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Bill Lockyer: Arnold right to veto gas-tax swap

The Legislature really dropped the ball with its version of the gas-tax-swap deal, state Treasurer Bill Lockyer told Alameda County officials today, and Gov. Arnold Schwarzenegger was right to promise a veto.

Lockyer @ AlaCo budget workgroup 3-17-10Lockyer addressed the county Board of Supervisors Budget Workgroup, with attendees including supervisors Keith Carson, Alice Lai-Bitker and Gail Steele; County Administrator Susan Muranishi; and dozens of county department heads and staffers, local nonprofit officials and other stakeholders.

Schwarzenegger’s version of the gas-tax-swap deal would’ve saved a lot of money, but the changes and compromises it underwent while wending its way through the Legislature reduced the General Fund savings to a fraction of what they had been, he said.

“Why do all this complicated shifting around if the net result is confusion,” Lockyer later elucidated outside the budget session. “It didn’t make sense to change everything around and have lawsuits about it … for a very modest net result.”

Lockyer said he also agrees with the governor’s pitch for a sales-tax exemption for green tech manufacturing equipment.

Inside the budget session, Lockyer had delivered a somewhat sobering assessment of the state’s fiscal situation – and so, the outlook for cities and counties – in the months to come.

Cash flow is fine now, he said, but if the Legislature and Schwarzenegger can’t reach a budget deal early in the summer, the state’s payments of gas tax funds, mental-health tax funds and other monies to cities, counties and school districts “almost inevitably” could be deferred for up to two months, to the tune of billions of dollars.

And Sacramento is counting on “unrealistically high” estimates of federal aid to help balance its books, meaning lawmakers and the governor will have to scramble to backfill an even bigger hole when that money from Washington doesn’t materialize.

Lockyer said he intends to sell about $14 billion worth of general obligation bonds this year to pay for infrastructure projects, and as much as $10 million (depending on when we have a budget deal) in short-term borrowing this summer to tide us through our annual cash-flow issues.

He said California gets a bad rap from bond-rating agencies, not because there’s any real risk of default – he’s constitutionally empowered to service the state’s debts no matter what the Legislature does or doesn’t do – but rather because of the widespread perception of legislative gridlock Sacramento exudes year after year, a perception unlikely to be dispelled so long as the state constitution requires two-thirds votes of the Legislature for all budget and tax bills. But with no significant chance of changing that any time soon and no chance of reforming Proposition 13 to allow for reassessment of commercial property, California will keep having to find ways to muddle through, he said.

Posted on Wednesday, March 17th, 2010
Under: Alameda County Board of Supervisors, Arnold Schwarzenegger, Assembly, Bill Lockyer, California State Senate, state budget | No Comments »

Maldo withdrawn, re-submitted for Lt. Gov.

Looks like the governor has backed off his initial plan to swear in Abel Maldonado as lieutenant governor later this month despite last night’s Assembly vote – he has withdrawn Maldonado’s name from nomination and then resubmitted it, effectively restarting the 90-day clock for another vote.

Maldonado issued this statement:

“I’m humbled and thankful to my colleagues in the Senate for confirming me to the Lieutenant Governor’s office and very disappointed with yesterday’s show of extreme partisanship and politicking in the Assembly.”

“The inability to come to a simple majority consensus on important issues is why Californians are rightfully disillusioned by Sacramento politics. I’ve said time and time again—I put the people first. The office of Lieutenant Governor is their office—it does not belong to Democrats or Republicans. For this reason, I wholeheartedly support the rescinding of my nomination. We must do the people’s work first.

“I agree with the governor’s interpretation of the constitution, and furthermore, I agree that we cannot waste time and resources on a lawsuit sure to be brought by politicians trying to protect a seat they believe belongs to them. Our focus should be acting on the budget deficit and improving our economy.

“So, it’s with the people in mind that I refuse to participate in what Democrats have promised to be a costly, wasteful lawsuit over their inability to act.

“Let me be clear – I will not waste a dollar of tax payer money fighting the lawsuit Democrats are sure to bring to protect what they feel is their office. I also refuse to waste another minute of time that should be spent on the business of the people. It’s time to balance the budget and create jobs.

“I’m honored to accept the Governor’s re-nomination and implore my colleagues to reject partisan influences as my colleagues in the Senate exemplified yesterday.”

UPDATE @ 3:46 P.M. FRIDAY: Here’s the governor’s statement:

“I am grateful to the leadership of the California State Senate for acting decisively and in a bipartisan manner in confirming Senator Abel Maldonado to the post of Lieutenant Governor. The display of extreme partisanship among Democrats in the Assembly yesterday resulted in legislative stalemate that can only be resolved through protracted litigation.

“If we are going to move California forward, create jobs and get our economy back on track, the Assembly Democrats cannot continue the political paralysis that throws every difficult decision to the courts. This kind of hyper-partisanship is exactly what the voters have rejected time and time again. It doesn’t produce new jobs; it doesn’t balance our budget; it doesn’t lower people’s taxes or provide health care to one sick child. It has to stop.

“The California Constitution is clear: the Legislature must confirm or reject my nominee for Lieutenant Governor within 90 days. Refusal to make a decision results in the nominee taking office. I believe the public good is not served by continued paralysis and protracted litigation because the Assembly Democrats cannot produce a simple majority to make a decision.

“Therefore, in an effort to avoid wasting time and energy on litigation that should be spent passing a jobs package that will get Californians back to work, I intend to withdraw and resubmit the nomination of Abel Maldonado for Lieutenant Governor back to the legislature and ask the Assembly to take the vote again until a majority decision is reached, one way or another.

“I believe Senator Abel Maldonado is most qualified to be Lieutenant Governor and I am proud to re-nominate him. I urge the Assembly to set aside partisan bickering and act swiftly and decisively on his nomination.”

Posted on Friday, February 12th, 2010
Under: Abel Maldonado, Arnold Schwarzenegger, Lt. Governor | 6 Comments »

A Maldonado re-vote?

It’s still at least theoretically possible for Assembly Democrats to beat Gov. Arnold Schwarzenegger at his own game and reject state Sen. Abel Maldonado as lieutenant governor.

The Assembly voted 37-35 yesterday on confirming Maldonado, R-Santa Maria, as lieutenant governor. Assembly Democrats contend this is a rejection, as Maldonado didn’t get 41 votes to confirm. Schwarzenegger and Maldonado interpret the state constitution otherwise, arguing that the Assembly must act by majority either to confirm or reject Maldonado, or else Maldonado can just be sworn in 90 days after his nomination.

This no doubt has the California Supreme Court’s justices rubbing their temples in anticipation of a possible intervention so politically charged that it’s sure to leave everyone unhappy.

But that need not necessarily come to pass. The governor’s office confirmed to me today that under this interpretation, the Assembly could vote again between now and Feb. 21 – the 90-day mark – to either confirm or reject Maldonado with 41 votes. And seven Assembly members didn’t vote yesterday.

One will remain on the sidelines no matter what. Republican U.S. Senate candidate and Assemblyman Chuck DeVore, R-Irvine, was on the campaign trail yesterday and absent from the vote, but issued a statement saying he would have abstained anyway. (Ed. note at 4:10 p.m.: Trevino informs me DeVore “actually was present on the Assembly floor for the morning vote. He was only gone for the afternoon session. Doesn’t affect his purposeful abstention, though.”)

“One year ago, I resigned as Assembly Minority Whip because I would not support the budget deal that led to the failed Proposition 1A — which would have been the largest state tax increase in American history. Senator Maldonado, by contrast, played a decisive role in putting 1A before the people. I won’t reward bad behavior with high office. It is in that spirit that I abstained from this vote.”

Today, campaign spokesman Joshua Trevino told me DeVore will abstain if there’s a re-vote.

“As he just told E.J. Schultz at the Fresno Bee (via Twitter), the GOP Assembly caucus has decided to support Maldonado. If Chuck votes no, it will be more a hit at them than the nominee per se. An abstention registers disapproval of the nomination without expressing direct disapproval of his fellow Republicans. It also serves as a de facto no when the affirmations are tallied.”

Two Assembly Democrats – Dave Jones, D-Sacramento, and Mary Salas, D-Chula Vista – opposed Maldonado in an earlier round of voting, but didn’t vote in the final tally. Let’s assume, for argument’s sake, that they would again oppose Maldonado in a re-vote. That would make it 37-37 – still four votes shy of a majority to confirm or reject.

Three Assembly Democrats – Hector De La Torre, D-South Gate; Kevin de Leon, D-Los Angeles; and Ed Hernandez, D-West Covina – were present but didn’t vote. Assemblywoman Wilmer Carter, D-Rialto, was absent.

I queried all four about what they would do if there’s a re-vote. Carter spokeswoman Ellen Braunstein responded to my query just before noon: “I haven’t been able to contact the Assemblymember yet, and will wait for her response.”

But, perhaps unsurprisingly, none of the other three have responded yet. Perhaps they were busy having their heads knocked together by Assembly Speaker Karen Bass, Speaker-elect John Perez and/or California Democratic Party Chairman John Burton, all of whom might like to see them fall into the party line to sink Maldonado once and for all.

Posted on Friday, February 12th, 2010
Under: Abel Maldonado, Arnold Schwarzenegger, Assembly, Chuck DeVore, John Perez, Karen Bass, Lt. Governor | 3 Comments »

Obama, Arnold, Steinberg throw down on taxes

So is it President Obama versus California Democrats, Schwarzenegger versus the truth, or both?

Gov. Arnold Schwarzenegger’s office this morning sent reporters a missive noting President Obama’s comment in an interview with ABC’s Diane Sawyer yesterday that “I can guarantee that the worst thing we could do would be to raise taxes when the economy is still this weak.”

Although the President was talking about federal taxes, the governor’s office juxtaposed this with Legislative Democrats’ calls to help close the state’s chronic budget shortfalls and structural deficit with some revenue increases. Among those was this:

Senate President pro Tem Darrell Steinberg (D-Sacramento) Calls For Tax Increase On Independent Contractors.
“Senate President pro Tem Darrell Steinberg of Sacramento said the state could generate a one-time boost of $2 billion simply by requiring tax withholdings on payments to independent contractors.” (Judy Lin, “Schwarzenegger Doesn’t Blame Voters For Ill Will,” The Associated Press, 1/25/10)
Steinberg: “At every opportunity I decry the governor and minority party’s refusal to consider applying the same tax withholding rules to businesses that we apply to working people. The Franchise Tax Board tells us that applying a 3 percent withholding for independent contractors would raise $2 billion.” (Senator Darrell Steinberg, “Schwarzenegger’s Budget Doesn’t Reflect California’s Priorities,” San Jose Mercury News, 1/18/10)

Steinberg’s office shot back a short while ago, accusing the governor of perpetuating his pattern of not letting the facts get in the way of his rhetoric.

Governor Schwarzenegger’s office today released a document stating that Senate President pro Tempore Darrell Steinberg’s endorsement of a tax withholding requirement on independent contractors is a tax increase.

That assertion is patently false, and is yet another example of how the Governor refuses to let the facts get in the way of his rhetoric.

Here are the facts. Under existing law, employers are required to deduct and withhold from wages an amount equivalent to an employee’s reasonable tax obligation. Each quarter, employers are then required to remit to the Employment Development Department the total amount of income taxes they withheld. These provisions do not currently apply to payments made for goods and services performed by independent contractors.

In other words, the proposal endorsed by Steinberg does not increase anybody’s taxes; it only proposes that independent contractors pay the taxes they currently owe. Indeed, according to the Franchise Tax Board, such a policy would result in more than $1 billion in revenue for fiscal year 10/11, with ongoing revenues in the hundreds of millions in the following years.

So here’s a question for the Governor: Why do you believe that the law-abiding taxpayers of California should be forced year after year to pick up the slack for tax-dodgers?

Posted on Wednesday, January 27th, 2010
Under: Arnold Schwarzenegger, California State Senate, Darrell Steinberg, state budget, taxes | 1 Comment »

Maldonado’s confirmation hearing scheduled

Senate President pro Tem Darrell Steinberg, D-Sacramento, has set a Rules Committee hearing to consider Gov. Arnold Schwarzenegger’s appointment of state Sen. Abel Maldonado, R-Santa Maria, as Lieutenant Governor for 1:30 p.m. next Wednesday, Feb. 3 in room 113 of the State Capitol.

Posted on Wednesday, January 27th, 2010
Under: Abel Maldonado, Arnold Schwarzenegger, California State Senate, Darrell Steinberg, Lt. Governor | No Comments »

Arnold’s veto-message wordplay lives on

(Note: This post was penned by San Jose Mercury News reporter Denis C. Theriault, in the Sacramento bureau.)

Reports of a certain veto message’s death — as in the one with the hidden, four-letter message apparently sent from Gov. Arnold Schwarzenegger to Assemblyman Tom Ammiano — have been exaggerated.

Despite a blog post by the Sacramento Bee last week saying the message had gone “poof,” it’s alive and well for all the world to see over on the governor’s Web site.

The message, you might remember, was issued in response to AB 1176 and seemed to follow the governor’s usual form when rejecting bills. But careful readers, eyeballing the first letter of each line, found something else: a familiar curse word, plus the word “you.”

The discovery kicked off a brief national media storm and saw the governor’s office defending the acrostic as mere coincidence — never mind that Ammiano had only weeks before peppered the governor at an appearance with some choice words of his own.

The Bee, in its post, looked only at the Legislature’s bill-tracking site,, which formatted the message’s text differently and ended up wiping out the acrostic.

So, after bleak budget forecast after bleak budget forecast, long live one of the lighter pieces of writing to come from the governor’s office last year.

Posted on Tuesday, January 26th, 2010
Under: Arnold Schwarzenegger, Assembly, Tom Ammiano | No Comments »

Tomorrow is National Angel Island Day

Angel IslandPresident Barack Obama has proclaimed tomorrow, Thursday, Jan. 21, to be “National Angel Island Day,” commemorating the 100th anniversary of the former immigration station in the middle of the San Francisco Bay.

Y’know, Angel Island State Park — one of the parks that the feds threatened to seize last summer after Gov. Arnold Schwarzenegger proposed closing it due to budget cuts? Yeah, that one.

ANYhoo, President Obama used the proclamation as an opportunity to reflect upon immigrants’ contributions to the nation. Read the full text, after the jump…
Read the rest of this entry »

Posted on Wednesday, January 20th, 2010
Under: Arnold Schwarzenegger, Immigration, Obama presidency | No Comments »

Berkeley-for-Berkeley swap on energy panel?

Gov. Arnold Schwarzenegger today nominated two people, one of whom is from the East Bay, to the California Energy Commission.

Robert WeisenmillerRobert Weisenmiller, 61, of Berkeley, has been principal and co-founder of the energy consulting company MRW and Associates since 1986; earlier he was co-founder and executive vice-president of Independent Power Corporation from 1982 to 1986. Weisenmiller was this commission’s policy and program evaluation director from 1980 to 1982, special projects officer from 1978 to 1980 and assistant to the commissioner from 1977 to 1978.

And Anthony Eggert, 37, of Davis, has served as science and technology policy advisor to the chair of the California Air Resources Board since 2007; earlier he was an advisor on energy and climate policy to the Office of Federal Governmental Relations for the University of California, Office of the President in 2007 and associate research director for the University of California, Davis Institute of Transportation Studies from 2002 to 2006. Eggert worked for the Ford Motor Company as manager of the California Fuel Cell Partnership from 2001 to 2002 and project engineer of Vehicle Environmental Engineering from 1996 to 1999.

Both men are registered decline-to-state; if confirmed by the state Senate, they’ll earn an annual salary of $128,109.

“The Energy Commission plays a vital role in helping meet the aggressive environmental goals my Administration is committed to achieving, through streamlining the permitting of renewable energy projects to help break ground quicker and create jobs while maximizing the billions of dollars in federal treasury grant funds for renewable energy projects,” said Schwarzenegger in his news release. “Both Anthony and Robert are the best, most qualified individuals to serve this purpose on the commission. They have the necessary experience and know-how to push our energy policies forward and I am confident that their service will help California take another step on the path toward meeting our goal of 33 percent renewable energy by 2020.”

That is, of course, assuming this goal stays in place. More on that after the jump…
Read the rest of this entry »

Posted on Wednesday, January 13th, 2010
Under: Arnold Schwarzenegger, energy, Environment, Global warming, Schwarzenegger | No Comments »

Of false dilemmas and hostage-taking

The oil-for-parks plan I wrote about earlier doesn’t seem to be the only, or biggest, false dilemma Gov. Arnold Schwarzenegger is setting up in his state budget proposal.

The governor’s plan relies on collecting $6.9 billion more in federal tax dollars, what he calls California’s “fair share” owed the state for faulty reimbursement formulas and federal mandates. He says California gets back only 78 cents on every tax dollar it sends to Washington, D.C. – a far lower rate than many states – and deserves much more considering its costs as an economic engine and a border state.

If the federal government won’t ante up, the governor says, he can entirely eliminate the CalWORKS welfare program, the IHSS program, and the Healthy Families low-cost medical insurance program for children, while freezing Cal Grants for higher education, eliminating funding for University of California and California State University enrollment growth and cutting state worker salaries by another 5 percent, among other measures – a wholesale shredding of the state’s social safety net and educational system.

But many governors before and including Schwarzenegger have tried and failed to reformulate the federal government’s support of California; to put all responsibility for this now on California’s Congressional delegation, especially in a time of national economic crisis, is passing the thus-far-unachievable buck. Remember when Arnold pledged to be “The Collectinator” way back in 2003, upon meeting with a President of his own party while the national economy was in far better shape? At the time, he was talking about $50 billion.

Bruce Cain, who directs the University of California, Berkeley’s Institute of Governmental Studies and UC’s Washington Center, might’ve said it best when I talked to him in late 2006 as San Francisco’s Nancy Pelosi was preparing to take over as Speaker of the House and named two Bay Area lawmakers to the powerful Appropriations Committee. Most federal spending is set by formula and isn’t easily changed, even by a change of leadership, he had said, so California wasn’t much more likely to get a significantly bigger slice of the budget pie now than it was before.

“You can’t expect to go from 79 cents on the dollar to 99 cents on the dollar because of this. You’re probably talking about maybe changing things by a couple of pennies,” Cain said at the time.

Other governors of both parties managed to better protect education, health and social services without the federal fix than Schwarzenegger has. Is he admitting his own failure? Is he merely creating a pretext for these draconian cuts he fully expects to make later in his final year in office, already knowing full well that the federal pot at the end of the rainbow isn’t likely to materialize?

Or is this a show of action-movie bravado, holding a gun to the head of California’s poor, elderly, disabled and students and hoping Congress will blink? And if it’s this, then isn’t it something the action-movie villain does, not the hero?

UPDATE @ 5:46 P.M.: I just spoke with Mary Beth Sullivan, executive director of the California Institute for Federal Policy Research, who agreed with Cain’s 2006 sentiments.

“Once you get into tweaking the formulas, you’re into whose ox gets gored,” she said – that is, reformulating to California’s benefit requires reformulating to some other state or states’ detriment, so it’s usually a slow, hard process with few returns. “All other governors tried it too…. It’s a laudable purpose because quite frankly if he gets it up to 80 cents on the dollar, that’s something, but is it realistic to think he can do it? I don’t think so.”

Congress might pass another stimulus bill with direct help for California and other budget-stricken states, she said, but like the first stimulus bill, that’ll be one-time funding, not a permanent reformulation. Beyond that, Congress is likely to start focusing on the national budget deficit, a process that might not be pretty for any of the states. So, she said, the best California should be hoping for is another one-time influx and maybe some tweaking around the edges.

That said, U.S. Sen. Barbara Boxer insists the American Recovery and Reinvestment Act already has made Gov. Arnold Schwarzenegger’s data obsolete.

Boxer’s office put out a report today estimating that Recovery Act money, coupled with the fall in Californians’ federal tax revenues due to the struggling economy, made it so that California received $1.45 for every $1 in federal tax dollars it sent to Washington in Fiscal 2009; Schwarzenegger’s 78-cents-on-the-dollar figure is based on data from 2005, which economically speaking was a different world entirely.

I pointed out that ARRA funding is one-time-only, not a reformulation that supports California going forward. Boxer’s staff acknowledged this, but also noted ARRA funding is still pouring into California during this budget crisis; they ballparked that the state has received about $18 billion so far, and there’s another $37 billion still in the pipeline.

The overall message from Boxer’s camp: Congress and the Obama Administration have been helping California – and other states – a lot, but can’t be expected to cure all of Sacramento’s ills.

Posted on Friday, January 8th, 2010
Under: Arnold Schwarzenegger, Schwarzenegger, state budget | 2 Comments »

Enviros blast Arnold’s oil-for-parks plan

Amid the cacaphony of outrage we’re hearing today over Gov. Arnold Schwarzenegger’s state budget proposals, environmentalists say they’re aghast at his plan to drop General Fund support for California’s state parks and replace it with money from controversial, not-yet-approved new oil and gas leases off the Santa Barbara coast.

They say Schwarzenegger is trying to set up a false dilemma by pitting the interests of one of California’s greatest natural resources – its coastline – against another – its parks.

Coastwalk California board president Fran Gibson said her group strongly opposes any further General Fund cuts for state parks, which already have been whacked in recent years. “It is unconscionable to leverage the PXP project against state parks in this way and use our coast and state parks as pawns in his budget game,” she said. “Both are critical natural public assets for current and future generations of Californians.”

California Coastal Protection Network Director Susan Jordan said the governor’s hypocrisy “cannot be overstated.

“He would rather reverse forty years of bi-partisan California state policy against offshore oil drilling to push through a pet project over 100 statewide groups have joined to oppose rather than require oil companies extracting oil from our state’s sea beds pay a severance tax – their fair share to taxpayers for doing business in California,” Jordan said. “We are the only oil producing state in America that does not tax extraction of gas and oil on lands owned by the state. This would bring in more than $1.5 billion annually to the state’s General Fund.”

And the California State Parks Foundation rejects the governor’s plan as “the wrong idea at the wrong time,” said president Elizabeth Goldstein.

“It’s noteworthy that the Governor has finally come around to the side of park advocates and park users in California by proposing to fund state parks, instead of cutting them as he’s proposed in the last two budget cycles,” she said. “But pegging the fiscal future of the state park system to offshore oil drilling sets up an unacceptable tradeoff between coastal protection and park preservation, and attempts to provide a band-aid for our state park system yet again. Band-aids are not what’s needed; what’s needed for state parks is a reliable, sustainable funding source, and CSPF and our partners are working toward that in the State Parks and Wildlife Conservation Trust Fund Act of 2010.”

That’s a proposed ballot measure which would create an $18-per-vehicle surcharge to raise the $130 million per year needed to support the state park system; all day-use access would become free of charge. Proponents must gather valid signatures from at least 433,971 registered voters by May 28 in order to put the measure on November’s ballot.

Posted on Friday, January 8th, 2010
Under: Arnold Schwarzenegger, California budget, energy, Environment, state budget | 1 Comment »