That's just not true. You can't say things like this."

October 30, 2012
Court says Arizona group must provide donor information in CA election

A Sacramento Superior Court judge tentatively ruled Tuesday that an obscure Arizona nonprofit must document the source of its $11 million initiative contribution, siding with the state's Fair Political Practices Commission.

The state campaign watchdog agency and Gov. Jerry Brown have railed against Phoenix-based Americans for Responsible Leadership for cloaking its contributors, saying voters deserve to know who is behind the eight-figure check. The funds went to a business committee opposed to Brown's tax initiative, Proposition 30, and supportive of a measure restricting union dues collection, Proposition 32.

FPPC chairwoman Ann Ravel has said her agency is trying to determine whether ARL violated state campaign disclosure rules, which require a nonprofit to reveal its contributors if funds were earmarked for an initiative effort. The commission is seeking everything from donor e-mails to financial transaction records to determine if a violation took place, which would trigger further action that could lead to public disclosure.

Judge Shelleyanne W.L. Chang wrote in a tentative ruling this afternoon that the FPPC has the authority to audit a nonprofit before an election and agreed that voters "will suffer irreparable harm" because they will never know the donors they potentially have the right to know.

October 26, 2012
Jerry Brown: 'Only God' can watch over every state employee

SAN MATEO -- Gov. Jerry Brown this afternoon downplayed a Los Angeles television station's report of Caltrans employees using state rental trucks for personal purposes, saying "only God" can watch over every one of the state's hundreds of thousands of public employees.

"Caltrans has been looking at it. I would be glad to look into it," the Democratic governor said after a speech to the California state conference of the National Association for the Advancement of Colored People.

"If somebody took some time off to do something, we'll find it, but, you know, to blow it up like it's some major thing -- there are 300,000 employees in the state of California, and I'd like to watch over all of them, but I think only God can accomplish that."

The report, by CBS 2 in Los Angeles, included video surveillance it said showed state workers using rental vehicles to run personal errands during business hours. It included video of a confrontation between Brown and reporter David Goldstein in which Brown said Goldstein is "like a thug."

October 25, 2012
Sacramento judge sets hearing Tuesday on $11 million donation

A Sacramento Superior Court judge scheduled a court date for Tuesday -- one week before the Nov. 6 election -- to consider whether an Arizona-based nonprofit must provide transaction data related to an $11 million donation made this month.

The state Fair Political Practices Commission sued little-known nonprofit Americans for Responsible Leadership to obtain information related to the eight-figure check and determine whether the group violated campaign disclosure laws. The group donated $11 million to a business committee that is fighting Gov. Jerry Brown's tax initiative, Proposition 30, and supporting a measure to restrict union dues collection, Proposition 32.

After a brief hearing in a packed courtroom today, Judge Barry Loncke asked both sides to submit court filings by Monday ahead of a hearing Tuesday morning, saying the court needed more time to consider whether Americans for Responsible Leadership must provide records.

October 25, 2012
VIDEO: Jerry Brown says slipping tax measure still has 'very good chance'

SAN FRANCISCO - With public support for his tax measure falling below 50 percent for the first time two weeks before Election Day, Gov. Jerry Brown said this afternoon that the numbers are "a little puzzling" but that the campaign can still be won.

"I think we have a very good chance," Brown said at a press conference with business leaders here. "I'm not going to let anything slow me down between now and Election Day."

The Democratic governor's remarks follow the release last night of a Public Policy Institute of California poll showing support among likely voters for Proposition 30 fading to 48 percent, down from 52 percent last month. Forty-four percent of likely voters oppose the proposal to raise the state sales tax and income taxes on California's highest earners.

October 25, 2012
State watchdog agency sues shadowy Arizona campaign donor

The state Fair Political Practices Commission sued an Arizona nonprofit this morning as it tries to determine whether the group illegally cloaked donors behind an $11 million contribution now playing a pivotal role in two state initiative contests.

Phoenix-based Americans for Responsible Leadership gave $11 million this month to a business committee opposed to Gov. Jerry Brown's tax initiative, Proposition 30, and supportive of a measure that would restrain union dues collection, Proposition 32.

The state FPPC filed suit this morning, asking the Sacramento Superior Court to force Americans for Responsible Leadership to provide communications and transactions data between donors and the nonprofit. The matter is slated for a 2 p.m. hearing today.

October 24, 2012
Poll: Jerry Brown's tax measure slips below 50 percent

Public support for Gov. Jerry Brown's ballot measure to raise taxes has fallen below 50 percent two weeks before Election Day, according to a new Public Policy Institute of California poll.

Forty-eight percent of likely voters support Proposition 30, down from 52 percent in September, according to the poll released tonight. Forty-four percent of likely voters oppose the initiative.

The survey comes as Brown makes a final push around the state to rally support for his proposal to raise the state sales tax and income taxes on California's highest earners.

The outlook for Proposition 38, the rival tax measure backed by wealthy civil rights lawyer Molly Munger, is even dimmer than for Brown's. Just 39 percent of likely voters support it, according to the poll.

Brown's job approval rating has held about steady, at 42 percent of California adults and 45 percent of likely voters. Disapproval of the state Legislature stands at 68 percent of likely voters surveyed.

Pessimism about the state's overall direction has declined since September, with 53 percent of Californians now saying the state is heading in the wrong direction, compared to 60 percent last month. Still, 80 percent of Californians believe the state is in a recession, according to the poll.

October 18, 2012
Jerry Brown stumps for Prop. 30 at Sacramento City College

prop30jerrybrown.jpgGov. Jerry Brown rallied hundreds of students at Sacramento City College today as he continued the campaign to get college students excited about his Proposition 30 tax increase.

"The idea of Proposition 30 is to put some more money into state coffers so we can pay for schools and colleges and the University of California. This is a crucial opportunity," the governor told the crowd gathered in a small courtyard on campus.

Proposition 30 involves two temporary tax increases: raising sales taxes by a quarter cent on a dollar for four years and income taxes for seven years on those making more than $250,000.


October 16, 2012
Mystery Arizona group sends $11 million to fight unions, Gov. Jerry Brown

A shadowy Phoenix-based group contributed $11 million Monday to a campaign committee funding attacks on Gov. Jerry Brown's tax initiative and supporting a measure curbing union dues collection, a new campaign finance report shows.

Americans for Responsible Leadership gave the donation to Small Business Action Committee PAC, which is backing Proposition 32 and opposing Proposition 30. Before the latest contribution, the PAC had been heavily reliant on more than $20 million from Charles Munger Jr.

A spokeswoman for the Small Business Action Committee said she didn't know where Americans for Responsible Leadership got its money.

October 10, 2012
State schools chief calls on Molly Munger to stand down

State Superintendent of Public Instruction Tom Torlakson tried to intervene Wednesday in the ongoing tax initiative fray by calling on wealthy Proposition 38 proponent Molly Munger to remove her ads attacking Gov. Jerry Brown's Proposition 30.

Torlakson, one of the few state leaders backing both measures, said he has personally expressed "deep concerns and disappointment" to Munger about her Tuesday launch of ads criticizing Brown's campaign for allowing politicians to take money from schools.

"I have urged Molly Munger, in the strongest possible way, not to air any such advertisement," Torlakson said in a statement released by the Brown campaign this afternoon. "I consider this to be the kind of negative campaigning that will confuse voters and turn them away from favorable consideration of either measure. I am concerned that this anti-Proposition 30 advertisement will create additional confusion about the two measures and lead to the defeat of both. This would be a tragic outcome our schools and our students cannot afford."

Torlakson said that his own polling shows that any negative ads have "a high probability of turning voters against both," though his office declined to release data backing up that claim.

Munger's campaign established a separate account to run ads attacking the governor's initiative, and she contributed $3 million Monday for that purpose. Her spokesman, Nathan Ballard, said Munger felt compelled to run the ad because Brown's initial Yes on 30 spot claimed to bypass Sacramento, a mantle she felt her initiative owned.

October 10, 2012
Molly Munger opens separate committee to attack Prop. 30

Wealthy attorney Molly Munger, who wants voters to raise income taxes for education and state budget relief in Proposition 38, has formed a new committee for the express purpose of critiquing rival tax initiative Proposition 30.

Munger contributed $3 million Monday to the new Committee to Defend Prop. 38 to fund a new round of statewide ads critical of Gov. Jerry Brown's initiative.

October 3, 2012
Charles Munger gives $10 million for Prop. 32, against Prop. 30

Editor's note, 2:03 p.m.: This post has been updated with responses from Beth Miller, spokeswoman for the Small Business Action Committee.

Republican activist Charles Munger Jr. has given more than $10 million to an independent committee supporting Proposition 32's campaign finance provisions and opposing Proposition 30's tax increase, according to a new state filing.

The committee has bought millions of dollars in advertising to support Proposition 32 and given some of the cash to a different campaign fighting Gov. Jerry Brown's tax measure.

October 3, 2012
VIDEO: Jerry Brown's tax campaign airs first TV ad

Gov. Jerry Brown's campaign to raise taxes went up this morning with its first television ad, painting Proposition 30 as an effort to protect school funding from "Sacramento politicians" - without once mentioning the tax increase or the fact it is a Sacramento politician proposing it.

"As state controller, my job is to watch the money," state Controller John Chiang says at the top of the ad. "I support Prop. 30 because it means no more school cuts with strict accountability. Sacramento politicians can't touch the money, and Prop. 30 requires annual audits posted online for everyone to see."

The ad includes no mention of the Democratic governor, whose public approval rating is only middling.

The campaign later said the ad is part of a series of five ads, two of which feature Brown.

September 28, 2012
Bloomberg: California among states with faltering economies

The economies of 36 states, including California, "showed signs of worsening" during the second quarter of this year, according to the Bloomberg Economic Evaluation of States.

Ironically, the on-line article by the international economic reporting organization was published just as California was hit with two major corporate pullbacks.

Comcast announced that it was shutting down its California call centers and Campbell Soups said it was closing its Sacramento plant.

Initially, Comcast cited the state's hostile business climate, but after politicians, including Gov. Jerry Brown, protested, the firm changed its stance. Brown has been touting employment gains and other positive economic news of late, and bad news is widely seen as a negative factor for the multi-billion-dollar tax increase, Proposition 30, that Brown and other Democratic politicians are hoping voters will endorse in November.

Recent polls, including one released Friday by the University of Southern California and the Los Angeles Times, indicate that the measure is favored by just over 50 percent of voters now and would be vulnerable to an opposition campaign.

The Bloomberg survey, dubbed BEES, found that 10 states, mostly those with thriving energy sectors, showed economic improvement during the second quarter while 36 stumbled. The first quarter survey had found 35 states improving.

September 24, 2012
Molly Munger's tax campaign swipes at Jerry Brown in first statewide TV ad

In a swipe at Gov. Jerry Brown and his ballot measure to raise taxes, the campaign for a rival tax measure suggested in its first statewide TV ad, released today, that Brown's initiative is the product of "Sacramento politicians" who have reduced school funding for years.

In its ad, the Proposition 38 campaign, backed by wealthy civil rights lawyer Molly Munger, touts its Nov. 6 initiative as a "new approach," sending money for schools directly to school districts.

The ad does not mention the Democratic governor or his tax initiative by name, but it criticizes the campaign's central argument, that failure to pass Proposition 30 will result in about $5.4 billion in cuts to schools and community colleges.

"For years, Sacramento politicians have chopped away funds for our schools," the ad says. "Today, we're 47th out of 50 in per-pupil funding. Now these politicians say unless we send more tax dollars to Sacramento, they'll cut education again."

The ad comes as the campaigns prepare to ramp up ahead of Election Day. Brown has yet to release a statewide TV spot. He said over the weekend that "the campaign is just beginning."

September 24, 2012
AM Alert: Capitol committee scrutinizes California tax proposals

VIDEO: Dan Walters says that conscientious California voters have their homework cut out for them in the next few weeks, what with 11 propositions on the Nov. 6 ballot.

The Legislature is out, but the Assembly Budget Committee is in, with a hearing today on November's three tax initiatives -- Gov. Jerry Brown's Proposition 30, Molly Munger's Proposition 38 and Tom Steyer's Proposition 39.

Click here to read the agenda, which includes presentations from proponents and opponents as well as representatives of the Legislative Analyst's Office. The hearing starts at 10 a.m. in the Capitol's Room 437.

Outside the building, domestic workers and their supporters are rallying at 11 a.m. on the west steps to urge Brown to sign Assembly Bill 889, by Democratic Assemblyman Tom Ammiano of San Francisco. They're also expected to deliver a giant pen and 25,000 petition signatures to the governor. The measure would give domestic workers -- including housekeepers and nannies -- overtime pay, rest periods and other labor protections.

In election news, Field Poll director Mark DiCamillo told The Bee's Torey Van Oot, "It seems like I've seen this movie before," when it comes to the matchup between Democratic U.S. Sen. Dianne Feinstein and Republican challenger Elizabeth Emken.

A recent survey shows Feinstein up by 26 percentage points as the campaign enters its final weeks. Independent and third-party voters favor her by an even wider margin. Click here to read the publicly released poll. You'll find statistical tabulations, compiled exclusively for Capitol Alert, at this link.

Meanwhile, the University of Southern California's Schwarzenegger Institute for State and Global Policy has lined up some big names to talk about post-partisanship at its first symposium today, including former Florida Gov. Charlie Crist, Sen. John McCain of Arizona, former New Mexico Gov. Bill Richardson, former U.S. Senate Majority Leader Tom Daschle of South Dakota, and former Gov. Arnold Schwarzenegger himself. Click here to learn more.

ADULT SERVICES: Assemblywoman Mariko Yamada, D-Davis, is conducting an Assembly committee oversight hearing to air complaints about the transition to the state's new adult services program. Start time is 1 p.m. in the Capitol's Room 126.

CAKE AND CANDLES: Sen. Mark Leno, D-San Francisco, celebrates his 61st birthday today.

September 20, 2012
Dan Walters Daily: Support for Jerry Brown's tax measure dips

VIDEO: Dan says Gov. Jerry Brown is "all in" for his tax measure, but the bet may be a loser.

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

See other Dan Walters Daily clips here.

September 20, 2012
AM Alert: Brown's proposal still fares best of three tax measures

VIDEO: Dan Walters says Gov. Jerry Brown is betting California's solvency on his ballot tax measure, and it's maybe 50-50.

Most California voters -- about two in three -- who have decided yea or nay on the governor's Proposition 30 intend to vote the same way on Molly Munger's competing Proposition 38, according to a new poll conducted jointly by UC Berkeley's Institute of Governmental Studies and the Field Poll.

The survey looks at trends among voters on those two measures as well as a third tax-related proposal, Tom Steyer's Proposition 39 to hike taxes on multistate companies operating in the state. Of the three, Brown's measure is still faring the best, but support has slipped.

The Bee's David Siders has more details in today's Bee. Want even more numbers? Click here to read the publicly released poll. You'll find the statistical tabulations, compiled exclusively for Capitol Alert, at this link.

Meanwhile, the California Air Resources Board is drawing a crowd today as business groups plan to protest the state's cap-and-trade market, which kicks off on Nov. 14. The board isn't expected to take action at its meeting, which starts at 9 a.m. at 1001 I St. in Sacramento, but the groups say they'll be there anyway. The Bee's Dale Kasler has more in this story. To read the agenda, click here.

Registration is closed for Perspectives 2012, but you might catch a glimpse of former Vice President Dick Cheney, former Mexican President Vicente Fox or Arianna Huffington of the Huffington Post near the dome. They're among the speakers at the Metro Chamber's forum, which runs all day at the Sacramento Convention Center.

Former New York Mayor Rudy Giuliani is also in town for an event with two Republicans -- Colusa County Supervisor Kim Vann, 37, who faces Democratic Rep. John Garamendi in the 3rd Congressional District, and with Ricky Gill, 25, who's up against Democratic Rep. Jerry McNerney in the 9th Congressional District. That presser starts at 8:30 a.m. at Sacramento Chamber of Commerce, 1215 K St. on the 14th floor.

Down in the south state, state schools chief Tom Torlakson participates in a round table discussion with Chris Steinhauser, the Long Beach Unified School District superintendent, and others about recommended new models for evaluating the state's teachers. That event starts at 10 a.m. at Marshall Academy of the Arts in Long Beach.

CAPITOL STEPS: State employees will be walking the mile around Capitol Park today to raise money for the American Heart Association, with a wellness fair from 11:30 a.m. to 1:30 p.m. on the west steps.

September 13, 2012
Tax campaign for Prop 38 issues call for ads - just 'be positive'

In perhaps the touchiest, feeliest appeal yet of the November tax campaign, Carol Kocivar, president of the California State PTA, invites viewers in an online ad to "be" Proposition 38 - just like her.

"I am 38," she says. "Will you be, too?"

The campaign for Proposition 38, the initiative rivaling Gov. Jerry Brown's tax measure, was in the digital equivalent of Mr. Rogers' Neighborhood today to announce a video contest urging Californians to record stories about how higher taxes could help their local schools.

The campaign said the contest winner will be featured in a primetime TV ad this fall.

"We're not looking for a full-length, Hollywood feature," Kocivar says. "Just a clip showing your face and sharing your authentic story, and you can even record it on your webcam or your camera phone."

The video, she says, could be "funny, serious, creative or dramatic. It could feature you, your family, your school. Just don't use any copyrighted content, and be positive."

September 11, 2012
Jerry Brown: Chamber 'clearing the way' for tax bid by staying neutral

REDWOOD CITY - Gov. Jerry Brown said today that it is "amazing" the California Chamber of Commerce's decided to take no position on his Nov. 6 ballot initiative to raise taxes, adding that the group's neutrality is "basically clearing the way" for passage of the measure.

"The chamber is neutral," Brown said, "which is amazing that the Chamber of Commerce would work so carefully with my administration and is not in opposition at all - is basically clearing the way for us."

The Democratic governor said at a bill signing event here that the chamber's neutrality "is a very important sign ... it's a very, very positive indicator of Proposition 30's potential to get the 'Yes' vote."

Brown's Proposition 30 proposes to raise the state sales tax and income taxes on California's highest earners.

September 9, 2012
Jerry Brown defends tax measure, likens Mitt Romney to Thomas Dewey

Gov. Jerry Brown said this morning that California's high tax rates have not dragged down the economy, defending his Nov. 6 ballot initiative to raise taxes in a television interview.

"I know we're a high-tax state, but that's happened under Ronald Reagan, it's happened under my father, it's happened under Schwarzenegger, it's gone a long time," the Democratic governor said on CNN's State of the Union with Candy Crowley. "Remember, California has created almost twice as many jobs at twice the rate of the country as a whole. So we're a real engine out here, in terms of Silicon Valley and Apple and Hewlett-Packard, and all the things we're doing."

California is outperforming other states in job creation, according to the state Employment Development Department, though double-digit unemployment remains higher than the national average.

Asked by Crowley if California's persistent budget deficits don't demonstrate that higher taxes hinder economic growth, Brown said, "It's just the opposite, because the economy is doing better than the rest of the nation."



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Capitol Alert Staff


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

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

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

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

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

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

Jeremy White Jeremy B. White covers the Legislature. jwhite@sacbee.com. Twitter: @capitolalert

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

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

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