Capitol Alert

If you've been keeping track at home, Wednesday marked the sixth time in 2008 that the administration of Gov. Arnold Schwarzenegger unveiled a budget plan.

Here's the message Schwarzenegger gave in a statement accompanying his budget plan:

Today's announcement represents the sixth budget I have proposed to the legislature this year. The fact that the legislature has failed to reach a compromise between Republicans and Democrats and take action during the last three special sessions is inexcusable.

My proposal today follows the same blueprint of my last two proposals which balance cuts with revenue proposals. And, I will continue to stand by my promise to Californians and only sign a budget that does everything we can as a state to reduce spending, create jobs and keep people in their homes.

It's pretty clear from the legislative leaders that they are listening to what they want to hear in the governor's plan.

"I applaud the governor for including elements of the Republican budget plan into the proposal released today," said Senate GOP chief Dave Cogdill in a statement.

"He may finally be coming around and realizing he needs to approve the responsible package of budget solutions the legislature passed December 18," chimed in Assembly Speaker Karen Bass.

On the flip are the reactions from the four legislative leaders:

Gov. Arnold Schwarzenegger's administration unveiled the Republican governor's plan to close the state's yawning $40 billion budget deficit on Wednesday morning.

Only Arnold Schwarzenegger wasn't there.

Instead, Schwarzenegger's Finance Director Mike Genest, surrounded by other fiscal advisers, unveiled the latest plan to chip away at the deficit.

Genest called the current deficit and economic climate "probably the most challenging budget situation the state has ever faced."

"The governor wants to act immediately," Genest said.

Last week, Schwarzenegger jetted off to Idaho for his annual Christmas vacation with the family. As of Wednesday morning, Schwarzenegger had not yet returned to the state. His exact whereabouts could not immediately be confirmed.

On the timing of today's announcement, Aaron McLear, a Schwarzenegger spokesman, said, "The governor has released the size of the the problem and the solution to the problem the day both were known."

"If the Legislature is ready to pass a solution he can support today, he will fly back for that," he added.

McLear said it was important for the governor to unveil his plan before the Legislature returns next Monday, Jan. 5. Rank-and-file members have been on vacation since just before Christmas.

"It's important for the governor that the Legislature is ready to take action immediately upon their return to work next week," he said.

Usually, Schwarzenegger, a master showman who rose to the governorship through Hollywood, takes center stage at such budget events. Genest, in general, stands in the background until the governor leaves the stage. Genest performs mop-up duty, walking the bravest reporters through the nitty-gritty of the spending plans.

Genest said today's unveiling is a broad outline of the budget, with the full language to be presented to the Legislature next week.

"I don't know if there will be an event" with the governor, Genest said.

Nearly two weeks ago, Democrats passed a budget package that would tackle $18 billion of the state's budget hole, but Schwarzenegger has vowed to veto the spending cuts and tax hikes. He has demanded to loosen the state's environmental and labor laws to spur economic growth.

Asked if today's event was a ploy to push the Democrats to further compromise, Genest said, "It's not a matter of political showmanship."

Not with the master showman himself nowhere to be seen.

Photo: Finance Director Mike Genest unveils Gov. Schwarzenegger's budget to address the budget shortfall over the next 18 months. Schwarzenegger's not there. Credit: Brian Baer/Sacramento Bee

A couple of readers have sent in lyrics for Capitol Christmas carols. They're not exactly uplifting, but in the spirit of the season, we've posted them after the jump.

If this space looks a bit empty in the next week or so, that's because Capitol Alert is off for the holidays until Jan. 5.

If news breaks, we'll still post it, but regular postings and e-mail alerts will return in 2009.

California home sales jumped by 83.2 percent in November from a year earlier, but with much of the sales activity in foreclosed houses, the median sales price dropped by 41.8 percent, the California Association of Realtors said today.

Despite the year-to-year increase in sales, CAR said that November was the first month since the first quarter of this year to see a month-to-month decline in sales and attributed it to the state's worsening economy.

"Despite the month-over-month decline, sales were above the 500,000 home level for the third consecutive month," CAR president James Liptak said. "Sales are now 102 percent above the monthly trough for this cycle, which occurred a year ago in September and October, and are 22.3 percent above sales in 2007 in year-to-date terms."

There were 514,710 closed escrow sales of existing, single-family detached homes in California last month, a seasonably adjusted number. A county-by-county and city-by-city breakdown is available here.

Chris Kelly, the chief privacy officer for Facebook, the hugely successful social networking Web site, is considering a run for attorney general of California, according to a report on TechCrunch.

TechCrunch's Michael Arrington, one of the tech industry's leading bloggers, reports that Kelly "will be announcing his candidacy for the office of Attorney General of California...in the 2010 election as a Democrat."

Kelly, in his role with Facebook, has had much interaction with state-level attorneys general. Earlier this year, Facebook reached an agreement with AGs for 49 states to protect underaged users from online predators and age-inappropriate material.

Other Democrats who have filed paperwork or are exploring a run for attorney general include San Francisco District Attorney Kamala Harris, Assemblyman Ted Lieu and former Assemblyman Joe Canciamilla.

The shape of the race depends entirely what incumbent Attorney General Jerry Brown does. Brown, a Democrat, is making noise about running for governor in 2010, but he could opt to run for reelection.

One other ironic note: Arrington, who has first reported the Kelly-for-AG story, once sued Facebook and Kelly,

UPDATE: Looks like I've been had by an old April Fools post on TechCrunch about this nonexistent lawsuit. For the record, Arrington's April Fools post wasn't dated April 1, but March 31. Either way, my mistake.

It's safe to say Tom Campbell, the former congressman exploring a run for governor in 2010, is not your typical Republican.

Back in October, he announced his opposition to Proposition 8, the gay marriage initiative.

Now, in an interview with a Bay Area TV station, he floats his solution to the state's budget crunch: a temporary 18-cent per gallon tax hike on gasoline.

"The price of gasoline has now fallen in our state. Last June it was about $4.60. If you were to put on a gasoline tax of about 18 cents, so we'd still be well under two dollars a gallon," Campbell said.

Gov. Arnold Schwarzenegger and the two Democratic leaders of the Legislature will meet face-to-face today for the first time since Schwarzenegger vowed to veto their deficit-cutting proposal last week.

The leaders and Schwarzenegger spoke Sunday via videoconference in a session where they made "some great progress," the governor said Monday.

But the governor has continued to hammer lawmakers in public appearances. Standing in front of the I-405 freeway Monday in Los Angeles, he declared a deal could be done in "half an hour," if it weren't for the sway that special interests hold over the Legislature.

"But because there are so many stakeholders behind the legislative leaders, and everybody pulling on them saying, don't give in on CEQA, and don't give in on environmental issues and don't give in on cuts and don't give in on that, it makes it very difficult for them," he declared.

Assembly Speaker Karen Bass issued a statement in response saying, "As long as he is in press conference/campaign mode, it is hard to figure out how to convince the governor to accept a responsible compromise."

Still, Schwarzenegger sounded his usual optimistic self.

"It could easily be that before Christmas Eve or Christmas Day that we have an agreement, that the legislators can be brought back between Christmas and New Year's to vote on it," he said.

GOP leaders have been all but cut out of the conversation as negotiations on the package are now between only Schwarzenegger and the Democrats.

"It is unfortunate that the governor and Democrats are only interested in raising taxes, not working with Republicans to negotiate a truly bi-partisan solution," said Assembly GOP leader Mike Villines in a statement Monday.

And it may be Christmas week, but a few brave, media-hungry souls are holding press events today.

In Sacramento, injured worker advocates hold a news conference to highlight the case of Richard Chance, who they say will be cut off from his disability workers' compensation this week after being thrown 35 feet after he was hit by a motorcycle two years ago on the job.

And in San Francisco, local lawmakers (Leland Yee, Tom Ammiano and Fiona Ma) hold a news conference to announce new double-fine zones in two heavily trafficked corridors of the city.

On a final note, this is the last AM Alert until the new year. There will be regular posts today and a PM Alert tonight, but Capitol Alert will be off for the holidays, from Christmas Eve through Jan. 5.

Of course, if news breaks, we will still post it online and e-mail it out. But regular AM and PM alerts will start back up in 2009.

Happy holidays!

California Board of Equalization member Judy Chu said today she's running for the East Los Angeles congressional seat now held by Hilda Solis, who has been picked by President-elect Barack Obama to be his labor secretary.

When she was in the Legislature, Chu represented the 49th Assembly District, which is in the congressional district, as is the city of Monterey Park, where she began her political career on the city council.

"I've served the district for 24 years and know it well," Chu told The Bee.

If elected, the Democrat would be the first Asian American from Southern California sent to Congress in more than a decade.

State Sens. Gloria Romero and Gil Cedillo have said they're seriously considering running for the 32nd Congressional District seat.

Romero beat Chu in a primary race for the Assembly in 1998. When Romero moved up to the Senate in 2001, replacing Solis, Chu won the Assembly seat that is now held by Chu's husband, Mike Eng.

Other Democrats mentioned as possible candidates for the congressional seats include Assemblyman Ed Hernandez, as well as Assemblyman Charles Calderon and his brother, state Sen. Ron Calderon.

Controller John Chiang laid out a nightmare scenario today of the state's resorting to IOUs or costly and uncertain emergency loans if Gov. Arnold Schwarzenegger and legislators don't agree on steps to close the state budget deficit very quickly because the state will run out of cash in about two months.

"Specifically, my office will be forced to pursue the deferral of potentially billions of dollars
in payments and/or the issuance of individual registered warrants, commonly referred to as IOUs," Chiang said in a letter to the governor and other officials.

"In order to ensure that the State can meet its constitutionally required obligation to schools and debt service, the Capitol's budget paralysis may leave me no choice but to, in full or in part, withhold payments or to issue IOUs to other individuals and entities entitled to state payments. Given the current financial instability of the banking industry, it is highly unlikely that the banks, if they accept the IOUs at all, will be able to do so for any sustained period of time. Consequently, the recipients of the registered warrants may have no apparent options but to hold them until redemption."

Chiang said his office is also pursuing the issuance of "revenue-anticipation warrants," a form of short-term borrowing that carries high interest and heavy fees because it's believed that the state cannot issue "revenue anticipation notes" that would have to be repaid by June.

Treasurer Bill Lockyer has said he doubted whether lenders would respond to the revenue warrants, known as "RAWs," but Chiang said his staff is pursuing that option to avoid the cash crunch expected in February.

"Without action by the Legislature and the governor, we literally are weeks away from a meltdown of state government that threatens the delivery of critical public services our citizens deserve and expect," Chiang said.

The full letter may be read available here.

While Gov. Arnold Schwarzenegger and legislators negotiate on health and welfare spending cuts to help close a yawning state budget deficit, the liberal California Budget Project is warning that those "safety net" services are feeling intense pressure from worsening economic conditions.

"These tough economic times underscore the vital role that government plays in people's lives. Public programs provide a lifeline that help keep California's families afloat when they struggle to make ends meet," said Jean Ross, executive director of the CBP. "As policymakers work to solve California's fiscal crisis, they should be mindful that we're in an economic downturn where it's more important than ever that California retain a strong safety net for those in need."

The report, a program-by-program snapshot of social service and health program demand, is available here.

Former Senate leader Don Perata has transferred another $400,000 to his legal defense fund from a campaign account he created to advocate for ballot measures .

The latest transfer means the Oakland Democrat has now taken a total of $1.9 million raised in an account earmarked for ballot campaigns and used it to shore up the legal fund he created to fight an FBI corruption probe.

The Bee reported on the first $1.5 million transfer earlier this month.

The transfers are legal, though California's campaign watchdog agency is considering stricter regulations of ballot accounts like Perata's.

The FBI has been investigating Perata since 2004, inquiring about his business dealings and those of his family and close friends. Both Perata's and his son's homes were raided by FBI agents four years ago.

No charges have ever been filed, though Perata has tallied up more than $2.1 million in expenses fending off the investigation.

His defense fund was $250,000 in debt as of the end of September, as the former leader faced the unwelcome prospect of being out of office - and without leverage over potential donors.

So Perata has transferred $1.9 million (out of the $2.7 million he had amassed) from the ballot committee to ease his legal debt load.

Here's Bee cartoonist Rex Babin's latest take on California politics:

Gov. Arnold Schwarzenegger made another appearance on 60 Minutes on Sunday, with a 12-minute segment reported by Scott Pelley.

The governor doesn't make much in the way of news, as Pelley focuses for much of the first part of the piece of the governor's record on climate change.

Schwarzenegger, as he did in a 2004 appearance on 60 Minutes, said, yes, he'd still like to be president. But the Constitution doesn't allow for the Austrian-born politician to occupy the White House.

He also spoke about the role of acting in politics.

"People think show business was in Hollywood, but I think (Ronald) Reagan was absolutely right. If he wouldn't have the training in acting, this would have been a very difficult job," Schwarzenegger said.

Politico's Ben Smith noticed that Schwarzenegger has already hung a photo of himself and President-elect Barack Obama, taken last month.

Watch the show below:

Watch CBS Videos Online

A week goes by, and so much happens, it's hard to keep track.

Here's a recap of last week's actions and inactions on closing the $40 billion state budget hole.

Monday, Dec. 15: Republicans finally put a no-new-taxes proposal on the table that called for cutting deeply into schools and social service programs. Neither Democrats nor Gov. Arnold Schwarzenegger embraced the $22 billion plan, which included $6 billion raised by raiding voter-approved preschool and mental health funds. In fact, Democratic legislative leaders made pretty clear the proposal was DOA.

Tuesday, Dec. 16: Assembly Democrats and Republicans split along party lines in rejecting a Democratic plan to end the standoff. The roughly $19 billion package of companion bills included one for $11.3 billion in tax hikes, the other for $7 billion in spending cuts.

Wednesday, Dec. 17: As expected, state officials cut off funds for thousands of public work projects statewide, including roads, levees, schools and prisons. State Treasurer Bill Lockyer called the action regrettable but necessary to preserve cash as the state general fund tumbles toward insolvency. Meanwhile, Democratic legislative leaders announced a complex and controversial package of tax increases and program cuts, an $18 billion effort designed to avoid the need for Republican votes that GOP leaders called illegal.

Thursday, Dec. 18: Democratic legislators approved the budget package, Republican legislators threatened to sue over it, and Schwarzenegger made the issue moot by vowing to veto it. Democratic legislative leaders then announced lawmakers were heading home for the holidays.

Friday, Dec. 19: Schwarzenegger ordered that state employees take two unpaid furlough days each month starting in February and that the least tenured state workers face layoffs. He also called for a new special legislative session, demanding that lawmakers return to Sacramento to resolve the budget gap before Christmas. Democratic legislative leaders said they wouldn't bring lawmakers back until they reached a deal with him to close at least part of the budget hole.

And that's the week that was. This week? Who knows. It's only Monday.

Democratic state Sens. Gil Cedillo and Gloria Romero say they're exploring running for the East Los Angeles County congressional seat that's expected to be vacated by Rep. Hilda Solis, reportedly President-elect Barack Obama's pick for labor secretary.

While Cedillo was expressing his interest Thursday to reporters on the floor of the Senate, Romero wandered by and said she was "definitely" looking at jumping into the race.

Told that in addition to Cedillo, the Calderon brothers -- Assemblyman Charles and state Sen. Ron -- could be contenders, Romero declared, "I can beat them all" -- and walked off.

Romero replaced Solis in the state Senate, and her East Los Angeles and San Gabriel Valley district encompasses the congressional district. Cedillo represents an adjacent Senate district, but members of Congress don't have to live in the district they represent.

Both senators have strong support among labor groups that were influential in Solis' climb from the state Senate -- where she was the first Latina elected -- to Congress.

Also mentioned as possible contenders are Assemblyman Ed Hernandez, D-West Covina; Judy Chu, chairwoman of the state Board of Equalization; and her husband Assemblyman Mike Eng, D-Monterey Park.

Once Solis is named as labor secretary, a special election for her replacement must take place within 140 days.

Or is it?

Here's Bee cartoonist Rex Babin's take on the latest go-'round.

For more of Babin's cartoons, click here.

The state's budget deficit -- an estimated $40 billion over the next 18 months -- just got a little worse, thanks to a San Diego Superior Court ruling.

The court declared that when the Legislature appropriated just $1,000 to repay school districts for the 38 programs that the state mandates they implement, it violated the state constitution.

The California School Boards Association, which was a lead plaintiff in the lawsuit, said it means the state owes schools another $160 million a year for mandates that the constitution says the state must finance when it imposes them on school districts and other local government entities.

SInce 2002, when the state's current deficit problems first emerged, the Legislature has appropriated just $1,000 a year, hoping to defer those mandate payments to some future date. Judge Charles Hayes, however, ruled last week that the practice violates Proposition 4, a measure approved by voters in 1979.

"The state has improperly shifted the costs for state-mandated programs from the state to the school districts and county offices of education," Hayes said. "This practice requires the districts and county offices to continue to provide state-mandated programs and services while deferring payment for those services to some unknown future date well beyond the one-year period of time contemplated in the government code. This could not have been the intent of the California voters when approving Proposition 4. ...The adverse effects of the state's failure to provide funding for mandated programs are being experienced by virtually all of the state's school districts."

The state's demographers calculated that six months ago, California's population passed 38 million, which provides a benchmark for placing its whopping budget deficit in perspective.

The Department of Finance, which figured out the new population numbers, also has estimated that the budget has a $40 billion deficit over the next 18 months, which works out to just over $1,000 for every man, woman and child in the state.

The plan to reduce the deficit by nearly half that Democrats ginned up this week relied primarily on a complex reconfiguration of taxes and fees that would have netted an estimated $9.3 billion in new revenues over the 18 months, which would have averaged about $245 per person or nearly $1,000 for a family of four.

The biggest single item in the budget is K-12 education, which costs the state, under the current budget, $42 billion or $7,000 for each of the state's 6 million students (not counting local property taxes or federal funds).

The fastest growing major program in recent years has been the prison system, which now costs taxpayers more than $10 billion or well over $60,000 per inmate, although prison officials say the incremental cost of keeping one inmate for one year is closer to $45,000, six times what the state spends for every elementary and high school student.

Higher education - the state's two four-year college and university systems and community colleges - are another big category. State funds and local property taxes (which partially support community colleges) amount to $14.2 billion in the current budget, two-thirds of the cost of running the systems. Student fees make up most of the remainder.

State prosecutors have ended an investigation into Assemblyman Jim Nielsen's residency by deciding not to file charges.

The Attorney General's Office has concluded that evidence is insufficient to sustain criminal charges, spokeswoman Christine Gasparac said Thursday night.

Gasparac declined to elaborate on the case, which stemmed from complaints that Nielsen, R-Gerber, ran illegally for the 2nd Assembly District seat by owning Tehama County property in the district but living in Woodland, outside district boundaries.

Nielsen is a former state senator who succeeded termed-out Assemblyman Doug La Malfa, R-Oroville, this month. The 2nd Assembly District covers portions of Yolo County and stretches north to Modoc and Siskiyou counties.

Bee photographer Brian Baer is often trolling the halls of the Capitol, camera in hand.

Check out this gallery of his photographs documenting the meetings and press conferences, blustering and posturing of the Legislature and Gov. Arnold Schwarzenegger as they have tried to tackle the 2008 budget.

Photo: Senate Republican leader, Dave Cogdill speaks to cameras after the Republicans unveiled their budget proposal on Dec. 15. Credit: Brian Baer/Sacramento Bee

What's next in a budget saga that began last January and continued steadily since is unclear.

Gov. Arnold Schwarzenegger promised to veto the Democratic budget plan Thursday afternoon.

The Republican governor didn't quibble with the Democrats' scheme to bypass Republicans or the idea of raising billions in news taxes.

He said the "economic stimulus" component of the package wasn't strong enough.

"From day one," Schwarzenegger said, "I always made it clear to Senator Steinberg and also to Speaker Bass that I will be willing to sit down with them and negotiate but it is clear that I need my - exactly what I recommended - economic recovery package."

Speaker Karen Bass didn't think asking for "exactly what I recommended" sounded much like negotiating.

"The governor claims he wants to negotiate but then says things must be exactly as he wants. That is astonishing given the crisis we face," she said in a statement following the veto vow.

Read full responses from Bass and Senate President Pro Tem Darrell Steinberg.

"They have to get to the cliff and fall off in order to really take this seriously," Schwarzenegger chided lawmakers.

"I'm damn proud of what the Legislature did today," Steinberg retorted.

Bass said that rank-and-file lawmakers won't be returning to the Capitol until January.

"We'll take a step back and keep on working," she said. She and Steinberg will stay, she added.

Amid all that bickering, state Treasurer Bill Lockyer said Thursday California's already woeful credit rating is likely to sink even lower.

Take a break from reading about the budget and check out Bee photographer Brian Baer's photo gallery of the months-long budget fight between lawmakers and the governor.

Assembly Speaker Karen Bass and Senate President Pro Tem Darrell Steinberg have issued statements in response to Gov. Arnold Schwarzenegger's vow not to sign the Democratic budget plan.

Here the statements are, in full.

Steinberg:

Californians expect the Legislature to solve the state's problems and that's what we began to do tonight.

Democrats passed a responsible plan that reduced the budget deficit by $18 billion, but the Governor rejected it for reasons that have little to do with the deficit itself.

It would be easy to fire back at the Governor for his insults.

I'm damn proud of what the Legislature did today.

Is there any other credible, politically acceptable plan put forward by anyone to make an $18 billion-plus dent in California's budget deficit?

The answer is no.

Bass:

I am frankly surprised how willing Governor Schwarzenegger is to push California over a cliff when he clearly is not fully aware of what the bills we passed today do. The governor said we didn't do economic stimulus. We did $3 billion worth of bond acceleration to get job-creating infrastructure projects moving for transportation, drought relief, park restoration and green technologies.

He said we didn't address CEQA-- we expedited CEQA for transportation projects and surplus property and we eased restrictions for hospital construction. All these actions will also help create jobs. He said we didn't address public private partnerships. We expanded public private partnerships - despite opposition from labor. Yesterday the state's Pooled Money Investment Board said they were stopping 2000 transportation projects in the state, which means a potential loss of thousands of jobs. Those projects weren't stopped because of economic stimulus they were stopped because of California's cash crisis--the cash crisis that the majorities in the Assembly and Senate addressed today passing an $18 billion package of solutions.

California's Treasurer warned today that there would be further dire consequences from Wall Street if Governor Schwarzenegger threw away the solutions passed by the legislature. I am surprised that warning alone didn't give the governor pause enough to thoughtfully consider bills that haven't even reached his desk yet.

The governor's haste is a waste of $18 billion in solutions that could have helped with our cash crisis and our budget deficit. The governor claims he wants to negotiate but then says things must be exactly as he wants. That is astonishing given the crisis we face. We are now waiting anxiously to see what the next step will be from a governor who has consistently been unable to produce even a single vote for a single budget solution.

At Senate President Pro Tem Darrell Steinberg's first press conference on his first day as leader of the California Senate, he was asked whether he would make sure the budget was in print for 24 hours before a vote was taken.

Yes, he replied, he would.

Well, so much for that. Continuing in the long tradition of last-minute legislation, the state Senate and Assembly passed its $18 billion package of cuts, taxes and fund shifts this afternoon with the ink barely dry on the bills.

As of this morning, when lawmakers were scheduled to begin meeting at 9 a.m., the Legislative Counsel still had not finished drafting the package.

In fairness, the cuts portion of the package has been in print for a few weeks, as lawmakers voted on it at the end of November. The revenues -- that is the complex tax-fee maneuver -- had not.

"I do know that I shared (language) with Sen. Cogdill's staff well, well ahead of time," Steinberg said this afternoon. "And, you know, we're doing the very, very best we can, given the urgency of the crisis."

In the end, the speed was all for naught as Gov. Arnold Schwarzenegger announced he would veto the package.

In a press conference at 4:30 this afternoon, Gov. Arnold Schwarzenegger said of the Democratic budget package, "I will not sign it."

Schwarzenegger criticized the Democratic leadership for watering down his proposed "economic stimulus" package.

"It actually doesn't do anything," Schwarzenegger said of the stimulus plan the Democrats crafted. The governor said he wanted more public-private partnerships, broader exemptions to the state's environmental laws for construction projects and more foreclosure relief.

"They call it economic stimulus but there's nothing there," Schwarzenegger declared. "It fell short on every single level," he added.

The governor did not say he was vetoing the package because it passed without GOP support and he ducked a question about whether he thought the tactic was legal.

"They should stay here and work some more on this budget. I'm willing to stay here. I don't think that anyone should go and celebrate Christmas -- none of the legislators -- and have people out there suffering," he said.

But Assembly Speaker Karen Bass said after the press conference lawmakers won't be returning to the Capitol until January.

"We'll take a step back and keep on working," she said, saying she and Senate leader Darrell Steinberg would remain in Sacramento negotiating with the governor.

The Bee's Dan Walters contributed to this report.

Photo: Gov. Schwarzenegger talks about how he will veto the democrats budget rescue plan, Thursday Dec. 18, 2008. Credit: Brian Baer/Sacramento Bee

UPDATED Assembly Republcians have fired off a letter to Gov. Arnold Schwarzenegger urging the Republican executive to side with the legislative members of his party and oppose the Democratic budget that passed out of the Legislature earlier this afternoon.

The letter calls the $18 billion package of tax hikes and cuts a "blatant attempt by the Democrats to violate the will of the people."

"It is an affront to the voters and taxpayers alike," they argue.

The Republicans argue it is an "illegal tax package" because it was passed out of the Legislature without a two-thirds vote. Raising taxes in California requires that threshold, but Democrats believe they can legally bring in new revenues through a combination of new fees, swapping taxes and leveraging loopholes in the state tax law.

The letter is signed by 28 of the 29 members of the Assembly GOP caucus. Only Assemblyman Paul Cook, R-Yucca Valley, did not sign. He is out due to illness.

Read it for yourself.

UPDATE: Senate Republicans have sent a similar letter, signed by all 15 members of the caucus.

"In addition to our objection to these new taxes, we are adamantly opposed to the Democrats' attempt to circumvent the Constitution by approving these tax increases without two-thirds approval of the Legislature," they write.

Photo: Assembly Republican Leader, Mike Villines speaks during a joint news conference with Senate Republican leader, Dave Cogdill, to unveil their budget proposal, at the State Capitol, Monday, Dec. 15, 2008. Credit: Brian Baer/Sacramento Bee

Chris Reed, an editorial writer for the San Diego Union-Tribune, reports that the California Air Resources Board is investigating whether one of the scientists who authored a study used by the board to justify new limits on emissions lied about his education.

Hien T. Tran, Reed reports, "is being investigated by air board officials over allegations he lied about having a Ph.D. in statistics from the University of California at Davis."

"We're going to take the appropriate actions if this is true," Leo Kay, ARB's director of communications, said to Reed.

No surprise here: The Democratic-backed budget package passed out of the state Senate early this afternoon on a majority vote.

The only real suspense was whether Sen. Lou Correa, a moderate Democrat from Orange County who squeaked into the Senate in 2006, would support the package.

He did not. The first tax bill passed 23 'aye' votes to 15 'no' votes, with Sen. Mark Wyland, R-Del Mar, not voting.

The Associated Press is reporting that Democratic Rep. Hilda Solis of California will be Barack Obama's pick for labor secretary.

Senate President Pro Tem Darrell Steinberg said he spoke with Gov. Arnold Schwarzenegger late Wednesday but reached no agreement on a Democratic plan to reduce the state's $41 billion budget deficit by $18 billion.

Steinberg said nonetheless that the Senate and Assembly plan to send their bills to Schwarzenegger's desk Thursday. The Senate convened at 11:30 a.m.

Schwarzenegger has not indicated he would sign the Democratic package, though he also did not tell Steinberg he would veto it. The governor on Wednesday wanted a stronger economic stimulus package and more permanent spending cuts. Democrats plan to include some of Schwarzenegger's economic stimulus, such as expanding the number of state transportation projects that can use outside contractors and receive exemptions to environmental regulations.

Democrats have crafted a complicated plan that they believe enables them to raise revenues without votes from Republicans. It also includes cuts to schools and other state services. Taxpayer groups and legislative Republicans vowed Thursday morning to file a lawsuit and pursue a referendum blocking a fee on gas.

Democrats contend that their plan is the only way to avert a major cash shortage that would cripple state services as soon as February. Republicans continued to assert Thursday that the state should immediately institute cuts before working on a package of new revenues.

The Senate leader said he had no plans to wait for a deal with Schwarzenegger before moving forward.

"I hope that he signs it," Steinberg said. "He should. There is no other viable $18 billion deficit reduction solution on the table ... It may not be everything in the way he drafted it, or his administration drafted it, but let's not be hasty in throwing an $18 billion solution out the window, with no other viable option."

Assembly Speaker Karen Bass said Thursday that she "could not imagine" that Gov. Arnold Schwarzenegger would veto the Democrats' budget plan.

"What we proposed was revenues and cuts, no economic stimulus," she said. "He asked us to include economic stimulus and gave us a list of ... 14 different items."

"We are doing not all of them, but most of them," she said.

Bass noted that the Democrats' plan was only a starting point -- $18 billion of a nearly $40 billion shortfall over 18 months.

"I could not imagine he would veto this when this is the only proposal with votes," she said.

Bass also said she was more optimistic today than Wednesday.

The Assembly leader said negotiations with the governor were not the reason why no vote was taken Wednesday on the Democrats' plan.

"The only reason we didn't vote last night is because we couldn't get all the bills processed," she said. "It had nothing to do with negotiations."

From Shane Goldmacher

California saw an 11 percent expansion in charter schools - independently operated schools within school districts - this year and enrollment in the 750 schools has climbed to more than a quarter-million students, according to a new report from the California Charter Schools Association.

The report indicates that the charter school movement continues to expand despite opposition from some traditional education groups, including unions. "The charter school movement continues to grow because charter schools deliver results," said Peter Thorp, interim CEO of the association. "It is exciting that new charter schools are replicating best practices and expanding access to highly successful public school models for more families in California."

Charter school expansion appears to be especially strong in large urban districts, including the state's largest, Los Angeles Unified, which saw 23 new charter schools opened this year. LAUSD, with 148 charter schools, has the largest number of any district in the nation.

In some large districts, more than 10 percent of students are in charter schools. But charter schools still handle fewer than 5 percent of the state's six million K-12 public school students.

The full report is available here.

Plans to vote out a majority-vote budget proposal crafted by Democrats unraveled late Wednesday night, as Gov. Arnold Schwarzenegger demanded more concessions from the Democratic leadership, particularly on the "economic stimulus" part of the package.

Session had originally been scheduled for 5 p.m., before it was pushed back to 7 p.m. and then 9 p.m. and then cancelled for the night, amid closed-door negotiations.

"As the governor has said, we need a balanced proposal that includes legitimate cuts, real revenues and economic stimulus," Schwarzenegger spokesman Aaron McLear said.

"If their proposal does not include these elements, (a) vote will be nothing more than a drill," McLear added.

Senate President Pro Tem Darrell Steinberg and Assembly Speaker Karen Bass pledged to meet the governor "more than halfway."

Both the Assembly and Senate plan to return to the Capitol for scheduled 9 a.m. floor sessions this morning.

Read more about the Democratic plan itself, which would raise the sales tax by 3/4 of a cent, levy a tax on oil produced in California and tack on a 2.5 percent surcharge to income taxes. It would also replace currently taxes on gasoline with a 39-cent-per-gallon fee.

Despite netting California billions in additional taxes, Democrats have structured the plan, they say, in such a way that it does not require the typical two-thirds support of the Legislature.

As John Myers of KQED put it on his blog, "If this were the Olympics and even if you hated it, you'd have to score some style points on the acrobatic budget maneuver."

Judge (and Assembly GOP leader) Mike Villines wasn't so generous. He accused Democrats of "raising taxes on people and playing funny math and calling it fees...(that) is not governing, that's trickery."

Not surprisingly, a legal challenge to the still unpassed Democratic proposal is already being prepared.

The conservative group Americans for Prosperity has organized a 10 a.m. news conference to announce its intent to file a lawsuit, saying the Legislature is illegally raising taxes without a two-thirds vote.

"Obviously, I and my colleagues -- and I am sure a lot of other people in the state -- will believe that what they've done is illegal," Senate Republican leader Dave Cogdill said in an interview Wednesady. "I would fully expect there'll be challenges filed."

Among the attendees at the event will be Howard Jarvis Taxpayers Association President Jon Coupal.

On Wednesday, the governor appeared alongside Coupal to tout the passage of Proposition 11, the Schwarzenegger-backed redistricting measure. The governor praised a bipartisan list of supporters, and happened to thank Coupal twice.

"And then Jon Coupal," Schwarzenegger said the second time, before pausing. "... who I mentioned already. I better mention him twice so maybe he won't attack me when I raise the taxes."

Good luck with that, governor.

Both houses of the Legislature were to convene this evening to vote on a new Democratic budget plan that raises taxes without two-thirds votes but the sessions were delayed as legislative leaders negotiated for a signature from Republican Gov. Arnold Schwarzenegger.

Schwarzenegger reportedly was demanding concessions from Democrats on regulatory and labor laws that business groups have been demanding - changes that the Democrats' allies in labor and environmental groups strongly oppose.

Lawmakers plan to return at 9 a.m. tomorrow.

That's the word from the office of Senate President Pro Tem Darrell Steinberg, and on the California Channel Web site.

UPDATED Gov. Arnold Schwarzenegger answered a question today about whether he might support the majority-vote package being crafted by legislative Democrats today to balance the budget.

Just don't look for an answer in his answer.

"We'll look into that," Schwarzenegger said.

Later, Schwarzenegger spokesman Aaron McLear added, "As the governor has said, we need a balanced proposal. That includes legitimate cuts, real revenues and economic stimulus, including public-private partnerships and design-build," referring to public contracting methods. "If their proposal does not include these element, tonight's vote will be nothing more than a drill."

Assembly Speaker Karen Bass addressed the question of Schwarzenegger's support today, but not with a definitive answer.

"We are working with him and we know that he feels the same way in the sense that he would definitely prefer a two-thirds solution," the Los Angeles Democrat said. "I think he is very impressed that this does take a serious bite out of the budget."

Senate Republican leader Dave Cogdill said he had not spoken with the governor Wednesday, but hoped he would veto the Democratic package.

"I believe the governor will see this for what it is, which is a drill, and probably won't sign it," Cogdill said.

"I certainly hope that he wouldn't," the Modesto Republican added.

Conservative Republicans fear Schwarzenegger will sign the package. Jon Fleischman, a GOP vice chairman of publisher of the FlashReport wrote this morning:

I feel pretty comfortable saying that Governors Deukmejian and Wilson would not only have vetoed a monstrosity of this sort if it reached their desk, they would have actually made it clear, upon hearing about the plan, that it ... was DOA. Arnold 1.0 would have done the same.

That said, it is my hope that Governor Schwarzenegger would and will make it clear that he has not interest in signing into law any massive "fee" increases that are uniformly opposed by all of the legislators from his own party. That said, I am also not betting on it. We certainly haven't seen any kind of statement from his office opposing this kind of back-room screwing of California taxpayers..

Less than three weeks into his tenure as Senate leader, Darrell Steinberg has laid down the gauntlet for Republicans in the Legislature, as he prepares to pass a budget package over their objections.

"I still believe in bipartisanship," the Sacramento Democrat pledged at a press conference announcing an end-run around getting Republican support. "But there is a greater responsibility than practicing bipartisanship and that is to govern. And that is what we intend to do here today."

Democrats intend to bring their budget package -- crafted specifically to strip the GOP of its veto authority -- at 5 p.m. today. California law requires a two-thirds vote to raise taxes, but Steinberg and the Democrats have crafted a plan that raises revenues through fees, swapping taxes and leveraging loopholes in the state tax law.

After the longest budget stalemate in California history and a month-and-half of gridlock in a special session, Steinberg claimed Democrats had "made every effort to engage our Republican colleagues in a bipartisan strategy to make a dent in this budget deficit."

"They're very clear," he continued. "They are not going to put up a single vote to raise the necessary revenue."

"You have two choices," Steinberg said. "You can either continue to sort of bang your head against the wall and hope that they will change their mind or you can govern. And we believe the higher responsibility is to govern."

"The message to our colleagues on the other side of the aisle is we want you to engage in governing with us. But now and beginning Jan. 1 in the next budget session, we will solve this problem either with you or without."

That approach obviously doesn't sit well with Republicans.

"The only time it's really a compromise with the majority party Democrats is when you give them what they want," said Assembly Republican leader Mike Villines. "Otherwise you're an obstructionist."

The Bee's Jim Sanders contributed to this report.

Photo Credit: Brian Baer/Sacramento Bee

To call the Democrats' latest tax package complex would be an understatement.

California law requires a two-thirds vote to increase taxes -- meaning Republican support is necessary. But Democrats are making an end-run around the GOP with this latest package, which the Legislature will vote on later today, in a number of ways.

Here's the bottom line:

• The state sales tax will rise three-quarters of a percent. Total in new taxes: $4.9 billion through the 2009-10 fiscal year.



• All residents will pay an additional 2.5 percent on their income tax bills. So if you owed the state $1,000, you would now owe $25 more. Total in new taxes: $1.75 billion through the 2009-10 fiscal year.



• California would implement an oil severance tax -- levied at 9.9 percent -- on all oil extracted from the ground in the state. Total in new taxes: $845 million through the 2009-10 fiscal year.



• The current gas sales and excise taxes would be eliminated and replaced with higher gas "fees." The new gas fee would be 13.5 cents per gallon higher than users at the pump currently pay. The new funds would be earmarked for transportation spending

How it works:

The first part of the plan is a quarter-cent sales tax hike that will bring in the state an estimated $1.6 billion in the next fiscal year.

At first blush, that would seem to require a two-thirds vote. But Democrats insist that technically they won't be voting to raise the tax.

Instead, they will be voting simply to stop paying that amount to local governments. With that money not flowing, local sales taxes have a trigger to automatically rise ¼ of a percent.

So the move is a de facto tax hike and the state saves money by not paying local governments.

The second part of the equation is just as complex.

In a single bill, Democrats will eliminate the sales and excise taxes on gasoline and replace those taxes with higher income taxes, sales tax and an oil severance tax.

The total revenues collected will turn out the same in that bill.

But the Democrats will then vote on a different piece of legislation to replace the old gas sales and excise taxes (which only went to transportation needs) with a gasoline "fee," to be set at 39 cents per gallon.

Because they are raising a "fee" and not a "tax," Democrats believe (and they say their lawyers have approved) they can do this with a majority vote.

In addition to all that, Democrats also plan to implement a new 3 percent income tax withholding on businesses that do independent contracting. This is not a new tax; the state is simply collecting the money earlier. It will result in $2 billion additional money in 2009-10 but will not be a long-term source of revenue.

All told, Democrats say the package will raise $9.3 billion in revenues.

The Democratic leaders said the package will contain the same cuts the Legislature rejected on Nov. 25.

On an unanimous 3-0 vote, California's top fiscal officials voted today to cut off bond funding for infrastructure projects across the state to conserve money ahead of the state's looming cash crunch.

State Treasurer Bill Lockyer, Finance Director Mike Genest and Controller John Chiang -- the three members of the usually obscure Pooled Money Investment Board -- all voted to cut off $3.8 billion in funding this morning.

California faces a nearly $40 billion shortfall in funds through July 2010. But, of more immediate concern, those fiscal officials say, is that the state will run out of cash sometime in February unless taxes are raised or spending is cut.

A spokesman for Gov. Arnold Schwarzenegger, Aaron McLear, ripped the Legislature for its "politics and posturing" while "tens of thousands of hard-working Californians face the possibility of being laid off this holiday season."

The Assembly failed to pass a Democratic budget plan Tuesday night, failing to garner needed GOP support. Both houses are expected to reconvene today, with Democrats unveiling a majority-vote budget plan that would make an end run around Republican lawmakers.

Chiang called today's vote to shut off infrastructure financing "extremely painful."

"Today's action was extremely regrettable, but the responsible and right thing to do," Lockyer added in a prepared statement. "We had no other option to keep crucial public services operating as long as possible."

The move shuts off state bond funding for nearly 2,000 projects, ranging from highways to levees to schools to prison construction, the treasurer's office said.

Staff members have recommended the panel meet again in two weeks to consider making exceptions to the financing cutoff.

California home sales picked up in 2008 but median prices continued to decline - by 17.8 percent - as foreclosures continued to create what the California Association of Realtors terms "a turbulent year" in the state's bellwether housing market.

CAR says after two years of steep declines in sales activity, home sales are expected to rise by 12 percent and hit 395,000 by the end of the year, with another 12.5 percent increase forecast for 2009. However, CAR says in its annual report on real estate activity, more than a fifth of the sales this year were at a loss to homeowners, many of them distress sales with the threat of foreclosure.

The median home sales price dropped 17.8 percent from $535,000 in 2007 to $440,000 this year, the largest yearly decline ever recorded by CAR, surpassing the 10.2 percent drop in 1995.

The full report must be purchased and downloaded and is available here.

Despite one of the worst recessions in California, the state's population still gained more than 400,000 persons in the 2007-08 fiscal year that ended last summer, the state's demographers say, and topped 38 million for the first time.

The new estimates from the state Department of Finance, based on a series of indices, continue a dispute with the Census Bureau, which contends that California has roughly a million persons fewer, thanks to an outflow of people to other states that the state's people-counters contend hasn't occurred.

A strong birth rate, one of the nation's highest, and a continued influx of foreign immigrants fueled a 1.16 percent, 436,000-person gain during the year, the Department of Finance said in its analysis of the data. Its demographers counted 571,000 births and 242,000 deaths for a "natural increase" of 329,000, three-fourths of the state's overall growth.

The state believes that the state's population has grown by 4.3 million since the 2000 census to 38,148,000, while the Census Bureau has a lower number, with the difference being the effects of state-to-state movement. Presumably the 2010 census will settle the dispute.

Placer was the state's fastest growing county during the year, 2.6 percent, followed by Imperial and Riverside. Three counties lost population, including a 4.22 percent loss in Alpine, the state's smallest county with just 1,202 persons, down 497 since 2007.

The full report is available here.

The Associated Press pulled the public records of the state Legislature and found out just how much in per diem payments state lawmakers have received since Gov. Arnold Schwarzenegger called a special session of the Legislature after the Nov. 4 election.

The state's 120 lawmakers have collected a total of $127,743 in payments. That's all tax-free.

Los Angeles Rep. Xavier Becerra, a Democrat, said he has turned down the Obama administration for a post as the United States trade representative.

The Spanish-language newspaper La Opinion broke the news on Tuesday/

Politico.com has Becerra's statement.

What does that all mean for Sacramento? Well, mostly it dashes Sen. Gil Cedillo's hopes of moving up to Congress.

Assemblyman Charles Calderon, a moderate Democrat from Whittier, has introduced a constitutional amendment to make all of California's statewide elections "open primaries."

The legislation is of note as Gov. Arnold Schwarzenegger heads to the state's railroad museum to talk about political reform today. Back in October, Schwarzenegger suggested that open primaries could be the next political reform he will push.

California passed an open primary law in 1996, but it was thrown out by the courts in 2000. This year, the state of Washington had its own open primary law upheld by the Supreme Court, paving the legal way for open primaries in California.

Calderon's office said the assemblyman's legislation will be modeled after the Washington law.

CORRECTION: The original version of this post said that as drafted, the measure, ACA 6, would only apply to statewide races -- governor, lieutenant governor, treasurer and the like -- not legislative campaigns. The measure would apply to legislative races as well. We regret the error.

Photo: Assemblyman Charles Calderon, D-Whittier, on the floor on Tuesday, Nov. 25, 2008. Now-Sen. Mark DeSaulnier is in the background. Credit: Brian Baer/Sacramento Bee

The Assembly's budget session on the Democrats' latest budget proposal lasted into the night Tuesday.

Republicans, as they have throughout the year, blocked passage, standing firm in their opposition to any new taxes to solve Califronia's nearly $40 billion deficit through July 2010.

No one seemed too surprised. Partisan tensions ran high during much of the debate.

The state Senate takes its budgetary turn this evening, with a 5 p.m. floor session.

Plans are afoot in the upper house, led by Senate President Pro Tem Darrell Steinberg, to craft a majority-vote package that could pass without GOP support.

Meanwhile, today the Pooled Money Investment Board will vote to suspend financing of infrastructure projects across California.

State Treasurer Bill Lockyer has released a detailed list of infrastructure projects that would be affected.

The board -- composed of Lockyer, Finance Director Mike Genest and Controller John Chiang -- meets at 10 a.m.

At 1 p.m., Gov. Arnold Schwarzenegger will return to the site of one of his signature events of the recall campaign -- the California State Railroad Museum.

Schwarzenegger will tout the passage of Proposition 11, the redistricting measure, and promise more political reforms going forward.

Open primaries anyone?

The railroad museum location is all about symbolism, as the state's pioneering political reformer Gov. Hirman Johnson led a series of reforms to curb the influence of railroad barons.

Five years and three months ago, Schwarzenegger declared there that in Sacramento, "the contributions go in, the favors go out, and the people are punished with wasteful spending and high taxes."

He promised a fundraising ban during while negotiating the budget, overhauling redistricting, better open records laws, and to veto any bill that didn't receive a full public hearing.

After the success of the Proposition 11 campaign, Schwarzenegger seems destined to continue to use the Legislature as his foil for political reform.

You know, creating things like a ticking deficit clock.

The Assembly has voted down the budget proposal before them along an initial party-line vote.

"We're going to remain in session for a while," Assembly Speaker Karen Bass pledged after the vote.

Here's some of the high-(or low)lights of the debate:

Assembly Majority Leader Alberto Torrico said he hopes that every year the Legislature won't put together the budget with "scotch tape and chewing gum."

"Every year, I'm disappointed," Torrico said.

Thirty minutes into the debate, he chided his GOP colleagues, saying he was "shocked" that no Republican had even "dared to even raise your mic."

GOP leader Mike Villines responded that he planned to be the only GOP speaker and to speak last. The Republicans were silent because they were "trying to bring the right tone to this discussion," Villines said.

"Not because we didn't care," he said.

Assemblyman Mike Feuer, D-Los Angeles, said constituents were expecting lawmakers to "feel a sense of urgency."

"Today in this room, I don't feel a sense of urgency yet," he added.

Assemblyman Jared Huffman, D-Marin, snapped at Republicans that they have to choose between their no-new-taxes pledge and their "pledge to uphold the state Constitution of California."

"We have reached a point where you've got to chose," he said telling them it was time to "elevate the interests of the people of this state over Grover Norquist."

2010 U.S. Senate candidate and GOP Assemblyman Chuck DeVore derided the Democratic plan as "proposed taxes that will kill our economy."

Republican Assemblyman Mike Duvall, in an animated speech, blamed environmental regulations for slowing economic growth. Let's "knock some of this CEQA stuff out of the ballgame," he declared, referring to the state's landmark environmental law.

Our favorite analogy of the evening was Republican Assemblyman Ted Gaines comparing the California government to the American auto industry.

Finally, former comic and freshman Assemblyman Tom Ammiano, D-San Francisco, said of picking which taxes to raise, "It's like choosing who's your favorite Menendez brother."

State Treasurer Bill Lockyer has released a detailed list of infrastructure projects that are at risk if the Pooled Money Investment Board votes Wednesday to suspend financing because of the Legislature's inability to close the state budget gap.

Lockyer said the move is necessary so the state can conserve cash as revenues lag and the political deadlock continues. The state is unable to sell bonds to replenish the pooled money fund.

The board -- Lockyer, Finance Director Mike Genest and Controller John Chiang -- meets at 10 a.m. to take up the matter.

The list can be viewed here.

Assembly Speaker Karen Bass announced Tuesday that her house would vote late this afternoon on a $19 billion package of cuts and new taxes to chip away at the nearly $40 billion deficit California faces over the next year and a half.

But, amid no solid indication the $19 billion package has the GOP support needed for passage, Bass said she was prepared to lock the doors of the lower house to force her Republican counterparts to the table.

"I'm certainly hoping we that won't need to lock the doors and lock people in," the Los Angeles Democrat said. "But I will tell you that I'm so concerned about the situation that we're facing today, if I'm worried some of the members might run away off the floor, it just might have to get to that."

State Treasurer Bill Lockyer has said he will stop funding infrastructure projects in the state beginning as early as Wednesday to conserve cash. The state faces potential insolvency in February if no new revenues or spending cuts are adopted, fiscal officials say.

Raising taxes in California requires a two-thirds vote of the Legislature. For all of 2008, GOP lawmakers have rebuffed attempts by Democrats and Gov. Arnold Schwarzenegger to do so.

Bass said she has had "informal discussions with various members of the Republican caucus" about supporting new taxes. Today's session, in part, appears to be an effort to ferret out those supporters.

Bass said she was "hoping that this proposal might generate some votes."

"We are not certain," she said.

The Democrats released only a broad overview of their package Tuesday afternoon. Bass said the new revenues, which will account for $11.3 billion, would include a three-year hike in the state sales tax, a new oil severance tax of 9.9 percent and a nickel-a-drink tax on alcoholic beverages in the state.

Those are all tax hikes Schwarzenegger has embraced, though Bass added that, "This is not his plan. The governor supports his plan."

The $6.9 billion in cuts, she said, would largely mirror those proposed by Democrats at the end of November, which were thumbed down by Republicans. The package also does not include any of the so-called "economic stimulus" proposals advanced by either Schwarzenegger or Republican lawmakers.

Session is scheduled to begin at 3 p.m., when lawmakers will first put the plan to a vote.

"We might put it on call for a lot of hours," Bass said. "I'm hoping that during those hours that it's on call that we can get down to what it will really take to get Republican support for the package."

With no end to California's budget impasse in sight, Assembly Speaker Karen Bass is considering a lockdown of the lower house tonight.

Bass said no decision has been made, but added, "It's a definite possibility."

For days, Bass has been weighing the prospect of locking down the Assembly as a way to tighten pressure on Assembly members to strike a budget deal.

Assembly Majority leader Alberto Torrico, D-Newark, floated the idea publicly last week of an around-the-clock lockdown of legislators during Christmas week, beginning Monday.

Bass, D-Los Angeles, did not indicate how long she might order the Assembly to stay inside the Capitol if no proposal is passed today to help bridge the state's projected shortfall of about $40 billion over 18 months.

Bass and Senate President Pro Tem Darrell Steinberg met briefly this morning with Gov. Arnold Schwarzenegger. An Assembly vote is expected today on a budget proposal expected to consist of both budget cuts and tax increases to help ease the fiscal crisis.

Mark Ridley-Thomas, who vacated his state Senate seat to join the Los Angeles County Board of Supervisors earlier this month, has endorsed Assemblyman Curren Price to replace him.

Price, an Inglewood Democrat, just began his second term in the state Assembly. He is expected to be opposed in the Senate race by fellow sophomore Democratic Assemblyman Mike Davis.

In his endorsement, Ridley-Thomas called Price "the man to beat" in the race.

"Curren understands the needs of working people, and shares their desire to earn a living to support their families. He knows the importance of quality of life for the people of this district and the state of California, and will work tirelessly to create the jobs and opportunities they need to succeed," Ridley-Thomas said in a prepared statement.

Democrats are expected to retain the 26th Senate District, which is overwhelmingly Democratic and in the heart of Los Angeles County. A special election is scheduled for March.

Andrew LaMar, who served as former Senate President Pro Tem Don Perata's communications director during Perata's final two years in office, has landed a job as the California Medical Association's new director of media relations.

LaMar was a former newspaper reporter, most recently for the Contra Costa Times. He started on Monday, the CMA reports.

Legislative Republicans unveiled their budget plan Monday and crossed their fingers that majority Democrats wouldn't immediately toss the $22 billion proposal in the waste bin.

Republicans proposed $15.6 billion in cuts (more than two-thirds of which target education) and $6 billion in revenues. Those revenues, however, are from pots of money approved by voters specifically for health care for children and the mentally ill.

It included no new taxes. Taxes "will only cause (the state) more harm at the end of the day," declared Assembly Republican leader Mike Villines.

"We would hope they wouldn't dismiss this proposal out of hand," said Senate GOP leader Dave Cogdill.

Cogdill better hope harder.

"This isn't a negotiated compromise," complained Gov. Arnold Schwarzenegger spokesman Aaron McLear. "This is a drill."

Schwarzenegger and legislative Republicans have been at odds recently, and the GOP deficit-cutting plan takes subtle shots at the governor in at least two places.

For one, the plan proposes to eliminate all state funding for the so-called Hydrogen Highway, a pet project of Schwarzenegger's. The move saves a mere $6 million, but merited a separate line-item in the Republican cut list. The GOP plan also cuts $550 million in funding for the state's after-school programs, which were created by the Schwarzenegger-backed 2002 initiative, Proposition 49.

(It's also of note that the GOP plan's biggest chunk of revenues comes from taking money from Proposition 63, the mental health initiative co-authored by Senate President Pro Tem Darrell Steinberg.)

All told, it looks like the Democrats will give the plan 24 hours to live. The Senate will have budget committees consider the proposal this afternoon. The Assembly Budget Committee will review the plan this morning.

Don't expect the hearings to be friendly for the GOP.

The Assembly will meet today at noon for a floor session, but the Democratic leadership is keeping plans for the session under wraps.

Finally, here's some sobering budget math: If you took every cut Republicans proposed (from eliminating transit funds to cutting payments for the aged, blind and disabled to $10.6 billion from schools) and added it to every tax the Democrats propose to raise (tripling the car tax and suspending the indexing of tax rates), you'd still only solve $23.7 billion of the nearly $40 billion deficit.

Photo: Assembly Republican Leader, Mike Villines listens to Senate Republican leader, Dave Cogdill, behind, as they unveil their budget proposal, at the State Capitol, Monday Dec. 15, 2008. Credit: Brian Baer/Sacramento Bee.

Predictably, Democrats don't think much of the Republican budget plan rolled out Monday.

Senate President Pro Tem Darrell Steinberg issued a sharp statement, which began, "Republicans obviously don't think the time for ideology and posturing is over."

Steinberg, a Sacramento Democrat, accuses the GOP leadership of relying on "phantom revenue" (see the list of revenues) and blasts the size of the cut to education as "the equivalent to shutting down the three largest school districts in the state, or over $1,300 a kid. That's no way to build for the future."

Assembly Speaker Karen Bass was more measured in her statement, saying the GOP package " does appear to be a sign of progress." Not that the Los Angeles Democrat embraced anything the Republicans proposed.

"At first glance it appears this proposal is not the serious response this crisis requires," she said of the plan, which will be the subject of legislative hearings on Tuesday. Her statement continued:

If it's just another hyperpartisan wishlist with items unrelated to the budget, that will come out. If there are responsible elements in the plan like the Democrats have advanced, that will come out. If there are unworkable one-time band-aids or unfounded assumptions, that will also come out.

Legislative Republicans have chanted that California has a spending problem, not a revenue problem for years. But the GOP leadership did propose two large infusions of revenue to help balance the state's books Monday - although the money would come by raiding existing voter-approved programs.

The Republican budget plan relies on $3.9 billion taken from Proposition 63, the measure voters approved in 2004 to fund mental health programs, as well as $2.1 billion taken from Proposition 10, the tobacco tax that funds children's health programs.

Both programs have substantial reserves in the bank, and the Republicans propose going to the voters in a 2009 special election asking them to siphon away those reserves to help lower the state's deficit. Advocates of the programs funded by those initiatives say the money is already earmarked for projects in the pipeline.

After the jump is a complete list of the GOP revenue proposals:

Legislative Republicans proposed a total of $22 billion in cuts and revenues to help close California's estimated $41.8 billion budget deficit on Monday.

Of that $15.6 billion were in cuts to existing programs.

Education, the state's biggest expenditure, takes the biggest hit, with more than $10.6 billion of the cuts allocated to K-12 schools and community colleges. That would bring school funding to just about the minimum required by state law.

The GOP lawmakers also proposed to eliminate funding for state transit agencies and an across-the-board 10 percent cut to the University of California and California State University systems.

Deep cuts in welfare and Medi-Cal programs also were proposed. The plan also would change eligibility rules to make it harder to enroll in those programs.

In a symbolic move, the GOP leaders also proposed a 5 percent cut (worth $26.2 million) to the Legislature itself, including the salaries of lawmakers. But that cut is smaller than the proposed lowering of monthly cash assistance to the poor, elderly, blind and disabled (where couples' monthly SSI/SSP grants would be dropped from $1,524 per month to $1,407.)

A list of the cuts is after the jump:

The Los Angeles Times' Michael Rothfield double-checked Gov. Arnold Schwarzenegger's public schedule against his list of donors and found quite a few matches.

Here's Rothfield's leading example:

When the owner of Staples Center had nearly completed a two-year project to generate power from the sun on the arena's roof, Gov. Arnold Schwarzenegger showed up at a ceremony to help lay the final solar panel and heap praise on the Anschutz Entertainment Group for going green.

Schwarzenegger returned that same night in late October for a far different, less public event: a fundraiser thrown by the company that raked in half a million dollars for his political endeavors. Guests mingled with the governor and First Lady Maria Shriver over cocktails and dinner on a terrace at Anschutz's L.A. Live development, then watched the Lakers' season opener from luxury box seats.

The Bee's Kim Minugh, meanwhile, got her hands on all the letters of support that poured in for Esteban Nunez, the son of ex-Assembly Speaker Fabian Nunez, who, along with three others, is accused of killing a San Diego college student.

Among those who wrote letters were Assembly GOP leader Mike Villines, Los Angeles Mayor Antonio Villaraigosa, Democratic consultant Gale Kaufman, Bob White, chief of staff to former Gov. Pete Wilson, Assemblyman Kevin de Leon and former Assemblyman Dario Frommer.

"I have had the opportunity to watch him grow and develop into a decent and responsible young man," wrote Villaraigosa, who said he has known the younger Núñez 10 years. "In my heart, I know Esteban Núñez as a young man of good and upright character."

The Bee's Aurelio Rojas profiled the efforts in the Senate and Assembly to root out government waste.

Ex-Speaker Willie Brown says of the selling-the-Senate-seat accussations against Rod Blagojevich, "This case could go up in smoke."

But I'm telling you now, for all the accusations about Blagojevich trying to sell the Senate seat vacated by Barack Obama, the feds had better come up with something more solid than just a couple of guys sitting around and talking.

Secretary of State Debra Bowen certified the election results and says a record 13.7 million Californians went to the polls this fall. That 79.4 percent turnout is the highest since 1976.

The best counties at turning out the vote: Sonoma (93.4 percent), Marin (90.8 percent) and Amador (88.6 percent).

Calitics' David Dayen breaks down more of the numbers.

The Los Angeles Daily News' Rick Orlov prints a note from signatures collector Sue Burnside, who says Ben Austin's failure to qualify in a school board race wasn't her fault.

The fact is Ben Austin is not my client. Burnside & Associates is not and has never been under contract to him or his Campaign. I have never met Mr. Austin.

I did not circulate or supervise Ben Austin's petition drive; I was on my honeymoon in South America.

An independent contractor misrepresented himself - without my knowledge or approval - as an employee of Burnside & Associates when he agreed to collect the signatures for Mr. Austin.

A record 13.7 million Californians voted in last month's election, shattering the previous record by 1.1 million ballots, Secretary of State Debra Bowen says in a final report on the election.

The percentage of registered voters who cast ballots in November, 79.4 percent, was the highest since 1976, Bowen's office calculated, but still well under the all-time record of 88.4 percent in 1964. "This was an election for the record books," Bowen said in a statement as she released the final report.

Sonoma County had the state's highest voter turnout at 93.4 percent while Merced County, at 66.6 percent, had the lowest turnout. Even at 79.4 percent of registration, however, fewer than 60 percent of Californians who are eligible to vote (18 years or older and citizens) actually cast ballots.

The election also continued Californians' penchant for voting by mail, with 41.6 percent of ballots cast in that manner. The full election report is available here.

Mike Genest, the governor's director of the Department of Finance, aggressively went after the Legislature for its inability to strike a budget deal. He did so in the Gov. Arnold Schwarzenegger's weekly radio address -- the usually benign three-minute Saturday chat.

Here's the meat of Genest's beef with lawmakers -- of both parties:

It is time for negotiation, compromise and solutions but so far all we've seen is posturing.

The Republicans have an entire set of demands they want met before even talking about raising the taxes we need to keep government running.

That's how you conduct a hostage negotiation.

But in a hostage negotiation at least you know when demands are met the hostage is released.

In this case, Republicans would only be willing to consider letting the hostage go.

The Democrats are just as bad.

They refuse to consider economic stimulus measures to counteract the tax increases like giving employers more flexibility on overtime and other regulations.

And they won't support legitimate long-term spending cuts.

In other words, they're more worried about the labor bosses and the special interests, than about solving these problems.

In the end, Genest says Schwarzenegger "is asking the leaders to come down to his office with a set of compromises, instead of demands."

Every year, Orange County Rep. Loretta Sanchez sends out a humorous, if strange, holiday card. It's a decade-long tradition and this year is no different.

Each year the card features the congresswoman and her fluffy white cat, Gretzky, doing any number of things.

2008 appears to be the year for motorcycle riding.

The Orange County Register has posted a fun gallery of Sanchez's past holiday missives.

The Register's Denis Bunis also talks to Sanchez about her cards, which were sent out to a half-million people, paid for by Sanchez's campaign committee:

"I like to give the people in my district a good little laugh and give them a little smile when it's holiday time and everybody is so stressed out,'' Sanchez said.

Here's Bee cartoonist Rex Babin's latest cartoon. Find all his work here.

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On the flip is the list of California's Electoral College electors who will be casting their 55 votes for President-elect Barack Obama today in the Assembly chambers in the state Capitol.

The wait is over.

Legislative Republicans are expected today to unveil their "mostly cuts" plan that they say will balance the books for the current fiscal year and make a dent in next year's budget deficit.

The two-year yawning fiscal chasm is now estimated at $41.8 billion.

Democrats have been complaining about the GOP's lack of specifics for awhile, but Gov. Arnold Schwarzenegger got into the act last week.

"I have felt many times that Republicans did not come prepared and Republicans have not been specific of what they need. They have been very vague," the governor complained.

Villines retorted, "They may not like what we say, but they know full well what we have proposed."

We'll report the GOP list of cuts on Capitol Alert once they've been released.

Democrats have pledged to "have a vote before Christmas" in the words of Assembly Speaker Karen Bass.

Of course, "a vote" and "a deal" are two, very different things.

Meanwhile, California's 2008 Electoral College meets in the Assembly Chambers today.

Capitol Alert has the full list of the Democratic electors.

The state's 55 electoral voters will be selecting President-elect Barack Obama and Vice-President-elect Joe Biden in a roughly 45-minute meeting.

Also today, Schwarzenegger and first lady Maria Shriver will induct the class of 2008 into the state's Hall of Fame.

The inductees are: musician Dave Brubeck, actor and activist Jane Fonda, authorTheodor "Dr. Seuss" Geisel, sculptor Robert Graham, record producer Quincy Jones, fitness guru Jack LaLanne, photographer Dorothea Lange, architect Julia Morgan, actor Jack Nicholson, scientist Linus Pauling, California founding father Leland Stanford and chef Alice Waters.

Photo: Assembly Republican leader, Mike Villines, right, and Senate Republican leader, Dave Cogdill, join Senate and Assembly Republicans to unveil a "fiscally responsible budget reform plan" in June 2008. Credit: Brian Baer/Sacramento Bee

There is yet another casualty in Sacramento's ever-shrinking corps of reporters covering state politics.

And this change can't even be blamed on the downward spiral of the newspaper industry.

The Web site PolitickerCA.com, part of a national network of state-level political sites, is to be shuttered, as parent-company Observer Media Group is closing sites across the country.

The site, which launched only earlier this year, has had at least three reporters covering California events and posting stories: James B. Gerber, Ben van der Meer and Jeff Mitchell.

Politico.com and MediaBistro have the details of the cutbacks.

On the addition side, the San Francisco Chronicle's Sacramento bureau has doubled in size -- from one reporter to two.

The Chronicle's Matthew Yi has been joined by Wyatt Buchanan, who previously worked out of San Francisco.

California has more men and women locked up in prison than any other state, a new federal report finds, and unlike any other state, the vast majority of those placed behind bars are parole violators.

The report bolsters contentions by critics of the much-overcrowded prison system that state parole officers, who belong to the same union as prison guards, are extraordinarily willing to slap a parole inmate back behind bars, thereby exacerbating a prison overcrowding problem.

California's prisons, the U.S. Department of Justice report says, had 174,282 inmates in 2007, and although it was one of the few states to show a decline in inmate population - 1,230 fewer than in 206 - the total surpassed every other state, beating out second-place Texas by about 4,000 felons. California's total, in fact, was almost identical to the entire prison population of the northeastern states, including New York.

On average, the nation's state and federal prisons took in almost two new offenders for every parole violator, but in California, the reverse is true. In 2007, California prisons took in 139,608 inmates and 92,628 of them were parole violators, almost a 2-1 ratio. In only one other state, Washington, did parole violators outnumber those being jailed by the courts, and that was only by 126 inmates.

The new data provide new ammunition for critics of the system, who have long complained about the propensity of parole officers to send their charges back behind bars. "California's prison crisis is a parole crisis," said Margaret Dooley-Sammuli, spokeswoman for the Drug Policy Alliance. "The state puts too many people under supervision for too long - and is too quick to return them to prison. It's hog-tying the criminal justice system and draining the state budget."

With the state budget running multi-billion-dollar deficits, the governor and the Legislature have been mulling whether to cut prison costs by releasing more low-risk inmates, but conservatives and anti-crime groups have refused to budge on the issue.

The new Department of Justice report is available here.

The Consumer Federation of California released its 2008 legislative scorecard today.

No surprise here: Democrats fared far better in the interest groups' scores than Republicans

Check out the full scorecard.

Assemblyman Sandré Swanson, D-Oakland, issued a statement Friday morning supporting Speaker Karen Bass' plan to lock lawmakers in during Christmas week until they get a budget deal.

"Many working families in California will not have a Christmas at all. I have a sleeping bag and am ready to be locked in until we get the budget done for the people of California," Swanson said in a statement issued at 9:14 a.m. this morning,

Then, at 10:07 a.m., came a nearly identical follow up e-mail from Swanson's office. Only this time he didn't have a sleeping bag.

"Many working families in California will not have a Christmas at all. I have my red pajamas and am ready to be locked in until we get the budget done for the people of California," he said in the revised statement.

Either way, he supports the lock in.

The speaker's office, meanwhile, has posted this video of Bass talking -- and looking visibly frustrated -- about the budget after Thursday's Big Five:

Although California's system of compensating workers for job-related disabilities has been overhauled to reduce employers' costs by as much as $15 billion a year, the state still ranks near the top in those costs, according to a new nationwide survey.

Gov. Arnold Schwarzenegger has often touted the 2004 workers' compensation changes as one of his best achievements, drawing kudos from business groups, while lawyers representing injured workers, labor unions and medical care providers have complained that they went too far.

The 2008 Industry Week Workers' Compensation State Ranking, however, lists California as next to last in terms of employer burden, with only Alaska having a higher burden. The survey analyzed not only work comp insurance premiums, but benefit payments per injured worker and per-capita payments.

A separate survey, conducted by the Oregon Department of Consumer and Business Services, weighed only insurance premiums and California ranked 38th, while Alaska had the highest costs. The surveys were reported in Smart's Workers' Comp Bulletin.

Gov. Arnold Schwarzeneggger and the Democratic leaders announced the membership of the state's new tax commission, which is charged with modernizing how California collects taxes, on Thursday.

On the flip are brief bios of all the appointees, courtesy of the governor's office:

So yesterday's Big Five meeting didn't go so well.

(Witness Senate Republican leader Dave Codgill pronouncing, "I just don't see this process as being productive or helpful.")

But Gov. Arnold Schwarzenegger and the two Democratic legislative leaders did get back together in the afternoon to name the 12-member tax commission.

The commission will be chaired by Gerald Parsky, as previously reported.

There will be two veterans of the Hoover Institute (John Cogan and Michael Boskin), three former lawmakers (Fred Keeley, Becky Morgan and Curt Pringle), one dean of the UC Berkeley law school (Christopher Edley) and one publisher of a Spanish-language newspaper (Monica Lozano).

We've posted the brief bios of the dirty dozen on Capitol Alert, courtesy of the governor's office.

Their tax report will be due on April 15. No joke.

San Francisco Mayor Gavin Newsom, who has been presenting his own bad budget news to his city this week, will be in Sacramento today.

He'll join newly elected Mayor Kevin Johnson and Fresno Mayor Alan Autry for an event touting Johnson's "proposal for a more accountable government structure."

Read: More power for the mayor.

Schwarzenegger, meanwhile, will celebrate the launch of Bank on California, which will be dedicated to offering checking and savings accounts to those without them. It's a first-state-in-the-nation program.

Of course, with the direction that this state seems to be moving, let's hope all the accounts are FDIC-insured.

In our Daily Piece of Bad Budget News: The Schwarzenegger administration has now put an official number on just how bad the deficit will be through June 2010: $41.8 billion.

They say that includes a $2 billion reserve.

Ain't that quaint.

Republican Sen. Jeff Denham, whose statewide profile grew during the failed recall attempt of him by Democrats earlier this year, said Thursday he is running for lieutenant governor in 2010.

The Atwater Republican has already lined up the backing of both legislative Republican leaders, Mike Villines and Dave Cogdill, as well as, which his campaign reports, "more than two-thirds of the membership of both the Assembly Republican Caucus and the Senate Republican Caucus."

The lieutenant governor post will be an open race in 2010, with incumbent Lt. Gov. John Garamendi already announcing he is running for governor.

The position is technically California's second-ranking constitutional office, but it contains few official duties. Many politicians have tried to use the post as a springboard to the governorship.

Denham is the first GOP candidate to declare his candidacy, though a litany of others have filed paperwork to run.

His most likely GOP opponent in the primary is Sen. Sam Aanestad who, through a spokesman, expressed interest in the race earlier this week.

On the Democratic side, Sen. Dean Florez of Shafter is the only candidate in the race thus far. Florez is the new majority leader in the Senate.

Curiously enough, Florez and Denham served together as chairman and vice-chairman of the Governmental Organization Committee in the Senate.

Some of the lieutenant governor's responsibilities include sitting on the UC Regents and the CSU Board of Trustees. Denham said in his announcement he is opposed to "surprise" tuition hike and wants "to stabilize fees for state colleges so that they remain affordable and accessible for all Californians."

In the Senate, Denham has made selling surplus property a top legislative priority, a job said he would continue on the State Lands Commission.

See who has endorsed Denham's candidacy after the jump, according to his campaign:

Note to Santa:

It's no joke -- Legislators may, indeed, spend Christmas week at the Capitol.

Assembly Speaker Karen Bass said Thursday that she is considering imposing an around-the-clock Christmas week lockdown of the Assembly until a budget deal is struck.

"That's certainly an option that will be explored," she said in an e-mail to The Bee. "The situation is so dire drastic measures have to be considered."

Assembly Majority Leader Alberto Torrico floated the idea Wednesday of a lockdown beginning Dec. 22.

Assemblyman Chuck DeVore, R-Irvine, said that keeping legislators from their families during Christmas week would backfire.

"To lock people down on the eve of Christmas like that in a vain hope to force Republicans to approve an economy-killing tax increase, I think, is irresponsible," DeVore said.

"I think what we need to do is come to a responsible, fiscally sustainable agreement and then have the leaders explain to their respective caucuses why it makes sense."

California would gain more in economic stimulus by rehabilitating highways around the state using revenue bonds than by pursuing Gov. Arnold Schwarzenegger's plan to accelerate 11 major state highway projects, the nonpartisan Legislative Analyst's Office said Thursday.

The Republican governor in November proposed using Proposition 1B bond funds for $822 million in state transportation projects, as well as $800 million for local transit and $700 million for local road improvements.

The LAO agreed Thursday that the local transit and road proposals have merit. But it said Schwarzenegger's proposal to waive environmental review requirements and streamline permitting for $822 million in state transportation projects could face serious hurdles, starting with a need to obtain federal environmental waivers.

The LAO also said the various changes would only gain the state a few months of time, since several of the 11 projects are already slated for early 2010. And the stimulus would only help certain regions where the projects are located.

Instead, the LAO suggested that state leaders ask voters next year to approve revenue bonds that borrow $794 million against future gas-tax money. Those funds would be used immediately for 122 projects around the state, rehabbing everything from bridges to pavement to roadside rest areas. The projects are ready for construction over the next three years but lack enough funding to begin.

The report can be found here.

Assembly Majority leader Alberto Torrico, the No. 2 Democrat in the Assembly, has floated the idea of a legislative lockdown during the Christmas week to break the budget impasse.

Speaking to my colleague Jim Sanders, Torrico said, "That'll get it done."

Gov. Arnold Schwarzenegger on Wednesday hinted he was game for meeting Christmas week.

"I also made it very clear to the legislative leaders that they should let their friends upstairs know that I'm willing to stay the whole weekend, until Christmas," Schwarzenegger said.

"We should work through this in order to get this done, because there will be no Christmas gift that would be greater for the people of California than for us to solve this crisis," the governor added. "And this problem, as I said, gets worse every day so, as we speak right now, more and more money is being spent red, is being spent, money that we don't have."

Lockdowns have been used with mixed success in recent years.

In 2007, then-Senate leader Don Perata locked the door and kept members in the upper house overnight -- to no avail.

But in 2003, then-Assembly Herb Wesson locked the doors on the Assembly and some 29 hours later lawmakers emerged with a deal.

The economists at UCLA's quarterly Anderson Forecast have more grim projections about the national and California economy.

In a report released today, the economists forecast a "nasty recession" that will be marked by four quarters of declining gross domestic product.

The economists project that national unemployment will soar to 8.5 percent by late 2009.

Here in California, the economists project "high unemployment into 2010."

"Unemployment is going to continue to be ugly," the forecast says of California. "There is no suggestion in the data that we are near (the) bottom."

The more general downturn in economic activity and concomitant job loss will soften the California housing market even further. So foreclosures will continue and residential construction and manufacturing of home furnishings and appliances will contract through the 2nd quarter of 2009 and begin to turn around closer to the end of '09.

Democratic Assemblyman Ted Lieu, D-Torrance, filed paperwork this week to run for attorney general in 2010.

Lieu is the third Democrat to make the move, following San Francisco District Attorney Kamala Harris, who announced she was exploring a run in mid-November, and former Assemblyman Joe Canciamilla, who filed in July.

Current Attorney General Jerry Brown is eligible to run for reelection in 2010, but the ex-governor has been making noise about trying to return to the governorship.

Both Harris and Canciamilla have already said that should Brown run for reelection they would bow out of the race.

On the Republican side, Sen. Tom Harman, R-Huntington Beach, filed his paperwork last week.

The 2006 GOP nominee, former Sen. Chuck Poochigian, also has an open account for the seat, though it has been largely inactive.

Photo: Assemblyman Ted Lieu speaking at a rally on November 25, 2008. Credit: Renee C. Byer/Sacramento Bee

Gov. Arnold Schwarzenegger and the two Democratic leaders of the Legislature are expected to announce the membership of the tax commission tasked with restructuring California's tax code today.

The 12-member commission will be chaired by Republican Gerald Parsky, Assembly Speaker Karen Bass revealed earlier this week.

The state's revenues are notoriously volatile, relying heavily on personal income taxes of the wealthy, which tend to rise and fall faster than the overall economy.

The governor and speaker have insisted the goal of the commission is to modernize the state's tax collecting system -- not raise taxes.

"It is revenue neutral, so we're not looking, at this particular point, for any additional revenues. We are basically just looking for one thing and that is to create stability," Schwarzenegger said at the press conference announcing the commission.

Schwarzenegger gets six appointments, while the Democratic leaders Bass and Darrell Steinberg each get three.

Legislative Republican leaders get nada. That has fueled their private fears that the commission is just an excuse to justify higher taxes.

Schwarzenegger said Wednesday he also plans to call a Big Five meeting today to talk about the ever-worsening budget

That's one day after the governor cast blame on the Legislature for not acting fast enough to solve the budget, singling out, in particular, the GOP leadership for criticism.

Should be nice and cozy in the governor's conference room today...

Meanwhile, the Senate budget subcommittees continue to chew off small parts of the budget balancing equation.

Finally, in our Daily Piece of Bad Budget News: Schwarzenegger said on Wednesday that the state budget deficit -- pegged for weeks at $11.2 billion -- has now grown to $14.8 billion in the current budget year.

That's a 32 percent jump.

What's more: administration officials now estimate the two-year deficit to be a staggering $40 billion. Jim Sanders has more on that in today's Bee.

Robert Klein, the chairman of California's Institute of Regenerative Medicine, has been approved by the stem-cell agency for a $150,000 salary.

Klein, who was a leading proponent of Proposition 71, the ballot measure that created the stem-cell agency, has worked for free for the last three years.

The $150,000 annual pay is less than the $275,000 to $508,750 he is eligible to receive as chairman.

But the six-figure salary is also for working only half-time.

"The salary constitutes a 50 percent time commitment," CIRM said in a press statement.

Gov. Arnold Schwarzenegger, in a letter to the stem-cell board sent last week, said he had "deep concerns" about the chairman and vice-chairman collecting a salary.

"I urge you to ensure that compensation for these positions is offered only if and to the extent absolutely necessary to implement its mission," the governor wrote.

"After three years of contributing my time to the agency without a salary, the work load and the current economy make it impossible for me to continue at the same level without compensation. I have expressed to the board that at least 15 percent of my effort will continue to be contributed time without compensation," Klein said in a statement Wednesday.

Related:

Schwarzenegger names his pick for stem cell vice chair
Art Torres' next job: Stem cell vice-chairman?
Stem-cell chief Klein in line to take a salary

Mary Nichols, the chair of California's Air Resources Board, will not be President-elect Barack Obama's administrator of the Environmental Protection Agency.

Lisa Jackson of New Jersey will, according to numerous news reports.

Geography might have played a role, as The Bee's Rob Hotakainen reported in today's paper:

If Nichols gets the post, she would add to California's growing clout in crafting a national response to global warming. As powerful committee chairs, California Democratic Sen. Barbara Boxer and Democratic Rep. Henry Waxman of Los Angeles are already positioned to take leading roles when the new Congress begins tackling the issue in January.

If Nichols loses out, it could be a result of geographic considerations. While officials with Obama's transition team have not given any public indication of who will be chosen, some environmental groups say that Jackson may have the upper hand because she would help balance California's power.

Photo credit: Autumn Cruz/Sacramento Bee

Gov. Arnold Schwarzenegger put the blame for the budget problems squarely on the back of the state Legislature in his Wednesday press conference.

That is not all that surprising, as the governor has long wagged his fingers at lawmakers when things turn south in California.

But this time Schwarzenegger took aim at GOP lawmakers, in particular Assembly GOP leader Mike Villlines' list of demands to be taken up before any discussion of tax hikes.

The governor did not distance himself from the policies Villines is advocating, saying "when you read through (the governor's) package you will see we address all of those issues."

But he took issue with the GOP approach.

"I have been to many meetings; none of those things were discussed. So I think it's very hard for the Democrats, in a way, to negotiate when no one puts that on the table and says here is the list of things that we ask for and if we have this list then we're willing to increase taxes and to come up with extra revenues. But it's always very vague and nothing specific and I think that makes it sometimes frustrating in those negotiations," Schwarzenegger said.

Schwarzenegger continued:

But I'm happy that the Republicans have a list now. But again, as you have just said, you can't go with a list like this and say if you commit to those things and if you're willing to make those changes, then we are willing to talk about revenue increases. That is not the way you negotiate. You have to say this is what it takes and then I'm ready to increase the revenues and I will get my people upstairs to vote for a revenue increase.

So that has been a holdup. I have felt many times that Republicans did not come prepared and Republicans have not been specific of what they need. They have been very vague.

Senate Republican leader Dave Cogdill did not take kindly to the governor's words.

"Bullying the legislature to adopt tax hikes won't make the ticking clock the governor unveiled today go away," he said in a written statement. "In fact it will only make our budget problems worse. Raising taxes doesn't solve the underlying problem of California's budget, which is the state spends more than it takes in."

Cogdill continued, "Now we've been told that unless we support tax increases - which would harm the economy - the Legislature will not consider enacting these common-sense reforms. We should all agree that economic stimulus will protect taxpayers' jobs and homes and we should have done it by now."

Nor did Villines.

"But let's be clear - Republicans have always entered budget negotiations with Democrats and the Governor fully prepared and fully engaged. For more than a year, we have offered countless proposals both publicly and privately - including specific budget reforms to help us live within our means, specific economic reforms to promote job creation and specific government reforms to ensure our tax dollars are spent more efficiently," he said.

We've posted a full transcript of the governor's press conference after the jump, courtesy of the governor's office, as well as Villines' and Cogdill's full statements:

Bill Burke, chairman of the South Coast Air Quality Management District, lost his bid to become the next chairman of the California Coastal Commission, the influential body that regulates development along the state's hundreds of miles of coastline.

Burke, the husband of former Los Angeles County Supervisor Yvonne B. Burke, lost to Bonnie Neely, the Los Angeles Times reports.

John Howard at Capitol Weekly outlined out the political terrain on Tuesday.

My colleague Steve Wiegand has the details of Gov. Arnold Schwarzenegger's hastily called news conference Wednesday.

"They met, they debated, they postured and they did nothing," he said. "They didn't deal with one of those issues, and that was after being three months late with (approving) the budget this year. If that isn't a shameful performance, I don't know what is."

Schwarzenegger also unveiled a "clock" counting California's growing budget defifict as lawmakers fail to act.

It reads: "Day 35...OUR BUDGET PROBLEM gets worse every second."

It includes a counter showing the deficit rising $470 every second. That works out to $40 million per day.

Schwarzenegger also said the state's deficit in the current year now stands at a projected $14.8 billion -- up from an estimated $11.2 billion just weeks ago.

Photo Credit: Brian Baer/Sacramento Bee

On Tuesday, Capitol Alert reported Art Torres, chairman of the Democratic Party, is in the running to be the next vice-chairman of the state's stem-cell board, after being nominated by state Treasurer Bill Lockyer, Lt. Gov. John Garamendi and state Controller John Chiang.

Well, Torres has officially got some competition for the job.

Gov. Arnold Schwarzenegger nominated Duane Roth, a current member of the Independent Citizen's Oversight Committee, to be the next vice-chairman on Tuesday.

The fight over the vice-chairmanship of the stem cell agency, the California Institute for Regenerative Medicine, ultimately comes down to money.

As in Torres has said he will accept a salary and Roth has said he will not.

In a Dec. 4 letter to the stem-cell board, Schwarzenegger wrote that he has "deep concerns" about the chairman and vice-chairman collecting salaries.

The current chairman, Robert Klein, has served in that post since 2004 without pay, but the board is meeting this week to consider granting him a salary. Salary guidelines for the agency put him in line for a $275,000 to $508,000 salary.

The prior vice-chairman, Ed Penhoet, also did not collect a salary. The vice-chairman's pay range is $180,000 to $332,000.

"Mr. Roth has asked me to convey that, should he be elected Vice Chair...he will not accept any such compensation," Schwarzenegger wrote in his nomination letter.

Esteban Nuñez, the son of former Assembly Speaker Fabian Nuñez, was released on bail late Tuesday, after a judge lowered bail from $2 million to $1 million.

The lowering of bail came despite the protest of the prosecutor in San Diego. Esteban Nuñez and three other defendants all pleaded not guilty last week to the charge of murdering a San Diego college student in October. The Bee has the story.

Photo: From left, Esteban Nunez, Ryan Jett, Rafael Garcia, and Leshanor Thomas, listen as they are arraigned for murder in Superior Court in San Diego, Calif., Thursday, Dec. 4, 2008. Credit: AP Photo/ Mark Avery

Insurance Commissioner Steve Poizner takes his gubernatorial fundraising show to Sacramento today for an evening event at Spataro, the upscale eatery and bar on L Street.

Poizner is one of two Republicans officially exploring a run for governor in 2010. The other is former Rep. Tom Campbell.

A third would-be GOP contender, former eBay CEO Meg Whitman, has been in the political news lately. Two of her early advisers, Adam Mendelsohn, Gov. Arnold Schwarzenegger's ex-communications director, and Steve Schmidt, Schwarzenegger's reelection campaign manager, have decided against working for her potential 2010 bid.

The split is said to be amicable, with GOP strategist Jeff Randle still on board the Whitman train.

Of course Mendelsohn and Schmidt's PR firm - Mercury Public Affairs - hasn't had the best news week itself. Its latest partner and co-chair -- Fabian Nunez -- has fallen hard times.

Back to the never-ending state budget saga, the newly constituted Senate budget subcommittees will begin meeting today to talk about how to tackle California's fiscal mess.

First up today are the subcommittees on education and health care.

And In our Daily Piece of Bad Budget News, state Controller John Chiang reported Tuesday that, "November blew away even the most pessimistic estimates, with General Fund revenue down $1.3 billion."

What does that mean?

Chiang explains it "could expand our immediate cash problem by another half a billion dollars, with no recovery in sight."

Assembly Republican leader Mike Villines provided this list to The Bee Capitol Bureau on Tuesday of regulatory and environmental changes Republicans want considered before they agree to talk about tax hikes.

In the interest of time, Capitol Alert presents the list to you without detailed explanation, but we can tell you that "Carl Moyer programs" relate to air quality standards.

Villines said he had provided a similar list to the other state legislative leaders and Gov. Arnold Schwarzenegger.

REGULATORY CHANGES - EMPLOYMENT LAW FLEXIBILITY
Employee Schedule Flexibility
Expanding Health Care Options for Employees (Health savings accounts)
Reducing Unwarranted Litigation
Overtime for high way earners
Meal and Rest clarification
Eliminate "needs test" to allow more apprenticeships

REGULATORY CHANGES - BUSINESS DEVELOPMENT
Design-build
Public Private Partnership
ADA compliance
Streamline small business certification process for micro businesses and sole proprietorships
Reclassify "destination management companies" (DMS) as consumers rather than retailers (SB 1628)
Streamlining the permitting process (THPS, development)
Contracting out

ENVIRONMENTAL FLEXIBILITY
Expanding deadlines for engine retrofits (on and off road)
Extending deadlines for greenhouse gas regulations (AB 32
Carl Moyer program changes
Regulatory flexibility for agricultural industry
3rd party analysis of economic impact of ARB regulations

TAX CREDITS
A new employee tax credit for businesses that hire out-of-work Californians
A manufacturing investment credit to help businesses purchase the equipment they need
Capitol gains reduction for businesses that invest in California
Modification of the tax code to encourage companies to locate jobs in California
Suspension of regulatory burdens that "discourage job creation"

More from Mike Villines' visit to The Bee.

E.J. Schultz of the Fresno Bee reports Villines is off to the nation's capital for meetings with congressional leaders and a "personal engagement."

He'll be back Friday. "I'll for sure come back earlier if we need to. What is important is that we continue to work...If we're going to do a conference call, great. If it needs to be in person, we'll come back early," he said.

Assembly Speaker Karen Bass was in Washington D.C. today meeting with the transition team of President-elect Barack Obama and talking about federal aid for the state, according to Orange County Register.

So much for immediate budget action.

Solving the budget stalemate is simple enough, Assembly Republican leader Mike Villines said in a visit to The Bee's Capitol Bureau Tuesday. Democrats have to capitulate to GOP demands for the 8-hour work day, meal breaks, looser environmental regulations, permanent budget cuts and a stiff spending cap, among other things.

Then, and only then, will Republicans come to the table to discuss -- but not necessarily agree to -- new taxes.

"We think you have to do these reforms first, cuts first and make sure that you're doing an economic package that puts people back to work," Villines said. "Then you have a discussion about revenue - and only then."

Even if Democrats were to agree to the GOP preconditions -- an unlikely scenario -- the Clovis Republican was careful not to commit Republican lawmakers' support for new revenues in the form of higher taxes. He floated other revenue possibilities, such as selling state property and collecting debt owed to the state.

Nearly all the items on the Villines' December wish list are anathema to the Democratic majority.

"This is very hard for Democrats to accept," Villines said of his list, which he said he had been distributed to the governor and other legislative leaders. "They'll say that look, 'This goes right to the heart of many things that we care terribly about and we just can't go there.' I understand that because we feel the same way about revenues."

Jim Evans, a spokesman for Senate President Pro Tem Darrell Steinberg, D-Sacramento, challenged the Republicans to "put a specific $17 billion, half cuts, half revenues, deficit-reduction plan on the table and then we can begin productive conversations."

Villines is holding out hope Democrats will cave. "I think that they'll ultimately come around to this," he said.

Art Torres, the chair of the California Democratic Party, is building support to become the next vice-chairman of California's stem cell agency.

Torres, a former Democratic lawmaker who has served as chairman of the state party since 1996, has been nominated for the post by state Treasurer Bill Lockyer, Lt. Gov. John Garamendi and State Controller John Chiang, all Democrats.

Lockyer argued Torres "represents the best our state has to offer" in his nomination letter.

"I'm very interested," Torres said of the job. "At this point, I think it's a good transition for me to go back to my public policy roots."

The post comes with a salary range of $180,000 to $332,000, according to CIRM documents.

Torres said he would accept a salary as vice-chairman. "I do need a salary because I am not a wealthy person," he said, adding that "what that compensation should be is up to the board."

Under Proposition 71, the 2004 initiative that created the $3 billion stem-cell agency, three statewide officials (Lockyer, Chiang and Garamendi), along with the governor, have the power to nominate a vice-chairman.

The 29 members of the Independent Citizen's Oversight Committee are expected to vote on the nominations in January.

Gov. Arnold Schwarzenegger has yet to name his nominee.

But a Dec. 4 letter to the stem-cell board from Schwarzenegger indicates he is unlikely to nominate Torres.

Democratic state Sen. Mark DeSaulnier is all gung-ho for a constitutional convention. As is GOP Assemblyman Sam Blakeslee. Contra Costa Times.

The last constitutional confab was in 1878.

Health Access' Anthony Wright makes the case that health care cuts are worse than taxes, due to federal matching funds:

For health care, the choice is clear: cuts to health care would have two or three times the negative economic impact as raising taxes. Most of state health care spending brings in federal matching dollars, bringing new meaning to a "multiplier effect."

For every dollar California cuts in health care, we lose a federal matching dollar in the Medi-Cal program, or two federal matching dollars in the Healthy Families program. Beyond the cut to the health care system on which we all rely, these cuts ripple through the local economy, with regard to lose jobs, wages, and individual spending.

Los Angeles politico Ben Austin failed to qualify for the ballot in his bid for the city's school board.

Why? Capitol Weekly's Anthony York has an explanation:

Ben Austin, who had secured the endorsements of Los Angeles Mayor Antonio Villaraigosa and downtown power players like Eli Broad, missed the ballot when his signature gatherer collected signatures for the wrong school board district.

"It's fairly heartbreaking," Austin said. "I really believe we can change things, and this is just heartbreaking."

It is a major gaffe for (Sue) Burniside, a seasoned veteran of Los Angeles politics. Austin said Burnside has refused to return his calls, but he was clearly angry.

"It's a one in a million thing. You hire a signature gathering firm just to deal with this one thing, and she blew it," he said.

Yvonne Walker, president SEIU Local 1000, sat down with State Worker blogger Jon Ortiz to talk budget cuts, among other things:

One Walker highlight:

We're not going to come out of this just with cuts. It's going to take a combination of a lot of the things. There are going to have to be cuts. We're going to have to raise taxes. We need to go after federal money. But let's sit down and see how we can work this out.

And we need to have everyone, the unions, the governor and the Legislature conveying the same message. Instead they're talking about cutting work breaks and lunches. We didn't get into this crisis because people eat lunch.

Assembly Republican leader Mike Villines announced his full leadership team on Tuesday.

And boy did he mean full.

With a 29-member caucus, no less than 14 of the Republicans are "leaders" of the caucus.

Only two - Assemblymen Nathan Fletcher and Jeff Miller -- are legislative rookies (one of "freshman," Assemblyman Jim Nielsen, previously served as Senate GOP leader in the 1980s). And only one - Assemblywoman Jean Fuller - is a woman.

The team:

Republican leader: Villines

Assembly Republican Caucus Chair: Assemblyman Cameron Smyth, R-Santa Clarita

Republican Floor Manager: Assemblyman Sam Blakeslee, R-San Luis Obispo

Assistant Republican Leaders:
Assemblyman Roger Niello, R-Fair Oaks
Assemblyman Bill Emmerson, R-Redlands
Assemblyman Ted Gaines, R-Roseville
Assemblyman Van Tran, R-Costa Mesa
Assemblyman Martin Garrick, R-Carlsbad

Chief Republican Whips:
Assemblyman Anthony Adams, R-Hesperia
Assemblyman Chuck DeVore, R-Irvine
Assemblywoman Jean Fuller, R-Bakersfield

Republican Whips:
Assemblyman Nathan Fletcher, R-San Diego
Assemblyman Jeff Miller, R-Corona
Assemblyman Jim Nielsen, R-Gerber

Pretty bad.

That was the budgetary assessment offered by four of California's fiscal gurus Monday - Mac Taylor, Bill Lockyer, Mike Genest and John Chiang - in the rare joint convention of the state Legislature.

"As unpalatable as tax increases or further program cuts may appear, neither is as toxic to the state's fiscal health as doing nothing," said state Controller Chiang. "Failure to act threatens our ability to respond to natural disasters, our ability to provide life preserving care to the elderly and the ill, and our ability to protect our communities from crime."

"Failure," he added, "is not an option here."

Not with that attitude.

"Some of my colleagues on both sides of the aisle are in denial," said Assembly Speaker Karen Bass before the gathering. "The goal of the day is to make sure there is no excuse for the denial moving forward."

Bass said Democrats, whose 50-50 split of taxes and cuts worth $17 billion was thumbed down last month, hoped to come back with an even bigger package later this month, somewhere in the neighborhood of $24 to $25 billion in budget savings.

The state faces an estimated $27.8 billion budget deficit over the next 18 months.

All the speakers emphasized that passing a package soon was critical.

State Treasurer Bill Lockyer said that in less than two weeks he will stop all infrastructure spending.

"In nine days ... we'll be forced to start shutting down planned expenditures for highways, schools, flood control and other things," he said.

So in what could be the last ribbon-cutting ceremony for a while, Gov. Arnold Schwarzenegger will officially light the Capitol Christmas tree tonight.

Providing the music? Rick Springfield of "Jessie's Girl" fame.

Photo: State Treasurer Bill Lockyer addressing the rare joint session of the Assembly and Senate on Monday Dec. 8, 2008. Credit: Brian Baer/Sacramento Bee

Assembly Speaker Karen Bass, D-Los Angeles, said Monday that Gerald Parsky, a longtime Republican political figure, will chair the tax commission she and Gov. Arnold Schwarzenegger formed in late October.

The commission, according to the executive order Schwarzenegger signed, will release a report on how to modernize California's tax structure on April 15, 2009.

The commission has gotten off to a slow start, however.

On October 30, Schwarzenegger said, "Speaker Bass and the Senate President pro Tem and I will name 12 commission members in time for them to begin their work in November."

But as of yet no one has been officially named to the commission. Bass said the names of the 12 commissioners would be released this Thursday.

That will give the members just about five months to design the overhaul of the state's tax structure.

My colleagues Dan Walters and Jon Ortiz are blogging the blow-by-blow of today's budget briefing for the full Legislature. Find the blog here. "Some of my colleagues on both sides of the aisle are in denial," said Assembly Speaker Karen Bass before the meeting began, referring to the breadth and depth of the state's budget problems. "The goal of the day is to make sure there is no excuse for the denial moving forward."

Jerry Brown's former chief of staff is out shaking the money tree for his old boss.

Of course, that's only of note because Brown's ex-chief of staff also happens to be an ex-governor: Gray Davis.

Davis sent a note last week inviting donors to a reception he is hosting at his home for Brown this Tuesday.

"Jerry has done a great job as California's attorney general," Davis wrote to invitees. "Please join us in supporting his re-election campaign."

Donors are asked to give from $2,000 to the legal maximum of $12,000.

Officially, the money raised must go toward Brown's reelection campaign for attorney general.

But Brown, who served two terms as governor before term limits were in place, is making noise about running for the state's top office again. And any funds he raises for his reelection campaign can easily be transferred to a run for governor. Brown has already stripped his 2010 campaign account title of any reference to attorney general. It's simply "Jerry Brown 2010."

Former Assembly Speaker and San Francisco Mayor Willie Brown reported this encounter with Brown over the weekend:

Finally I asked Jerry, "Are you really deadly serious about running for governor?"

"I am, I am," he said.

So is Davis signaling what side he intends to take in the 2010 gubernatorial primary? Not clear, as Davis did not return a call for comment.

Gray and Sharon Davis are co-hosting the reception with three other Southern Californians: Dan Weinstein, the co-founder of Wetherly Capital Group whom Davis appointed to the California State University Board of Trustees, William Chadwick, the multimillionaire managing director of Chadwick Saylor & Co who put his Malibu home up for sale for $65 million earlier this year, and William McMorrow, the CEO of the real estate investment firm Kennedy Wilson.
Photo: California's current and past governors gathered in 2004 to oppose Proposition 66, a Three Strikes reform measure. From left to right: Pete Wilson, Jerry Brown, Arnold Schwarzenegger and Gray Davis. Credit: AP Photo/ Damian Dovarganes

The media-hungry group Citizens for Responsibility and Ethics in Washington has released a new list of lacking members of Congress.

This 2008 list is packaged as the "Most Embarrassing Re-Elected Members of Congress."

Nine members are on the list; four (that's 44 percent) are from California.

The Californians are: Reps. Ken Calvert (R), Jerry Lewis (R), Gary Miller (R), and Laura Richardson (D).

Here's the full list:

Rep. Michele Bachmann (R-MN)
Rep. Vern Buchanan (R-FL)
Rep. Ken Calvert (R-CA)
Rep. Jerry Lewis (R-CA)
Sen. Mitch McConnell (R-KY)
Rep. Gary Miller (R-CA)
Rep. John Murtha (D-PA)
Rep. Laura Richardson (D-CA)
Rep. Don Young (R-AK)

CREW explains itself here.

Here is Bee cartoonist Rex Babin's latest cartoon, from Sunday's California Forum section. It is based on this story from last week's Bee.

The California Progress Report, which publishes numerous left-of-center articles daily, has a new editor: David Greenwald.

The founder of the site, Frank Russo, is now the chief of staff to freshman Assemblywoman Nancy Skinner, D-Berkeley.

Republican Rep. Darrell Issa, whose personal funds helped qualify the 2003 recall for the ballot, is in line to become the ranking Republican on the House Oversight and Government Reform Committee.

"Right now I have the opportunity to attack the problems of government that my constituents are most concerned about. This is my opportunity to do a lot more about fixing government," Issa tells the North County TImes.

Former state Sen. Jim Battin, R-Palm Desert, sent out this holiday e-card, courtesy of JibJab.

"Here is how NOT to solve the budget crisis," Battin warns.

The faux-video features Gov. Arnold Schwarzenegger, chief of staff Susan Kennedy, Senate President Pro Tem Darrell Steinberg, Senate GOP leader Dave Cogdill and Assembly GOP leader Mike Villines in a snowball fight.

Speaking of Villines, the Clovis GOPer has filed paperwork to extend his stay in the Capitol -- by running for state Senate in 2014.

Villines will be termed out of the Assembly in 2010, but the Senate seat he wants to seek -- currently occupied by Cogdill -- won't be free until four years from then.

So why file the paperwork now (six years in advance)? The move could be in part to continue fundraising. If a politician does not have an open account for a future office, under California law, they can't continue to raise money for themselves.

Finally, the cast is in for Tuesday's Christmas tree lighting ceremony outside the state Capitol. Mario Lopez, he of Extra and Saved by the Bell fame, is the emcee.

Rick Springfield, he of "Jessie's Girl" fame, will be performing.

"California's the entertainment capital of the nation, if not the world. And we get... Rick Springfield" is Josh Richman at the Oakland Tribune's take on the booking. "Just another sign of dysfunction in Sacramento, I guess. (Sorry, Rick.)"

The entire state Legislature will meet today in a "joint convention" to get even more dire news about California's woeful financial situation.

Treasurer Bill Lockyer, for instance, will tell lawmakers that unless a budget is adopted the state will stop financing construction projects for roads and other infrastructure. That's not just bond sales for future projects -- those will stop, too. It means projects that are underway will no longer be able to draw down cash from the treasurer's pooled account as the state's general fund moves toward insolvency. Thousands of jobs could be lost.

"No budget, no state financing," said Lockyer spokesman Tom Dresslar. "The spigot is completely off. We're talking about a complete shut-off of state infrastructure financing unless we get a budget fast."

Lockyer, Controller John Chiang, Department of Finance Director Mike Genest and Legislative Analyst Mac Taylor will describe the consequences of failing to reach a budget compromise.

The state faces an estimated $27.8 billion deficit over the next year and a half.

Barring moves by the Legislature, Gov. Arnold Schwarzenegger said in a letter to state lawmakers last week that, "The state will experience a cash-flow crisis beginning in February or March."

After the lame-duck Legislature failed to reach a budget accord, Schwarzenegger called for a special session of the new Legislature to address the state's "fiscal emergency." The new members -- including 25 "true freshmen" -- were sworn in only a week ago.

Outside of the annual State of the State address or speeches by visiting dignitaries (such as the presidents of Mexico and Spain, in 2003 and 2001, respectively) - joint sessions are rare for California.

"There have been presentations by heads of state and distinguished policy experts but in those instances they were sharing their expertise with the Legislature," said Dotson Wilson, the Assembly's chief clerk and parliamentarian.

"This particular joint convention is much more interactive," Wilson added.

The format of the joint convention -- which is set to begin at 3 p.m. -- allows all 120 lawmakers to ask questions of those testifying before the Legislature.

"All the members are on the floor discussing a policy," said Wilson.

Also, late Friday Senate President Pro Tem Darrell Steinberg named the membership and chairmanships of the upper house's five budget subcommittees. See who they are.

Photo: The Assembly Chambers in Nov. 2008. Credit: Brian Baer/Sacramento Bee.

Senate President Pro Tem Darrell Steinberg named the membership and chairmanships of the upper house's five budget subcommittees late Friday.

UPDATE: Jim Evans from Steinberg's office sent along a note saying these assignments are only for the special session on the budget, not necessarily for the regular 2009-10 session.

They are:

Budget Subcommittee No. 1 on Education
Sen. Gloria Romero, Chair (D)
Sen. President pro Tem Darrell Steinberg (D)
Sen. Majority Leader Dean Florez (D)
Sen. Jenny Oropeza (D)
Sen. Carol Liu (D)
Sen. Mark Wyland (R)
Sen. Abel Maldonado (R)
Sen. Mimi Walters (R)

Budget Subcommittee No. 2 on Resources
Sen. Joe Simitian, Chair (D)
Sen. Alan Lowenthal (D)
Sen. Fran Pavley (D)
Sen. Pat Wiggins (D)
Sen. Minority Leader Dave Cogdill (R)
Sen. Dennis Hollingsworth (R)
Sen. Roy Ashburn (R)

Budget Subcommittee No. 3 on Health and Human Services
Sen. Alex Padilla, Chair (D)
Sen. Mark Leno (D)
Sen. Gilbert Cedillo (D)
Sen. Elaine Alquist (D)
Sen. Leland Yee (D)
Sen. Dave Cox (R)
Sen. Bob Huff (R)
Sen. Sam Aanestad (R)

Budget Subcommittee No. 4 on State Administration, General Government and Corrections
Sen. Mark DeSaulnier, Chair (D)
Sen. Rod Wright (D)
Sen. Gloria Negrete McLeod (D)
Sen. Loni Hancock (D)
Sen. Christine Kehoe (D)
Sen. George Runner (R)
Sen. John Benoit (R)
Sen. Tom Harman (R)

Budget Subcommittee No. 5 on Revenues and the Economy
Sen. Denise Ducheny, Chair (D)
Sen. Lou Correa (D)
Sen. Ron Calderon (D)
Sen. Ellen Corbett (D)
Sen. Lois Wolk (D)
Sen. Robert Dutton (R)
Sen. Jeff Denham (R)
Sen. Tony Strickland (R)

Gov. Arnold Schwarzenegger officially named San Francisco Democrat Carole Migden to a high-paying seat on the state's waste board on Friday.

The job pays $132,178 per year.

The appointment was announced Friday afternoon by the Schwarzenegger administration along with a slew of other, largely unpaid board posts, such as members of the board of directors of the Grand National Rodeo, Horse and Stock Show.

Capitol Alert reported Migden was likely to receive the appointment last week.

Migden, who lost her Senate reelection primary to then-Assemblyman Mark Leno in June, is the third ex-lawmaker to land of the lucrative Integrated Waste Management Board in the last two weeks.

The first was ex-Assemblyman John Laird. Then came former Sen. Sheila Kuehl. All three are Democrats. All three also happened to be members of the LGBT caucus.

Migden is a controversial pick after the series of public missteps that helped lead to her electoral deficit in June.

A couple years back, she pressed the vote button of an Assembly Republican for her own legislation. Earlier this year, she paid a state record $350,000 fine for campaign finance violations. She pleaded no contest to misdemeanor reckless driving after a 30-mile drive in her state-owned SUV ended in a collision.

And in August, Senate officials sent her staff members home after she was heard berating them from the hallway.

Jim Boren of the Fresno Bee editorial board called the Migden pick "the worst appointment of Gov. Arnold Schwarzenegger's political career."

Schwarzenegger's office, in a written statement, said the idea for the appointment was from newly sworn-in Senate President Pro Tem Darrell Steinberg.

"Senator Steinberg recommended Senator Migden to serve on the Integrated Waste Management Board because she has held several elected positions throughout local and state government for nearly 20 years and her background will serve well in this new role to promote zero waste in California in partnership with local governments, industry officials and the public," Schwarzenegger spokesman Rachel Cameron e-mailed in a statement.

Migden began her political career as a San Francisco supervisor before rising to become a state Assemblywoman and then Board of Equalization member and then state senator.

There is a long tradition of legislative leaders and governors appointed ex-lawmakers and close acquaintances to the Integrated Waste Management Board.

Photo: Sen. Carole Migden speaks to a crowd of protesters at rally on the north steps of the California State Capitol in Sacramento on Tuesday June 19, 2007. Credit: Sacramento Bee/ Randall Benton

The Sycuan band of El Cajon sent a letter to Gov. Arnold Schwarzenegger on Thursday announcing the tribe was walking away from an agreement to expand its gambling casino and, in turn, provide millions in revenues to the state.

The San Diego Union-Tribune's James Sweeney has the story:

Two years ago, Schwarzenegger and Sycuan Chairman Tucker posed for photographs after both signed the agreement that promised to be lucrative for the tribe and the state.

Sycuan had agreed to pay much more on its existing slots, roughly 10 percent of net winnings or $20 million a year. It also agreed to pay up to 15 percent on the additional 3,000 slots.

Over the life of the deal, which would have run through 2030, the state would collect an estimated $1.6 billion, Schwarzenegger's administration said. The tribe would have received at least several times that.

But now the tribe says its won't be expanding.

"It is with sincere regret that Sycuan is unable to take advantage of the August, 2006 amended compact between our tribe and the state," Tucker said in the letter.

The deal had authorized an expansion from the tribe's current 2,000 slots to as many as 5,000 machines. The tribe spent $6 million defending its compact in a referendum on the February 2008 ballot.

Sen. Tom Harman, R-Huntington Beach, filed paperwork this week to explore a run for attorney general in 2010.

Incumbent AG Jerry Brown is widely expected to enter the race for governor, leaving the race wide open.

On the Democratic side, San Francisco District Attorney Kamala Harris is exploring a run. And former Assemblyman Joe Canciamilla, D-Pittsburg, has also filed paperwork.

Both Democrats have said they would run only if Brown does not opt to run for reelection.

The 2006 GOP nominee, former Sen. Chuck Poochigian, is the only Republican besides Harman to have an open account for the seat.

A team of top California environmental officials are heading off to Poland this weekend.

Gov. Arnold Schwarzenegger, who has increasingly fashioned himself as a worldwide environmental figure, is dispatching the team to the United Nations conference on climate change.

Schwarzenegger hosted his own, pre-UN climate change conference last month (where President-elect Barack Obama made a surprise video-appearance.)

In any case, Linda Adams, secretary for environmental protection, Mike Chrisman, secretary for resources, Margret Kim, international climate advisor, Tony Brunello, deputy secretary for resources and Anthony Eggert, senior advisor, are off to the week-long UN summit.

Who's not on that list? Mary Nichols, the chair of California's Air Resources Board and a rumored top contender to be Obama's administrator of the Environmental Protection Agency.

As it happens, Nichols met with The Bee's editorial board Thursday, where she was asked about her conversations with Team Obama.

"I'm not talking about that. I've been asked not to talk about it," she said.

Asked not to talk about it? Hmmmm...

Meanwhile, Assemblyman Roger Niello, R-Fair Oaks, is demanding that Nichols push back approval of California's roadmap to reducing its greenhouse gas emissions.

That roadmap, known in Capitol parlance as the "AB 32 scoping plan," was criticized by the nonpartisan Legislative Analyst's Office as "inconsistent and incomplete" in a report requested by Niello and Assembly GOP leader Mike Villines.

AB 32 requires California to limit greenhouse-gas emissions to 1990 levels by 2020, a roughly 20 percent reduction when the law was passed in 2006. The scoping plan is the guideline to achieve the goal.

Niello, who voted against AB 32 in 2006, cited the LAO report in a letter to Nichols on Thursday asking her to reschedule next week's air board meeting, where members are expected to adopt the plan.

The entire Legislature will meet in a joint session Monday in the Assembly chambers to discuss the state's cash situation and overall budget dynamics with state fiscal leaders, according to Jim Evans, spokesman for Senate President Pro Tem Darrell Steinberg.

In a rare Budget 101 session, Treasurer Bill Lockyer, Controller John Chiang, Department of Finance Director Mike Genest and Legislative Analyst Mac Taylor will describe the consequences of delaying a compromise over the budget. They're likely to discuss the possibility of issuing IOUs to state vendors and state workers, as well as layoff scenarios and other consequences.

The meeting is scheduled for 3 p.m., and the Senate will hold its own session at 5 p.m. for house business.

The California Redevelopment Association, an umbrella organization for municipal redevelopment agencies, filed suit today to block a $350 million state raid on local redevelopment funds.

The raid was part of the 2008-09 state budget that Gov. Arnold Schwarzenegger signed in September after a record-long political stalemate. Since then, however, state officials say the budget has developed an $11.2 billion deficit that Schwarzenegger and legislators are attempting, so far without success, to close.

The lawsuit, fled in Sacramento Superior Court, contends that the shift of funds violates a provision of the state constitution that reserves redevelopment funds for investment in designated zones to clean up economic and physical blight.

"While we understand the difficult situation with our state's budget, taking redevelopment funds is unconstitutional, plain and simple," said John Shirey, executive director of the California Redevelopment Association. "We repeatedly warned state lawmakers that raiding redevelopment funds to balance the state's budget violates the Constitution, yet they took these funds anyway."

State officials contend that taking redevelopment funds is fair because they result from property taxes on redeveloped property and are retained by redevelopment agencies rather than shared with schools and other local governments, as are other property taxes. Under another provision of the state constitution, the state is obligated to make up the loss of those property taxes to schools and that amounts to a $2 billion a year drain on the state treasury.

The city of Moreno Valley's redevelopment agency is a co-plaintiff in the suit, alleging that the money it would lose to the state would create a $1 million deficit and thus impact pending improvement projects.

Gov. Arnold Schwarzenegger's legislative secretary, Chris Kahn, plans to leave at the end of the year, according to several sources.

Kahn, 42, joined Schwarzenegger's office after the governor won re-election in 2006. Kahn serves in his current role as Schwarzenegger's main liaison to the Legislature, a crucial role as budget stalemates have become commonplace in recent years.

While Kahn has focused much of his attention on the budget, he also reviewed the flurry of bills the Governor's Office must consider each year. During Kahn's tenure, the governor signed bills requiring restaurant chains to post nutrition data on their menus, banning text messaging while driving and discouraging regions from adding sprawl to their communities.

Schwarzenegger press secretary Aaron McLear said he could not provide details. Kahn was not available for comment.

Kahn will be replaced by chief deputy Michael Prosio, sources said.

The final piece of Assembly Speaker Karen Bass' leadership team was put in place today when freshman Assemblyman Isadore Hall was named the new assistant majority whip.

Earlier today, Capitol Alert reported that Assemblyman Paul Krekorian, a Burbank Democrat in his second term, and freshman Assemblyman John Pérez, a Los Angeles Democrat, had made the list.

The full team:

• Speaker pro Tempore -- Assemblymember Lori Saldaña (D-San Diego)
• Majority Floor Leader -- Assemblymember Alberto Torrico (D-Newark)
• Assistant Majority Floor Leader -- Assemblymember Paul Krekorian (D-Burbank)
• Majority Whip -- Assemblymember Fiona Ma (D-San Francisco)
• Assistant Majority Whip -- Assemblymember Isadore Hall (D-Compton)
• Democratic Caucus Chair -- Assemblymember John Pérez (D-Los Angeles)
• Rules Committee Chair -- Assemblymember Ted Lieu (D-Torrance)

As large as it is, California's projected budget deficit may be only the third worst among the states according to a new survey by the National Conference of State Legislatures.

Arizona, with a projected 24.2 percent deficit next year and New York at 20 percent are deeper in the hole than California at 18 percent, the NCSL survey found. In terms of actual dollars, however, California easily leads the pack. Overall, NCSL says, states face $97 billion in additional budget deficits over the next 18 to 24 months and California, at $28 billion and growing, approaches a third of the total.

"These budget gaps are approaching those seen in the last recession, which were the worst since World War II, and show every sign of growing larger," says William T. Pound, NCSL's executive director. "While the data we collected from state legislative fiscal officers are pretty sobering, our discussions with legislative leaders tell us that they expect the problem to only get worse."

More on the NCSL report is available here.

With Los Angeles Rep. Xavier Becerra being strongly considered as the United State's next trade representative, folks might succeed him in Congress are already lining up.

The Los Angeles Times runs down the list:

Names include Los Angeles County Supervisor Gloria Molina, state Sen. Gil Cedillo and Los Angeles City Council President Eric Garcetti, each of whom represents parts of Becerra's district, which includes the heart of Los Angeles.

Cedillo released a statement Wednesday saying he was " strongly interested in pursuing this opportunity," but wanted to " consult with Congressman Becerra as well as other close friends and advisers, before making a final decision."

The Times could not reach Molina, and Garcetti called it too early to speculate.

UPDATED 5:26 p.m.: A Molina spokeswoman tells the Times, "Supervisor Molina is not going to Congress. She still has a lot to do at the county."

Here's Bee cartoonist Rex Babin's latest work:

President-elect Barack Obama named former Los Angeles Assemblyman Louis Caldera as the director of the White House Military Office earlier this week.

Caldera, a Democrat, previously served in the Clinton administration in multiple roles, including as Secretary of the Army.

"Louis has served his country with distinction in uniform and in government, and his pedigree is second-to-none. I know he'll bring to the White House the same dedication and integrity that have earned him the highest praise in every post, from Secretary of the Army to university president," Obama said in the press release announcing the appointment.

Assemblyman Paul Krekorian, a Burbank Democrat in his second term, has been appointed assistant majority leader of the Assembly, the fourth-ranked post in the house.

Prior to Krekorian, Assemblyman Kevin de León, D-Los Angeles, served as assistant majority leader. De León is now the Appropriations Committee chairman.

Krekorian and Assemblyman Felipe Fuentes had both jockeyed for the chairmanship of the influential Utilities and Commerce Committee. Fuentes is expected to be announced soon as chairman of the panel, while Krekorian landed as assistant majority leader.

Meanwhile, Assemblyman John Pérez, a Los Angeles Democrat who was first sworn into the lower house earlier this week, has landed as the Democratic caucus chair, one of the Assembly's half-dozen leadership positions.

Pérez is a first cousin of Los Angeles Mayor Antonio Villaraigosa and will be the only freshman member of the leadership team, according to the officers posted on the Assembly Web site. (Bass has yet to officially announce Pérez's post.)

Pérez replaces Assemblywoman Noreen Evans as caucus chair. Evans is the new chair of the Assembly Budget Committee.

See past related stories:

Bass taps Mendoza as Housing chair
Bass names Ed, Water and Ag chairs
Bass shuffles more chairs
Bass taps Evans, de León for budget and approps
Torrico is new majority leader
Price to chair GO

Assembly Speaker Karen Bass is rounding out her leadership team. The latest additions: Paul Krekorian and John Pérez.

The Public Policy Institute of California has released a survey of voters looking into why Californians voted for or against Propositions 1A (high speed rail), 4 (abortion notification), 8 (gay marriage) and 11 (redistricting).

Find the full poll results on Capitol Alert's PPIC page.

Most of the results are unsurprising. Evangelical Christians supported Proposition 8 at an 81 percent clip, while voters without a college degree (62 percent) were more likely to vote "yes" than college graduates (43 percent).

One notable number is that a substantially higher percentage of Republicans (77 percent) supported Proposition 8 compared to Proposition 4 (66 percent).

That extra turnout of the GOP base was among the many factors contributing to the measure's success.

Voters have lots of criticism for the initiative process, with 75 percent saying too much money is spent, 63 percent saying ballot wording is confusing and 52 percent saying there are just too many propositions.

But they're satisfied (67 percent) overall with the process.

More importantly, they trust themselves more than their elected officials.

A full 4 percent of respondents said they have a "great deal" of trust and confidence in the state's elected officials.

Did we mention the poll has a margin of error of plus or minus two percentage points?

The Legislature grabbed a 21 percent job approval rating, while Gov. Arnold Schwarzenegger is sitting (at least relatively) pretty at 42 percent.

Other highlights: The economy is the top issue, rated so by 59 percent of respondents. Barack Obama garnered the support of 78 percent of Latinos. And only 56 percent of Democrats opposed Proposition 11.

The Associated Press has a copy of the arrest warrant for Esteban Armando Núñez and three other young men who face murder charges.

From that, the AP recounts the night that a San Diego student was stabbed to death:

After being turned away from a fraternity party near San Diego State University, Esteban Nunez and the others went to a friend's apartment, where they drank beer and rum.

The friend, Briana Perez, described people in her apartment becoming increasingly agitated about being rejected from the party. Some said, "Let's go burn down their house" and "Let's show them how we do it in Sac-Town," according to the warrant.

Perez told police that Nunez and Rafael Garcia did most of the talking. Garcia, Ryan Jett and Leshanor Thomas, all 19, face the same charges as Nunez.

The four left the apartment and later encountered a group of men leaving a fraternity party about 2 a.m. Two of the stabbing victims interviewed in the hospital told police they were challenged to a fight. Their assailants called them "punks" and other names.

"They were walking down the street, there was a verbal exchange. It escalated into a physical altercation and eventually into the stabbing," San Diego Police Capt. Jim Collins said.

A felony complaint filed in San Diego County Superior Court said the defendants used a knife or multiple knives to stab the four men. Luis Santos, a 22-year-old student at San Diego Mesa College, died at the scene. The stab wound "sliced through the bottom of his heart," according to the arrest warrant.

That is followed by more details about how the defendants allegedly tried to hide the knives and destroy other evidence, filing a plastic cup with gasoline at a 7-Eleven to start a fire.

More from the AP:

In the arrest warrant, investigators said the four defendants belonged to a "close-knit group of friends who call themselves 'THC' aka The Hazard Crew."

Thomas said Esteban Nunez told his friends not to worry, according to the arrest warrant: "Nunez said whatever happens, he would take the rap for it" and that "hopefully his dad would take care of it and could get them off on self defense."

Ex-Sen. Tom McClintock had already declared victory as northern California's newest congressman, but Democratic opponent Charlie Brown made it official today with a phone call to the Thousand Oaks Republican.

Brown shared the news in an e-mail to supporters. "So a short time ago, I called Senator Tom McClintock to congratulate him on a hard fought victory, and to wish him well in Congress," he wrote.

To his supporters, Brown said, "I can only offer my deepest gratitude -- for your generosity of time and resources, and your unwavering energy and encouragement. Together, we have transformed the 4th District, and lifted this campaign higher and farther than anyone thought possible."

Peter Hecht has more.

Watch the video, which features everyone from Jack Black (as Jesus) to Allison Janney as a Proposition 8 supporter. Proposition 8, which passed on Nov. 4, banned same-sex marriage in California:

Courtesy of the Associated Press.

Not on the video, but notable is that San Diego Police Capt. Jim Collins said of the stabbing, "There's a possibility it could be gang-related," according to new reports.

After Esteban Armando Núñez was arrested Tuesday night in connection with an Oct. 4 killing, former Assembly Speaker Fabian Núñez released a statement Wednesday calling the situation "a very difficult and painful experience for every family involved."

Here's Núñez's statement in full*:

"This is a very difficult and painful experience for every family involved. Maria and I love our children very much. We are confident our son Esteban will be cleared of the charges he is facing. We will continue to fully cooperate with all law enforcement officials and have faith in our system of justice. We ask that the media respect our family's privacy as the process moves forward."

The Bee's Jim Sanders and Kim Minugh have the latest information on the arrest.

*CORRECTION: We inadvertently left off the last sentence of Núñez's statement in the original post.

Turnout in the Nov. 4 election was the highest since 1972, the Los Angeles Times reports.

That would be more than 60 percent of eligible voters trekking to the polls (or the mailbox, as the case may be). The percentage of registered voters who cast ballots was pegged at 80.6 percent.

A federal judge with sway over the fate of California's prisons said Tuesday he was leaning toward the early release of prisoners to improve medical care. Per the AP:

U.S. District Judge Lawrence Karlton said releasing thousands of inmates before their sentences are up may be the only option unless lawmakers change their minds and approve the construction program.

"Something's better than nothing if you're desperate," he said.

Speaking of judges, California Supreme Court Chief Justice Ron George was recently on jury duty. Per Matier and Ross.

The Chronicle duo also report outgoing Senate leader Don Perata scratched plans for a big going-away bash:

"Upon reflection, it feels inappropriate to host an elaborate celebration when many among us are caught in the vortex of economic and unemployment uncertainty and anxiety," Perata wrote to invitees.

Celebrity and Mormon Donny Osmond weighs in on the gay marriage debate. (Hat tip: Wilshire and Washington)

There are many gay individuals that are members of our church. I know many of them. In fact, some of my best friends are gay. You ask how I react regarding their marriages. Well, I do support our Church leaders who say that we can accept those with gay tendencies in our church as long as they do not act upon their temptations. Everyone has tenancies to succumb to temptation, but we all have the same standard given to us by our Father in Heaven. Whether we may be tempted to be immoral with members of our own sex or of the opposite sex, we are expected to live chaste lives. This is very well explained not only in the Book of Mormon, but in the Bible as well

Bee cartoonist Rex Babin gives his take on Gov. Arnold Schwarzenegger's meeting with President-elect Barack Obama on Tuesday.

And here's an actual photo of the encounter.

Credit: (AP Photo/ Pablo Martinez Monsivais)

Gov. Arnold Schwarzenegger heads to San Diego today to pick up an award from the California State Association of Counties for his support of ballot measures that protect local government and transportation funding.

Better to get the award now. Who knows what friends he'll have left after dealing with the state's 19-month projected shortfall of nearly $28 billion.

Speaking of shortfalls, the California Lottery Commission meets today to discuss, among other things, lottery ticket sales, or lack thereof. Oh, and the commission will be asked to approve a $4.3 million contract with a Sacramento firm to do the final design for a new lottery headquarters.

The annual campaign to provide gifts for military families gets underway, with lawmakers joining state Veterans Affairs Secretary Thomas Johnson at the Capitol.

Finally, the Legislature's lawyers will be sued today by MAPLight.org and the California First Amendment Coalition. They contend the database of bill information held by the Legislative Counsel's Office is a taxpayer-funded public record and should be made available. While the data is available at the leg counsel's website for all to see, MAPLight.org wants to buy the core database.

The non-profit website tries to show the connection between campaign contributions and votes in the Legislature. Having the database maintained by the Legislature would allow researchers to spot trends and do a fuller analysis of votes and legislative actions.

Can't imagine why the Legislature's lawyers would want to prevent that?

Gov. Arnold Schwarzenegger is trying to turn up the budget heat on lawmakers after the lame-duck session failed to produce much beyond a public Capitol squabble.

His Department of Finance estimates that over the next two months, lawmakers will lose $2 billion out of the $9.2 billion in solutions Schwarzenegger proposed in November. The bulk of those losses -- "erosions" in budgetspeak -- will come in January.

Many of Schwarzenegger's proposed taxes were originally slated to start Jan. 1, and four of them are estimated to produce $1.3 billion in January alone. Of those, the 1.5-cent increase in the sales tax would gain the state $900 million next month, according to the Department of Finance.

Under Schwarzenegger's original plan, the state would save an additional $700 million this month and next through spending cuts, according to the Department of Finance. Those include cuts in payments for CalWORKS and SSI/SSP recipients, as well as state employee changes like the furlough plan.

Department of Finance Director Mike Genest sent a letter Monday to legislative leaders saying that Schwarzenegger's solutions are now worth only $7.2 billion if not implemented until February. That means lawmakers and the governor would have to find an additional $2 billion through cuts and tax increases beyond the host of proposals Schwarzenegger suggested.

The governor made brief reference Monday to other possible solutions, such as state employee layoffs, but he does not plan to introduce further ideas until his January budget proposal, according to Finance spokesman H.D. Palmer.

Of course, all of the current discussion assumes an $11.2 billion revenue shortfall in the current fiscal year. Once January rolls around, Schwarzenegger will introduce yet another budget proposal that likely will project an even larger budget gap in an existing $103.4 billion spending plan.

Schwarzenegger aides and Legislative Analyst Mac Taylor last month testified that because the governor's November budget did not account for increases in demand for state services, almost a given in bad economic times, the budget hole likely will grow larger.

On his second day on the job, Senate President Pro Tem Darrell Steinberg announced (almost) a full roster of committee chairmanships in the state Senate.

Most of the picks are as Capitol Alert reported previously:

From Steinberg's office:

• Sen. Christine Kehoe (D-San Diego): Senate Appropriations Committee


• Sen. Ron Calderon (D-Montebello): Senate Banking & Finance Committee


• Sen. Denise Ducheny (D-San Diego): Senate Budget and Fiscal Review Committee


• Sen. Gloria Negrete-McLeod (D-Chino): Senate Business, Professions & Economic Development Committee


• Sen. Gloria Romero (D-East Los Angeles): Senate Education Committee


• Sen. Loni Hancock (D-Berkley): Senate Elections, Reapportionment & Constitutional Amendments Committee


• Sen. Alex Padilla (D-San Fernando Valley): Senate Energy, Utilities and Communications Committee


• Sen. Joe Simitian (D-Palo Alto): Senate Environmental Quality Committee


• Sen. Roderick Wright (D-Inglewood) Senate Governmental Organization Committee


• Sen. Elaine Alquist (D-Santa Clara) Senate Health Committee


• Sen. Mark Leno (D-San Francisco): Senate Public Safety Committee


• Sen. Ellen Corbett (D-San Leandro): Senate Judiciary Committee


• Sen. Fran Pavley (D-Augora Hills) Senate Natural Resources & Water Committee


• Sen. Alan Lowenthal (D-Long Beach) Senate Transportation and Housing Committee

There are also some committee chairs we did not previously report.

Sen. Carol Liu, a freshman Democrat from Pasadena, will chair the Human Services Committee, previously chaired by the new Health Committee chair Elaine Alquist. Fellow freshman Sen. Mark DeSaulnier, D-Martinez, will chair the Labor and Industrial Relations Committee.

Sen. Pat Wiggins, D-Santa Rosa, moves from the chairmanship of the Public Employees and Retirement Committee to the Local Government Committee.

Sen. Lou Correa, D-Santa Ana, replaces her as the so-called PERS committee chair,

Sen. Lois Wolk, D-Davis, will chair the Revenue and Taxation Committee.

There are currently 24 Democrats in the caucus (due to former Sen. Mark Ridley-Thomas' recent resignation) and the announced committee chairmanships account for 19 of those members.

Who are the rest?

Well, there's Steinberg (who will chair Rules), Sen. Dean Florez (the new majority leader), Sen. Jenny Oropeza (the new caucus chair), Sen. Gil Cedillo (a member of the Rules Committee) and Sen. Leland Yee (the assistant president pro tem).

Still unannounced? The two GOP-chaired commitees, Agriculture and Veterans Affairs, chaired by Republican Sens. Abel Maldonado and Mark Wyland, respectively.

With lawmakers at an impasse over the state budget, the SEIU State Council, which represents state workers, took it upon itself to propose its own dream plan Tuesday.

And we mean dream in the politest of terms, as in it might happen in a parallel universe where Democrats don't need any Republican votes and federal dollars pour from the sky.

First off, it includes no cuts.

It then raises taxes by $14.2 billion through June 2010. The plan proposes a targeted increase in the state's vehicle-license fee that hits only vehicles worth more than $20,000. It also increases taxes on households making above $250,000 a year, imposes a tax on oil production, increases alcohol taxes and broadens the sales tax to include entertainment.

The SEIU budget finally raises a remaining $15 billion through a federal bailout, including a $10 billion payment in 2009-10.

Republicans have resisted taxes so far, but they've especially rejected targeted taxes that impact the wealthy. Democrats didn't even put those kinds of taxes in their budget bills last week.

And not even Assembly Speaker Karen Bass, who recently wished out loud that California could use federal dollars in lieu of cuts, thinks the state would receive $15 billion from Washington.

SEIU's main point was to argue that the state already cut spending in its September budget relative to the governor's original proposal in January, so that should be counted as a sacrifice already made.

With Assemblywoman Alyson Huber sworn into the lower house on Monday, we can now swear in the Department of Finance's John Ponce as the Capitol Alert elections quiz winner.

It took nearly a month after the election, but Ponce - on the strength of Huber's come-from-behind win and his spot-on prediction for the results of Proposition 4 - pulled through.

Back in mid-November, we outlined how the quiz results hung on the Sieglock-Huber contest.

Ponce will receive $50 in a Starbucks gift card for answering the most questions correctly and getting both tiebreakers.

"I won this because of two women - one is Alyson Huber and other is the reference librarian over at the California state library," said Ponce. "I owe them both a coffee, or a latte or cappuccino."

For the politically inclined, find the quiz - and the answers - after the jump.

I missed this amid the pre-Thanksgiving holiday shuffle: the Los Angeles Area Chamber of Commerce has endorsed raising the Vehicle License Fee to 2 percent, a key revenue Democrats put up for a vote last week before the lame-duck Legislature.

From a Chamber press release:

Acknowledging the scope of California's fiscal crisis, the L.A. Area Chamber encourages a balanced approach to narrowing the deficit incorporating equal spending reductions and revenue increases from sources including a reinstated Vehicle License Fee (VLF). The Chamber opposes any industry-specific tax or fee increases, which single out specific sectors of the economy to address a systematic problem. The Chamber Board of Directors did not indicate support for other tax increases.

Seems worth noting that the business coalition in a town where cars are king has endorsed raising the car tax.

Robert Klein, the chairman of California's stem cell agency, hasn't taken a salary since assuming that post after the passage of Proposition 71 in 2004.

But that could soon change.

The California Stem Cell Report says Klein, is now seeking his salary -- which could make him the state's second highest-paid employee outside the UC system:

The request will come up at next week's meeting in Irvine of the CIRM (California Institute of Regenerative Medicine) board of directors. The agenda only states that the item involves "consideration of compensation of chair of the ICOC(the CIRM board)." No details were offered online. But Don Gibbons, the agency's chief communications officer, confirmed today that it was a salary request but declined to offer a justification for the move.

Klein's salary could be as high as $508,750 (starting salary is $275,000, according to the agency's salary structure). The Stem Cell Report's David Jensen, who has been critical of Klein's role at the stem-cell agency, continues:

At CIRM, the way for Klein's salary request was cleared when Ed Penhoet resigned as vice chairman. He is also a multimillionaire and co-founder of Chiron. Penhoet, who is continuing to sit on the board, was eligible for a salary, which he did not accept. Penhoet's resignation cited time constraints and did not mention the salary issue. But a vice chairman working for free while the chairman takes a handsome salary would create an awkward situation. No successor to Penhoet has been nominated.

Rep. Kevin McCarthy, who is less than three years removed from serving as Assembly Republican leader in California, has been tapped as chief deputy whip for House Republicans in Washington D.C.

McCarthy's appointment by Rep. Eric Cantor, the number two Republican in Congress, cements the Bakersfield Republican's meteoric rise to power in the nation's capital.

Roll Call, the D.C. insider publication, calls McCarthy's appointment "a changing of the guard" within the Republican conference.

McCarthy started his career as an aide to former Rep. Bill Thomas, the Bakersfield Republican who once chaired the influential Ways and Means Committee.

McCarthy is 43 years old.

Photo: Then-Assembly Republican leader Kevin McCarthy, R-Bakersfield, talks to the media in 2005. Credit: Sacramento Bee/ Brian Baer

It's a recurring theme in these darkening fiscal times that boosting government investment in roads and other public works will jump-start the economy, create jobs and ultimately improve tax revenues.

Gov. Arnold Schwarzenegger will make that case today in Philadelphia when he meets with other governors and the incoming federal administration, President-elect Barack Obama and Vice-president-elect Joe Biden.

The National Governors' Association is asking for a variety of aid from the new administration, including the speed up of about $136 billion in federal projects that are in the pipeline.

Closer to home, the Bay Area Council, the Sacramento Council of Governments and other local government groups will discuss the issue at a daylong conference at the Sheraton Grand in Sacramento.

Meanwhile, the Service Employees International Union California Council and health care advocates, among others, will lay out their state budget suggestions at a Capitol news conference.

SEIU released a budget-related TV ad on Monday, featuring President-elect Barack Obama.

Also at the Capitol, newly seated Sen. Mark Leno and his replacement in the Assembly, Tom Ammiano, will discuss legislative resolutions to urge the court to overturn voters' approval of Proposition 8 last month.

Lt. Gov. John Garamendi joins a panel discussion on global warming with the Public Policy Institute of California.

State Superintendent of Public Instruction Jack O'Connell will discuss an increase in the number of students receiving free or reduced-price meals at the state's schools as the economic crisis deepens.

In San Francisco, a three-judge panel could issue a long-awaited decision on whether the state's overcrowded prisons are hindering the delivery of adequate health care to inmates.

Assembly Republican leader Mike Villines named GOP Assemblyman Cameron Smyth as the caucus chair, the No. 2 slot in the GOP hierarchy.

Smyth replaces Bob Huff, who left the Assembly to join the state Senate.

Senate GOP leader Dave Cogdill kept most of his leadership team intact from the last session, making only a single change.

Cogdill replaced termed-out Sen. Jim Battin*, R-Palm Desert , as GOP vice chairman of the Senate Rules Committee with Sen. Sam Aanestad, R-Penn Valley.

Cogdill replaced Sen. Bob Dutton, R-Rancho Cucamonga, as GOP vice chairman of the Senate Rules Committee with Sen. Sam Aanestad, R-Penn Valley.

Sen. Bob Dutton retains his seat on the rules panel and will continue to serve as vice-chair of the Senate Budget Commitee.

*CORRECTION: The original version of this post said Dutton was replaced as vice-chair of the Rules Committee, but that was incorrect. Battin was replaced as vice-chair.

Other GOP senators keeping their posts:

• Sen. George Runner, R-Lancaster, is the caucus chair.


• Sen. Tom Harman, R-Huntington Beach, is the caucus whip.


• Sen. Mark Wyland, R-Del Mar, is assistant leader.

On his first day as Senate pro tem, Sen. Darrell Steinberg reshaped the leadership of the state Senate Monday, confirming several top positions first reported by Capitol Alert.

• Sen. Dean Florez, D-Shafter, is the new Senate majority leader.


• Sen. Jenny Oropeza, D-Long Beach, is the new Democratic caucus chair. Oropeza will also sit on the Senate Rules Committee.


• Sen. Christine Kehoe, D-San Diego, is the new Appropriations Committee chair.


• Sen. Denise Ducheny, D-San Diego, remains the budget chair.


• Sen. Gil Cedillo remains on the Rules Committee.

Daniel Zingale, a senior Gov. Arnold Schwarzenegger aide who works on health care issues and serves as chief of staff to First Lady Maria Shriver, will leave the Governor's Office in January, he said Monday.

Zingale will become a senior vice president for policy and communications for The California Endowment, a leading health care foundation based in Los Angeles. He will remain based in Sacramento, where he will be charged in part with establishing the foundation's presence here.

A Democrat who once worked for Gov. Gray Davis, Zingale became Shriver's chief of staff in 2005 shortly before the special election that year. He also became a senior adviser to Schwarzenegger in 2006, a move that along with the appointment of chief of staff Susan Kennedy was considered part of the governor's shift to the political center.

Zingale emerged as a principal figure in developing Schwarzenegger's universal health care proposal in 2007. That plan failed to win enough legislative support, and lawmakers now are focused on smaller pieces of health care reform, such as ensuring that all children are covered.

Zingale also has worked on key health bills signed by Schwarzenegger to ban trans fats in California restaurants by 2010 and require chain restaurants to post the caloric content of their menu items.

"I had the honor of being able to craft a great framework for reform here in the Governor's Office, and obviously the Endowment is a key player for accomplishing comprehensive reform here in California," Zingale said.

In an inauspicious start to a new two-year legislative session, heavy fog in Sacramento is preventing Gov. Arnold Schwarzenegger from holding a morning press conference at the Capitol to announce new budget special sessions.

The governor's morning commute flight from Santa Monica to Sacramento has been canceled due to low visibility at Sacramento International Airport, according to his office. He's planning to make the budget announcement at 12:30 p.m. in Los Angeles instead.

There are 10 Republicans brand new to the Legislature being sworn in today. That doesn't include former Sen. Jim Nielsen, who served as GOP leader of the upper house in the mid-1980s.

Capitol Alert offers a brief introduction to the GOP freshman class:

AD 3 - Dan Logue, R-Linda

Yuba County supervisor.
Replaces Rick Keene, R-Chico
District: Lassen, Nevada, Plumas, Sierra and Yuba counties, parts of Butte and Placer counties
Main cities: Auburn, Chico, Grass Valley, Loyalton, Marysville, Oroville, Susanville, Truckee

Dan Logue comes to Sacramento via a gig as a Yuba County supervisor. He arrives with a mission not to expand the scope of state government, but to limit it.

In a recent commentary for the FlashReport, Logue argued for "decentralizing" state government.

"Local agencies and taxpayers are losing money to Sacramento bureaucracies, when instead they should have more money returned to them to fund vital services that meet unique local needs," he wrote.

In a questionnaire for the the California Association of Business, P