California Insider

A Steve Westly campaign fundraiser that had been scheduled for the lunch hour on Wednesday in Sacramento was abruptly cancelled Tuesday night amid questions about a solicitation sent out by an ally of the controller who was helping him raise money.

The $2,500-per-person event was targeted to information technology professionals in town for a big annual conference. Jeff Wallack, the event's sponsor, noted in an email invitation that Westly's department was "completing their procurement of the 21st Century Project," referring to a big IT contract the controller is administering for the state's new computerized payroll system. The not-so-subtle implication was that by attending the fundraiser, IT folks might get in on some of the work. Although a primary contractor has already been selected, there is some question about whether that bid will hold up, and even if it does, there's still a ton of subcontracting to be done.

The email, by the way, also described Westly as "a founder of EBAY." Westly was an early employee (#23) of eBay, not a founder.

The lobbying community thinks the event was cancelled because the Wallack email looked bad. But with Westly writing checks to the campaign at a pace of $5 million per week or so, maybe they've just decided they don't need to raise money anymore.

Lt. Gov. Cruz Bustamante is scheduled to join three legislators to ride their bikes to the Capitol on Thursday to promote Bike to Work Day and physical fitness in general. Bustamante, who's been losing weight on a fitness regimen of late, and Sen. Deborah Ortiz will bike from Elk Grove. They will meet up there with Sen. Tom Torlakson and Assemblyman Lloyd Levine, who plan to leave Torlakson's Antioch home at 3:30 a.m. to make the 75-mile trek to the Capitol. The lite-gov and the lawmakers will be available to do live interviews via cell phone as they pedal away. Times sure have changed since the days when lawmakers huffing and puffing at 3:30 a.m. not only were not riding bikes but were in no position to be doing media interviews.

According to this story from the New York Times, only 15 Democrats (and one independent) voted against the Sessions amendment to the immigration bill that would require the construction of hundreds of miles of new fencing along the border. Neither Boxer nor Feinstein were listed among the "no" votes. I'm not a big fan of the idea, but when some people try to make the fence into a partisan issue, remember that there were 83 votes for the amendment on the floor of the U.S. Senate. Let's hope it turns out to be what some have called a very strong fence with a "very big gate."

Austin Bay says forget the border, fix Mexico.

Standard & Poor's has just upgraded the state's bond rating from A to A+. Still, the rating agency offers this cautionary note:

There are reasons to believe the current surge in revenues could be of a onetime nature, which is a concern. In April the state received $11 billion in personal income taxes, a high proportion of which was from taxpayers filing for extensions, who tend to be progressively taxed upper-income filers with more volatile income. In addition, capital gains tax revenues increased by 32% in fiscal 2005 with recent double-digit housing price increases and strong stock market gains being likely contributors to this increased capital gains tax income. Gov. Schwarzenegger's proposal to spend down much of the state's fund balance in fiscal 2007 also constrains the rating, as does the substantial amount of deficit financing bonds remaining, which is almost equal to the estimated fiscal 2006 general fund balance. However, the governor is also proposing the use of about $3.8 billion of the state's estimated $101.0 billion of fiscal 2007 general fund expenditures for onetime purposes. In addition, he announced a plan to retire all deficit bonds by fiscal year-end 2009, including the repayment of roughly $1.5 billion in fiscal 2007.

Senate leader Don Perata was an early advocate for the kind of big infrastructure bond that eventually became Gov. Arnold Schwarzenegger's top legislative priority for 2006. Below, from Perata's office, is a comparison of his bond proposal, SB 1024, and the eventual agreement reached by the Legislature and the governor. Perata clearly got everything he was seeking, and then some.

Flood Protection

SB 1024: $1.2 billion for levee strengthening
Water bond, AB 140, includes no less than $2.5 billion for levee improvements

Trade Infrastructure, Port Security and Port Air Quality Improvements

SB 1024: $2.5 billion
$3.1 billion in SB 1266.

Augment the State Transportation Improvement Plan (STIP)

SB 1024: $1.5 billion
$2 billion in SB 1266.

Rail and Transit

SB 1024: $1 billion
$4 billion in SB 1266.

Local Bridge Seismic Retrofit Program

SB 1024: $125 million
$125 million in SB 1266.

State Local Partnership Program

SB 1024: $1 billion
$1 billion in SB 1266.

Transit Security Program

SB 1024: $500 million
$1 billion in SB 1266.

Grade Separation Program

SB 1024: $325 million
$250 million in SB 1266.

Transit-Oriented Development Incentives

SB 1024: $400 million
Housing bond, SB 1689, includes $300 million for TOD incentives.

Affordable Housing Funding

SB 1024: $1.4 billion
Housing bond, SB 1689, includes $1.5 billion for affordable housing.

Infill Development Incentives

SB 1024: $775 million
Housing bond, SB 1689, includes $850 million in infill incentives.