"Gov. Arnold Schwarzenegger met with the four legislative leaders Thursday for their first formal get-together in a month. But no progress was reported," reports Judy Lin in the Bee.
"Assembly Speaker Karen Bass said a vote wouldn't be coming any time soon.
"Schwarzenegger brought in David Crane, his special economic adviser, along with representatives
of three investment houses to again pitch his lottery
scheme, but Democratic leader Don Perata said he remains
skeptical the plan could be used to help fill this
year's $15.2 billion deficit.
"'I think it's pretty conclusive that it's not a budget solution for this year, but it does
have potential for the years following,' said the Senate's president pro tem."
Meanwhile, "[l]egislative leaders are drafting a complicated scheme
to help close the state's massive deficit by raiding funds voters have set aside for transportation
and local government services, Gov. Arnold Schwarzenegger said Thursday, adding
that it probably would force a state sales tax hike," reports Evan Halper in the Times.
"'It is not a good idea,' the governor said in an interview with The Times.
But Schwarzenegger, anxious to get a budget passed
before the state experiences a cash crisis, did not
rule out signing off on such a plan.
"During the half-hour interview in his office, the governor offered
a broad outline of the proposal being discussed in
closed-door budget negotiations. Schwarzenegger, who seemed
exasperated by his inability to fix California's fiscal dysfunction five years into his governorship,
cited the borrowing plans to bolster his point that
the state's budget system was in need of reform.
"The proposal is being considered as part of a possible
compromise between Democrats seeking to close the deficit
with $5.6 billion in income tax hikes on the rich and Republicans
vowing to block any new taxes.
"The legislative plan would balance the state budget
with the help of $1.1 billion voters set aside for transportation projects
and at least $1.4 billion earmarked for local governments under Proposition
1A, which was approved in 2004, Schwarzenegger said. State law requires that the
money be paid back -- at a steep interest rate -- in three years.
"In order to ensure that the money is repaid, "I literally would have to guarantee that with a sales
tax or something," Schwarzenegger said. 'Where [else] do we get the revenues that someone can be saying
so freely we can pay back this $2.5 billion we are borrowing?'
"Officials involved in the confidential budget negotiations,
who agreed to speak on condition of anonymity, said
lawmakers also were looking to borrow $200 million voters set aside for early childhood education
programs through 1998's Proposition 10."
Halper also looks at the plan by legislative Democrats to tax the
rich.
"Their plan to balance the state budget would raise
the wealthiest Californians' income taxes -- already the highest in the nation -- to a level not seen anywhere in the country in years.
After years of income taxes steadily dropping elsewhere,
California would raise the effective rate on those
earning at least $1 million to 12%, more than twice the rate in most other states that
have income taxes.
"Although legislative leaders are weighing a plan to
balance the budget in part by raiding transportation
funds and local government accounts, many Democrats
are still rallying around an income-tax increase as the best way to bring the budget into
balance over the long term.
"Economists and money managers, though, are wondering
whether California would be returning to this well
one time too many. There is, they say, a point at which
the cash infusion is outweighed by damage done to the
economy: Entrepreneurs get driven away. Profits get stowed
in tax shelters. Companies shelve plans for expansion.
"'The more a tax sticks out like a sore thumb, the more
taxpayers will look for ways to avoid it,' said Robert Ward, deputy director of the Nelson A. Rockefeller Institute
of Government in Albany, N.Y. California's income tax on its highest earners 'would be a significantly higher rate than in any other
state.' Rhode Island's is the next highest, at 9.9%."
""Proposition 8, the constitutional amendment that would ban same-sex marriage in California, is opposed by 51 percent of likely voters with 42 percent in favor, according to a new Field Poll," reports Bill Ainsworth in the Union-Tribune.
"Those results put the proposed ban in a politically
perilous position in the Nov. 4 election, said Mark DiCamillo, director of the nonpartisan Field Poll.
"'Starting out behind is usually an ominous sign for
a proposition,' DiCamillo said. 'Over 90 percent of propositions that start out behind get
taken down.'
"Typically, ballot measures start out ahead, but become
less popular as the opposition campaign begins raising
questions and creating doubt, he said."
"President Bush took a helicopter tour of charred forests above Shasta
Lake on Thursday and vowed to do the "best … we possibly can" in directing federal assistance to help California
respond to devastating wildfires," reports the Bee's Peter Hecht.
"With nearly 2,000 lightning fires since mid-June devouring more than 880,000 acres and burning a hole in the state budget, Bush
promised not to leave California stranded.
"Federal disaster officials to date have pledged $31 million in direct reimbursements for California's firefighting costs, and the White House said Thursday
that a total of $154 million in aid is on the way. The state has deployed
more than 2,000 firefighters and support personnel while running up
costs of more than $100 million since mid-June. Federal firefighting costs have surpassed $220 million.
"The most recent fires come on the heels of the costliest
fiscal year in California history. Major blazes near
San Diego, Lake Tahoe and elsewhere last year helped
push 2007-2008 state firefighting costs past $390 million, more than $310 million more than the state had budgeted.
"'I would like to just let the people out here know that
we're paying attention to you in Washington, D.C.,' Bush said after Air Force One touched down at Redding
Municipal Airport."
"California on Thursday became the first state in the nation to approve green
building standards to cut energy and water usage, a move that officials
say will help the state meet its ambitious goals to
curb greenhouse gas emissions," reports the Chron's Matthew Yi.
"The plan, adopted by the California Building Standards
Commission, requires that all new construction - from commercial buildings to homes, schools and hospitals
- reduce energy usage by 15 percent, water use by 20 percent and water for landscaping by 50 percent. A voluntary form of the code is scheduled
to kick in on July 1, 2009.
"'There is no statewide standard in the nation such as
our green building standard,' said commission chairwoman Rosario Marin. "In fact, we're the first one in the world, and we anticipate others
to follow us."
"The rules do not specify how to make the reductions,
but ideas range from installing energy-efficient appliances and increasing natural lighting
to using low-flow toilets and planting drought-resistant vegetation. The code will be voluntary while
the commission works on a mandatory regulation, which
the panel hopes to have in place by end of 2010 or beginning of 2011, Marin said."
"State regulators Thursday evening imposed a $10 million fine on Anthem Blue Cross, saying the health
insurer abruptly rescinded the coverage of some 1,770 people who received their medical care through the
company," reports Capitol Weekly.
"The fine was part of an agreement between the state
Department of Managed Health Care and Anthem Blue Cross.
Under the terms of the pact -- in which the health insurer did not acknowledge any
wrongdoing -- the company will offer coverage to the former enrollees,
who will be able to purchase policies without under
going medical underwriting.
"'The fine is a record amount and sends a message that
if you come to California to sell health insurance,
you must play by the rules,' said DMHC Director Cindy Ehnes.
"Los Angeles City Attorney Rocky Delgadillo was not
happy with the settlements.
"'These settlement agreements add up to a raw deal for
California consumers courtesy of the DMHC.'
"They will not make the victims of this insidious practice
whole, they will not require that the companies disclose
their wrongdoing, and, in my opinion, they will not
adequately punish the companies for their shameful
conduct."
"The California Supreme Court gave new protection to the state's endangered species Thursday, ruling unanimously that developers, loggers and other
commercial interests may be required to compensate
for unforeseen wildlife losses," reports Maura Dolan in the Times.
"The ruling, which affects both public works and private
development, threw out a long-term logging plan approved by the state for 200,000 acres in Humboldt County, a plan that lower courts
put on hold several years ago.
"The state high court said the Department of Forestry
had approved an "unidentifiable" plan that was still a work in progress and then delegated
its completion to the logging company.
"Justice Carlos R. Moreno, writing for the court, called the Forestry Department's action illegal and an abrogation of its duties.
"The California Department of Forestry "failed to proceed according to law," Moreno wrote.
"The decision grew out of lawsuits that followed the
historic Headwaters Agreement, a 1996 pact between Pacific Lumber Co. and the state and
federal governments. It was designed to resolve litigation
and disputes over the logging of old-growth forests."
"State officials expanded a previously filed lawsuit against Countrywide
Financial Corp., adding allegations on Thursday that the mortgage
lender rewarded staff for selling risky loans," writes the AP's Jacob Adelman.
"The new claims amended a lawsuit filed on June 20 by the California attorney general's office accusing Countrywide of deceiving borrowers
with misleading advertisements and other unfair practices.
"The latest filing said Countrywide paid higher commissions
to agents who put borrowers into loans with higher
rates and fees than they qualified for based on credit
scores and other factors.
"It also alleged that Countrywide employees regularly
overrode warnings from the company's computerized underwriting system that analyzed the
ability of applicants to repay loans."
And from our Texas bureau, "Police said they will not file charges against a clerk whose parents
and husband were charged with robbing the pizza restaurant
where she
worked, officials said. Police said the clerk didn't know they planned
to rob the Pizza Patron Friday night."
"While the robbery was in progress, the clerk discovered
her father was
the robber when another clerk struck him, knocking
him out and knocking
off his wig and sunglasses. He was later apprehended
after witnesses
followed the getaway pickup.
So much for take your father to work day..
