A handful of reporters, a student from Sac State and some others were waiting for him at the foot of the Capitol steps.

The former congressman and state senator had invited us to meet him on this chilly morning to talk about health care and other issues and, as usual, greeted each of us at the foot of the Capitol's western steps with extreme courtesy before launching into his policy points.

With his customary handouts on site, Campbell first proposed a state health care plan that he said would take the $42 billion in federal and state money used to cover low-income Californians and spend it instead on private insurance for those same people, which he estimates would produce $8 billion to $14 billion in savings.

That money, he said, could bridge the $7 billion state budget shortfall projected for this fiscal year. One big caveat -- it would require receiving a federal waiver, not a sure bet as the federal government crafts its own health care reform plan. It also wouldn't cover uninsured people unless the state spent the savings on that purpose.

Campbell moved on and repeated his call for an independent investigation into Attorney General Jerry Brown's office covertly taping conversations with reporters.

He also said he would ask voters to support a $11 billion water bond included in recently signed water legislation, with the preference that it "be as much revenue bond as possible" rather than a general obligation bond.

Campbell talked, with traces of his native Chicago accent, about his voting record ("I do not recall a single election when I did not vote"), the challenges of competing against two billionaires ("I've been a teacher and a public servant and if as a result I don't have a personal fortune, I wouldn't change a day of my life"), and his personal motivations for running ("My background is economic, and I've never known a time when the state's economic crisis was greater").

One young man told Campbell he had heard the candidate advocated legalizing heroin. Campbell has in fact said nothing of the kind and responded Friday with icy denial.

Campbell badly trails his rivals Meg Whitman and Steve Poizner in financial resources and has run a campaign based in large part on access -- online, at tele-town hall meetings and at chats such as this morning's. He even called a Bee reporter later from John Wayne Airport in Orange County to clarify a point he had made at the Capitol.

While Campbell had been running a close second to Whitman in polls, a recent Capitol Weekly survey showed Campbell falling behind as his rival uses her enormous war chest and blankets the state in radio ads.

Campbell has done pretty well so far on the strength of access and attention to detail even without much money. The coming months will tell whether that pushes him to the finish line.

Alert Capitol types will recall that ACA 8 would amend the constitution to prohibit legislative houses or committees from considering any issue (except in emergencies) that hadn't been noticed to the public at least 72 hours in advance. Moreover, no bill could be voted on before it had been in print for at least 24 hours.

"This past year's all-night sessions (there have been four of them) were an embarrassment to the institution," Jeffries wrote in a recent letter.

Not to mention hard on the constitutions of tired old reporters...

That company is California Strategies, one of the state's biggest public affairs consulting firms, with 20 partners in seven cities from both major parties. At least four of the company's principals and associates are supporting one of the candidates, all in a free-of-charge, advisory role, said Jason Kinney, a principal and spokesman for the firm.

Victoria Bradshaw was secretary of the agency from 2004 to 2008, when she left to replace then-cabinet secretary Dan Dunmoyer in the horseshoe. She'll continue that job until a replacement is named, according to a release from the governor's office.

"With her tremendous knowledge and expertise in state government and in the labor and workforce development field, there is no better person to take on this position," Schwarzenegger said in a release.

The position, which requires Senate confirmation, entails advising the governor on policy issues and managing the agency, which handles job training programs, occupational safety laws, the state workers' compensation program and other workforce-related programs. She'll earn $175,000 a year.

Both the governor and Bradshaw said they wanted the agency to focus its efforts on encouraging the use of the "green" developments to jump-start economic recovery.

"Just as California led the world into the information digital age and became the leader in biotechnology, we will help our state translate cutting edge environmental policy into economic opportunity that will lead this emerging wave of entrepreneurship," Bradshaw said in a statement.

Well, happiness for producers of those spots apparently exists more than 6,000 miles away.

That's right, the board isn't heading to the Golden State's dairy farms to film a new series of ads boasting about California's cows.... they're going to New Zealand. In fact, a better deal on production costs is sending them to Auckland, the sister city of California's entertainment industry hub.

The Los Angeles Times' Richard Verrier reports in a pun-laced piece that the decision "cheesed-off" some groups.

"It's totally out of line," said Ed Duffy, business agent for Teamsters Local 399, which represents location managers, studio drivers and casting directors. "If they're promoting California products, they should be shooting in California."

Milk board officials said the New Zealand shoot represented a "minor portion of production" and was a matter of simple economics. The board solicited bids from around the world, and the New Zealand site was the lowest, said Michael Freeman, the board's vice president of advertising.

"It was a no-brainer," he said. "The dairy industry is facing the worst economic downturn since the Great Depression. We have a fiduciary responsibility to spend their hard-earned dollars as efficiently as we can. In this particular case, we found significant cost savings by shooting a portion of this product overseas."

Gov. Arnold Schwarzenegger's has backed new financial incentives to keep film and television production projects in California, but commercials aren't eligible for the credits.

Freeman told the Times that the board "would never misrepresent California cows by shooting them elsewhere."

Hm. So what are they shooting there?

UPDATE 1:35 p.m.: Amy Kull, a representative for the Milk Advisory Board, called to answer our question about what sort of filming was set to take place in New Zealand.

The commercial's California production staff will film cows in front of a green screen during a four-day production trip, she said. (The theme of the campaign is cows from around the world auditioning to move to The Golden State, so these will be the "unhappy" cows seeking happiness in California).

Kull reiterated that the board was trying to save money at a time when the economy has forced 10 percent of California dairy farmers out of business this year. She also noted that six to eight weeks of post-production work will be done back in California for each of the 10 spots being shot.

"Basically it's 100 times the work that's done in California than is done in New Zealand," Kull said. "They looked at every possible way they could save, and this is one way they could save on only 10 percent of the production value."

Video: One of the spots from this year's California Happy Cows campaign.

It heaps praise on Texas - the Austin area was ranked No. 1 on Milken's list of "best-performing cities," released today, while three other Texas cities were listed in the top five, with only No. 3 Salt Lake City cracking that elite list.

Cities in recession-wracked California, meanwhile, saw their rankings decline - especially those hit hard by the collapse of the housing market.

Schwarzenegger is scheduled to participate in a moderated conversation about using alternative energy sources to fight climate change, his office said Friday. He'll also meet with Israel Prime Minister Benjamin Netanyahu to talk about environmental protection and other issues.

The stop in Israel precedes Schwarzenegger's scheduled trip to visit with U.S. troops in Iraq.

Wondering who's in charge while Schwarzenegger is out of town? With the lieutenant governor's seat still vacant, Senate President Pro Tem Darrell Steinberg assumes the role of acting governor while Schwarzenegger is out of the country.

The Fair Political Practices Commission is investigating a series of transactions in which Anderson and his supporters wrote large checks to county Republican committees days before the committees deposited similar amounts into Anderson's campaign coffers.

There is no legal cap on on how much cash a candidate or individual donor can give to a county party committee or how much a committee can donate to a candidate's campaign chest, but advance coordination on such contributions is illegal.

The three-judge panel, which ruled that the state must come up with a plan for cutting the prison population to address overcrowding, rejected the state's first proposal last month on the grounds that it did not meet their requirements.

But Gov. Arnold Schwarzenegger wasn't buying it in an interview today with The Sacramento Bee editorial board.

Republican gubernatorial candidate Steve Poizner's campaign manager, Jim Bognet, accused rival Meg Whitman today of falsely asserting she had never received a response from Poizner earlier this year after inviting him to three debates in the fall.

The California Association of Realtors reported today that the proportion of households that could afford to buy an entry-level home was 64 percent in the third quarter of this year, up sharply from the 55 percent level a year earlier.

Bettenhausen formerly served as director of the California Office of Homeland Security, which was combined with the Office of Emergency Services to create Cal EMA in 2009. The former federal prosecutor has served as acting secretary of the new cabinet-level agency since its creation.

"As a valued member of my administration, Matt has played a key role in ensuring that we are prepared to protect Californians from potential emergencies and disaster situations," Schwarzenegger said in a statement. "With his experience and capabilities, I am confident that Matt will continue to provide Californians with the highest levels of security, emergency preparedness, response and recovery."

The salary for the position, which requires Seante confirmation, is $175,000.

Photo: Cal EMA Web site.