Capitol Alert

Lest you think that the failure of political leaders to reach an agreement on balancing the budget is so much tears and flapdoodle, state Treasurer Bill Lockyer points out that if the state is forced to issue IOUs and its infrastructure bonds in turn are downgraded by the credit ratings agencies to a BBB-plus level, it could cost California an additional $8 billion in credit costs on its public works bonds.

How much is that? Lockyer says it's:

· More than the total combined amount the state spent on the University of California and California State University System last year.
· 52.5 times the amount spent on state parks in a year.
· More than it would take to give taxpayers a 15 percent cut in personal income taxes.

That's a lot.

If misery loves company, the Golden State should be comforted by the news that at least nine other states are facing a deadline of midnight tonight to have a balanced state budget in place by the start of the fiscal year Wednesday.

According to the National Conference of State Legislatures, 46 of the 50 states start their budget years on July 1. Ten of those 46 had yet to complete work on a balanced budget by yesterday, including Delaware, Illinois, Indiana, Mississippi, North Carolina and Ohio.

Remedies for the ills of not having a budget in place range from the Golden State's plan to pay many of its bills with IOUs to Indiana's plan to shut down non-emergency services.

Oh, and speaking of California, there was no white smoke coming from the Capitol Dome at midday to herald a agreement among legislators and the governor.

Today is the day.

Do lawmakers and Gov. Arnold Schwarzenegger reach a meeting of the minds on the state budget, or do they issue an invitation to Controller John Chiang to issue IOUs for the first time in 17 years?

Both houses likely will be in session all day and into the evening, but look for the real action at the negotiating table in the Governor's Office.

A key issue is $3.3 billion in budget savings that have to be approved by midnight -- in the current fiscal year -- or will be lost forever. Democrats are pushing the cuts to schools and redevelopment agencies to be approved by midnight, but the GOP and the governor want a full package before signing off.

The 1992 version of this melodrama ended badly, with drunken shouting, a fistfight, and a mysteriously stopped clock in the Assembly. Ultimately, the production ran all summer, with IOUs, court fights and rock-bottom performance ratings for politicians of all stripes.

Most other events of the day go hand in hand with the budget, including a meeting of the Citizen's Compensation Commission at 10 a.m. to discuss reductions in elected official's benefits.

At 11 a.m., health care providers and patients gather on the west steps to protest cuts and elimination of Medi-Cal benefits.

At 5:00 p.m., the SEIU will be donning its familiar purple in the heat of the late afternoon to rally against budget cuts at the Capitol.

Aside from the budget mess, the state will hear testimony on regulations to lethal injections. The meeting takes place at 9 a.m. in the Department of Health Services Auditorium.

Fundraising continues as usual.

Rick Keene and Bob Huff hold separate events in downtown Sacramento. Assemblyman Felipe Fuentes

Chances are slim that even the luckiest attendee will pocket enough winnings to make a real impact in the state's fiscal woes.

Two new additions to San Francisco Mayor Gavin Newsom's gubernatorial campaign:

* Ricky Le, political director. Le most recently served as executive director of the California Democratic congressional delegation and was a senior adviser to Rep. Zoe Lofgren (D-San Jose).

* Abbe Ross, chief operating officer. Ross directed operations in multiple states for Hillary Clinton's presidential campaign.

Already on the team:

* Garry South, senior adviser
* Eric Jaye, campaign director
* Nick Clemons, campaign manager
* Paige Barry, finance director
* Benenson Strategy Group, polling

The Service Employees International Union's state council today endorsed LT. Gov. John Garamendi to represent California's 10th District in the U.S. Congress.

The powerful union umbrella group said it's backing Garamendi because he's a "champion for universal health care, higher education, and economic opportunity."

SEIU state council executive director Courtni Pugh cited Garamendi's "lifelong support for working families," displayed when he was first a California legislator (1974-1988), then twice as insurance commissioner and now lieutenant governor.

The 10th District seat will soon be up for grabs in a special election triggered by the appointment of current Rep. Ellen Tauscher, a veteran Democrat, as undersecretary of state for arms control and international security.  The Senate approved Tauscher's appointment last week.

The 10th District district stretches from San Francisco's east bay area to the Sacramento-San Joaquin Delta.

The SEIU says it has more than 700,000 state and local government members across California who work in all 58 counties, including social workers, nurses, classroom aides, security officers, college professors, homecare workers, and janitors.

Gov. Arnold Schwarzenegger reiterated Monday that he will veto any majority-vote budget solution with new taxes and went so far as to call such a maneuver "illegal."

As Democrats in the state Senate pursued a majority-vote budget package Monday morning, the Republican governor held a press conference in his office to say that the plan was dead on arrival.

"What they are working on right now is, I think, all part of the kabuki," Schwarzenegger said. "They are wasting time by going through those drills, trying to pass a simple-majority, illegal tax increase. I will never sign anything like this. I think they know I will never sign those kinds of things. So why waste time and run out of time, and then all of a sudden we have to hand out IOUs?"

The "kabuki," as the governor calls it, happens for a reason. By sending the governor a majority-vote budget package, Democrats want to say that they passed a solution but that Schwarzenegger rejected it. That claim may ring slightly hollow, since a majority-vote plan couldn't take effect for another three months and would not necessarily avoid IOUs, but it's part of the political maneuvering that takes place in the Capitol.

Schwarzenegger emphasized that he wants the Legislature to solve the entire $24 billion budget problem by Tuesday without new taxes and with several reforms, such as eliminating boards and commissions.

Senate President Pro Tem Darrell Steinberg's office responded that lawmakers have approved eliminating state agencies and restructuring certain boards, an efficiency plan different from what the governor proposed but which saves the same amount of money.

Governor Arnold Schwarzenegger made it clear this morning he won't sign a package of taxes and cuts approved by Assembly Democrats last night as a way of balancing the state budget.

"I will veto any majority vote tax increase bill that punishes taxpayers for Sacramento's failure to live within its means," the governor said in a prepared statement. "The Legislature will have a difficult time explaining to Californians why they are running floor drills the day before our budget deadline. We do not have time for any more floor drills or partial solutions. It's time for the Legislature to send me a budget that solves our entire deficit without raising taxes."

It's sort of sun-rises-in-the-east news, since the governor had already said he did not favor further taxes or fees as part of the budget-balancing solution.

But it does blunt the effects of the squeeze play Democratic legislators were attempting. Even as Assembly Speaker Karen Bass, D-L.A., and Senate President Darrell Steinberg, D-Sacramento, were meeting with Schwarzenegger Sunday night, the Assembly was passing a package of bills that made deep cuts in state spending, raised taxes on cigarettes, imposed a new tax on oil production and raised or imposed new fees on property insurance policies, vehicle registration and drivers licenses.

The Senate was set today to take up the bills.

State Insurance Commissioner Steve Poizner has called a news conference in Los Angeles this morning -- and it's not about the budget.

Poizner, a likely 2010 candidate for governor, is taking on Iran.

The GOP hopeful will order insurers in California to disclose investments they may have in foreign companies that do business in the oil and weapons industry with Iran.

Department of Insurance officials suspect the probe eventually will turn up billions of dollars of such indirect investments.

Poizner has no power to make the companies divest, but he can (and will) disseminate the information they provide him. (Perhaps at another news conference....)

Poizner also aims to enforce a new California law that prohibits California-based companies from making direct investments in Iran, one of the countries designated by the U.S. Department of State as a state sponsor of terrorism.

Now, back to the budget.

The Assembly spent Sunday evening voting on a majority vote plan including tax increases.

Besides facing almost certain veto by the governor, the plan -- which couldn't take effect until 90 days after a gubernatorial signature -- would do nothing to head off a warning by state Controller John Chiang that he will be forced to issue IOUS Thursday if a balanced budget is not in place by Wednesday.

Pete Wilson was governor the last time the state issued IOUs, when lawmakers also faced the contentious issue of cutting education before the fiscal year ended at midnight on June 30.

(They didn't. And the state's credit rating went down the tubes.)

Some might argue Wilson's California isn't all that much different from Gov. Arnold Schwarzenegger's.

Tonight, in Santa Monica, Wilson gives his take on the economy and the rise of special interest groups.

He might even disclose what he'd be doing if he were in Schwarzenegger's shoes right now.

The forum -- "Was Pete Wilson Right?" -- is moderated by Joe Mathews of the New America Foundation.

Compiled by Dan Smith and Micaela Massimino

Assemblyman Mike Villines has spent more than $800,000 to promote his candidacy and to discourage would-be challengers in next year's Republican primary for state insurance commissioner.

Villines is not required to formally declare his candidacy until next March, but he said he is very serious about running and recently filed his statement of intent with the secretary of state.

The Clovis lawmaker, who served as Assembly Republican leader for a three-year period that ended last month, hopes to replace another GOP politician in the insurance commissioner's post, Steve Poizner, who is running for governor.

"I believe it's a slate race, so I bought them all," Villines said of his preparation for next year's primary.

The Assembly failed to make demonstrable progress Friday in closing the state's gaping budget deficit, but it did say goodbye to singer Michael Jackson and actress Farrah Fawcett.

With the clock ticking toward a Tuesday deadline to take action so the state can avoid issuing IOUs, Assembly members again failed to approve a bill that would make $11.4 billion in spending cuts across a wide range of state programs. The bill was also defeated on Wednesday.

But before adjourning until Saturday morning, Assembly members stood for a moment of silence to mark the deaths of Jackson and Fawcett on Thursday.

"Many of us grew up with the music of the Jacksons," said Assemblyman Sandre Swanson, D-Oakland. "... I think it's time for us to recognize him as the king of pop in the most positive way we can."

Assemblyman Mike Davis, D-L.A., then rose to ask the house to adjourn in memory of Fawcett.

"I think most of all, for a lot of the men around the world, Farrah Fawcett will be remembered for her work as America's favorite cover girl," Davis said. "There may even be some in the body here who might remember if they go in the garage to get those old posters of Farrah Fawcett, one of America's most beautiful blonds."

The Senate, meanwhile, took up routine confirmation of some gubernatorial appointees. Senate Democrats then went into caucus.

Workers' compensation insurers collected nearly $11 billion in premiums from California employers last year and incurred slightly more than that in payments to injured workers, medical care for job-related maladies and other expenses, the Workers' Compensation Insurance Rating Bureau reported today.

The annual report provides more fodder for several interlocking political issues, including insurers' demands for premium increases in the face of rising costs, controversy over the 2004 overhaul of the system that reduced employers' costs by tightening eligibility for benefits and even Gov. Arnold Schwarzenegger's proposal to sell part of the state-owned State Compensation Insurance Fund, the largest provider of work comp insurance, to cover state budget deficits.

The data released today cover only employers with such insurance and not the large employers who are self-insured. The report said that 58 percent of the insurers' direct expenses, $4.1 billion, went to medical care, with "slip and fall" being the most common injury at 28 percent, followed by back injuries at 21 percent.

The remaining 42 percent ($3 billion) was for direct payments to injured workers and other costs, including $276 million to lawyers who represent workers in seeking compensation. The full report can be found here.

Another day, another session in the quest to fill the state's budget hole before the new fiscal year starts next Wednesday.

Both houses have set floor sessions again -- the Assembly at 9:30 a.m., and the Senate at 10 a.m.

The focus? Preventing IOUs, according to Senate President Pro Tem Darrell Steinberg.

State Controller John Chiang is warning that without a balanced budget by Tuesday, he will start issuing IOUs next Thursday to pay most of the state's bills.

The last time the state used IOUs -- formally called registered warrants -- was in 1992.

Before that, it was during the Great Depression.

The three bills that sailed through the Assembly on Thursday on unusual bipartisan votes, only to be shot down by the Republicans in the Senate, would have freed up between $4 billion and $5 billion in cash.

That's cash that Assembly Budget Chair Noreen Evans says could fend off the need for IOUs through August.

Gov. Arnold Schwarzenegger had included similar proposals in his own budget plans.

But Thursday, he and Republican senators were pretty adamant that they'd rather see the state issue IOUs than agree to what they call a piecemeal approach to closing the deficit.

COMMISSION: Members of Detachment 88, Air Force ROTC, at Sacramento State get commissioned as second lieutenants in the Air Force. The ceremony starts at 10 a.m. on the Capitol's west steps.

SPECIAL OLYMPICS: The flame of hope arrives on the Capitol's north steps at 10:30 a.m. before it's taken to UC Davis for opening ceremonies of the Special Olympics North California summer games.

CARS: The Metropolitan Owners Club of North America displays 40 of the diminutive Metropolitan cars on the west side of the Capitol building at 3 p.m.

Don't these people know that the primary is almost a year away?

Former Republican Senate leader Jim Brulte, gubernatorial campaign chairman for Steve Poizner, was so inspired by yesterday's Capitol Alert joust with Meg Whitman spokesman Mitch Zak that he fired off a second letter arguing why his Silicon Valley billionaire is way better than theirs.

Brulte pointed to a Rasmussen Survey that said voters most definitely prefer entrepreneurs such as Poizner, founder of a wireless technology firm, over the ilk of corporate CEOs such as Whitman, the former head of eBay.

"Sure enough, while people who start their own businesses (like Steve Poizner) have a +85 favorable rating, corporate CEO's (like Meg Whitman) have a -43 rating," Brulte writes, inserting his own parentheses.

Zak had a ready answer in a phoner: "If you look at eBay and the company that Meg grew from 30 employees to 15,000, Meg made a career of helping people start businesses."

Might as well figure this is going to be a loooong campaign. Eleven months and 14 days to go, and the well-oiled campaigns for the two business titans have barely tapped into their reservoirs of sound-bites -- or their deep pockets of dough.

Sales of existing homes are continuing to surge in California, according to the California Association of Realtors, but since many of them are distressed properties, median prices are continuing to sag.

Home sales in May were 35.2 percent above those of May 2008, CAR reported today, but the median price was 30.4 percent lower. Nevertheless, the median price of $267,570 was 4.2 percent higher than April's median, and the inventory of unsold homes dropped to 4.2 months in May, less than half the rate a year earlier.

"With affordability for first-time buyers at a record high, sales of existing, single-family homes continued to remain above the 500,000 level for the ninth consecutive month," said CAR president James Liptak. "Buyers are beginning to realize that the combination of favorable home prices, historically low mortgage rates, and first-time home buyer tax credits, may not align again for many years.

Closed escrows of existing, single-family detached homes in California totaled 556,590 in May at a seasonally adjusted annualized rate, according to information collected by CAR. Statewide home resale activity increased 35.2 percent from the revised 411,770 sales pace recorded in May 2008. Sales in May 2009 increased 2.9 percent compared with the previous month.

A full, city-by-city rundown on home sales is available here.

The Bay Area Council, a consortium of corporate CEOs that's been promoting the idea of a constitutional convention to fix California's governmental ills, is unhappy about a newspaper article that, it says, implies it's giving up.

The article appeared in Capitol Weekly, a Sacramento newspaper that specializes in political issues, and begins with this paragraph:

"Citing political pressures, the business group pushing the idea of a constitutional convention for the state has begun efforts to hand off that effort to an independent committee."

He article says that the Bay Area Council is convening a panel to formulate details of a constitutional contention in response to complaints from conservative, anti-tax groups that such a convention could undo Proposition 13, the 1978 ballot measure that limits property taxes and requires a two-thirds legislative vote on increasing taxes.

The council's draft language for a 2010 ballot measure to call a constitutional convention specifically says it cannot mess with Proposition 13 but that, Capitol Weekly said, has not mollified those on the right.

Today, the council's chief spokesman, John Grubb, said the article implied that it had stopped work on the convention and "This is absolutely not true and we have requested an immediate correction."

The article doesn't say that the council has halted work on the convention, but Grubb apparently is concerned about its effect on organizational work.

"The Bay Area Council is in the process of creating an open, transparent process to determine what goes into the convention," Grubb said in an email to journalists. "This will involve gathering between 50 and 100 of the state's top political and academic experts to help determine what questions the delegates should answer in a limited constitutional convention. Somehow gathering these experts (rather than the Bay Area Council itself determining what should or shouldn't be in the convention) was interpreted to mean that we were trying to "offload" the whole effort. Wrong.

"Some may wish we would stop, but the members of the Bay Area Council, other organizations that are standing with us and the thousands of Californians directly pushing us on - who are proxies for millions more - do not want us to stop. We won't."

The Capitol Weekly article is available here.

California's highest-income residents are amassing ever-greater shares of personal income while those at the bottom are falling behind when adjustments for inflation are taken into account, according to a new study of state income tax data by the California Budget Project.

The CBP is a think tank in Sacramento that presses for policies that benefit poor and working class Californians and its new study buttresses its contention that current policies favor the rich. It covers trends through 2007, the latest for which data are available, and therefore does not deal with income effects of the current recession.

"One-quarter (25.2 percent) of total AGI went to the wealthiest 1 percent of taxpayers in 2007, nearly twice their share (13.8 percent) in 1993, the earliest year for which data are available. In contrast, taxpayers with incomes in the middle of the distribution had just 10.0 percent of total AGI in 2007, down from 13.0 percent in 1993," the new CPB study concludes.

"This means that the top 1 percent of taxpayers received 25 times their proportionate share of AGI in 2007, while middle-income taxpayers received half of their proportionate share of income. If the share of income going to the wealthiest 1 percent of taxpayers had remained the same since 1993, the bottom 99 percent of taxpayers would have had an additional $123 billion in income in 2007 - equal to $8,388 each."

The distribution of personal income is an important economic index because the deficit-ridden state budget is dependent on personal income taxes for more than half of its support, and the top 1 percent of taxpayers account for half of income tax revenues. Those revenues have dropped sharply in the last two years, largely because of declines in capital gains income by the wealthy.

A commission appointed by Gov. Arnold Schwarzenegger and state legislators will soon deliver a plan for overhauling the state's taxation system, aimed at making it less volatile, and one of its recommendations is likely to be some kind of flat income tax that would reduce reliance on taxes from the wealthy and increase the burden on middle- and lower-income taxpayers.

The full CBP report is available here.

Senate President Pro Tem Darrell Steinberg convenes a 9 a.m. floor session today, vowing to "work every day" to pass a budget by July 1. Steinberg insists he won't bend on protecting in-home care for the elderly, college assistance for young adults and health care for children. And he is hoping he won't look like a pretzel once the deal is done.

Check out the video of his presser after Wednesday's wranglings to find out more on what's next to come in the "serious business" of sorting out California's fiscal mess.

Speaking of health care, the Health Care for America coalition will be holding rallies today outside offices of U.S. Dianne Feinstein in San Francisco, Fresno, San Diego and Los Angeles to demand more strident support from the California senator for President Barack Obama's universal health care efforts.

The coalition includes Health Access California, the Service Employees International Union, the American Federation of State County and Municipal Employees, Associations of Community Organizations for Reform Now (ACORN), the California Partnership and the Children's Defense Fund.

While the budget and health care may dominate the day's attention, the Little Hoover Commission will hold a 9 a.m. hearing in Capitol Room 437 on management and governance of California's water supply.

Maybe it's just a reminder that all those clouds - ominous or otherwise - around the state house these days couldn't exist without water. Hot air alone is not enough.

Although the economy is mired in recession, Californians are continuing to upgrade their access to the Internet, a new study by the Public Policy Institute of California has found.

The PPIC survey found that broadband Internet access increased by 7 percentage points to 62 percent of Californians during the past year and at-home Internet access is up 4 points to 67 percent while overall Internet use rose 6 points and computer ownership by 3 points to 75 percent.

"Californians increasingly see their computers and the Internet as necessities, not luxuries," says Mark Baldassare, PPIC president. "At a time when most economic indicators are going down, these technology indicators are going up."

There are, however, significant differences in Internet access and use along ethnic lines with just over half of Latinos (52 percent) having home computers, in contrast to 89 percent of Asian Americans, 87 percent of whites and 75 percent of African-Americans. And only 39 percent of Latinos have broadband Internet service, far lower than the percentages for other ethnic groups.

The full PPIC survey of computer use is available here.

Just hours after a budget proposal went down in defeat, the Senate Rules Committee met in executive session Wednesday afternoon and approved pay and benefit cuts for Senate staff.

The Senate is trying to cut 10 percent from its $100 million annual operating budget. One of the main ways to do that: chopping 5 percent from salaries of staff earning $50,000 a year or more and cutting health benefits.

A memo is to come with details. No official word released on if the vote was unanimous.

But this much is known:

Number one: The deal includes a one-day furlough per month equaling a 5% reduction for everyone on staff earning over $50,000 per year.

Number two: Expect a hiring freeze effective July 1, 2009, with vacancies to be filled only by transfer of individuals currently on the payroll. Current Senate Fellows will be considered as current staff.

Number three: Staff will see reduced maximum benefits for dental, orthodontics, and vision, and a reduction of Senate payment of staff bar dues from 100 percent to 50 percent.

The furloughs and benefit reductions are expected to save $3.5 million.

Steve Poizner's gubernatorial campaign chairman, former state Senate Republican leader Jim Brulte, is taking a swipe at the idea that Meg Whitman's experience as chief executive officer of eBay qualifies her to be governor of California.

In a letter to legislators backing Poizner, Brulte says of Whitman: "Though she has much to offer, her campaign is once again proving why first time candidate business executives never win."

Brulte adds: "Like Democrat Steve Westly, Meg is running based on her experience at eBay. Voters were unmoved by the millions of dollars Westly spent touting eBay's success (in a 2006 gubernatorial run)...as Republicans will be too. Voters simply don't buy the connection that running an online auction company is the best training ground for our next governor. And never in modern history has there been a worse time to be running on the 'corporate CEO' brand."

But it is not as if Poizner hasn't run on his own corporate brand.

In 2006, he pitched his business acumen to win election as state insurance commissioner, five years after selling his SnapTrak Inc. -- a developer of global positioning technology for cellphones -- for $1 billion.

In the battle of Silicon Valley billionaires, Team Whitman spokesman Mitch Zak responded to Brulte's missive by touting her endorsements and business savvy.

"I think Pete Wilson would disagree with his friend Jim Brulte strongly. So would John McCain. So would Mitt Romney," Zak said. "These folks all know what it takes to be leaders in government and are convinced Meg Whitman would be the best choice. She's helped create millions of jobs and build organizations. If they're interested in a side-by-side, Steve Poizner vs. Meg Whitman, we'll take that discussion every day of the week and twice on Sunday."

Calling a constitutional convention to fix California's dysfunctional state government is an idea that's been picking up steam because of the state's perpetual budget crisis, and now Rudy Giuliani, the former mayor of New York and presidential candidate, is suggesting that his state do the same thing for the same reason.

"New York state government is not working," Giuliani writes in a New York Times article. "This has been true for some time. But the paralysis and confusion that has overtaken the capital demonstrates the need to confront this dysfunction directly and take decisive steps to solve it once and for all. That's why I'm calling on Albany to convene a state constitutional convention."

Although California hasn't had such a convention in 130 years, New York last had one in 1967. Even so, Giuliani says another is needed to reform state government by giving the governor more budget power (Arnold Schwarzenegger could relate to that), enacting campaign finance reform, changing the way legislative districts are drawn and, interestingly, imposing term limits on state legislators, a step that California took 19 years ago.

Giuliani's full article is accessible here.

The Service Employees International Union has just dropped another wad of cash for another television commercial, this time lambasting Gov. Arnold Schwarzenegger for calling for "sacrifice" by cutting social services but refusing to tax cigarettes and oil extraction.

The ad buy, described by spokesman Mike Roth as a "six figure" air time purchase, falls short of the SEIU's recent $1 million commercial blitz to pressure lawmakers and the governor for a budget deal to its liking.

The text of the newest commercial, running today in Sacramento and all other state markets, reads as follows:

"Balancing the state budget requires sacrifice AND common sense. When lawmakers cut health care for kids, the governor called it 'shared sacrifice.' When they slashed aid to college students, and home care for seniors, he called it 'shared sacrifice.' Now they propose taxes on Big Oil and Tobacco and he calls it a deal-breaker. His plan? Even more cuts for children, students, and seniors.Tell the Governor special interests should sacrifice, too. It's common sense."

Antonio Villaraigosa's decision to honor his L.A. mayoral gig and not to run for governor had just given Gavin Newsom a chance to own the stage as the new generation challenger to likely Democratic favorite Jerry Brown.

And yet the San Francisco mayor seemed melancholy when asked at a Tuesday presser in the City about his L.A. colleague.

"I called him yesterday and obviously it was a tough decision for him to make," Newsom said of Villaraigosa, a veteran lawmaker and former Assembly speaker. "...In spite of some of the punditry, Antonio Villaraigosa and I have always gotten along and I admire his stewardship and his commitment. He has been in office for decades and has served, I think, very, very well."

Newsom, who said he was "surprised, but not shocked" by Villaraigosa's announcement demurred on whether he thought he now has a better chance of getting elected governor with the L.A. mayor out of the race.

"People like me should not answer those questions," Newsom said.

If anyone doubted that today's legislative debates on the Democrats' version of the state budget are basically "drills" aimed at staking out public positions, rather than actually doing something, a leaked copy of the Assembly Democrats' "talking points" should put the issue at rest.

Veteran Capitol journalist and blogger Greg Lucas obtained a copy of the points Democrats are supposed to make during the debates, including one in which the legislators are to insist that it's not a drill, but a genuine effort at resolving the political impasse on closing the budget deficit.

Democrats were told by their leaders to praise the plan because it protects the safety net of health and welfare services and schools and calls for "shared pain."

"This is not a drill. This is the deficit fix," says one suggested line that is certain to be parroted. "This is the responsible solution vetted in public with hundreds of hours of public testimony..."

The memo is a peek into the essentially staged nature of supposed debates on legislative floors and is available here.

Enrollment in California's "independent study" high schools has surged by 44 percent in the last eight years, a new study by WestEdt, a San Francisco-based educational research organization, has found.

The state's 231 independent study schools - those in which 75 percent or more of students pursue educations more or less on their own - now handle about 4 percent of California's nearly two million high school students, the Wested researchers found.

"About half of the independent study high schools targeted a specific student population, mainly students at risk of school failure and home study students," EdWest's summary of the study said. "These schools were less likely than other schools to be located in urban areas or to have opened before 2001/02, while more likely to be charter schools or offer instruction below ninth grade."

There are marked differences in ethnic, socioeconomic and gender makeup between students in the independent study schools and those in traditional high schools. Independent study students are 44.4 percent white, for instance, while those at traditional schools are less than a third white. Independent students are also 54.6 percent male and roughly two-thirds less likely to be "socioeconomically disadvantaged" than traditional students, with only a few of them classified as English-learners.

"This report begins to fill a void about what is known of these schools, which have shown a sharp increase in enrollment," Vanessa X. Barrat, the report's lead author and a senior research associate at WestEd. "The study should be useful for educators and policymakers given the interest in public education alternatives to traditional schools to meet wide-ranging student needs, continuing parent demand for choice in their children's education, and NCLB accountability requirements."

The report can be found here.

The Senate and the Assembly are expected to take up the Democrats' package of budget bills today.

The outlook: not too pretty.

Republicans say it's a political drill, and Gov. Arnold Schwarzenegger says he won't sign it.

The word from the governor's press office is that he'll be in "private meetings in Sacramento."

All but one of the Senate committees originally scheduled to convene have put off their meetings until Thursday.

The exception is the Rules Committee, which votes this afternoon on five of the governor's appointees to the Board of Parole Hearings.

Outside the Capitol, the proposed budget revisions also take the stage.

Advocates for seniors protest cuts to Medi-Cal. That's at 9 a.m. on the Capitol's west steps.

Then, members of SEIU Local 99 march from 7th and J streets to rally on the north steps at 10:30 a.m.

FUNDRAISERS: No shortage today, with Assembly members Marty Block, D-San Diego; Joe Coto, D-San Jose; Cathleen Galgiani, D-Livingston; Diane Harkey, R-Dana Point; Alyson Huber, D-El Dorado Hills; Jeff Miller, R-Corona; John A. Pérez, D-Los Angeles; Manuel Pérez, D-Coachella, and Van Tran, R-Garden Grove; and Senate Republican leader Dennis Hollingsworth of Murrieta and Sen. Tony Strickland, R-Moorpark, among those hosting events.

Sen. Patricia Wiggins, D-Santa Rosa, became the first state senator to turn in her state-leased vehicle and gas card last week.

This week Sen. Jeff Denham, R-Merced, decided to turn his official car and gas card, too, staff at the Senate Rules Committee said today.

Interesting twist on Wiggins: According to David Miller, the senator's press secretary, Wiggins liked her 2007 Honda Civic hybrid so much, she bought it back from the dealer who purchased the vehicle from the state after Wiggins gave up her lease.

The Senate Rules Committee reports that the original price for Wiggins' 2007 car was $25,883.85. The committee reports that the the highest dealer bid for the hybrid was $11,000 from Maita Toyota in Sacramento. Sold.

The lowest bid from a party not identified by the committee was $9,800.

Wiggins paid Maita Toyota $12,993 for the car, plus taxes, licensing fees and other transaction costs, Miller said.

The Honda Hybrid had about 60,000 miles on it when Wiggins turned it in.

Miller said his boss will be footing the bill for gas now, and is also taking a 20 percent reduction in her per diem allowance, which is about $35,000 a year for legislators.

Denham communications director Jann Taber said today that Denham turned his car in Monday because he believes "it's the right thing to do." He'll now be driving his personal car between the Capitol and his Atwater home.

California, whose growth has been tied to migration from other states and nations for decades, has evolved into a state that must look inward for future workers and leaders, a new study by the University of Southern California's Population Dynamics Research Group concludes.

Declining in-migration, high birth rates and a strong inclination of those born in the state to remain here are all part of the changing profile, the study says. Only four other states have higher rates of retaining those born in the state, and California's rate, 66.9 percent, is markedly higher than the national rate of 50 percent.

"California is undergoing profound change from a land of migrants to one with a much more settled population," says the demographic study. "A majority of young adults, and soon the middle-aged, are native Californians whose entire lives have been shaped in the state.

"These homegrown citizens are also much more deeply rooted than other residents, and they represent a tremendous resource for California's future. However, the middle-aged voters and leaders of the state may not have fully appreciated the transformation that has occurred; nor have they fully committed to the new future of the state."

"There is no foreseeable wave of migration that is coming from outside California to save us," the analysis continues. "If we fail to invest in the children of California, we will only be shortchanging ourselves."

The study found, as have other analyses, that the severe recession that buffeted California during the early 1990s sent hundreds of thousands of people -- some believe as many as a million -- out of the state seeking work. But since then, the USC researchers found, there's a much larger tendency to stay put. But the study stopped short, because data were lacking, of the effects of the most recent, even more severe recession.

The federal Census Bureau contends that there has been a strong outflow of people from California during the past decade, but the state Department of Finance's demographic unit disputes that contention, and the conflict presumably will be resolved by the 2010 census.

The full USC study is available here.

Battlelines were hardening today over a Democratic plan to bridge a $24 billion budget gap, a package of more than a dozen bills scheduled to be voted upon Wednesday.

Senate President Pro Tem Darrell Steinberg said that Republicans have signaled that they won't support proposed tax increases in the package, including proposals targeting tobacco and oil extraction.

But even without taxes, the Democrats' plan would fill more than $21 billion of the gaping hole that threatens to leave the recession-wracked state unable to pay all its bills next month.

"Why isn't it better to solve $21 billion instead of zero?" said Steinberg, D-Sacramento.

Democrats cannot implement their package without support from Gov. Arnold Schwarzenegger, however, and the governor's spokesman said that any partial or stopgap plan will be rejected.

"Anything less than $24 (billion) doesn't solve the problem," McLear said.

Schwarzenegger also will reject the Democrats' tax increases if they reach his desk, according to McLear.

"Increases in taxes are not an option," he said.

McLear said he expects the Democrats' plan to fall short of the necessary votes for passage Wednesday, prompting more negotiations as the state inches closer to a financial abyss.

Steinberg said that Democrats cannot accept Schwarzenegger's alternative plan, which calls for elimination or deep cuts to services ranging from health insurance for low-income children to financial assistance for college-bound students.

"The price is too high," Steinberg said. "We're not eliminating the safety net for the most vulnerable Californians. It's anathema to everything I believe in and that the members of my caucus believe in."

Republican legislators also threaten to block the Democrats' plan Wednesday.

To take effect immediately, the program cuts proposed in the Democratic package would require at least a handful of GOP votes in each house -- and that support appears increasingly unlikely because many Republicans say the cuts are not deep enough.

Steinberg noted irony in the notion that Republicans, who for years have pushed for smaller government, are threatening to reject a package containing more than $11 billion in program cuts.

"It's a little bit odd," Steinberg said.

California lost 21 percent of its manufacturing jobs during the first seven years of this decade, according to a new study by the Milken Institute, which cited the state's "reputation for an unfriendly business climate, comparatively high tax rates, a restrictive regulatory climate and unsustainable government spending" for the decline.

The report did note that the decline was virtually the same as the national loss of manufacturing jobs during the seven-year period, although it was more than 50 percent higher than the seven states Milken views as being competitive with California for factory investment.

The report compares California's performance and policies to those of seven "peer" states - Arizona, Indiana, Kansas, Minnesota, Oregon, Texas and Washington - chosen for their increasing share of U.S. manufacturing jobs and production, especially in high-tech manufacturing.

The report's preparation was sponsored, in part, by the California Manufacturers and Technology Association, which lobbies for state policies to protect and increase the manufacturing sector, ranging from more vocational education to regulatory reform.

Among the report's recommendations are streamlining regulatory procedures, more coordination among public agencies, private-public partnerships, encouraging students to pursue technical educations, and creating "incubation centers" to encourage manufacturing.
The full report is available here.

At the close of day Wednesday, one more state senator sent in official word that he's ready to take a 5 percent pay cut to do his part for the budget crisis.

That leaves just two senators left who haven't agreed to Senate President Pro Tem Darrell Steinberg's call last week to collegues to take a voluntary reduction.

A week ago, Sen. Sam Aanestad's spokesman said the Grass Valley Republican would take a cut if his caucus agreed to it.

Maybe the caucus agreed.

The state controller's office confirmed receipt Wednesday of Aanestad's request for the 5 percent salary cut "effective immediately."

Aanestad sits on the Senate Rules Committee, which during an executive session Wednesday approved cuts in health benefits and a 5 percent reduction in salary for all Senate staff earning over $50,000 a year.

The senators' pay cuts will kick in July 1.

Those who aren't on record yet requesting the cut are Roy Ashburn, R-Bakersfield, and Roderick Wright, D-Inglewood.

Read the list of the senators who've put in their paperwork for the reduction after the jump:

As lawmakers hold pressers today in anticipation of more budget crunching to resolve California's staggering fiscal deficit, some legislators will be taking time to tell President Barack Obama and Congress what to do on social and public health issues.

The Senate's Veterans Affairs Committee will take up a resolution by Christine Kehoe, D-San Diego to urge the president and Congress to adopt the Military Readiness Enhancement Act of 2009, which would repeal the "Don't Ask, Don't Tell" policy and allow gays to serve openly in the military.

The Assembly Health Committee will hear a resolution by Sandré Swanson, D-Alameda, to call on Obama and Congress to address disparities in treatment of HIV/AIDS in African-American and Latino communities.

On the California front, the Assembly Transportation and Housing Committee will consider a bill by Fiona Ma, D-San Francisco, to clarify the California High-Speed Rail Authority's ability to exercise eminent domain power.

The Senate Human Services Committee will consider a bill by Bonnie Lowenthal, D-Long Beach to allow youths to be eligible for food stamps as they "age out" of foster care and transition to adulthood.

Meanwhile, the Assembly Committee on Jobs and Economic Development will hold a 9 a.m. hearing in Capitol Room 4202 on the state of manufacturing in California and whether the Golden State can regain its competitiveness.

A dustup over some remarks by a Merced County supervisor about air quality may be an opening salvo in the 2010 campaign for lieutenant governor.

The supervisor, Mike Nelson, during a May meeting of the San Joaquin Valley Air Pollution Control District, called for inter-group cooperation on controlling air pollution in the valley, which has some of the state's dirtiest air. Then he said he tends to "tune out" when environmental activists address the board.

"Oftentime when people come up here, I don't think they're telling the truth, so that's it," Nelson said.

His remark offended air quality activists, who launched a campaign to either censure Nelson or force him to resign from the board. State Sen. Dean Florez, D-Shafter, got into the act, sending Nelson a letter saying his remark created an "unwarranted level of hostility."

Nelson apologized last week, but refused to resign. Environmentalists and farm worker groups who called for Nelson's scalp were not mollified and on Monday, Sen. Jeff Denham, R-Merced, interceded on his behalf with a letter to the board praising him as "knowledgeable, accessible and reasonable" and labeling Florez's criticism as "self-serving."

Actually it may be self-serving for both senators. With Lt. Gov. John Garamendi running for Congress, the lieutenant governorship will likely be vacant next year. Florez and Denham are potential, even likely, candidates.

Los Angeles Mayor Antonio Villaraigosa will announce his gubernatorial plans at 1 p.m. today on CNN -- at least that's what Wolf Blitzer and his people think.

CNN's publicity machine asid Villaraigosa will make the call on Blitzer's "The Situation Room."

Villaraigosa's spokesman told the AP that the mayor indeed would appear on the show.

Both the Assembly and the Senate have scheduled floor sessions today.

Word is that legislative leaders expect a vote on budget revision proposals later this week.

Meanwhile, committees in both houses continue to work through the other chamber's bills.

Today, the Senate Committee on Business, Professions and Economic Development takes up Assembly Bill 1116, otherwise known as the Donda West law.

AB 1116, by Assemblywoman Wilmer Amina Carter, D-Rialto, would prohibit elective cosmetic surgery unless a doctor or dentist had cleared the patient for the procedure.

The measure is named for hip-hop artist Kanye West's mother, who died in late 2007 after plastic surgery.

Over in the Assembly, the Natural Resources Committee considers Senate Bill 722, Senate President Pro Tem Darrell Steinberg's measure to establish advertising standards for greenhouse gas emission credits.

Other committees meeting today on the Senate side include Banking, Finance and Insurance, Environmental Quality, and Public Employment and Retirement.

On the Assembly side: Revenue and Taxation, Rules, Transportation, and Utilities and Commerce.

Outside the Capitol, first lady Maria Shriver joins the nation's first lady at Bret Harte Elementary School in San Francisco to help hundreds of volunteers construct what's being billed as "the first fully volunteer-built intergenerational playground in the nation."

Shriver and Michelle Obama are both in the Bay Area to kick off this year's National Conference on Volunteering and Service.

The event lasts through Wednesday.

Three more senators' letters rolled in to the state controller's office Friday requesting self-inflicted salary cuts -- including one from the man who started it all, Senate President Pro Tem Darrell Steinberg.

The Sacramento Democrat asked colleagues last Tuesday to voluntarily slice 5 percent of their salaries as of July 1.

Senators should sacrifice, too, he said, as Californians face deep cuts in services and state employees -- including Senate staff -- have been given or will get their salaries reduced by furloughs.

Also submitting letters via e-mail or fax Friday were Sen. Dean Florez, D-Shafter, and Sen. Gloria Romero, D-Los Angeles.

Any other senators who plan to volunteer must submit their requests to the controller's office by July 22 for the cut to be applied for the pay period that begins July 1. The senators are paid once a month. Of course, sources in the controller's office say, the cut can also be applied retroactively.

State Insurance Commissioner Steve Poizner has bolstered his gubernatorial campaign team by hiring three campaign veterans who worked for GOP presidential candidates John McCain, Mitt Romney and Rudy Giuliani.

Audrey Perry, hired as Poizner's new deputy campaign manager, is a Georgetown University law graduate who served as campaign finance counsel for McCain-Palin 2008 and as deputy counsel for the Romney for president campaign.

Poizner's new gubernatorial campaign policy director Lanhee Chen is a Harvard law graduate who served as the domestic policy director for Romney's White House bid.

New Poizner communications director Jarrod Agen was the California spokesman and western regional communications coordinator for the Giuliani for president campaign.

The three new hires join a Poizner-for-governor team that includes campaign chairman and former state Senate Republican leader Jim Brulte, political strategist Stuart Stevens of The Stevens and Schriefer Group, campaign manager Jim Bognet, finance director Julie Westlake and senior adviser Kevin Spillane.

Gray Davis, the only California governor ever to be successfully recalled from office, wants graduating law students to know that failure doesn't mean the end.

Davis' advice is contained in a commencement speech he delivered last month to the Columbia University Law School, his alma mater, which has just been posted on the Internet.

After recounting his personal and professional career - including a few pats on the back for himself for his gubernatorial accomplishments - Davis gave his account of being recalled in 2003 and replaced by actor Arnold Schwarzenegger, to wit:

"Ultimately, I lost the recall election. Let me say you haven't lived until you've heard Arnold Schwarzenegger say, 'Hasta La Vista, Baby.'

"That election brought a very abrupt end to my 31 years of public service. The next day I told my wife I was disappointed that we didn't get to finish the work that we started, but we had accomplished much, and it was time for us to move on.

"Before I left office, I made sure that my administration fully cooperated with the incoming one, and I have since worked with Governor Schwarzenegger on a number of initiatives that we jointly support.

"Rest assured, all of you will experience failure at some point in your life, deserved or not. I believe I am uniquely qualified to convince you that there is no defeat, no matter how devastating, that you cannot overcome.

"We can't always control what happens to us in life but we can control our response. Do not let a setback define your life -- get off the canvas, hold your head high and move on. You will be surprised how many good things will happen to you if you have the grace to accept what life has dealt you and the courage to continue on."

A video of the commencement, including Davis' speech, is available here.

California's general fund budget is dependent on personal income taxes for about half of its support, which is why it and other states with high dependence are feeling the nation's most severe budget pinches, a new study by the Nelson A. Rockefeller Government Institute reveals.

"The April 15 deadline for personal income tax returns brought very bad news for many states," says the report, called "April Is the Cruelest Month."

Overall, state income tax collections this year are running 27 percent below what they were a year ago, the Rockefeller survey found, although a few states actually reported increases.

California's income tax revenue decline, 33.8 percent, is the fourth highest in the nation but the other states reporting higher percentages - Arizona, South Carolina and Michigan - are much less dependent on income taxes. In Arizona, for instance, just a quarter of its general fund revenues come from the income tax.

When those two numbers are combined, the decline in income tax revenues means an overall revenue drop of 16 percent in California, one of the highest numbers in the nation. New York and Massachusetts are faring worse than California, as is Oregon, which has no sales tax and is dependent on income taxes for a whopping 68.5 percent of its revenues.

The full Rockefeller report is available here.

Moody's Investor Service, following on the heels of Standard & Poor's, placed California on a credit watch list today, citing the state's chronic budget deficits and a "continued political stalemate" over closing them.

"Although the executive branch has proposed a package of budgetary and cash measures, thus far no meaningful solutions have come out of the Legislature," Moody's said. It listed the state's fiscal problems as continued deterioration in the state's economy - a concern underscored by today's announcement that California's unemployment rate reached a record 11.5 percent in May - and voters' rejection of several budget-related ballot measures in May that limit alternatives for closing the deficit, currently estimated at more than $20 billion for the 2009-10 fiscal year.

"If the Legislature does not take action quickly, the state's cash situation will deteriorate to the point where the controller will have to delay most non-priority payments in July. Lack of action could result in a multi-notch downgrade," Moody's said. "If the Legislature does take action, we will assess the likely impact of those actions: whether they improve liquidity, whether they improve budgetary balance, whether they provide long-term solutions or quick fixes, and whether we believe the solutions to be viable, to determine whether the actions taken leave the state in a position consistent with the current rating level."

California already has the lowest credit rating of any state.

Ah, the lure of Los Angeles.

Assemblymen Jim Beall, Charles Calderon and Kevin de León head to the south state for a news conference this morning on the effects of the proposal to eliminate Proposition 36 drug and alcohol treatment programs.

That's at the Los Angeles County/USC Medical Center.

Immediately after, the Assembly Select Committee on Alcohol and Drug Abuse, which Beall chairs, holds an informational hearing on "the human and financial cost of alcohol on society."

State Superintendent of Public Instruction Jack O'Connell also heads to L.A., where he joins educators to highlight the potential effects of budget cuts on summer school.

Then O'Connell addresses members of the Los Angeles City Council on the state's dropout and graduation rates.

Here in Sacramento, however, lies the enduring romance of the Pony Express.

Riders delivered the mail from St. Joseph, Mo., to our fair capital from April 1860 until October 1861. Then newfangled technology known as the telegraph put it out of business.

Back on June 9, modern-day aficionados started a commemorative run out of Missouri.

The last rider is scheduled to gallop into Pony Express Plaza at 2nd and J streets this morning.

For readers who are tempted to romanticize state politics back in those days, we leave you with the story of Milton Latham.

Governor in early 1860, Latham promised in his inaugural address to tackle the state debt. It was close to an eye-popping $3.9 million. Million with an M.

Then Latham persuaded the Legislature to appoint him to a vacant U.S. Senate seat. The senator, you see, had died in a duel.

All in all, Latham was governor for five days. It's still the record.

And the next governor inherited the state debt.

FUNDRAISERS: Events today include Ted Gaines for Assembly 2010 (all-day Golf Classic at Catta Verdera Country Club, Lincoln); and John Garamendi Congressional District 10 Exploratory Fund (breakfast at Orchard Gables, Grand Island, Walnut Grove). Because of an error in a compiled list furnished to Capitol Alert, a previous version listed a noon lunch at Spataro for Nathan Fletcher.

STATE PARKS: State parks supporters protest proposed budget cuts Saturday at Sutter's Fort, 2701 L St., Sacramento, starting at 10 a.m. Other park protests this weekend are listed here.

PARADE: Participants in the Sacramento Pride Parade rally at 9:30 a.m. Saturday on the Capitol's west steps, then parade to Southside Park at 6th and T streets to join an all-day festival.

The California Republican Party seemed to hit political paydirt in a YouTube ad that pilloried the Service Employees International Union for "bullying state leaders in the budget process."

The ad featured footage of an angry woman telling lawmakers that union members would work to defeat lawmakers who didn't vote their way.

It turns out that the woman portrayed as an SEIU union leader in the commercial is a home health care worker from Fresno named Lisa Brown, who works for the state by caring for her son who has Down syndrome.

Now Brown is calling on Republicans to pull the ad and "apologize for its content."

"I am the mother and care provider for a sweet young man with developmental disabilities who doesn't comprehend the implications of budget cuts on the table in Sacramento," Brown said a letter to the state Republican Party.

Brown, who is an SEIU member but not a union official, said: "Your attempt to label me a 'union bully' would be hilarious if it weren't so dangerous to people that I love.'"

The GOP ran the video to counter a $1 million SEIU advertising blitz featuring a television commercial that urges lawmakers to consider taxes on oil extraction, cigarettes and alcohol to avoid social services cuts.

In the selected clip in the GOP ad, Brown hardly treads easily on lawmakers:

"We helped to get you into office, and we got a good memory," she says angrily at a legislative budget hearing. "And come November, if you don't back our program, we'll help to get you out of office."

Brown said in her letter that she appeared at the hearing "to speak from my heart and in my own words" on behalf of services for the disabled.

But California Republican Party spokesman Kevin Roberts said the ad succinctly portrayed SEIU political threats against elected officials and will continue to run.

"I'd say the clip speaks for itself. It's an open threat in a public hearing that many Californians are appalled to see," he said.

Two more senators' letters requesting 5 percent pay cuts as of July 1 have arrived at the State Controller's Office today.

The letters were from Carol Liu, D-La Cañada-Flintridge and John Benoit, R-Palm Desert.

A third senator, Jeff Denham, R-Merced, had declined a 2.75 percent pay raise back in December 2007. Denham sent a letter Thursday asking that his salary be set at $110,397, which is the same as taking a 5 percent pay cut from the $116,209 most senators get paid.

Official letters are starting to roll in -- two so far -- from state senators answering the call to sacrifice during a time of fiscal crisis and volunteer for a 5 percent pay cut.

As of this afternoon, the State Controller's Office, which issues legislators' paychecks, reported receiving letters from two senators: Ellen Corbett, D-San Leandro, and Patricia Wiggins, D-Santa Rosa.

Most senators receive a salary of $116,208 a year.

Wiggins actually sent her letter last week, an aide said. That was before Senate President Pro Tem Darrell Steinberg, D-Sacramento, sent out a letter Tuesday afternoon urging colleagues to step out and take a cut as of July 1.

Steinberg and Sen. Lois Wolk, D-Davis, say they're definitely doing it, although their names are not yet on the controller's official list.

Some senators have already taken a cut or declined to take prior salary increases, controller records show. Back in December 2007, four senators declined to take a 2.75 percent salary increase that kicked in January 2008.

They were Jeff Denham, R-Merced; Christine Kehoe, D-San Diego; Gloria Negrete McLeod, D-Chino; and Mark Wyland, R-Solana Beach.

In February of this year, Sen. Dave Cox, R-Fair Oaks, took a 5 percent pay cut. In May Sen. Lou Correa, D-Santa Ana, went for a 10 percent reduction.

And in June, two senators volunteered for an 18 percent cut: Alan Lowenthal, D-Long Beach, and Abel Maldonado, R-Santa Maria.

There's nothing like massive budget cuts to gore a few state agency oxen -- and sometimes the oxen gore back.

Witness today's news release from the California Statewide Law Enforcement Association (CSLEA), which represents about 7,000 cops of various sorts who work for the state. Among them are officers of the Bureau of Narcotic Enforcement in the state Dept. of Justice. The BNE agents have a sterling national reputation as top law dogs in fighting the illegal drug industry, especially the organized crime element.

But the budget changes approved by the two-house conference committee include a hefty cut in the bureau, which agents say will result in the loss of 70 positions.

To stir up public opinion, the CSLEA and Association of Special Agents - Dept. of Justice say they are planning to run radio and newspaper ads around the state tomorrow. Public support might come in handy, particularly since the headline on their news release isn't likely to make many legislators feel warm and fuzzy about restoring the cuts. It read:

"California Legislature surrendering to drug lords in Mexico"

A day after Senate leader Darrell Steinberg urged colleagues to do their part for the budget crisis - and take a 5 percent pay cut - Capitol Alert looked into what some Sacramento-area lawmakers were planning.

Sen. Lois Wolk, D-Davis, will be taking the 5 percent reduction in her salary. "That's in addition to the $35,000 a year in per diem money she already declines," said Craig Reynolds, Wolk's chief of staff. He said she'll be sending a letter to the State Controller's Office to let those who issue the paychecks know.

Sen. Dave Cox, R-Fair Oaks, already volunteered to take a 5 percent pay cut last February, his aides pointed out.

Sen. Sam Aanestad, R-Penn Valley, won't discuss the idea until the Senate Rules Committee meets next Wednesday. That's when the committee is scheduled to give thumbs up or down to series of ideas for chopping the Senate's own $100 million annual operating costs by 10 percent.

Aanestad spokesman Bill Bird said the senator's impression is that the Rules Committee will take up Steinberg's idea in a package of proposed cuts - even though the Rules Committee doesn't have the power to vote to cut senators' salaries.

After the vote, Bird said, the senator expects the Republican Caucus will take up the matter of the proposed self-inflicted pay cut. "If the caucus supports it, then he'll support it," Bird said.

On Tuesday Steinberg, D-Sacramento, said he's already made up his mind to take the voluntary cut.

The Rules Committee, which he chairs, does have the power to save nearly $4 million out of the Senate's operating costs with a proposal to cut salaries of Senate staff making over $50,000 a year. The plan is cut 5 percent of their salaries with a furlough day and reduce their health benefits.

Who says Californians can't agree on anything?

Almost nine of every 10 registered voters in the state support tax breaks for businesses that provide health insurance for their employees, according to the latest Field Poll.

Requiring health insurance companies to offer coverage to anyone regardless of health conditions also draws approval from 81 percent of those surveyed.

But requiring people to maintain a minimum level of health insurance coverage under threat of fines or penalties? Seven out of 10 respondents turned thumbs down on that idea.

And almost two of every three Californians oppose giving people a fixed amount to buy health insurance on their own instead of getting coverage through work.

Even so, 69 percent of those surveyed supported requiring employers to offer health insurance to workers or pay into a government fund to cover uninsured Americans.

And 74 percent backed expanding Medicare to cover uninsured people ages 55 to 64.

Conducted in conjunction with the California Wellness Foundation, the Field Poll surveyed 1,207 Californians -- all of them registered to vote -- via telephone May 5-24.

Click here for more details on those voters' views on reforming the nation's health care system and other health policy issues.

GOVERNOR: Gov. Arnold Schwarzenegger will be in Fresno this morning delivering a budget update at the Tower Theatre for the Performing Arts.

GOVERNMENT REORGANIZATION: The Senate Labor and Industrial Relations Committee looks at the Unemployment Insurance Appeals Board, the Workers Compensation Appeals Board, Occupational Safety and Health Appeals Board, and the Agricultural Labor Relations Board.

PUBLIC MONEY: The Fair Political Practices Commission considers prohibiting government agencies from paying for mass mailings that take a stand on ballot measures. Also on the agenda: its proposed $5,400 fine on Rosario Marin, former head of the state's consumer services agency, for accepting money to make speeches in violation of the state's Political Reform Act. The meeting starts at 10 a.m. at 428 J St. in Sacramento.

HIGHER EDUCATION: Assemblymen Warren Furutani and Michael Duvall join University of California President Mark Yudof and others to discuss how to close the California workforce's so-called "skills gap." The meeting, sponsored by the Public Policy Institute of California, the California Research Bureau and the William and Flora Hewlett Foundation, starts at 10:30 a.m. at the Sacramento Convention Center.

SPEECH: Republican gubernatorial hopeful Tom Campbell talks to members of the Greater San Jose Hispanic Chamber of Commerce at noon at Maggiano's Restaurant in San Jose.

FUNDRAISER: Tom Berryhill for Assembly 2010 hosts a reception and dinner at 5:30 p.m. at Clayton's Restaurant in Modesto.

First, Attorney General Jerry Brown, who used to be California governor, stridently announced in a fundraising e-mail that California's budget mess is causing him to "think seriously about running for governor again." Translation: You can count on it.

Now, the campaign manager for Mayor Gavin Newsom, who's already declared his candidacy, is seeking to raise fundage by selling "glimmers of hope from San Francisco" as an antidote for "the terrible news from Sacramento."

In a memo called "Why We Organize," Newsom for California director Eric Jaye pitches Newsom's "smart budgeting" as mayor in dealing with San Francisco's own fiscal crisis.

Jaye also sells Newsom's role in helping implement universal health care in San Francisco and links to a Newsom interview on MSNBC.

The MSNBC host charitably bills Newsom's on-going work on the Healthy San Francisco program as a model for Washington.

Newsom, who's trying to become the first San Francisco mayor elected governor of California since James "Sunny Jim" Rolph in 1930, will likely be happy enough just making it to Sacramento.

Orange law professor Ronald D. Rotunda, a Harvard Law School graduate, has been appointed to the state's Fair Political Practices Commission.

Rotunda's appointment to the politcs and money watchdog agency was announced today by state Controller John Chiang and the FPPC.

Rotunda replaces former Commissioner Ray Remy, who was appointed by former Controller Steve Westly. Rotunda serves on the commission until Jan. 31, 2013.

"The FPPC is fortunate to have such a distinguished legal scholar join the Commission," FPPC chairman Ross Johnson said in a statement.

For more on Rotunda's background, click here. 

Rotunda teaches legal ethics and constitutional law at Chapman University in Orange, where he is the Doy and Dee Henley Chair and Distinguished Professor of Jurisprudence.

Note to political wrong-doers: Years ago, before his time in the faculties of several distinguished law schools, including the University of Illinois, Rotunda served as assistant majority counsel for the Watergate Committee.

Yes, that Watergate.

The California Citizens Compensation Commission meeting scheduled for Friday has been postponed until June 30, the Department of Personnel Administration announced this morning.

The panel, which imposed 18 percent pay cuts for lawmakers effective December 2010, is to meet again to consider a reduction in other compensation, such as state-paid cars.

The debate comes as both houses are pondering self-imposed budget cuts. Senate President Pro Tem Darrell Steinberg has asked each senator to voluntarily cut their pay by 5 percent effective July 1.

A special election for the vacant Assembly seat formerly held by Curren Price will be conducted Nov. 3 in Los Angeles County.

Gov. Arnold Schwarzenegger set the date by proclamation Tuesday, about a week after Price, D-Inglewood, was sworn into the Senate to replace Mark Ridley-Thomas, who was elected to the Los Angeles County Board of Supervisors.

A primary election for the Southern California Assembly seat will be held Sept. 1 and candidates from all parties will appear on the same ballot. If none wins more than 50 percent of the vote, top finishers from each party will run off Nov. 3.

Democrats outnumber Republicans by more than four to one in the 51st Assembly District, covering portions of Los Angeles County, including Inglewood, Hawthorne, Gardena, Westchester, Lawndale and West Compton.

Labor activists furious over proposed budget cuts they say will harm California families are taking their fight to the local gas station.

Decrying "catastrophic cuts to education, health care, public safety and other vital services," the California Labor Federation will be pinning blame on....the Chevron Corp.

In protests at Chevron stations in eight California locations, the Labor Fed will lambast corporate tax breaks in state budgeting that it charges are a $2.5 billion giveaway for big oil and big business.

The new union campaign comes on the heels of a $1 million advertising blitz by the Service Employees International Union, suggesting that California tax oil extraction, booze and cigarettes instead of slashing social programs for vulnerable residents.

Today the state Senate Health Committee will take up a bill by two converts to the cause, Sen. Alex Padilla, D-Los Angeles and Senate President Pro Tem Darrell Steinberg. The two lawmakers are proposing a $1.50 tax per pack of smokes. Their Senate Bill 600 would deposit 85 percent of the cigarette money into the state's general budget fund and another 15 percent into a tobacco tax and health protection fund.

Meanwhile, other lawmakers and state schools superintendent Jack O'Connell will take a break from the budget mess for the rare opportunity to give out some money - somebody elses' - to deserving students.

At 11:30 a.m. on the Capitol's north steps and lawn, a political delegation will help Comcast Cable award $174,000 and 15 notebook computers to distinguished high school seniors from 27 counties. In the greeting line will be senators Dave Cogdill, R-Modesto and Bill Berryhill, R-Ceres, and Assembly members Joan Buchanan, D-Alamo, Joe Coto, D-San Jose, Fiona Ma, D-San Francisco, Pedro Nava, D-Santa Barbara, and Sandre Swanson, D-Oakland.

In a more solemn ceremony, Assembly members Paul Fong, D-Cupertino, and Kevin de Leon, will hold a presser in Capitol Room 317 to discuss a resolution to apologize to Chinese residents for persecution that began during the Gold Rush.

In interviews with political scribes ever ready to report on his expected encore bid for governor in 2010, Jerry Brown routinely lets it be known that he just might stick around for another term as attorney general.

But in a recent fundraising letter, Brown treads into perhaps his most serious discussion on returning to Sacramento to take charge once again.

"I like my current job and truly believe we are getting important things done," Brown says in the letter. "Yet, when I see the mess in Sacramento and think about all the people who are suffering as a result, I think seriously about running for governor again. It is rather amazing that the same issues are still front and center: water, energy, prisons, education and, of course, living within our means."

And so Brown seeks donations to "build a movement - of truth, of creativity, of inclusion."

He warns of "well-funded Republicans" (that would mean Silicon Valley billionaires Meg Whitman and Steve Poizner) "spending their own wealth on hundred million dollar plus campaigns" that threaten "a hostile takeover of the airwaves during the next governor's campaign."

He also talks about his former days as governor when "the schools were good" and "the state wasn't broke."

But he demurs on jumping in just yet.

"Before I make a final decision, I would like to know if it's possible to build a large base of supporters from every part of the state and even beyond," Brown writes.

He adds: "Whether I seek re-election as attorney general or the governorship, I intend to do everything I can to turn this state around."

It seems like a pretty safe bet that it won't be as attorney general.

Standard & Poor's Ratimg Services has placed California's credit rating, already the lowest among the states, on a watch list "with negative implications" due to the state's chronic and unresolved budget deficit.

The credit watch notification on general obligation and lease-revenue bonds reflects "our
assessment of the state's projected depletion of cash by the end of July 2009 absent the adoption of a significant revision to the fiscal 2010 budget," S&P said in a statement.

"Although we continue to believe the state retains a fundamental capacity to
meet its debt service, insufficient or untimely adoption of budget reforms serve to increase the risk of missed payments in our view," the notice continued.

The action affects approximately $59 billion of GO debt and $8.1 billion
of appropriation debt. "Both the timing and magnitude of the state's impending liquidity shortfall raise significant credit concerns, in our view, particularly if the state were to begin fiscal 2010 without having meaningful budget revisions in place. We believe that without budget revisions, the state may need to defer (or issue registered warrants in lieu of making) cash payments for certain lower-priority obligations (such as vendors, student aid, and tax refunds) in order to preserve cash for required payments for education and debt service.

"Were the state to do this, or if it were to adopt a budget package that relied on assumptions that we regard as too optimistic or that relied on mechanisms
for bridging the projected shortfall through at least fiscal 2010 that we regard as unreliable, we may consider lower ratings."

S&P's warning was issued as Gov. Arnold Schwarzenegger and legislative leaders enter an intensive phase of negotiations over how to close a 2009-10 budget deficit estimated as high as $24 billion, including the governor's proposed $4.5 billion reserve.

Schwarzenegger has proposed sharp cuts, especially in education and health and welfare programs, while Democratic leaders want to ease the cuts with some new taxes.

The California Republican Party is running a pointed ad on YouTube in a low-budget answer to the Service Employee International Union's $1 million television advertising blitz urging lawmakers to consider new taxes along with spending cuts.

While the SEIU commercial suggestively calls on the Legislature to tax oil extraction, cigarettes and alcohol to avoid slashing vital social programs, the GOP lambastes the union for "bullying state leaders in the budget process."

To view, click here.

The text of the ad reads as follows:

Announcer: "Two million Californians are out of work and state leaders just imposed one of the largest tax increases in history. But the big labor unions want to raise your taxes again to try to protect every penny of state bureaucrats' salaries.
Labor unions are spending millions on ads and are even bullying state leaders in the budget process with blatant threats to protect their bloated contracts."

Video of SEIU speaker addressing legislators: "We helped to get you into office, and we got a good memory. And come November, if you don't back our program, we'll help to get you out of office."

Announcer: "For too long SEIU and their cronies have used intimidation to hijack the budget process. And with the economy in shambles, union bosses are now demanding even higher taxes on hardworking, overtaxed families. Call the Democrat leadership in Sacramento and tell them it's time to stand up to the union bullies."

It figures to be a momentous day - or maybe just another day with no momentum whatsoever - in the quest to cure California's burgeoning $40 billion deficit.

The joint legislative conference committee is due to grapple with reams of paper and proposals on how delicately or sharply to slice the budgetary knife into K-12 schools, higher education, prisons and welfare.

Meanwhile, lawmakers will be struggling over questions about raising revenues - while generally avoiding the 't' word. Democrats have been proposing new taxes on oil extraction and additional taxes on booze and cigarettes. But apparently booze and cigarettes are now off the table. No word on whether they were consumed to dull the stress over the budget mess.

While the Leglislature looks for spending cuts to address the state's money shortage, Assemblyman Sandre Swanson, D-Alameda, will be convening a 10 a.m. press conference in Capitol Room 1190 to sound the alarm over a shortage of doctors in California communities.

Along with United Farm Workers co-founder Delores Huerta, Swanson will be discussing a need for legislation to address physician shortages at nearly 50 rural and inner-city hospitals.

The campaign of Republican gubernatorial candidate Meg Whitman trotted out a new endorsement Monday -- Orange County Rep. John Campbell. That's not exactly news, except for the fact that Campbell previously endorsed another GOP candidate -- Insurance Commissioner Steve Poizner.

Here's what Campbell said in a Whitman press release today:

"Meg Whitman is the best candidate to effectively manage our state, establish fiscal discipline in Sacramento and usher in the pro-growth tax relief our economy desperately needs."

Here's what Campbell said in a Poizner press release on Dec. 19:

"Steve is the right man at the right time for California. As our nation grapples with so many complex and difficult issues, we need leaders like Steve who have the ability to develop innovative solutions."

So what gives?

It seems that Campbell has had a change of heart and now thinks that Whitman is the right woman at the right time.

"Meg Whitman was not in the race when Congressman Campbell endorsed Steve Poizner, and at the time, he had not even met her," explained Campbell's spokesman Brent Hall. "He withdrew his endorsement of Steve Poizner in January and has remained neutral until now."

California's charter schools, reflecting those in other states, have generated mixed academic performance results, according to a major new Stanford University study.

Stanford's Center for Research on Education Outcomes (CREDO) examined academic test scores and other data in 15 states and the District of Columbia, embracing about 70 percent of the nation's charter school students, and found what it called "a wide variance" in achievement.

The detailed supplemental report on California found "mixed results between charter school and traditional public school performance," adding, "Reading gains were significantly higher and math gains significantly lower in charter school students compared to their traditional public school peers.

"African-American students attending charter schools performed significantly better in reading, and Hispanic charter school students performed significantly worse in math. For students that are low income, charter schools had a larger and more positive effect on both reading and math compared to their traditional public school peers.

"English language learner students attending charter schools also had a larger and more positive effect on both reading and math than their counterparts in traditional public schools. Special Education charter school students reported significantly higher gains in math than their traditional public school peers."

The full report on California and other states is available here.

Los Angeles Mayor Antonio Villaraigosa may be unwilling to totally kill off speculation he is going to run for governor. But a vote by the United States Conference of Mayors today suggests that he has other plans.

In the mayors' national convention in Providence, Villaraigosa was elected as the organization's second vice-president for 2009-2010. Under the guidelines of the Conference, he would then become first vice-president in 2010-2011 and president of the organization in 2011-2012.

"Everybody understands that once you get elected, you automatically move up," said Elena Temple, communications director for the U.S. Conference of Mayors.

There may still be time for Villaraigosa to bolt the gig. But some political consultants privately suggest that Villaraigosa has already waited too long to raise enough money to kick off a gubernatorial run. His election by Conference of Mayors will only increase talk that he is not interested in moving up in California.

His new mayoral duties come after a Sacramento television reporter asked Villaraigosa at a Capitol press conference last week whether another dating relationship with a Los Angeles television anchor - though not as a married man this time - could impact any future gubernatorial plans.

"I don't think it is going to have any impact whatsoever," Villaraigosa answered crisply.

Later, in an interview, Villaraigosa said he was too centered on Los Angeles' fiscal crisis and his civic responsibilities to worry about the next political step or even a time frame for making a decision.

"Right now, I'm not focusing on the governor's race whatsoever," he said.

Sooner or later, people may start to believe him.

Republican Assemblyman Steve Knight's district will be targeted first in a new campaign by a coalition of union groups to pressure legislators to raise revenue in balancing the state's budget.

The six-figure campaign of targeted mailings was announced today by the "Fair Budget Coalition," a group of public employee labor unions.

Coalition members include the American Federation of State, County and Municipal Employees, the California Teachers Association, California Federation of Teachers, State Building and Construction Trades, Service Employees International Union California State Council and other groups.

Spokesman Mike Roth said the goal is to stress that Knight, R-Palmdale, and other GOP lawmakers are out of touch with their constituents, who want to see the state's projected shortfall of $24 billion solved through a combination of program cuts and revenue increases.

Knight said he is open-minded on budget issues but does not base his decisions on television ads.

"It's not going to sway me," he said.

The freshman GOP legislator said he does not want to cut money for schools or services to the elderly, disabled or other vulnerable populations. But harming the state's economic engine with tax hikes is not a viable alternative because it would extend the state's recession, he said.

"I don't want to hurt our business community and I don't want to hurt our taxpayers," Knight said. "That's exactly what will happen by (further) taxing them and raising their fees."

Knight won his seat by less than 2 percentage points last November in a district that encompasses portions of Los Angeles and San Bernardino Counties. Republicans outnumber Democrats by slightly more than 1 percentage point.

Knight's district will receive the first two in a series of mailers by the group to "draw attention to the Republican assemblyman's support for budget cuts that harm middle-class families and vulnerable populations," the coalition said in a written statement.

One of the mailers begins with a headline that reads, "Steve Knight's Cuts Are Hurting Californians," and its appeal ends with Knight's photograph, office phone number and a line reading, "Tell Assemblyman Steve Knight that enough is enough."

The coalition objects to the extent of proposed cuts to schools, health care, home care and other services in solving the fiscal emergency that has been exacerbated by a sagging economy and plunging tax revenue.

Roth said the campaign will be expanded to other legislative districts. He declined to identify targeted lawmakers or to elaborate on the cost of the mail appeal, other than to say it totals six figures.

Marty Hittelman, president of the California Federation of Teachers, said that he hopes the campaign will build momentum for a balanced approach that solves the state's fiscal emergency without unduly hurting the needy or damaging schools.

"If we go around the state and put up advertising that asks the public to tell legislators that they need to do the job they were elected to do, which is to provide the services that Californians need, then perhaps we can get some movement in Sacramento," Hittelman said.

Republicans consistently have balked at the notion of tax hikes to bridge the budget gap. Hittelman said that some Democrats may be targeted, too, if they are unwilling to consider revenue generation.

The coalition's campaign is separate from a $1 million television advertising campaign launched last week by Service Employees International Union to encourage adoption of tax hikes in curing the budget shortfall.

Hittelman said the California Federation of Teachers will launch a radio campaign this week as well.

Senate President Pro Tem Darrell Steinberg and Sen. Mark Leno, D-San Francisco, will be taking on all comers tonight in an Internet town hall on the state budget.

Steinberg and Leno, a member of the joint legislative budget conference committee, will answer e-mailed questions in a live webcast from 6 to 7:30 p.m.

Submit questions here both before and during the event.

Watch the webcast here.

Meanwhile, parse out Gov. Arnold Schwarzenegger's comments on the budget crisis, taxes, illegal immigration and other topics, by watching indexed segments of his videotaped interview with The Bee editorial board.

Lawmakers figure to have a pretty restless week as they battle over the budget and the governor's call to eliminate, consolidate or reorganize scores of state boards, departments and agencies.

Today, the Senate Business, Professional and Economy Development Committee looks at reorganization possibilities for everything from the Board of Registered Nursing to the Bureau of Automotive Repair.

The board and agency reduction hearings continue throughout the week.

On Tuesday, the Assembly Public Safety Committee takes up Senate Bill 226 by Sen. Elaine Alquist, which would crack down on identity theft by requiring suspects caught in a particular county to be tried there for all the identities they are accused of stealing around the state.

On Wednesday, the Senate Health Committee considers Senate Bill 600, a plan by Steinberg and Sen. Alex Padilla, D-Los Angeles, to impose additional taxes on cigarettes and tobacco products.

Then on Friday, the California Citizens Compensation Commission will meet to confirm its recent decision to cut salaries of constitutional officers and lawmakers by 18 percent for those who take office or start new terms after December 2010.

A leader in this year's successful ballot fight to ban same-sex marriage in California is planning to run for a Sacramento-area Assembly seat.

Andrew Pugno has filed "intention to run" papers with the secretary of state, targeting the 5th Assembly District seat that will be vacated when Republican Roger Niello is termed out next year.

Pugno, who crafted Proposition 8 and helped qualify it for the ballot, is a Folsom attorney, married with two boys ages 6 and 13. He has created a campaign Web site at www.andypugno.com.

A Republican, Pugno, 36, is seeking the seat of a suburban district that covers swaths of Sacramento and Placer counties, from Folsom to North Highlands to Granite Bay.

"California is on the verge of a complete meltdown if we don't change course," Pugno said. "As a small business owner, I see the way out of the problem is to revitalize business and get employers hiring again, putting people back to work."

Pugno expanded upon that theme in writing a column for a Republican Web site, www.flashreport.org.

"The state cannot continue to increase spending to fund the unproductive portion of our society, while the over-taxed, businesses and entrepreneurs who fuel our state's economy continue to lay off employees and shut their doors," he wrote.

"The Republican Party needs new leaders and new voices to make meaningful policy changes that will fundamentally change the way we run our state. For California, real reform is the only path to a brighter future."

Pugno said his candidacy has nothing to do with controversy over this year's tax-raising budget deal or Niello's decision to support it in return for various provisions meant to restrict state spending and stimulate the economy.

Three other candidates have expressed interest in the 5th District seat by filing papers with the secretary of state. They are Republican Craig De Luz and Democrats Jared Gaynor and Lawrence Miles Jr.

Gov. Arnold Schwarzenegger said Friday that he is willing to abandon his budget-balancing proposal to borrow $2 billion from local government -- if lawmakers can agree on an alternative.

Schwarzenegger addressed the issue during a question-and-answer session that followed an Escondido speech he gave about the urgent need to mend the state's $24 billion budget hole this month.

"By the way, this is not yet a 100 percent thing," Schwarzenegger told a questioner who complained about the proposed raid of property tax revenue from cities, counties and special districts.

"My Republican colleagues have said they don't like that idea of borrowing from local government, and my Democratic friends have also said that they don't like to borrow from local government.

"So if both parties don't like to borrow from local government, of course we won't borrow from local government, that's clear," Schwarzenegger said.

The governor said the state's finance director, Mike Genest, has developed a list of potential new cuts - in areas ranging from foster care to state employee health care - that could negate the need to borrow from local government.

Aaron McLear, Schwarzenegger's spokesman, said the governor never has wanted to borrow from local government but wants to impress upon lawmakers the trade offs necessary to replace that $2 billion.

"What the governor is doing is stepping in, saying, 'If you don't want to do that, then here are the cuts it would take to avoid that,'" McLear said.

"This is really just a part of negotiation," he added. This is not him backing off of anything, or him changing anything. We need to start negotiating."

Chris Reed, blogger and editorial writer at the San Diego Union-Tribune, sat in on Gov. Arnold Schwarzenegger's meeting with the U-T's editorial page this morning and filed this account.

Beyond the budget message, Reed got to ask the governor a burning question:

Finally, after the meeting was over and he was shaking attendees' hands, I got to ask him the question that I once posed to press secretary Aaron McLear, but Aaron considered too stupid to pass along to Arnold.

The question: Do you think in English or German?

Arnold's intriguing answer: When it involves math, he thinks in German. Otherwise, English.

There's a cheap shot to be had here -- no wonder we have budget problems, etc. -- but I will take the high road.

The Schwarzenegger administration this morning defended the state government umbrella agencies targeted for elimination by a two-house budget committee trying to solve the state's fiscal woes.

"We don't think that elimination across the board is the way to go," said Deputy Finance Director Ana Matosantos. "We think in some areas consolidation would make some sense. In other areas we think it would make us less, not more efficient."

Michael Cohen of the Legislative Analyst's Office said the move would likely save about $15 million in the state's deficit ridden General Fund, which is an estimated $24.3 billion out of whack through June 30, 2010.

Last week, the budget committee voted unanimously to dismantle the following eight offices and reassign only necessary positions:

• Health and Human Services
• Labor and Workforce Development
• Resources
• Environmental Protection
• Business, Transportation and Housing
• State and Consumer Services
• Office of Planning and Research
• Office of the Secretary of Education

Gov. Arnold Schwarzenegger today created the California Complete Count Committee to oversee the upcoming federal census in the Golden State and assigned a threatened agency to oversee the work.

Schwarzenegger said the group, to be coordinated by the Governor's Office of Planning and Research, will help ensure that every Californian is counted during the 2010 census, therefore guaranteeing the state gets its fair share of federal dollars over the ensuing decade.

OPR is one of the state agencies a two-house budget committee has recommended for elimination. The governor, at the time, seemed to agree, calling it "a total waste."

To see the list of appointees, read the jump:

Budget season, meet fire season.

In fact, Insurance Commissioner Steve Poizner will "kick off summer fire season," as the news release says, at the Burbank Fire Department this morning.

Joining the gubernatorial hopeful: Chuck Kavitsky, chairman of the Fireman's Fund Insurance Co., who'll be highlighting a recent study -- author unspecified -- that finds that firefighters need more support in light of proposed budget cuts.

Fire season. Here's how the state Department of Forestry and Fire Protection defines it: "That portion of the year, generally six to eight months in the summer and fall in California, declared such by the responsible public agency fire administrator."

Burbank is in Los Angeles County, which is one of CalFire's so-called "contract counties."

But its neighboring CalFire units of San Bernardino, Riverside and San Diego declared ramped-up "summer preparedness" -- in other words, this year's fire season -- almost two months ago.

Gov. Arnold Schwarzenegger also makes his way to the south state, where he'll be delivering a speech in Escondido to "update Californians on the status of the state budget," as the news release says.

Meanwhile, back in Sacramento, the budget conference committee meets.

Thursday, the panel delayed decisions on proposals ranging from offshore oil drilling to wildland fire-protection fees.

So, stay tuned for any more of that support in light of proposed budget cuts.

MEMORIAL SERVICE: The funeral Mass for labor leader Jack Henning starts at 1:30 p.m. at San Francisco's Cathedral of St. Mary.

FUNDRAISERS: Taxpayers for Jim Nielsen 2010, Wilmer Amina Carter Foundation, and Anna Caballero for Senate 2010 host events today. Saturday afternoon, Sen. Abel Maldonado and his wife, Laura, host what they're billing as "an exquisite food and wine luncheon" at Santa Maria's Byron Winery to benefit the Reform for Change Committee.

Saying that borrowing money without a balanced budget in place "would be irresponsible," Gov. Arnold Schwarzenegger revoked a financial mechanism today that he agreed to last year for seeking emergency loans.

In a letter to state Controller John Chiang, the governor said he was rescinding his authorization for a General Cash Revolving Fund, which he had approved in April 2008. The fund is legally necessary to enable the controller to borrow money on the commercial credit market through the issuance of Registered Anticipation Warrants, or RAWS. The warrants usually carry steep interest rates and up-front fees, but would give the state more than a year to repay.

"I have informed legislative leaders that under no circumstances will I agree to issue a RAW to paper over our current budget shortfall," Schwarzenegger said. "This revocation ends any chance that the state could issue a RAW and helps to clarify that our only alternative to running out of cash is to enact the budget solutions needed to restore the 2009-10 budget to balance."

The governor and legislators are wrestling over the best way to close a $24 billion hole in the budget they approved last February for the fiscal year that begins July 1.

Schwarzenegger has proposed a package of about $17 billion in cuts and about $7 billion in accelerated tax collections, borrowing from local governments, selling some state assets and making some accounting maneuvers. Assembly Speaker Karen Bass, D-L.A., has said her caucus wants more revenues raised, although she stopped short of specifically calling for higher taxes. Senate leader Darrell Steinberg, D-Sacramento has suggested restoring some of the cuts by spending down a $4.5 billion reserve the governor wants.

But a spokesman for state Treasurer Bill Lockyer said Lockyer does not favor a reduction of the reserve because it would make it harder for him to borrow money from Wall Street.

"When you start slashing the reserve, you slash our ability to instill confidence in investors that the state will be able to meet its obligations," said Tom Dresslar.

Chiang and Lockyer have warned that if the governor and lawmakers don't have a deal in the next three weeks, they may be unable to borrow enough money in the private markets to ease the cash flow crunch the state normally faces in the first months of a fiscal year. Chiang has estimated that the state's coffers will run out of cash by July 28.

Without the governor's move, officials said it would have been possible, although hugely expensive, for the state to borrow money to see it through the summer while a budget fix was hammered out.

But Schwarzenegger told reporters on Wednesday that there was no good reason to delay making the "hard decisions" on a budget fix.

"It doesn't get any easier in three weeks from now or four weeks from now" he said. "Now is the time to make those kinds of changes, make those kinds of cuts. I will not under any circumstances sign a RAW.

"If anyone comes to me and says 'the budget is not done, we are running out of money,' then, let me tell you, the state will come to a standstill, because I will not sign a RAW just so the Legislature will have additional time to solve the problem."

A consortium of 75 labor organizations, health advocacy associations and other groups sent a letter to legislative leaders this morning demanding that tax breaks given to businesses in February be repealed before other programs are cut from the state budget.

"Fairness dictates that everyone shares in the pain," the letter says. "And that includes some of the world's wealthiest corporations. Before considering additional cuts to programs Californians care so deeply about, we ask that you shut down these corporate tax giveaways."

The "giveaways" were part of an economic stimulus element in the $40 billion budget-balancing package approved by the Legislature and Gov. Arnold Schwarzenegger in February. They included giving tax credits to small businesses that create new full-time jobs in the next two years, and tax breaks to television and film productions made in California and to companies that do business in more than one state.

In the letter, the coalition estimated the tax breaks would cost the state $2.5 billion a year, although other estimates have put the cumulative impact at about $1 billion.

"This is an issue of basic fairness," said California Labor Federation Executive Secretary-Treasurer Art Pulaski. "Not one additional dollar should be taken from education, services for children, seniors and the disabled or public safety until these unnecessary tax giveaways to wealthy corporations are shut down."

The groups signing the letter ranged from Asian Pacific American Legal Center to the Women's Foundation of California.

The rollback demand adds another ingredient to the budget-balancing soup. The governor has proposed to close a $24 billion gap through about $17 billion in program cuts and $7 billion in accelerated tax collections, borrowing from local governments and other one-time maneuvers.

Earlier this week, Senate President Darrell Steinberg, D-Sacramento, suggested drawing down a $4.5 billion emergency reserve the governor has proposed, in lieu of cutting some social service and education aid programs. Wednesday, Assembly Speaker Karen Bass, D-L.A., indicated her caucus would seek as-yet unspecified "revenue increases."

The government reorganization hearings continue, with the Senate Natural Resources and Water Committee scheduled to consider the fates of several entities that fall under the natural resources umbrella.

Listed as coming under scrutiny: the departments of Fish and Game, Forestry and Fire Protection, Water Resources, and Boating and Waterways, as well as the San Francisco Bay Conservation and Development Commission.

The joint legislative budget conference committee is set to meet. Again.

Check The California Channel online for committee schedules, and watch proceedings live via streaming video.

If you've got a hankering to hear Sen. Abel Maldonado discuss last February's budget vote, the Santa Maria Republican will be addressing that very topic in San Jose this afternoon.

His talk, part of the "Uncommon Exchange" series sponsored by Generation Exchange and Silicon Valley's American Leadership Forum, starts at 4 p.m. at the Historic Hoover Theatre.

AWARDS: The Sacramento County Democratic Party hosts its annual Tower Bridge Awards tonight at the Citizen Hotel. The Web site for the event lists state party Chair John Burton, Vice-Chair Alex Rooker and Lt. Gov. John Garamendi as confirmed guests.

FUNDRAISER: Jerry Hill for Assembly 2010 hosts a breakfast at Lucca Restaurant.

Compiled by Micaela Massimino

If there's one thing state Attorney General Jerry Brown apparently can't abide in a drug store, it's expired products.

The AG's office announced today that a settlement reached with CVS Pharmacy (which also applies to Longs Drugs) calls for the stores to provide a $2 coupon -- good for any future purchase -- to any customer who finds a product on the shelves with an expiration date that has come and gone.

The settlement stems from a months-long investigation by Brown's office that found CVS stores in Southern California "had regularly sold expired baby food, baby formula, over-the-counter medications and dairy products to consumers," according to a news release.

The stipulated judgment, reached in San Diego County Superior Court, requires the stores to do better.

California's exports of manufactured and agricultural products are continuing to decline, down by more than 25 percent from last year, according to data released by the U.S. Department of Commerce and analyzed by the University of California's Sacramento center.

Exports during April were $9.25 billion, 25.5 percent below the $12.42 billion in goods shipped abroad in April 2008, marking the sixth consecutive month of export declines.

"Far from revealing any evidence of an impending economic recovery, California's export trade nose-dived in April," Jock O'Connell, the UC Center's international trade and economics adviser, said.

"In April, we plumbed new depths," O'Connell added. "These are the lowest California export numbers for the month of April since 2005."

The decline in exports was reflected in lower traffic through the state's air and sea ports. The number of outbound loaded containers in April was off by 18.3 percent from April 2008 at neighboring Ports of Los Angeles and Long Beach, while the Port of Oakland saw a more modest 4.1 percent drop.

International air freight tonnage was off 22.5 percent at Los Angeles International Airport and 34.4 percent at San Francisco International Airport.

The picture on import traffic was no brighter. The UC Center Sacramento analysis showed that the value of foreign goods entering the United States through California dropped by 28.5 percent in April.

From the inside-baseball department: Assembly Speaker Karen Bass has announced some changes to Assembly standing committees, given that former Assemblyman Curren Price got sworn in as Sen. Curren Price earlier this week.

Governmental Organization Committee
Assemblyman Joe Coto, D-San Jose, has replaced Price, D-Inglewood, as committee chairman, and Assemblyman V. Manuel Pérez, D-Coachella, has been appointed to the committee.

Insurance Committee
Assemblyman Jose Solorio, D-Anaheim, has replaced Coto as chairman.

Public Safety Committee
Assemblyman Juan Arambula, D-Fresno, has replaced Solorio as chairman. In addition, Assemblyman Tom Ammiano, D-San Francisco, has replaced Assemblywoman Nancy Skinner, D-Berkeley, on the committee.

Budget Committee
Ammiano has replaced Arambula on the committee.

Budget Subcommittee No.4 on State Administration
Ammiano has replaced Arambula as subcommittee chairman.

Appropriations Committee
Coto has replaced Price on the committee.

Arts, Entertainment, Sports, Tourism, and Internet Media Committee
Price has been removed from the committee, creating a Democratic vacancy.

Business and Professions Committee
Price has been removed from this committee as well, again creating a Democratic vacancy.

State Controller John Chiang released the state revenue report for May today, and bottom line: Things are getting worse.

Chiang said the revenue projections for May -- made in early May as part of the governor's revised budget proposal -- were off $827 million when the books closed on the month.

Personal income taxes were off $475 million, 23 percent below estimates. Sales taxes (off $109 million, 3.3 percent) and corporate taxes (off $84.4 million, 25.8 percent) also fell below projections.

Year over year, state general fund revenue in May was down 17.7 percent -- $1.14 billion -- from May 2008. One possible bright spot: Corporate tax collections were up over May 2008, but still below estimates in the governor's May revision. The controller's office attributed that uptick in corporate taxes to a new law creating a 20 percent penalty for corporations that didn't pay their full tax liability by May 31. The increase in May represents companies moving to beat the deadline and avoid the penalty.

"Without immediate solutions from the governor and Legislature, we are less than 50 days away from a meltdown of state government," Chiang said in a statement. "A truly balanced budget is the only responsible way out of the worst cash crisis since the Great Depression."

Chiang has said the state will run out of cash in July, projecting a $2.78 billion cash deficit on July 31.

Chiang's full report is available here.

The Daily Show with Jon Stewart took on the California budget crisis this week.

Watch John Hodgman's report here.

Spurred by a suggestion from a Bee reader last Friday, Gov. Arnold Schwarzenegger has added a new feature to his government accountability Web site that allows folks who come across government waste (insert your own "is that redundant?" line here) to report it to the guv.

The feature is called "Waste Watchers," and can be reached by clicking here, or going to the main Web site, here.

Best of all, you can do it anonymously. The guv said he got the idea from someone who posted the suggestion during a meeting Schwarzenegger had with The Bee's editorial board, which was webcast.

"I am committed to making state government more accountable to the people of California," Schwarzenegger said in a news release officially announcing the Web site today. "With this new Waste Watchers feature, I am asking those on the front lines of state government to report any waste they may see. The knowledge of Californians who work in and around state government is a critical component to ensuring that we are operating efficiently and people are getting the most for their tax dollars."

Anyone can use the site, but according to the news release, "the Administration anticipates that state employees, in particular, will have government waste to report and new efficiency measures to recommend."

The California State Council of Service Employees International Union launched a $1 million statewide advertising blitz today with a television commercial calling for new taxes to help balance the state budget.

The commercial -- filled with images of Gov. Arnold Schwarzenegger and potential tax targets, including oil derricks, cigarettes and booze -- can be viewed here.

Here's the text of the ad:

In Sacramento ... a budget crisis. To solve it, we need balance ... cooperation ... common sense.

The politicians propose cuts that hit families ... with no sacrifice from the special interests.

It means a million kids will lose health care. Hundreds of thousands denied college. Seniors forced into nursing homes. All while keeping huge tax breaks for Big Oil. And no tax hikes on tobacco or liquor.

Tell Sacramento to balance spending cuts and taxes. It's just common sense.

Looking for a creative and challenging state job that will have you working in some of the state's most, uh, creative and challenging environments? Looking to meet interesting people? How about making $10,759 a month, plus benefits?

If this sounds like something right up your alley, take a look at the application invite below from the State of California. The state is taking apps for prison warden, a job that requires, among other things, "knowledge of and experience in interfacing multifaceted programs." Having seen the "Shawshank Redemption," "Brubaker" and "The Bird Man of Alcatraz" helpful but not necessary.

Oh, and you have to be at least 21.

Click here for the job posting.

The budget drama takes a lunchtime detour today from the Capitol to the Sheraton Grand Hotel.

Republican Sen. Abel Maldonado and Democratic Sen. Denise Moreno Ducheny are addressing the Sacramento Metro Chamber's annual State Legislative Summit.

The confab of business leaders is discussing economic development, flood protection, water resources and transportation.

Under the dome itself, the budget conference committee meets yet again.

And several Senate committees hold hearings on whether to consolidate or eliminate certain boards, departments and commissions.

Revenue and Taxation, for instance, is set to look at the Franchise Tax Board, the Board of Equalization, the Department of Motor Vehicles and others starting at 1:30 p.m.

Gov. Arnold Schwarzenegger, meanwhile, expands on his green-vehicle theme by showcasing the Peapod, billed as a low-speed, four-passenger neighborhood electric vehicle.

And they do mean low speed. The car tops out at 25 mph.

That's happening at the Capitol's east steps.

A little later at the north steps, activists from Equality California and other organizations are donning red shirts to protest proposed cuts to HIV/AIDS-related health and drug services.

FUNDRAISERS: The money circuit continues with these listings: Jim Nielsen 2010, Tom Berryhill for Assembly, Fiona Ma 2010, Jeff Denham for Lieutenant Governor 2010, Lois Wolk for Senate 2012, Anthony Portantino 2010, Kevin Jeffries for Assembly 2010, Ira Ruskin for Senate 2012, Anthony Adams for Assembly 2010, John A. Pérez for Assembly 2010 and Pedro Nava for Attorney General 2010. If you have to ask, you likely can't afford it.

Lynn Montgomery, a former chief of staff to Lt. Gov. Cruz Bustamante, has been named a commissioner of the state's Fair Political Practices Commission.

FPPC chairman Ross Johnson announced her appointment late Tuesday afternoon.

Attorney General Jerry Brown selected Montgomery, who was a political reform consultant and one-time FPPC media director earlier in her government career.

The part-time position, which does not require Senate confirmation, pays $100 per day plus travel expenses. Montgomery will serve on the five-member commission until 2013.

Montgomery was  the FPPC's media director for a decade before she became director of member services at the Assembly Speaker's Office under four different speakers, including Bustamante, Antonio Villaraigosa, and Willie Brown.

Over at the attorney general's office, they're preparing a title and summary for a proposed initiative that -- who knows? -- might raise an eyebrow or two under the Capitol dome.

The measure, which was submitted by a couple of Lake Arrowhead folks and would need 433,971 signatures from registered voters to make the ballot, would require all legislators to submit to testing on the first day of the legislative session "for illegal use of controlled substances and the habitual use of alcohol."

If a lawmaker tested positive, he or she would be banned from any official acts until he or she had completed a substance abuse treatment program, which the member would have to pay for out of his or her own pocket. If they tested positive a second time, they would forfeit their office.

Marijuana use would be OK if they had a prescription for it.

Neither of the proponents, Dorothy Cummings and Gary Ellis, could be immediately reached for comment.

Those of you who think California's legislative branch is a creaky contraption of cranks and kooks need look no further than Albany, N.Y., to feel better about things.

According to the New York Times, two dissident Democrats in the New York state Senate have formed an alliance with the 30 Republican senators to take over the 62-member house. Some of the juicier elements:

· The Democrats had just assumed control of the house, after 40 years in the political wilderness.

· Demo senators tried to stall the coup by storming from the chamber, turning out the lights as they left.

· Both of the defecting Dems have histories of legal troubles. Reeps called on one of them to resign a few months ago after he was indicted on felony charges of stabbing someone with a broken glass.

· The other wayward Dem was named Senate president. In New York, that means he's next in line to be governor should something untoward happen to the incumbent, David A. Paterson.

Speaking of Paterson, he said at a news conference Monday night that the move was "an outrage" and New York's Capitol had become "a dysfunctional wreck."

Click here for the whole story.

Los Angeles Mayor Antonio Villaraigosa leads a delegation of California mayors to the state Capitol today to meet with Gov. Arnold Schwarzenegger and legislative leaders on the latest budget proposals affecting local governments.

The mayors want to preserve what they consider to be critical city services. The governor has proposed borrowing about $2 billion from local governments and altering funding for police, fire and transportation.

Joining Villaraigosa are San Diego Mayor Jerry Sanders, Santa Ana Mayor Miguel Pulido, Fresno Mayor Ashley Swearengin and Sacramento Mayor Kevin Johnson.

Meanwhile, the budget conference committee continues its work today on proposed health care cuts.

In non-budget news, Swearengin is also scheduled at the Sheraton Grand Hotel at noon, when state leaders honor recipients of this year's James Irvine Foundation leadership awards.

Josefina Alvarado Mena of Oakland, Tim Dang of Los Angeles, Kathryn Icenhower of Los Angeles, Luis Santana of Fresno, Richard Valle of Union City and Jennifer Vanica of San Diego won $125,000 apiece for their work to reduce violence, promote cross-cultural understanding, provide cost-effective social services and increase literacy.

Joining Swearengin in presenting the awards: Controller John Chiang, Treasurer BIll Lockyer, Assemblywoman Julia Brownley, Health and Human Services Secretary Kim Belshé and Business, Transportation and Housing Secretary Dale Bonner.

NEWS CONFERENCE: Senate Republican leader Dennis Hollingsworth and Sen. George Runner join physician Darilyn Falck, the area director for the Christian Medical Association, and others on the Capitol's north steps at 10 a.m. to ask Gov. Arnold Schwarzenegger to oppose an Obama administration proposal to reverse a last-minute Bush administration rule -- often called a medical conscience clause -- granting broad protections to health workers who refuse to take part in abortions or provide other health care that goes against their consciences.

MEETING: The California Postsecondary Education Commission considers two staff reports on access and equality, one on policy recommendations for lesbian, gay, bisexual and transgender students, and the other for students with disabilities. The commission meets at 770 L St., Sacramento, starting at 9 a.m.

FUNDRAISERS: No shortage of events today. Those plying the money circuit include Assembly members Charles Calderon, Wilmer Carter, Bill Emmerson, Dan Logue and Brian Nestande, as well as Sens. Dave Cogdill, Ellen Corbett, Lou Correa, Pat Wiggins and Leland Yee, and Senate President Pro Tem Darrell Steinberg.

The state's political watchdog said Monday it will fine Rosario Marin, former head of the California's consumer services agency, a total of $5,400 for accepting money to make speeches in violation of the state's Political Reform Act.

The state's Fair Political Practices Commission outlined its case against Marin -- who resigned as secretary in March following a story in The Los Angeles Times -- in a commission summary report, which commission members will review at a June 18 meeting.

To read it, click here.

Marin accepted more than $20,000 in speaking fees while serving as secretary of the State and Consumer Services Agency, as well as chairwoman of the Building Standards Commission and the Victim Compensation and Government Claims Board, according to the FPPC.

The Political Reform Act bars political appointees from accepting money for speeches when that line of work is not their predominant income-generating activity.

Marin, also a former U.S. treasurer and the author of "Leading Between Two Worlds," said she believed there was nothing wrong with accepting honoraria for giving talks, including payments from corporate interests her department oversaw.

Marin told the FPPC that she even made her paid speech-making activities known not only to key members of Governor Schwarzenegger administration, but also to no fewer than four department and agency attorneys whose responsibilities included reviewing Marin's annual statements of economic interests on Form 700.

The FPPC says its proposed fine covers three breaches between 2006 and 2008 and reflects the fact that nobody inside the state raised any questions about her accepting more than $10,000 for speeches. Marin made no attempt to hide the payments.

Since resigning, Marin has fully cooperated with the FPPC probe and has sought a speedy resolution of the case, the FPPC added.

Today's "Recessionary Silver Lining" comes from David Crane, who is Gov. Arnold Schwarzenegger's special adviser for advice on jobs and economic growth. Crane points out that even as deep in the toilet as California's economy has been in the past 18 months, it's still diverse enough that it actually grew (albeit by a tiny 0.4 percent) in 2008.

According to stats compiled by the U.S. Bureau of Economic Analysis, the Golden State's "real Gross Domestic Product" (money spent on goods and services, plus investment and foreign trade, adjusted for inflation) withstood declines in construction, finance and insurance by enjoying slight growth in information, professional and technical services.

Moreover, Crane said in a memo to "interested parties" last week, the Federal Reserve Bank of Philadelphia reports that through February of this year, California ranked 16th in terms of late-2008-early-2009 economic performance. (Alaska was first, Oregon last.)

Alas. Crane points out that because California government is so heavily dependent on income tax revenues from wealthy people, and wealthy people's incomes are often dependent heavily on the fortunes of Wall Street, state budget revenues remain pathetically low.

"A tax system that looks more like California's economy will be much more stable than the current system," Crane says.

Heck, we'd probably settle for one that looked like Alaska's...

A funeral Mass for longtime California labor leader Jack Henning has been set for 1:30 p.m. Friday at San Francisco's Cathedral of St. Mary, at 1111 Gough St. A reception at the cathedral will follow the Mass.

The Mass will be preceded by visitation hours from 2-4 p.m., and a Rosary at 4 p.m., Thursday at the McAvoy O'Hara Evergreen Mortuary, at Geary Boulevard and 10th Avenue in the city. In lieu of flowers, the family asks that donations be made in Henning's name to St. Anthony's Dining Room in San Francisco.

A gifted orator who served as U.S. ambassador to New Zealand and as a labor official under two presidents, as well as leading the California Labor Federation for 26 years, Henning died last Thursday at his San Francisco home. He was 93.

Democrats have remained coy on the idea of new taxes, but Sen. Abel Maldonado, R-Santa Maria, told the Santa Cruz Sentinel last week that it is "not reasonable" for any legislator to rule out taxes to help resolve the $24.3 billion deficit.

"For Republicans to say we're not going to do this or for Democrats to say we're not going to do that is not reasonable. We're going broke," Maldonado said. "Taxes and cuts and maybe even borrowing should be on the negotiating table."

(Hat tip to the Flash Report for the link)

Will the budget bells soon toll for many of California's renowned bureaucratic acronyms?

And if so, who will emerge from the fiscal battle between the CSAC (California Student Aid Commission) and the CPEC (California Postsecondary Education Commission)?

And who will be left standing from an epic throw-down involving the IWMB, the DTSC, the DOC, the OEHHA, the CARB and the DPH? (That would be the Integrated Waste Management Board, Department of Toxic Substances Control, Department of Conservation, Office of Environmental Health Hazard Assessment, California Air Resources Board and Department of Public Health.)

The acronym smackdown begins this week.

Senate President Pro Tem Darrell Steinberg has announced a series of committee hearings on proposals to consolidate or eliminate state boards, departments and commissions to help pare down California's $24.3 billion budget deficit.

"There's no doubt that much can be done to make government work better for the people that it serves," Steinberg said in a statement. "The question is whether we do it in a smart way that maximizes taxpayer dollars while providing the oversight the public demands."

Steinberg's office put out a schedule for Policy Committee Hearings on Government Reorganization and Consolidations. Presumably, that would be PCHGRC for those in the know.

The consolidation clashes start Tuesday when the Senate Transportation and Housing Committee considers a bill -- SB 409 -- by Denise Ducheny, D-San Diego. The legislation seeks to merge freight and passenger rail oversight agencies by joining functions of the Department of Transportation, High Speed Rail Authority and Public Utilities Commission.

Then Wednesday, Senate committees take up acronym elimination bouts starting with consolidation discussions for the CSAC and CPEC. The same day, there is a three-way scrum between the DMH, DADP and EMSA -- or the Department of Mental Health, Department of Alcohol and Drug Programs and the Emergency Medical Services Authority.

The acronym smackdowns will only multiply next week when, starting June 15, Senate committees review functions, and potential consolidations, for another 30 or so state boards and departments.

NEW SENATOR: Curren Price will be sworn in as the Senate's newest member today. The Inglewood Democrat was elected last month to the seat left empty last year when Mark Ridley-Thomas was elected to the Los Angeles County Board of Supervisors.

FUNDRAISERS: Michelle Steel of the Board of Equalization and Assemblyman Kevin de León hold separate events this evening at Chops in Sacramento.

Former state Sen. Carole V. Migden has been released from her court-ordered probation nearly three months ahead of schedule.

Migden asked for the early release and the court agreed to her request during a hearing on Tuesday, reports Jess Sullivan in The Daily Republic of Fairfield.

Migden was placed on probation in August 2007 after she pleaded no contest to a misdemeanor reckless driving charge.

She rear-ended another motorist on Highway 12 in May 2007 after several motorists called law enforcement dispatchers to report Migden's erratic driving.

Migden initially said she had been distracted while talking on a cell phone.

She subsequently revealed she was diagnosed with leukemia in 1997 and blamed her meds.

Migden still faces a civil lawsuit filed by the driver she rear-ended, motorist Ellen Butawan.

The Daily Republic says Butawan sued Migden for property damage and injuries, claiming Migden's conduct displayed a deliberate disregard for the safety of others.

Migden now earns $132,000 a year on the Integrated Waste Management Board.

The still unscheduled special election to replace outgoing Bay Area Rep. Ellen Tauscher may soon become fodder for the national debate of the U.S. military's "don't ask, don't tell" policy.

Tauscher, who is leaving her East Bay seat to join the Obama administration, is the sponsor of the Military Readiness Enhancement Act of 2009. The House bill would repeal the policy and allow veterans forced out of the armed services for admitting they were gay to re-enlist.

Today, Dan Choi, a Arab linguist and lieutenant in the New York Army National Guard who declared he was gay on national television, endorsed a West Point classmate with a similar story to replace Tauscher.

Anthony Woods, an Army captain and Iraq War veteran who was discharged after telling his commanding officer he was gay, is running in a crowded field that will likely include Lt. Gov. John Garamendi, Assemblywoman Joan Buchanan and state Sen. Mark DeSaulnier.

A special election date is to be set once Tauscher is confirmed as Obama's undersecretary of state for arms control and international security.

Choi, who plans to campaign in the district for Woods, is waging a highly publicized fight against his dismissal from the military. It extends to his advocacy for Woods, whom he endorsed today as "a leader and an officer of the highest caliber."

After considering education cuts on Thursday, the budget conference committee is scheduled to look at health care cuts today after finishing up education issues, then work on human services cuts on Saturday.

But there's good news. If you're sick of watching the Legislature grind away at the state budget deficit, maybe you can see sausage being made tonight instead.

Competitors at this year's Celebrity Chef Challenge at the California Auto Museum will have 45 minutes to turn five secret ingredients into three dishes.

Emcees are Edie Lambert of KCRA 3 and former Assemblyman Dennis Mangers, now a senior adviser for Senate President Pro Tem Darrell Steinberg.

Among the celebrity judges: former Assemblyman Lloyd Levine, who just so happens to be married to Lambert.

As for those secret ingredients, maybe they have something to do with the museum's "72,000 square feet of automotive excellence," touted on the event's Web site.

Let's hope they're using olive oil instead of 10W-30.

Festivities begin at 5:30 p.m. at the museum at 2200 Front St. The event benefits InAlliance, which provides services to people with disabilities and brain injuries.

GOVERNOR: Gov. Arnold Schwarzenegger goes live on The Bee Web site starting at 11 a.m.

Catch his discussion with the Sacramento Bee editorial board at sacbee.com/live.

And if you really want to grill him on the budget, e-mail your questions in advance to topics@sacbee.com.

Please include your name and city.

Government, union and political officials reacted today to the death of legendary labor leader Jack Henning:

Gov. Arnold Schwarzenegger

Jack Henning was a premier labor leader who led a long and distinguished career in public service both at the state and national level. He dedicated his life to improving the lives of others, revolutionized the labor movement and had an enormous impact on California. Maria and I join all Californians in remembering Jack's service and our hearts go out to his family and friends during this difficult time.

­­­­­­­­­­­­­­­­­­­­­­­­­Secretary of Labor Hilda L. Solis

Today American workers lost a tireless advocate, and I lost a dear a friend. I would like to extend my heartfelt condolences to the family of John F. 'Jack' Henning. For most of his life, Jack Henning was on the front lines of the labor movement, fighting for civil rights, equality and justice for working Americans. He was a man of modest means, with a thirst for knowledge and a tremendous sense of compassion for his fellow man. His life story is one that inspires me and many Americans. His career began in his home state of California, where he fought for the most vulnerable - the working poor and underclass - fighting to improve their standard of living. A master orator, Jack began a steady climb within the labor movement and later served in the Kennedy and Johnson administrations as the U.S. undersecretary of labor. As a testament to his work, President Johnson later named him ambassador to New Zealand. Jack Henning was a champion, visionary and unwavering voice on behalf of the working women and men of the United States and of the world. We are all indebted to his leadership, and he will be missed.

Senate President Pro Tem Darrell Steinberg

All Californians lost a true friend today in Jack Henning. Jack Henning's commitment to working people and social justice serves as an inspiration to us in these recessionary times. Workers still benefit from his leadership on farmworker rights, workplace safety, worker's compensation and in many other areas. Jack Henning was a giant and he will be missed.

Assembly Speaker Karen Bass

Jack Henning spent his life trying to make California a better place to live and work. He was a tireless fighter for the labor movement and for social and economic justice. Jack Henning served the public well as Ambassador to New Zealand and as a Regent of the University of California. With his passing we reflect on Jack's love for the working men and women of California and his great love for his family, including his adored late wife Betty and his son Pat, who became his own fixture in the Capitol community. My colleagues and I in the Assembly send our sincere condolences to Jack's children, grandchildren, brothers and sisters in labor and his countless friends. We will adjourn Assembly session in his honor next week.

California Democratic Party Chairman John Burton

Jack Henning dedicated himself to improving the lives of poor and middle-class workers in California - and across the nation. In 26 years at the helm of the California Labor Federation, AFL-CIO, Jack fought to protect farm workers, men and women who were injured on the job, low-wage workers, the unemployed, women and children. Under his leadership, the Labor Federation set the standard for unions across the country. A San Francisco native whose father was a charter member of the Plumbers union, Jack never forgot where he came from or who he was. Not only was Jack Henning a strong advocate for the working men and women of California, but also he was a personal friend of mine for decades. The California Democratic Party sends condolences to Jack's seven children, 12 grandchildren and six great-grandchildren and to the labor community on this loss. Jack Henning was a great man who will be deeply missed.

United Farm Workers President Arturo S. Rodriguez

Today the American labor movement and the state of California lost a genuine champion of working people, and especially farm workers. No one inside or outside the California labor movement more consistently or selflessly championed the farm workers' cause over as many decades than Jack Henning. No one loved and respected Cesar Chavez more. Jack never wavered, whether it was standing with the United Farm Workers on picketlines in the dusty fields and vineyards or in the halls of the state Capitol. From the 1960s to the 1990s, he rallied the entire labor movement to support the UFW during strikes, boycotts, legislative and political battles. Jack Henning played a critical role in realizing the era's most important advances for all working families. He understood the labor movement could never be true to itself if it ignored the poorest of the poor, the men, women and children who work in the fields.

Lt. Gov. John Garamendi

The working men and women of California made great strides in being treated justly and fairly on the job because of the hard work, commitment, and leadership of legendary labor leader Jack Henning. Organized labor is where it is today in California and throughout the nation because of Jack Henning, a man who I had the honor of calling my friend. He did everything possible to encourage the labor movement for everything including the minimum wage, organizing the rights for farm workers and workers compensation. Jack accomplished what he did with the unusual mix of grace and tenacity with workers in the fields or politicians in the halls of government. He is the definition of a true public servant. My thoughts and prayers are with his family.

State Treasurer Bill Lockyer

For most of my public life, Jack Henning was the voice and conscience of California workers. His passion for economic equality and social justice inspired a generation of post-war labor organizers. In his fight to bring decent treatment to workers and a better life to their families, Jack never wavered. And he will never be forgotten.

Gov. Arnold Schwarzenegger said today that while he's naturally impatient, he wouldn't criticize the pace legislators are setting in finding solutions to the state's $24.3 billion budget deficit.

"I'm never happy with the speed of anything that is happening here in this building," the governor told reporters at a Capitol news conference called to announce a new Web site at which state government audits, contracts and other documents will be available for public inspection.

"I'm always just more anxious to get going, anxious to work around the clock," he said. "But they are working very hard and I'm not taking anything away from them."

A 10-member two-house legislative committee is poring over the budget for the fiscal year that starts July 1, looking for programs to pare. Wednesday, the committee voted unanimously to eliminate eight state agencies that report directly to the governor. In terms of reducing the deficit, the cuts were more symbolic than substantive, since they would save only about $25 million.

State Controller John Chiang has warned that if a balanced budget is not in place my mid-June, it will be difficult for the state to seek short-term loans on the private investment market to smooth out a cash shortage it faces in the first few months of the fiscal year.

Schwarzenegger said that while he might have started with programs that could result in larger savings, "I'm not about to tell the legislators how they should do their business. I think in the end, what is important is the outcome."

With a new Web site and a YouTube annnouncement, Republican state Sen. Tom Harman has formally declared his intentions to run for attorney general in 2010.

Also eyeing the race is Republican Chuck Poochigian, who lost to current Attorney General Jerry Brown in 2006. A third Republican, Tom O'Brien, the U.S. attorney for the Central District of California, is been pushed by party activists to join the race but appears less than enthusiastic about getting in.

The expected Democratic field includes District Attorney Kamala Harris, Los Angeles City Attorney Rocky Delgadillo, Assembly Majority Leader Alberto Torrico of Newark, Assemblymen Ted Lieu of Torrance and Pedro Nava of Santa Barbara, and former state lawmaker Joseph Canciamilla of Pittsburg.

Brown is expected to run for governor but is publicly keeping his options open to defend his seat.

Jack Henning, a longtime leader in California's labor movement who served in the administrations of Gov. Pat Brown and Presidents John F. Kennedy and Lyndon B. Johnson, died today at his San Francisco home, labor officials said.

Henning was 93.

"Jack was a lion of a man and a great labor leader," said Art Pulaski, head of the California Labor Federation. "His vision and his magnificent oratory inspired several generations of union activists."

The CLF released a brief biography on Henning, which can be found on the CLF website by clicking here.

New Assembly Republican leader Sam Blakeslee announced the selection of four GOP caucus whips this week, putting some of the final touches on his leadership team as the Capitol braces for budget fights.

The new whips, responsible for helping to coordinate floor operations, are Tom Berryhill of Modesto, Connie Conway of Tulare, Steve Knight of Palmdale, and Brian Nestande of Palm Desert.

The caucus's assistant minority leaders are Nathan Fletcher, of San Diego, and Martin Garrick, of Solana Beach.

Blakeslee, of San Luis Obispo, also tabbed four colleagues to serve as "team leaders" in key public policy areas: Fletcher on environmental, energy and economic issues; Curt Hagman, Chino Hills, corrections; Jean Fuller, Bakersfield, water; and Dan Logue, Linda, elimination of inefficiencies in state government.

The new GOP leader, who assumed the post June 1, previously announced the selections of Cameron Smyth of Santa Clarita as caucus chairman; Ted Gaines, Roseville, caucus floor leader; and two deputy floor managers -- Hagman and Mike Duvall, of Yorba Linda.

Jim Nielsen, of Gerber, will serve in a new caucus position, chairman of Ways and Means. As the Assembly GOP's point man on fiscal issues, he will serve as vice chairman of both the Assembly Appropriations and Budget committees.

Moorpark's Audra Strickland will lead efforts to build caucus cohesion; Fuller will strive to make district operations more efficient; and Bill Berryhill, of Ceres, will coordinate member services in an attempt to improve the caucus's support system.

In the misery-has-company department, we have a report today from the National Conference of State Legislatures, wherein it is disclosed that tax revenue-wise, things are tough all over.

According to an NCSL survey, 35 of 38 states that submitted data said they have collected less personal income tax (PIT) revenues through April of this year than April 2008. (Alabama, Colorado and North Dakota were up. Go figure.)

Those looking for a silver lining or a last-guy sense of superiority will be heartened to learn that four states (New York, Tennessee, Arizona and Michigan) suffered bigger PIT drops than California.

The Golden State was second in the biggest-drop-in-sales-tax-revenues category, to the state of Washington.

"You don't have to look any farther than the state of California to know that having a 'Gordian knot' of conflicting measures acting upon on your state budget is a recipe for disaster." - Colorado state Treasurer Cary Kennedy,
speaking after Colorado Gov. Bill Ritter signed a bill loosening restrictions on general fund spending and establishing a rainy-day reserve fund that will be fed when economic times are good.

The Legislature's budget conference committee returns to work today after shaking things up a bit Wednesday by proposing to get rid of six state umbrella agencies and two other offices.

The move seemed to be aimed at higher-paid administrative appointees who answer to Gov. Arnold Schwarzenegger and oversee on-the-ground departments that provide direct state services.

But even if all eight entities got whacked, as deputy legislative analyst Michael Cohen told The Bee's Kevin Yamamura, it would save less than $25 million from the state's general fund budget.

And, as Yamamura points out in his story today, California is facing a $24.3 billion budget deficit nearly 1,000 times as large.

In non-budget news, the Senate finished up voting on its bills Wednesday -- two whole days before the deadline to say yea or nay and move them to the Assembly for its consideration.

Some of the bills that passed Wednesday were Senate Bill 550, which would require retailers with scanner capabilities to flag recalled food items and stop them from getting sold; Senate Bill 95, which would require car dealers to prove they are paying off a vehicle's lien before transferring the title; and Senate Bills 602 and 603, which would tighten tobacco sales.

GOVERNOR: Gov. Arnold Schwarzenegger continues his green theme this morning on the Capitol's west steps as the E-Fuel Corp. introduces its final production model of the MicroFueler, which converts waste to ethanol.

ASSEMBLY REPUBLICANS: Assembly Republican leader Sam Blakeslee of San Luis Obispo has named four Republican whips: Tom Berryhill of Modesto, Connie Conway of Tulare, Steve Knight of Palmdale and Brian Nestande of Palm Desert.

GOVERNORPLUS: The governor will be live Friday on the Bee's Web site starting at 11 a.m. Watch his discussion with the Sacramento Bee editorial board at sacbee.com/live and e-mail questions for him in advance to topics@sacbee.com. Please include your name and city.

Two Sacramento firms are among a slew of lobbying firms across the country that have been fired by the bankrupt General Motors Corporation.

The Flanigan Law Firm and Mark Watts, until recently with California Strategies and Advocacy LLC, were let go by GM here in Sacramento.

GM was a prestige client for both operations and a big spender in the city.

The insolvent car maker sacked its outside lobbyists in Sacramento, Washington, D.C. and other state capitals after filing for bankruptcy protection.

The move aims to cut spending and save cash as the automaker tries to reorganize its businesses and return them to profitability after years and billions of dollars of losses.

Michael Flanigan, a partner at the firm, confirmed GM's decision Wednesday.

"We've been with them for years. They have some great people. These are tough times and tough decisions have to be made," Flanigan said. "But tomorrow's another day."

Mark Watts, who just left California Strategies to launch Smith & Watts - taking the GM account with him - said he received a call Monday night from a GM executive in Detroit, advising him that all lobbying contracts were terminated by the bankruptcy court.

"It's disappointing," Watts said. "I've been associated with them since 1997, but I'm a realist too and these problems are global."

GM's spending on lobbying has declined in recent months as its fortunes sank.

For the 2007-2008 legislative session, GM spent $569,395 on lobbying, including $102,376 between October and December of 2008, state lobbying filings show.

Yet for the first quarter of 2009, Flanigan billed GM only $16,000, while California Strategies billed just $6,000, the filings show.

California can cut $6 billion from education through June 2010 without jeopardizing federal funds after the Obama administration on Wednesday approved the state's revised application for stimulus money.

Gov. Arnold Schwarzenegger's finance officials said last month that they mistakenly assigned $2 billion to California's education spending in 2005-06 when the money was actually spent in 2006-07. The error played a big factor in California's current budget discussion because the state cannot spend less on education now than it did in 2005-06 as a condition of receiving stimulus money.

Under the state's initial application, California could only have cut about $2 billion from the state's education budget through June 2010. But Gov. Arnold Schwarzenegger last month proposed cutting $6 billion from K-14 schools to shrink a $24.3 billion budget gap, alarming education advocates.

Schwarzenegger aides said that they mistakenly assigned $2 billion from 2006-07 to 2005-06 because technically the money was meant to "settle up" reduced education payments in 2005-06.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Assembly Speaker Karen Bass, D-Los Angeles, said Tuesday that they had no position on whether the state's new application should have been approved. But Steinberg said Democrats were not willing to cut $6 billion from schools.

School groups lobbied the Obama administration and questioned the convenient timing of Schwarzenegger officials discovering they had made an error favorable to more budget cuts right as they needed to make additional school reductions.

The Department of Education on Wednesday said that it concluded California's application revisions "are consistent with the manner by which state appropriations for 'settle up payments' are treated for accounting purposes."

Bob Wells, Association of California School Administrators executive director, said, "It's just a shame. I think it pretty much gives the green light to the state to continue cutting schools."

Wells said $6 billion in cuts would result in more teacher layoffs and larger class sizes. Schwarzenegger proposed giving school districts the flexibility to reduce the school year by up to seven and a half days in order to save money.

"The governor is fighting for California's fair share of Recovery Act dollars and is pleased that the administration approved our application," said Schwarzenegger press secretary Aaron McLear.

Attorney General Jerry Brown should immediately return $52,500 in campaign contributions he's received from relatives and a company of two men his office is investigating in the public pension fund corruption probe, Steve Poizner's gubernatorial campaign said today.

"Brown's unethical conduct and arrogance undermines the credibility and integrity of the Attorney General's office and is a disservice to the civil service professionals who seek to serve the people of California,"  the Poizner for Governor campaign said in a statement.

Poizner's campaign was reacting to a story in today's Bee. Click here to read it.

Brown's spokesman Scott Gerber told The Bee on Tuesday that the attorney general had no intention of returning the campaign contributions. 

John J. Pitney Jr., a political scientist, said Tuesday the campaign contributions may become a problem for Brown, but ethics expert Robert Stern said he wasn't as troubled as Pitney.

To back its own call for Brown to return the donations, Poizner's campaign cited past statements Brown has made about campaign contributions and their influence on him.  

California appears to be falling behind the curve on many indicators of socioeconomic wellbeing these days, and the Census Bureau has added another -- access to the Internet, which is no small irony in a state that has spawned so much communications technology.

Although California is slightly above the national average in its residents living in homes with Internet access at 69 percent, according to a new data report, it's well below the national average in individual access to the Internet.

The Census Bureau found that in 2007, just 60.9 percent of the state's residents accessed the Internet from any location, the 16th lowest rate among the 50 states and the District of Columbia. The highest level of such access was found in Alaska, 76.1 percent, while the lowest was 51.5 percent in Mississippi.

The full report, which analyzes Internet access by various demographic and economic factors, as well as geographic ones, is available here.

Ever wonder what legislators do while pretending to listen to a governor tell them what they think they already know?

Well, Assemblyman Dave Jones, D-Sacto, Twitters tweets. At least he did during Gov. Arnold Schwarzenegger's speech to the assembled state lawmakers Tuesday.

Jones fired off 10 tweets during the guv's speech, starting with "Gov just walked into Chamber to deliver speech on budget," and ending with "Gov's speech short on specifics. Lots of nice rhetoric."

The lawmaker's most insightful observation was "Missing on the dais behind Gov is Insurance Commissioner Steve Poizner. Where is he?"

This is of interest to Jones (and relatively few others) because the assemblyman is termed out of the Legislature next year and is seeking the Democratic nomination for insurance commish.

For those of you as yet untainted by this communication form, it's perfectly legal. "Tweets" are messages of up to 140 characters sent via a Web-based social networking service called "Twitter."

It's both a good way to fill time and annoy other people. Sort of like some Capitol Alert items...

With the Budget Conference Committee meeting again today, you'd think it was all budget, all the time.

But the Senate and the Assembly also both have floor sessions again -- Friday's the deadline to move their bills to the other house.

Tuesday, the Senate passed 31 bills -- including a rewritten Senate Bill 250 on spaying and neutering dogs and cats.

Some of the other measures sent to the Assembly:

• Senate Bill 797, which would prohibit manufacture, sale or distribution of bottles, cups or containers of anything edible or drinkable if they hold more than 0.1 parts per billion of the chemical bisphenol A.

• Senate Bill 10, which would let a county put a measure on the ballot to authorize an additional assessment on vehicles owned by residents of that county.

• Senate Bill 484, which would make it an infraction or a misdemeanor for someone to get ephedrine or psudoephedrine without a prescription.

The Senate expects to finish up its bills today.

SPEECH: State Controller John Chiang addresses the League of California Cities during its Budget Action Day, starting at 10 a.m. at Sacramento's Citizen Hotel.

GOVERNOR: Gov. Arnold Schwarzenegger will be live Friday on the Bee's Web site starting at 11 a.m. Watch his discussion with the Sacramento Bee editorial board at sacbee.com/live and participate by e-mailing your own questions for him in advance to topics@sacbee.com. Make sure to include your name and city.

The state Senate, which refused Monday to approve controversial legislation that virtually mandates the spaying and neutering of dogs and cats, reversed itself today after its author agreed to make changes.

The bill, SB 250, passed after Sen. Dean Florez, D-Shafter, agreed to exempt hunting and working dogs from the measure and to declare it will not apply to an animal escaping its yard for the first time.

"Critics of past efforts to encourage spaying and neutering have said clearly that any legislative solution to our shelter crisis must focus on owner responsibility, and I believe this measure does just that," Florez said when introducing the bill.

The measure, a successor to past efforts to require neutrering pets, has generated huge controversy among pet owners and breeders. It fell five votes short of passage on Monday but cleared the Senate on a 21-16 vote today, sending it to the Assembly.

Click the image to view the animation.

A little bit of good news leaked out of state government today, offsetting the widespread angst about the state's historically serious budget problems.

The state Labor and Workforce Development Agency reported that a five-year, $90 million initiative to increase the state's supply of registered nurses appears to be bearing fruit with substantial increases in nurse training programs, enrollment, faculty and graduates.

Gov. Arnold Schwarzenegger launched the public-private program in 2005 and the agency, an arm of his administration, said in its 2008 report, released today, that 9,580 registered nurses graduated last year, a 54 percent increase in annual nurse production over the previous four years.

More than 23,500 students are currently enrolled in nursing education, a 68.9 percent increase, in 131 nurse training programs, 23 more than existed when the initiative began.

Schwarzenegger hailed the results as "a direct illustration of the success and importance of the public-private partnerships established when I launched the California Nurse Education Initiative in 2005," adding, "Health care jobs are a critical part of a healthy economy -- and we need to continue this fantastic momentum by further helping ensure the California workforce is prepared to fill the healthcare job demands of the future."

Despite the increases in nursing education, however, there are still shortages of registered nurses now and projected into the future, as many as 116,600 nursing job openings by 2020 due to population growth, the aging of the population and the retirement of current nurses from the baby boom generation. At 647 registered nurses per 100,000 population, California is still well below the national average of 825, according to the report.

The full report is accessible here.

There's nothing more likely to pass for progress around the Capitol than a legislative hearing. With that in mind, be alerted that Sen. Dean Florez, D-Shafter, has scheduled a June 16 hearing by the Senate Committee on Food and Agriculture to see if California really needs a Dept. of Food and Agriculture.

Florez appears to be leaning toward the "no" column. A news release from his office today says the committee "will meet to consider whether or not it makes sense for agriculture to remain the only California industry with its own $100 million general fund-backed agency, when most of its functions could be performed by other departments."

Florez says that in the light of California's budget woes, it might make sense to allocate the business part of ag to a business department and the environmental and health aspects to environmental and/or health agencies.

"Agriculture had its own set of rules on air quality and worker protections for a long time, but we have finally reversed those to protect both the environment and public health," Florez said. "There are certainly more changes in the pipeline to protect the state's finances."

Of course if we don't need a Dept. of Food and Ag., doesn't it follow that we don't need a Committee on Food and Ag. either?

When the political debate over how to handle California's uninsured motorists was burning a few years back, it was widely reported that the state had one of the nation's highest rates of uninsured driving.

Mandatory insurance laws have apparently cut into the problem, but California still has one of the nation's higher rates of motorists lacking insurance, according to a chart published by Smart's California Insurance Report, an industry newsletter.

The uninsured rate ranges from 29 percent in New Mexico to 1 percent in Massachusetts (2007 data) with California clocking in at 18 percent, seventh highest.

The Schwarzenegger administration has so far produced three May revisions of the 2009-10 budget, each one adding additional spending reductions and other steps to handle the state's ever-widening budget deficit - and created great confusion among Capitol types in the process.

The three revisions have been merged into one spreadsheet detailing how the administration proposes to close the deficit, adding up to $3.1 billion in changes for the current fiscal year, $20.8 billion for 2009-10 and another $18.6 billion in 2010-11. The spreadsheet is available here.

Gov. Arnold Schwarzenegger will address a joint session of the Legislature today in a budget speech that likely will be similar to the State of the State address he gave in January. The governor is expected to urge lawmakers to come to quick resolution while recognizing the various roadblocks in California's budget system rather than blaming lawmakers. Sort of a "don't hate the player, hate the game" approach that he's adopted for the last year.

You can watch the speech live online at 10 a.m. on Cal Channel. Or, if you'd prefer just the audio, you can listen live online at KQED.

For Sam Blakeslee, not everything went smoothly on his first day as Assembly minority leader.

"I arrived at work, got out of the car, went to the elevator and promptly went to the wrong office," said Blakeslee, of San Luis Obispo, who took the reins of the 29-member GOP caucus Monday from Mike Villines of Clovis.

"When I realized why the key wasn't working..."

Blakeslee laughed.

Asked about the toll the job could take on his personal life, with the state facing a projected $24.3 billion shortfall, Blakeslee said that both he and his wife are prepared for whatever comes.

"My wife said, 'I'll see you in a year and a half,' " he quipped.

Blakeslee, a Christian but not a regular churchgoer, said he "very, very seriously" prays to God each day.

"I always ask for wisdom to understand the complexity of problems, I ask for courage to be able to do the right thing -- and for discernment, to appreciate how my decisions ultimately affect other people," he said.

Asked if God ever answers, Blakeslee smiled.

"I often have a sense of purpose, I think, because of his guidance in my life," he said.

So far, no divine intervention, however.

And no $24.3 billion.

A Sacramento Superior Court judge on Monday tossed out a lawsuit against a state law that forbids harassment of public school kids because of their gender or sexual identity.

The lawsuit was filed last year by the conservative California Education Committee, which argued the 2007 law would allow girls and boys to enter each others' locker rooms and was impossible to follow because it was vague.

The suit was filed against California Superintendent of Public Instruction Jack O'Connell.

Attorney General Jerry Brown defended the law, SB 777 by Sen. Sheila Kuehl, which was signed by Gov. Arnold Schwarzenegger.

Equality California, a leading gay rights group, sponsored the legislation, calling it necessary to protect kids from attacks and discrimination because of perceived or real sexual orientation and identity.

The California Education Committee is affiliated with Murietta-based Advocates for Faith & Freedom, a nonprofit law firm that challenges laws and court decisions that it says "have created a society increasingly devoid of the message and influence of God."

Sacramento Superior Court Judge Shelleyanne W.L. Chang's order Monday said the plaintiffs had failed to make their case.

Gov. Arnold Schwarzenegger addresses both the Assembly and the Senate in Assembly chambers at 10 a.m. about his latest budget proposals.

Democratic legislative leaders -- Senate President Pro Tem Darrell Steinberg and Assembly Speaker Karen Bass -- then give their response.

Shortly after, Republican legislative leaders -- Senate Republican leader Dennis Hollingsworth and Assembly Republican leader Sam Blakeslee -- take center stage.

Then, the "Big 5" are to meet.

The Budget Conference Committee meets, and both houses have floor sessions today.

The Senate has 60 bills left to consider after passing 52 measures on Monday.

Two measures failed, including the controversial Senate Bill 250 on spaying and neutering pets.

Legislation sent to the Assembly included SB 48, which would require publishers of textbooks offered for sale at a public postsecondary institution to make the textbooks available electronically -- by Jan. 1, 2020.

Now there's a deadline a college student would love....

As members of the State Lands Commission, Lt. Gov. John Garamendi and state Controller John Chiang today officially urged lawmakers to reject Gov. Arnold Schwarzenegger's plan to plug part of the budget hole with proceeds from offshore oil drilling.

The three-member commission earlier this year rejected a similar plan to allow Plains Exploration & Production Co. to slant drill into California waters off the Santa Barbara coast, with Garamendi and Chiang voting against the Tranquillon Ridge project and Department of Finance chief deputy director Tom Sheehy voting in favor. The company already drills in federal waters adjacent to California waters.

The lands commission has opposed new offshore oil leases since 1969, when a major oil spill occurred off the Santa Barbara coast. Some environmentalists supported the Tranquillon Ridge project earlier this year because they brokered a deal with Plains Exploration & Production to shut down other oil platforms in exchange. But other environmentalists disapproved of the new oil lease.

In his revised May budget, Schwarzenegger proposed allowing the Tranquillon Ridge oil lease in exchange for $1.8 billion over 14 years, including $100 million in 2009-10.

"This is a deliberate attempt to overturn the decision of this body, the State Lands Commission, a decision that was based on the finding that this proposal was not in the interests of the state," Garamendi said in a statement.

Schwarzenegger spokeswoman Lisa Page responded: "Governor Schwarzenegger's proposal to use Tranquillon Ridge as a vehicle to end oil drilling off Santa Barbara's coast and bring new revenues into the state is a win-win that will benefit California now and will benefit the environment by speeding up the permanent removal of drilling platforms from the Santa Barbara coastline."

Photo: AP/Michael A. Mariant. Oil platform off the Santa Barbara coast.

The state Senate voted today to require large motorcycles to undergo the same biennial smog checks now required of cars, but it's unlikely to be enacted in that form.

The 22-17 vote was largely along party lines with Democrats joining the author of the bill, Sen. Fran Pavley, D-Agoura Hills, in support and Republicans opposed. But to get enough votes for passage, Pavley promised to eliminate mandatory smog checks from the bill and and change it to tighter regulation of motorcyclists who remove their machines' catalytic converters.

Pavley said motorcycle owners now enjoy an "unfair loophole" because many remove their catalytic converters, knowing they won't face smog tests. But Republicans, led by those who are motorcycle owners themselves, described it as an ineffective and expensive intrusion, and it fell well short of the required 21 votes until Pavley promised to amend it in the Assembly.

As written, the measure, SB 435, applies only to post-2000 motorcycles with engines of 280 cubic centimeters or more displacement.

The state Senate today rejected one of the legislative session's most controversial bills, aimed at encouraging -- or perhaps compelling -- dog and cat owners to have their animals neutered.

Former Assemblyman Lloyd Levine carried pet sterilization measures for several years but was unable to move them through the Senate. After his departure, Sen. Dean Florez, D-Shafter, took up the cause but his bill, SB 250, died in the Senate, falling five votes short of the 21 required.

SB 250 didn't ban unsterilized pets outright but made it very difficult for owners of dogs and cats to keep them without sterilization. It generated bitter confrontations among animal owners.

Former San Joaquin County Supervisor Jack Sieglock, who narrowly lost his bid for the Assembly last year, announced today that he will try again in 2010.

The Lodi Republican lost to Democrat Alyson Huber by 474 votes out of 189,106 cast in what was an open seat that includes parts of Sacramento, El Dorado and and San Joaquin counties.

Huber, of El Dorado Hills, has already voted for tax increases that were part of the February budget deal.

"The Sacramento liberals still refuse to curb their runaway spending, and they're putting our state's economy in peril," Sieglock said in a prepared release announcing his 2010 campaign.

The release noted that Sieglock got less financial support from independent expenditure committees and the state Republican Party than other GOP candidates in competitive races and had to overcome the Democratic tide associated with Barack Obama's candidacy.

On the other hand, voter registration in the 10th Assembly District has slipped even more toward the Democrats since the presidential election, according to May 4 registration statistics from the Secretary of State.

A new communications launch is readying for Meg Whitman's gubernatorial team.

Look for Tucker Bounds, the former chief spokesman for John McCain's presidential campaign, to head a list of new hires for an amped up Whitman communications squad.

The Meg communications effort 2.0 will likely be unveiled sometime this week when team Whitman opens a new campaign headquarters in Cupertino.

Whitman's team already includes Sacramento's Randle Communications (and capital-based senior strategist Rob Stutzman with Navigators Global), Former San Jose Mercury News political scribe Mary Anne Ostrom also recently signed on with Whitman's communications team.

Ever since Gavin Newsom opened San Francisco's City Hall to same-sex weddings in 2004, he hasn't shied away from the political, legal and social firestorm he helped fuel.

Yet the San Francisco mayor's gubernatorial campaign has also been working doggedly to shed his single-issue candidate persona. Newsom and his handlers have tried to advance his image as a "hard-headed pragmatist" who gets things done, who reshaped San Francisco with green buildings and new housing and now is making tough city budget choices amid California's fiscal crisis.

But when the California Supreme Court affirmed the Proposition 8 ban on gay marriage --while preserving 18,000 same-sex marriages already performed -- Newsom retook center stage on the issue. And despite a renewed flurry of news stories speculating whether he can define himself more broadly, his campaign increasingly sees the marriage issue as a winner in the Democratic primary.

"We're not backing away from the issue," Newsom's senior campaign adviser, Garry South, said today. "Newsom has made it clear over and over again that he will stand where he is on same-sex marriage. In the Democratic primary, this is an issue that I think will propel him to victory. Far from shying away from it, it is a major, major part of who he is and who he will be as governor."

On the day of the Supreme Court ruling, Newsom appeared nationally on CNN's Larry King to declare that the court's support for legal civil unions is not enough. "Separate is not equal," he said of the marriage debate. "A word does matter."

South argues that will be particularly true in the Democratic primary, where Newsom's stand may give him sway with Democrats who voted 68 percent to 34 percent against Proposition 8 -- which passed statewide 52 percent to 48 percent. He will likely compare his standing on the issue with that of Attorney General and former Gov. Jerry Brown, who filed unsuccessful court briefs arguing that Proposition 8 violated an "inalienable right to liberty" under the state constitution.

The Newsom camp is clearly wagering that the mayor will have more street cred in the primary as the man who took on the gay marriage issue first -- and longest. It also making another, perhaps riskier, calculation that the issue won't hurt him if he becomes a general election candidate.

South points to a 2008 CNN post-election poll that showed independent voters opposing Prop 8, 54 percent to 46 percent. The way his political theory plays out is that a Republican gubernatorial candidate needs 60 percent of California's "decline to state" vote in order to win in the blue state.

"It's pretty hard to see how you're are going to do that if you are demagoguing on same-sex marriage," South said.

Meanwhile, the issue may prove tricky in the Republican primary because none of the current GOP candidates is staking out a position clearly in concert with social conservatives.

Meg Whitman, who supported Prop 8, also said the same-sex marriages performed before the initiative's passage should stand. Whitman and Insurance Commissioner Steve Poizner -- who also supported the gay marriage ban -- back civil unions, a position still out of touch with many conservatives. And Campbell took an even greater risk with Republicans voters, who overwhelmingly supported Prop 8. Shorly before the election, he penned an editorial calling for a "no" vote, declaring that "discrimination at any level is bad for business."

But whether Proposition 8 is good for gubernatorial politics is a question soon to be answered.

Although gas prices have retreated from their highs of last year, Californians are continuing to reduce their fuel consumption due to less driving, more efficient cars and/or the recession.

The state Board of Equalization says that Californians burned 1.12 billion gallons of gasoline in February, down from 1.28 billion in February 2008, but the board adds in its monthly report that the actual decline may be only half that apparent amount because of a statistical anomaly.

The average California gas price at the pump in February 2009 was $2.27 per gallon, a 29.7 percent decrease from the average price in February 2008 when it was $3.23. Gasoline sold at the lower price in February 2009 generated approximately $187 million in sales tax during that month, an estimated $117.8 million less than was generated in February 2008.

Diesel fuel totaled 181.8 million gallons in February, an 18.8 percent or 42.2 million-gallon decline from February 2008. The board says that decline probably reflects the decline in freight traffic from the recession. California diesel cost $2.26 in February 2009, down 35.2 percent compared to February 2008, when the average diesel price was $3.49.

"Fuel prices appear to continue to be sensitive to economic conditions, including last year's price spikes and this year's downturn," said board chairwoman Betty Yee. "The overall trends indicate Californians are embracing fuel savings, either through less driving or by driving fuel-efficient vehicles."

The full month-by-month fuel report, dating back to 2000, is available here.

Residential and commercial property values are declining due to the state's recession, causing pain to local governments as property taxes flatten, but the valuations of privately owned utilities are continuing to rise.

Utilities are valued by the state Board of Equalization, rather than local assessors, and the board has pegged their value at $76.9 billion, up $1.2 billion from the previous year. Local governments and school districts will receive an estimated $842.5 billion in taxes from the utilities, a $13 million increase from the previous year.

Pacific Gas and Electric Co. kept its title as the state's largest and most valuable utility at $19.3 billion, followed by Southern California Edison at $12.7 billion.

The full list of utilities and their tax values is available here.

By large margins, California voters want to retain the two-thirds legislative vote requirement for budgets and the state's initiative system that allows voters to pass laws, according to a new attitudinal survey conducted by students at the University of California, Riverside.

Voters also oppose layoff of teachers to narrow the state's budget deficit, and blame the Legislature, more than Gov. Arnold Schwarzenegger, for the state's chronic fiscal difficulties.

Undergraduate students in the political science class, "Mass Media and Public Opinion," interviewed a 276-person sample of registered California voters between May 11 and May 24 and said the results have a margin of error of plus or minus 5.9 percent at a confidence level of 95 percent.

Despite the relatively low number of respondents, the differences reported are so great that they remain statistically significant, said David Crow, who teaches the class. The course covers all aspects of survey design, including sample selection, questionnaire development, data collection, data analysis, and statistical hypothesis testing.

"The survey is a general assessment of the political climate of California based on fiscal issues," said Crow, associate director of UCR's Survey Research Center. "It also gave our students a chance to study survey research methods through experiential learning."

The two-thirds budget vote, which has been in the state constitution in one form or another for most of the last century, has become a point of partisan contention with Democratic legislative leaders and their allies vowing to ask voters to change it, arguing that it gives the Republican minority too much power over the budget.

The full survey results are available here.

The Budget Conference Committee has a busy week ahead.

Members are scheduled to hear public comment today on education, higher education, child care and development. Meetings continue all week.

Tuesday, Gov. Arnold Schwarzenegger is set to address lawmakers at a joint session about -- drumroll, please -- the state budget with the $24.3 billion hole in it.

State Controller John Chiang pleaded with Schwarzenegger and legislative leaders last Friday to fix the budget deficit "no later than June 15th."

Chiang's letter to them projected that starting July 29, the state won't have the cash needed to meet all of its payment obligations.

If the budget isn't truly balanced, Chiang warned, California will be hard pressed to borrow money to cover its cash flow problem.

FLOOR VOTES: Friday is the deadline for both the Assembly and the Senate to pass their own bills and send them to the other house. The Assembly has 305 bills on file; the Senate, 155.

TOWN HALL: U.S. Rep. Dan Lungren, R-Gold River, holds a town hall on health care and other issues at 7 p.m. at Folsom City Hall.

FUNDRAISER: The Friends of Sam Aanestad for Lieutenant Governor 2010 holds a reception starting at 5:30 p.m. at Frank Fat's. Sponsors, $6,500; tickets, $1,500.