PolitiCal

On politics in the Golden State

Category: Budget

California lawmakers again consider legalizing sports betting

AFP-Getty_TOPSHOTS-AMFOOT-NFL-SUPERBOWL
Days after the Super Bowl provided one of the biggest wagering opportunities of the year, California officials are once again discussing legislation to legalize sports betting in this state.

State Sen. Roderick Wright (D-Los Angeles) has had bill language drafted similar to SB 1390, the legislation he introduced last year that was approved by the Senate but stalled in the Assembly, according to Stan DiOrio, his legislative director.

On Wednesday, the Senate Republican Caucus put out a report on the issue, noting that new legislation is likely and that there are potential benefits to allowing Californians to legally place bets in their home state on the Lakers, Dodgers or Ducks games.

"Authorizing sports wagering at California's horse racing tracks and satellite wagering facilities on fair grounds, card clubs, and tribal casinos, for instance, could … bring more people into these facilities on slow business days," the report said. "Such a plan might provide the vital financial help to the racing and fair industries which they have been seeking desperately."

It also could provide tax revenue to the state, the report said. But, the Republican analysis warned that it would not be enough for the state to pass a law legalizing sports betting. That is because there is a federal prohibition on sports betting in all but a few states, according to the report, titled  "You Wanna Bet? Legalized Wagering on Sporting Events Gets a Second Look."

A lawsuit is challenging the federal law, and Congress is considering a bill to allow sports betting in some states, but the Republican analysis says the challenges are "great" to remove all the obstacles, including opposition from professional sports leagues that fear it will lead athletes and others to cheat.

"Many would argue that the opposite is true – that a legalized, regulated, and policed wagering environment will reduce cheating as sports-fixing schemes are, by their nature, done through illegal means,'' the report said.

ALSO:

Millions misspent? Gov. Jerry Brown finds it 'boring' 

California passes up millions for prison healthcare, report says

Gov. Brown dismisses Texas' job-poaching efforts as 'a big nothing'

--Patrick McGreevy in Sacramento

Photo: Jacoby Jones, center, of the Baltimore Ravens runs for a touchdown in the third quarter against the San Francisco 49ers during the Super Bowl. Credit: Timothy A. Clary/AFP/Getty Image.

 

 

Millions misspent? Gov. Jerry Brown finds it 'boring'

APphoto_Bank Apartments

Gov. Jerry Brown, a self-proclaimed penny pincher who takes pride in flying Southwest and crashing at the homes of friends instead of hotels while away on state business, was uncharacteristically blasé when asked about millions of dollars that appear to have been spent improperly by the state’s firefighting agency.

The funds have been reported about extensively, first in the Times and the Wall Street Journal, and followed by stories in other major media outlets.

Asked if he could talk about the issue during a news conference in West Sacramento, Brown said he couldn’t, as he hadn’t read any of the coverage. “I find it a relatively boring story, to tell you the truth,” he said. “But I’ll certainly look into it. If there’s a few million bucks lying around and someone didn’t put it in the right account, we’ll figure it out. We appreciate you bringing these things to my attention because nobody else did.”

The comments rankled GOP legislator and prompted Senate Republican Leader Bob Huff (R-Diamond Bar) to issue a statement a couple of hours later.

“After the $40-million state parks fund scandal, the governor assured us there were no other hidden pots of money to be found in the depths of state government,” Huff said in the statement. “But just weeks later, we see there’s a completely different money-hiding scandal unfolding at CalFire. I can’t speak for the governor, but 'boring' is the last word I would use to describe these very disturbing revelations of hidden funds.”

Huff went on: “Thousands of people worked a lot of hours to produce those 'few million bucks' the governor so casually dismisses. As my father used to say, if you take care of the pennies, the dollars will take care of themselves.”

ALSO:

GOP legislators want feds to investigate fire fund

Former governors call for changes to environmental law

California passes up millions for prison healthcare, report says

-- Evan Halper in Sacramento

Photo: A bank vault in Richmond Va. Credit: Mark Gormus / Richmond Times-Dispatch

Gov. Jerry Brown: 'Texas, come on over'

AFP-Getty_516718643

Gov. Jerry Brown said Monday that he was hardly alarmed by Texas Gov. Rick Perry’s latest effort to poach California businesses.

“Of course they’re coming here,” Brown said. “So are the British coming here, so are the French, so are the Russians, so are the Chinese — everybody with half a brain is coming to California. So Texas, come on over.”

Brown spoke Monday in Hollywood at Founders Forum 2013, a conference on innovation for entrepreneurs and venture capitalists. During his brief speech, he urged business leaders to be creative and invest in online education. He cited companies such as Apple, Google and Facebook as a sign of California’s modern successes.

After his speech, Brown responded to a new survey of California business leaders, released Monday by the California Business Roundtable. The survey found that 69% of business leaders said it was harder to do business in California than in other states. Nearly the same number, 62%, rate California’s economy worse than the rest of the country.

“It’s nonsense,” Brown said. “Some things are hard to do. If you want to open some kind of tannery on Wilshire Boulevard, you’re going to get a lot of opposition. If you want to open a creative enterprise, you’re going to get open arms.”

He said that between his two terms as governor, California’s gross domestic product rose from $150 billion a year to nearly $2 trillion, a testament to the success of California businesses. Although California doesn’t allow everything, he said, the ideas and opportunity on the Pacific Rim make it an ideal place to do business.

“That’s life — life is obstacles,” Brown said. “I didn’t get to be governor 37 years later by not overcoming obstacles. Yes, there are problems. But that’s the stimulus for our current creativity.” 

ALSO: 

Brown commits to major Medi-Cal expansion

Texas Gov. Rick Perry launches ads to lure California businesses

State of the State: 'California did the impossible,' Brown says

— Laura Nelson in Los Angeles

Follow her on Twitter: @laura_nelson

Photo:  Google+ logo is seen at annual developer conference at Moscone Center in San Francisco last year. Credit: AFP Photo / Kimihiro Hoshino  

 

Texas Gov. Rick Perry launches ads to lure California businesses

APphoto_Texas State of the State

“Building a business is tough, but I hear building a business in California is next to impossible.”

So says Texas Gov. Rick Perry in a new advertising campaign targeted at California companies.

The Lone Star governor plans to broadcast the radio ads throughout the Golden State in an effort to lure companies here to move east. Such poaching is familiar to Californians.

The economy here dwarfs that of any state, but its tax rates are higher and regulations more onerous. Other states are constantly sending their economic development teams to California to try to lure firms away.

Perry likes to joke that he goes on “hunting trips” here, in which the game he is after is dissatisfied California firms. His latest move may be as much political as it is economic. The 2012 presidential campaign was not kind to the Texas governor’s image. He entered the GOP primaries a clear favorite, with a high approval rating and an impressive fundraising operation. He exited after a series of gaffes and missteps and has had a limited national profile since.

Taking aim at California has always been a favorite sport of Republicans seeking to bolster their national standing. On the website that Perry launched to accompany Texas' advertising campaign, the he goes after the latest round of tax hikes passed in California, which increased the marginal rates on the income of the superwealthy to more than 13%, among the highest in the nation. “Now with the passage of Prop. 30, which increases California’s already excessive income and sales tax … businesses are moving to Texas,” Perry writes in an open letter posted on the website.

Experts differ on how successful these campaigns are. Corporate executives are constantly grumbling about conditions here. Some have, indeed, left. More could go now that taxes have been hiked. But the collapse of the state economy that antitax advocates and others have warned about for decades has yet to take shape. Despite a badly battered budget exacerbated by years of political dysfunction, the state’s economy is showing strong signs of growth, with some California sectors helping lead the national recovery.

ALSO:

California escapes the ratings cellar

California taxes surge in January, report says

Jerry Brown, lawmakers get higher marks in new poll

-- Evan Halper in Sacramento

www.twitter.com/evanhalper

Photo: Gov. Rick Perry delivers his state of the state address to lawmakers in the Capitol in Austin, Texas, last week. Credit: Eric Gay / Associated Press

 

California finances praised but not upgraded by Moody's

Photo: Gov. Jerry Brown gestures as he delivers his State of the State address on Jan. 23. Credit: Rich Pedroncelli / Associated Press

A major Wall Street rating agency said Monday morning that Gov. Jerry Brown's latest budget proposal shows California's finances are on the mend. 

But the agency, Moody's Investors Service, cautioned that California's progress could easily stall given the state's roller-coaster reputation.

"The state's improving economy, combined with recent tax increases and spending controls, has put the state on a path to large surpluses, although one that is typical of the boom-and-bust revenue and economic cycles of California," said a statement from Emily Raimes, Moody's vice president and senior credit officer. 

Moody's did not upgrade California's credit rating from "A1," which leaves it as one of the lowest-rated states in the nation.

Another major ratings agency, Standard & Poor's, upgraded California's finances last week. The shift means it has moved out of last place (a position now held by Illinois) but remains second-to-last with a credit rating of "A." 

Bill Lockyer, the California state treasurer, said the upgrade is proof that Brown and lawmakers have made "decisions that have been tough and painful but correct."

ALSO:

California escapes the ratings cellar

California taxes surge in January, report says

Jerry Brown, lawmakers get higher marks in new poll

-- Chris Megerian in Sacramento
twitter.com/chrismegerian

Photo: Gov. Jerry Brown delivers his State of the State address on Jan. 23. Credit: Rich Pedroncelli / Associated Press

California taxes surge in January, report says

Brown January 13-14 budget

California was flooded with tax dollars in January, according to a new report, and the state received $5 billion more revenue this month than Gov. Jerry Brown had anticipated.

The Wednesday report from the Legislative Analyst's Office shows a stark reversal for the state budget. At the end of November, tax revenue had fallen almost $1 billion short in the current fiscal year, according to figures from Brown's Department of Finance.

Now the state appears to be $5 billion ahead, which could provide further evidence for the governor's declaration that California has emerged from its financial crisis.

The analyst's office floated three possible causes for the surge in tax revenue. The most positive theory is also the simplest -- the economy has improved and there's more income to tax.

The others are less optimistic. It's possible that wealthy residents, fearful that federal budget negotiations would increase their taxes, decided to cash out investments early. If so, that means the state could see less tax revenue in the next fiscal year.

It could also be an issue of timing -- this year, residents may end up paying more of their taxes in January and less in April.

In addition, there's an important caveat to the positive news from the Legislative Analyst's Office. Much of the extra revenue could be gobbled up by the state's constitutional school funding formula, said Jason Sisney, a deputy legislative analyst.

“There are certainly scenarios where the increased revenue is entirely consumed by Proposition 98," he said.

ALSO:

Assembly race will split key Jerry Brown allies

Counties express concerns about Medi-Cal expansion

State lags in disarming thousands prohibited from owning guns

-- Chris Megerian in Sacramento
twitter.com/chrismegerian

Photo: Gov. Jerry Brown discusses a chart showing budget surpluses. Credit: Rich Pedroncelli / Associated Press

Skelton: Jerry Brown's speech was good, but not complete

Gov. Jerry Brown

Gov. Jerry Brown is on a roll. Democrats effusively praised his State of the State speech, while Republicans held their fire. 

In Monday's column, George Skelton says the governor's speech was "vintage Brown: Quoted dead guys. Recalled California’s glory. Preached bold vision."

But, Skelton says, there are "two things he inexcusably ignored."

One was gun control. Secondly, Brown didn't talk about hundreds of billions of dollars in unfunded obligations for public employee pensions and retiree healthcare. 

“It’s the most serious financial problem facing the state and that’s why I’m so disappointed that so little attention is being paid to it,” says Joe Nation, a Stanford professor and former lawmaker.

All of Skelton's columns are here

ALSO:

California lawmakers set to tackle healthcare expansion

No criminal investigation for parks department, letters say

Gov. Brown calls for environmental law reform to 'cut needless delays'

Photo: Gov. Jerry Brown delivers his State of the State address at the Capitol. Credit: Luis Sinco / Los Angeles Times

Cal Fire kept $3.6 million from state's treasury, records show

The California Department of Forestry and Fire Protection hid $3.6 million from legal settlements rather than depositing it into the state’s cash-strapped general fund as required, interviews and documents reviewed by The Times show.

For seven years, Cal Fire placed the money with the nonprofit California District Attorneys Assn., paying the group to hold it. Cal Fire used the cash for equipment purchases and training purposes.

The practice ended last year amid questions about whether the fund was legal.

After questions from The Times last week, Cal Fire director Ken Pimlott notified the state Department of Natural Resources and state Department of Finance about the existence of the fund. The Department of Finance is planning an investigation.


That probe follows revelations that the state Department of Parks and Recreation hid $20 million as parks were being closed because of budget cuts. In the wake of the parks department scandal, the Department of Finance looked for secret funds in other departments but did not find Cal Fire’s account with the prosecutors’ association, a spokesman said.


Auditors found more than $200 million that agencies had squirreled away as lawmakers cut the state budget.


The Cal Fire fund is just the latest discovery of money hidden by California agencies and raises questions about whether there are others that like this one were entirely off the state books.


Last August, Pimlott froze money moving in and out of that fund after receiving a briefing from his staff, said Janet Upton, a Cal Fire spokeswoman.


She said the agency was determining how to deposit the remaining $810,000 into the state general fund. Upton said this was not an admission that there was anything wrong with Cal Fire establishing the fund.


Documents and emails show that top Cal Fire officials were aware of potential problems with the fund as far back as 2008, when an internal audit was launched. In early drafts, auditors said Cal Fire needed Department of Finance approval for the fund, which it never asked for. The auditors said that Cal Fire’s chief counsel expressed concern that if the Department of Finance learned about the fund, it would demand the money be placed in the state treasury.


Another draft contains a September 2009 letter from Anthony Favro, head of Cal Fire’s auditors, to Del Walters, then Cal Fire director, saying, “Of primary concern is the propriety of the fund...and this conflict needs to be addressed by CAL FIRE Executive Management.”


In September 2009, Favro sent another email saying: “I am concerned about the possible perception and allegation that we are using this fund to bypass State contracting, purchasing, and travel rules and guidelines.”


Cal Fire’s own regulations state these types of legal settlements should go into the state general fund.
Some of the most critical comments about the fund were cut in the final audit.


Upton said Pimlott was not aware of the comments in the drafts until The Times asked about them. She said that spurred him to notify the other agencies.


Upton said she was told that the comments were dropped from the final report because auditors were treating the money as if it were part of the general fund. But because the district attorney’s group is a nonprofit, it didn’t apply.


Despite the audit, Cal Fire continued to send money into the fund. Pimlott had signed a new agreement with the association in 2011, about before he frozen the fund.


Cal Fire, with an annual budget of about $600 million, is responsible for preventing and putting out wildfires on about 31 million acres.


The Legislature last year passed a law requiring rural homeowners who rely on state firefighters to pay $150 a year for fire-prevention services, which could bring in $200 million. Gov. Jerry Brown said the state could no longer afford to pay the full cost of putting out blazes in fire-prone areas.


The state Legislature established the agency’s civil cost recovery program to force those responsible for starting a fire to pay Cal Fire’s costs of putting out the blaze.


The program “helps offset the burden placed on the state’s budget by returning recovered dollars to the state’s General Fund,” according to a Cal Fire fact sheet.


Cal Fire established the fund with the district attorney’s association in 2005. The CDDA charged a fee to hold the money. The amount of that fee changed over the years. When it was started, the prosecutors receieved 3% of the money when it came in and another 15% when Cal Fire pulled money out for training or equipment.


Martin Vranicar, the CDAA’s assistant chief executive officer, said his understanding was that Cal Fire approached his group to set up the fund. “We were under the assumption that Cal Fire had the authority to do what they were doing,” he said. “The presumption is that government knows what they’re doing is correct and certainly proper.”


Cal Fire used the fund to purchase equipment, such 600 digital cameras and 26 evidence sheds for $600,000. According to the audits and emails, Cal Fire insisted the equipment belonged to the CDAA. That led Favro to send an email to Walters and Janet Barentson, Cal Fire’s current deputy chief director, asking, “Isn’t this a gift of public funds?”


Vranicar said his group definitely does not own the equipment. “I didn’t want us responsible for equipment purchased on their behalf and be accountable if it was lost or misused,” Vranicar said.
The CDAA began to have doubts about the fund when its new accounting firm asked questions and a new memoranda of understanding was being negotiated in 2011.


It recently informed Cal Fire the association will end its role as fund manager Feb. 10.

--Jeff Gottlieb in Sacramento

Cal lawmakers propose 72-hour posting of bills before final votes

114866.ME.0831.lobby.25.REDA bipartisan group of California lawmakers concerned by the past rushing of legislation has proposed asking voters to require all bills to be in print and online for 72 hours before final passage.

Sen. Lois Wolk (D- Davis) and Assemblywoman Kristin Olsen (R-Modesto) have introduced identical bills with the aim of improving transparency in the Legislature.

Wolk noted that in the last two-year session, the Legislature considered nearly 5,000 bills. "While most of those proposals were publicly shared and well-vetted, some were not,” Wolk said. "Last-minute changes to bills can leave legislators unsure of what they are voting on, and prevent the public from weighing in on proposals."

Her Senate Constitutional Amendment 10 is jointly authored by Senate Republican leader Bob Huff (R-Diamond Bar) and Sen. Lou Correa (D-Santa Ana), and coauthored by Olsen and Sen. Mark DeSaulnier (D-Concord).

Assemblyman Mike Morrell (R-Rancho Cucamonga) previously introduced a bill requiring all budget bills to be posted on the Internet for three days before action. The constitutional amendments introduced by Wolk and Olsen would apply to all legislation, including budget bills.

“Californians are largely cynical about their state government and these bills will help increase better decision making and accountability,” said Olsen, who introduced Assembly Constitutional Amendment 4.

ALSO:

State's Judicial Council puts new courthouses on ice

Assembly speaker warns UC officials against fee hikes

State says crowding report for Valley State Prison was overstated

-- Patrick McGreevy in Sacramento

Photo: The state Capitol. Credit: Los Angeles TImes

 

 

Democrats wrongly placed Brown's tax plan at top of ballot, court says

Assembly floor

A legislative maneuver that gave Gov. Jerry Brown's tax measure top billing on the November ballot was unconstitutional, a state appeals court ruled Friday.

Although the court's decision has no impact on the tax measure, which was approved by voters, it could restrict how lawmakers handle budget legislation in the future.

Howard Jarvis Taxpayers Assn. President Jon Coupal, who filed the lawsuit, said the case revealed "an abuse and manipulation of the political process."

The situation involves a complicated web of laws for the state's annual process for assembling the budget.

Every budget involves multiple pieces of legislation known as "trailer bills" because they're passed after the primary budget bill has been approved by the Legislature. They start out as blank "spot bills" and are later filled in with details in the final days of negotiations.

Last year, Democratic lawmakers used one of the trailer bills to ensure Brown's tax proposal was listed first on the ballot, which political observers say can increase a measure's chance of passing. Lawmakers claimed this legislation was related to the budget and should go into effect before the election.

If the legislation was not part of the budget, it would have required a two-thirds vote to take effect immediately, allowing Republicans to block the bill.

The Sacramento-based 3rd District Court of Appeal said the maneuver was improper.

State law "does not allow the Legislature to name empty spot bills in the budget bill and only after the budget bill is passed to fill those placeholders with content as urgency legislation," the judges wrote in their decision.

Phillip Ung, a policy advocate at California Common Cause, said the court's ruling will help make the budget process more transparent. Trailer bills will need to include some details when the primary budget bill is passed in order to be considered budget legislation and get approved with a simple majority vote.

"It’s not the victory I think voters have been waiting for," Ung said. "But it moves the dial of transparency more toward voters than toward legislative secrecy.”

Mark Hedlund, a spokesman for the Senate leader, said "the Legislature acted in good faith" when it approved trailer bills last year. He said the decision is still being reviewed and may be appealed.

A spokesman for the governor, Gil Duran, declined to comment.

ALSO:

State's Judicial Council puts new courthouses on ice

Assembly speaker warns UC officials against fee hikes

State says crowding report for Valley State Prison was overstated

-- Chris Megerian in Sacramento
twitter.com/chrismegerian

Photo: The California Assembly floor in 2008. Credit: Los Angeles Times

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