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Daniel Weintraub

California Insider

A Weblog by
Sacramento Bee Columnist Daniel Weintraub

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« November 15, 2005 | | November 17, 2005 »
November 16, 2005

Google and the future of advertising

Anyone with an interest (that's me) or even a curiosity about the future of newspapers ought to read this article about Google's plans for software that will make it possible to search for anything anyone has uploaded to the company's Web site. It appears to be the first move in a plan by Google to get into classified advertising, which remains something like a third of most metro newspapers' revenue. That revenue is already being drained away by services such as eBay and Craig's List. If Google jumps in, watch out.

Posted by dweintraub at 12:39 PM

LAO forecast: great news for governor

The LAO's new long-term forecast for the state's fiscal picture is here.

The bottom line is that her forecast could not be any more favorable for the Schwarzenegger Administration. Revenues are up, significantly, and expenditures are running a bit below forecast.

HIll projects that the state will end the current fiscal year with a positive balance of about $5.2 billion. That's $1.3 billion that was already budgeted as a reserve, plus about $1 billion more than had been assumed in higher revenues from prior years, and $2.9 billion in higher revenues in the current year.

She also projects that the ongoing, structural shortfall, which hasn't gone away, will shrink to $4 billion in the 2006-07 budget year, for which the governor will propose a budget in January.

What this means is that the governor, without tapping into his deficit bond reserve, raising taxes, or reducing projected spending, could propose a budget that uses this year's surplus to cover next year's shortfall, and have money to spare—about $1.2 billion in reserve. Interestingly, this scenario would include full funding for Prop. 98 (as currently defined) -- including the first funding for Schwarzenegger's long dormant Prop. 49 expansion of after school programs.

Basically, the three-year workout that he has said was his goal all along has nearly come to pass.

Now there is still the little problem of that structural shortfall, which keeps shrinking but won't quite go away.

Hill projects that in 07-08, it will again be at the $4 billion level, before slowly fading each year to almost nothing by 2010-11, even if the state takes no corrective action, i.e raising taxes or cutting projected spending.

The most likely prospect is that Schwarzenegger, or whoever is governor in January 2007, will use the last of his deficit bond to cover the shortfall one more time, and they will just keep fudging things from there, a few trims, a few fund shifts, until the books finally balance.

The one caveat, and it is not a small one, is that the state remains in a very precarious fiscal position. If a recession hits or if revenues simply fall short of what Hill is projecting, the structural shortfall starts growing again, to a point where it could not be managed.

Hill's forecast seems much brighter than the hints the governor's people were putting out a week ago. I suspect they just want to use very conservative projections to keep the heat on the Legislature to not start increasing spending again, so that the shortfall number keeps shrinking, perhaps faster than Hill's projection suggests it will.

Posted by dweintraub at 9:41 AM


Hundreds of marchers backed by the signatures of 10,000 parents, students and other residents of mostly poor South Los Angeles demanded Tuesday that the Los Angeles Unified School District relinquish control of a large, troubled high school -- aptly named Jefferson -- and turn it over to a charter school operator who wants to run it for the community. The school district is resisting but is trying to negotiate a truce that would break the school into smaller units, each run by a different outfit. Pretty soon a smart politician, could be from either party, is going to see that there is a massive groundswell building against ineffective, bureuacratic control of our public schools. The groundswell is strongest in the poorest communities where the schools, for whatever reason, are doing little more than warehousing the students on their way to a dysfunctional adulthood. When are the Democrats who claim to represent these people going to see that running the schools from Sacramento or downtown Los Angeles is not working, and that they need to do everything they can to tap into the energy of these parents who are desperate to create a better life for their kids? Republicans get this, but, unfortunately, won't act on their good instincts because they fear that decentralizing the schools will only further empower the teachers unions that have fought against reforms and accountability. As these Los Angeles parents realize, charter schools remain the best option for cutting through this knot and returning control of the schools to parents and the communities where it belongs while retaining oversight and accountability at the regional and state levels.

Posted by dweintraub at 8:24 AM

Lockyer, Girardi and Sempra

Bill Lockyer is set to announce today a lawsuit against San Diego-based Sempra Energy alleging that the firm manipulated electricity supplies to drive up prices during the California crisis. The LA Daily News, meanwhile, has an interesting story here suggesting that the timing of Lockyer's suit appears to play into the hands of a trial lawyer who has been a major Lockyer contributor and is suing Sempra in a separate case involving natural gas supplies.

Posted by dweintraub at 7:26 AM



At Crossroads, a panel of experts and the public debate the future of health care in California. We'd like you to join the conversation.

Daniel Weintraub


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