O.C. supervisors, in reversal, ask governor to cancel fairgrounds sale

The Orange County Board of Supervisors approved a resolution today asking Gov. Arnold Schwarzenegger to "immediately cancel the proposed sale of the Orange County Fairgrounds."

The 4-0 vote marks a reversal from July, when the board approved a resolution in favor of selling the fairgrounds to a local government agency or nonprofit. Supervisor Chris Norby was absent for today's action.

The governor earlier this year proposed liquidating half a dozen state properties to raise funds to help ease California's budget crisis, and the state put the 150-acre Costa Mesa site on the auction block last month, giving bidders a deadline of Jan. 8.

Supervisor John Moorlach said the board initially supported the sale because they thought the terms would allow it to be sold to a local nonprofit or government.

But since then, state officials have indicated through auction documents and letters that they want to maximize profit, possibly by selling the land as something other than a fairgrounds, and that has fueled speculation that it could be sold into private hands and developed.

"It's creating so much aggravation that the easiest way to keep the fairgrounds a fairgrounds — which was our overarching goal — is just to cancel the sale," Moorlach said.

But that doesn't mean the county doesn't have a Plan B: Like the city of Costa Mesa and a nonprofit formed by the governor-appointed fair board, the county is exploring making a bid of its own for the property.

After all, quipped Moorlach, "The governor doesn't always do what we ask."

--Tony Barboza in Orange County

Schwarzenegger predicts more budget cuts for California

Gov. Arnold Schwarzenegger today predicted a new round of budget cuts, as the state’s finances remain shaky despite large spending reductions made by the governor and lawmakers in July.
 
Schwarzenegger, at a news conference today and at the Fresno Bee’s editorial board Monday, estimated that the current fiscal year’s budget is $5 billion to $7 billion in the red, on top of the $7.4-billion deficit projected by his aides for the fiscal year that begins in July.
 
The governor said he would reveal his specific plans to deal with the problems in January. But he said that, as in the past, no program would be immune to the budget knife. A wide spectrum of programs were cut as state leaders closed a deficit exceeding $20 billion over the summer.

“I think there will be across-the-board cuts again,” Schwarzenegger told reporters today in San Jose, after signing legislation that is part of the water deal he reached last week with lawmakers. “We are not going to go and pick and choose" between programs. "I think that we always have to go and cut across the board."

Schwarzenegger downplayed the impact on state finances from the water deal’s proposed $11-billion bond issue, which will go before voters next year. He said the state would not borrow much of the money for several years, after it has paid down some of its current debt.

The governor said that though there are signs of a recovery in the housing market and strength in the green technology sector, “the economy is not coming back yet the way we want it.”

In a bit of positive news, California Controller John Chiang announced today that tax revenue for October was $285 million above projections, although for the current fiscal year it is still short by $854 million.

--Michael Rothfeld in Sacramento

Groups file measure to block state raids of local funds

An alliance of local government groups proposed a ballot measure Tuesday in hopes of walling off their money from Sacramento.
 
In times of fiscal crisis, California leaders have long looked to municipal coffers for relief. The proposed measure, aimed at the November 2010 ballot, would prevent state officials from seizing local redevelopment money, gasoline taxes, highway funds and other revenue.
 
“The system is unsustainable, and we want to make sure that local services are not sacrificed because of the inability of state leaders to manage the state budget,” said Chris McKenzie, executive director of the League of California Cities, one of the groups backing the proposed initiative.

Judge blocks cuts to home care program

A federal judge today blocked California from cutting in-home aid for 130,000 elderly and disabled state residents whose services would have been reduced or eliminated as of Nov. 1.

U.S. District Judge Claudia Wilken in Oakland issued a preliminary injunction against the $263.5 million in cuts, siding with the plaintiffs’ argument that the state’s method of determining whose services would be cut was unfair.

“The short answer is we’re very relieved,” said Melinda Bird, senior counsel for Disability Rights California and an attorney involved in the class-action case.

The funding, which was cut in July as part of the state budget, pays for aides to cook, clean, shop and perform other services to assist the elderly or infirm so they can remain in their homes rather than be forced into nursing homes or other facilities.

Before today’s court ruling, an estimated 36,000 Californians faced elimination of such services. Another 97,000 would have had their services reduced. The program serves approximately 462,000 Californians.

-- Shane Goldmacher

Plan emerges to solve new $140-million gap in L.A. schools budget

The weekend’s flurry of bill signings and vetoes included the governor’s veto of a measure that would have forestalled a new $140-million deficit affecting Los Angeles' public schools. But the deficit will likely be cured in another fashion as a result of apparently successful negotiations that preceded the veto.

Senate Bill 84 would have reversed unplanned-for cuts in supplemental funding totaling $400 million statewide and $140 million to low-performing schools in the Los Angeles Unified School District.

Last week, in the wake of intensive political pressure, the office of Gov. Arnold Schwarzenegger tentatively blessed a different financial fix. It consists of accelerating the spending of federal stimulus dollars to fill the gap.

The benefit is that many California school districts, including L.A. Unified, won’t face an immediate new deficit that could imperil their finances.

The downside is that, in the process, California would burn up more precious federal stimulus dollars, which then won’t be available for the next school year when budget deficits are expected to open up once again. In fact, if this accelerated money is used now, only 10% of the original stimulus funding would remain. School districts, including L.A. Unified, had hoped to save about 50% of the one-time federal funds for the 2010-11 school year.

“It’s not as if new money fell from heaven,” said Rick Simpson, deputy chief of staff for state Assembly Speaker Karen Bass (D-Los Angeles). "We’re getting the money early and using it for this purpose. It’s a policy trade-off.”

New billion-dollar hole in California's budget

State revenue has already fallen more than $1 billion short of assumptions in the budget lawmakers passed less than three months ago, according to a new report from the state controller.

Disappointing income tax receipts are the main culprit, falling 11% below what lawmakers and Gov. Arnold Schwarzenegger expected when they agreed on a patchwork budget during the summer, halting the state’s issuance of IOUs. Sales and corporate taxes have also slid below projections.

"While there are encouraging signs that California's economy is preparing for a comeback, the recession continues to drag state revenues down,” said Controller John Chiang in a statement. He called the new figures “a major blow to a budget that is barely 10 weeks old.”

Even before the bad fiscal news, policymakers were bracing for a big budget deficit next year. The Department of Finance anticipates a $7.4-billion deficit in 2010-11. That’s a conservative estimate, because lawsuits have tied up or reversed some planned budget cuts.

“I urge lawmakers and the governor to prepare for more difficult decisions ahead," Chiang said.

--Shane Goldmacher in Sacramento

Orange County Fairgrounds officially put up for sale by state

The Orange County Fairgrounds was placed on the auction block today in an attempt to cut into the state deficit.

The state Department of General Services issued a request for proposals for the 150-acre property in Costa Mesa, giving bidders until Jan. 8 to make offers.

Earlier this year, Gov. Arnold Schwarzenegger proposed liquidating state properties -- including Los Angeles Memorial Coliseum, San Quentin State Prison and three state-owned fairgrounds -- to raise cash to help balance the state budget.

If a buyer is found, the property could be in a new owner’s hands a year from now, said Eric Lamoureux, a spokesman for the state agency.

The Orange County Fairgrounds are the highest-value property listed in a July 24 budget bill that authorizes the sale of state assets as a way to shore up California's finances.

The Orange County Fair Board and Orange County Board of Supervisors each passed resolutions supporting the idea to sell the fairgrounds to a local government or nonprofit agency, saying they wanted the land to remain in local hands and continue to be used for a fair.

Federal suit filed to block massive cuts to in-home supportive services

Advocates for more than 130,000 elderly and disabled recipients of in-home supportive services this morning filed suit in federal court in San Francisco to block more than $53 million in state budget cuts that, as of today, would eliminate or drastically reduce services provided to them.

The suit is the latest example of legal challenges and administrative appeals that may delay tens of millions of dollars in expected budget cuts to health and human services, from adult day care centers to respite and home health aides.

David Oster, 35 of Torrance is among those suing to prevent cuts to in-home supportive services. Oster, who is autistic and bipolar, said he relies on in-home aide Julia Medina, 53, to help with cooking, cleaning, grocery shopping and other household chores.

"Before she came, this place was a whole mess," Oster, 35, said as he showed off his tidy one-bedroom apartment Wednesday as Medina looked on. "She helped clean up the mess; we worked on that together."

State Senate passes reduced prisons package, $200 million short of savings assumed in budget [Updated]

The state Senate this evening relented on a smaller package of cuts in prison spending than it approved three weeks ago, passing and sending Gov. Arnold Schwarzenegger a bill that falls more than $200 million short of the savings assumed in the state budget.
 
The measure, SBX3 18, authored by Sen. Denise Ducheny (D-San Diego), would reduce supervision for low-level offenders on parole so that they could not be sent back to prison for violating the terms of their release. And it would allow some offenders to earn shorter terms by completing rehabilitation programs.

Sen. Gloria Romero (D-Los Angeles) called the package “prison lite,” and said she was voting for it though it did not go far enough. It was approved 21 to 15.

The vote was the culmination of weeks of controversy and dispute over how to safely cut the population of the state’s overcrowded prisons to ease budgetary pressure and satisfy a federal court order to reduce the number of inmates.

The Senate, despite fierce opposition from law enforcement, had earlier approved a broader package of cuts that would have reduced the number of inmates by 37,000 over two years, nearly the amount federal judges have demanded. That package would have achieved $525 million of the $1.2 billion in prison cuts authorized in July’s budget deal.

The Schwarzenegger administration planned to make up the difference with administrative actions that require no legislative approval.

The package sent to the governor’s desk this evening, however, is estimated to be more than $200 million short, creating that much red ink for the state.

[Updated 6:45 p.m.: Schwarzenegger will sign the bill, spokeswoman Rachel Cameron said.

“While we are disappointed the Legislature fell short on budgetary savings, the centerpiece of this legislation is the parole reform that protects public safety, avoids early release and saves the state nearly $1 billion,” Cameron said.]
   
-- Michael Rothfeld and Shane Goldmacher in Sacramento

Judge affirms exemption from furloughs for some state workers

A Superior Court judge in San Francisco today affirmed her tentative decision exempting 6,200 State Compensation Insurance Fund employees from thrice-monthly furloughs ordered by Gov. Arnold Schwarzenegger.

Judge Charlotte Walter Woolard upheld her decision, issued Monday, after hearing arguments from both sides.

A written order lifting the furlough for those workers will be submitted for her signature on Sept. 10, along with a motion by the employees' union to apply the exemption pending an expected appeal by the Schwarzenegger administration, said Felix De La Torre, senior staff attorney for the Service Employees International Union, Local 1000.

Woolard’s ruling requires the affected workers to receive back pay plus interest.

Schwarzenegger ordered the furloughs to save the cash-strapped state money.

-- Patrick McGreevy in Sacramento

UC to close Sacramento center

The University of California has decided to close the doors on its Sacramento center for students learning about California government in the capital city.

The program, which Associate Director A.G. Block estimated has served 600 to 700 students since 2004, will continue operating for those arriving this fall, run by a skeleton crew including Block, the executive director and one other aide.

Other staff were informed of layoffs Monday, the same day several of this term’s 18 students arrived, he said.

The university expects to save as much as $850,000 through the closure, said Peter King, a spokesman for the UC Office of the President.

Block called the move shortsighted because “each one of our students is an ambassador for the university in the halls of power.”

“If you think about the total multibillion-dollar budget of the University of California, the money spent on the UC Center is not even a rounding error,” said Block. The center submitted a $635,000 budget this year, pared back from its nearly $1 million the previous year.

The closure of the popular center has already begun to reverberate in the Capitol, where many UC interns have worked in recent years. Assemblyman Dave Jones, a Sacramento Democrat, called the program a “practical opportunity to learn about how policy and legislation are made.”

“It’s one thing to learn about it in a book,” said Jones, who called on the UC Regents to reconsider the closure. “It’s quite another to actually participate in the process.”

Tentative ruling against governor on some furloughs

Gov. Arnold Schwarzenegger was dealt a setback Monday when a Superior Court judge in San Francisco tentatively ruled that the 6,260 employees of the state Compensation Insurance Fund are exempt from furloughs the governor imposed in February.

They are due back pay plus interest, said the ruling by Judge Charlotte Walter Woolard.

She said state law exempts the fund’s employees from the governor’s order, adding that “a ‘furlough’ reduces the availability of staff and constitutes a ‘staff cutback.’ ‘’

The judge will hold a hearing Tuesday before finalizing her ruling in the lawsuit, which was filed by the Service Employees International Union Local 100.

“This is another crack in the governor’s illegal furlough scheme,” said Yvonne Walker, president of the local, which has filed five lawsuits challenging Schwarzenegger’s furlough of more than 200,000 state employees three times a month.

Schwarzenegger ordered the furloughs to help balance the state's budget.

-- Patrick McGreevy in Sacramento

Photo: Mark Boster / Los Angeles Times

Budget crisis hasn't slowed aerial assault on Station fire, officials insist

Despite state and local budget cuts, crews have the air support they need to handle the Station fire, officials said.

The state budget that Gov. Arnold Schwarzenegger signed last month canceled the contract for California’s largest firefighting tool, a DC-10 jet,  to save taxpayers about $7 million.

It was replaced with a contract for two DC-10s on a pay-as-you-go basis, but at a higher hourly rate. But after several fires hit Northern California earlier this month, authorities reversed that decision and signed a 90-day contract for the plane, which costs taxpayers an average of $43,404 a day.

“The determination was made that it would cost more to have it on an as-needed basis than on an exclusive-use contract,” said Cal Fire aviation chief Bill Payne.

State's EBay sales strategy poor, auction expert says

Schwarzenegger administration officials have described their auction of old stuff on EBay over the last two weeks as an innovative way to make money for the state’s depleted coffers. But the president of a Los Angeles auction business specializing in EBay sales says the foray into online auctions has been like many of the state's traditional programs: lackluster.

Officials put some used cars, with their visors signed by Gov. Arnold Schwarzenegger, and other items on EBay and Craigslist last week as part of what the governor promoted as the Great California Garage Sale and a boost for state coffers. But Eric Gazin, president of celebrity auction house Auction Cause, said the state’s ads for its sale of unneeded and unclaimed goods were so poorly done that “they are leaving a lot of money on the table.” 

For one thing, Gazin said, the pictures did not reflect well on the merchandise, which included a pearl ring, some earrings and a bunch of coat racks.

“A 12-year-old could have taken better pictures of jewelry and cars,” said Gazin, who once helped Schwarzenegger and Texas Gov. Rick Perry auction some boots on EBay for charity. “It looked like someone in their basement that made a very amateur attempt to sell something.”

Gazin pointed out that the state refused to ship the cars, thereby narrowing the field of potential buyers and possibly losing money. And the state’s policy of no returns or exchanges, with “no exceptions,” would discourage buyers.

He also said that the decision to ship small items by parcel post instead of priority mail would indicate to an experienced buyer that the state doesn’t know what it is doing. Gazin noted that the state also referred people through EBay to its own website, where it was advertising the tag sale. Directing customers to off-site merchandise is prohibited.

Erin Shaw, a spokeswoman for the State and Consumer Services Agency, said in a statement: "State workers are not specially trained in listing EBay items, so we are very pleased with the tremendous positive response we've received on each and every item."

Usher Lieberman, an EBay spokesman, said that referring customers to a sale off the site is indeed a policy violation, but “we’re sensitive to the position the state finds itself in, and we’re happy to be helping them to raise the profiles of some items that they have for sale.”

Lieberman also said the state’s return policy notwithstanding, if a customer purchased an item that was not as described, EBay would refund the money and pursue the issue with the state.

As of this afternoon, the state had nearly $58,000 in sales on EBay and $9,000 on Craigslist, plus more than $1 million from sales of items offered in a Sacramento-area warehouse.

--Michael Rothfeld in Sacramento

More than $1 million collected so far at Sacramento 'garage sale' [Updated]

Unemployment in California is high, which could partly explain why thousands of people had time to line up on a Friday morning to go shopping. Another explanation could be the impulse to find a bargain, as Gov. Arnold Schwarzenegger’s administration prepared to launch the Great California Garage Sale and unload some unneeded items, cheap.

The governor toured the site this morning, as shoppers who had waited since before dawn outside of the Sacramento-area warehouse filed in and others patiently stood in line again to make their purchases. The crowds thinned this afternoon.

Erin Shaw, a spokeswoman for the State and Consumer Services Agency, said that so far today the state had sold more than $1 million in items, although some laptop and desktop computers were still available, as was a dental chair.

“We do still have several hundred cars available for sale” as well, she said, though the flat-screen televisions were gone.

The state has been selling some items on eBay and Craigslist since last week, including cars with Schwarzenegger’s signature on the visor. Several California Highway Patrol motorcycles, also with his signature and priced at $2,200 each, went quickly at the warehouse. This afternoon, the governor listed another item – an autographed state of California jacket -- with a starting price of $1,000 on eBay.

Schwarzenegger promoted the sale as a way to help the state balance its budget, which was more than $20 million [correction: $20 billion] in the red until he reached a deal with lawmakers last month to cut many state programs.

-- Michael Rothfeld in Sacramento

State to close largest youth lockup, convert it to adult prison

The state is closing California’s largest youth prison as the population of juvenile delinquents in state custody continues to decline, corrections officials announced today.

The facility, the Heman G. Stark Youth Correctional Facility in Chino, will be converted into an adult prison.

Officials said the move is part of a plan to “right-size” staff at the Department of Juvenile Justice, which is downsizing its workforce by 400 employees this year in an effort to save the state up to $40 million.

The plan also is geared toward reducing treatment costs for youth inmates from $252,000 per person to $175,000, state officials said.

The Chino facility opened in 1959 and now houses less than 400 juvenile inmates. They will be redirected to other facilities. An exact date by which the closure will be completed has not yet been determined.

The number of juvenile offenders in state custody has dropped over the last 10 years from a peak of nearly 10,000 to approximately 1,700, the result of legislation that now puts most young inmates in county jails.

--Michael Rothfeld in Sacramento

Gov. Schwarzenegger calls Assembly gutless on prisons [Updated]

Gov. Arnold Schwarzenegger this afternoon said Assembly lawmakers “don’t have the guts” to make the cuts to the state prison system, criticizing them as politically motivated for stalling on a plan that would reduce the number of inmates in state lockups to save money.

“They don’t have the guts to go in there and to make the prison reform that they have been talking about for two decades, which we need to reduce the amount of inmates in there,” Schwarzenegger said in a webcast interview with the co-founders of Twitter at the company’s headquarters in San Francisco.

“The Assembly legislators, for them it was easier to go and make the $10-billion cut in education, but it is impossible for them to make the $1-billion cut” for prisons, he said.

Assembly delays vote on prisons package, will remove sentencing review from bill

Assembly Speaker Karen Bass has put off a vote on a package of legislation intended to trim spending on state prisons, and she intends to eliminate a provision of the plan that would have created a commission to reevaluate California’s sentencing laws, according to an Assembly source who was not authorized to speak publicly on the matter.

After keeping Assembly members until midnight Thursday in the hope of reaching a deal on prisons, Bass (D-Los Angeles) said she would try to approve it today. But based on conversations over the weekend, she still does not have enough votes from the Democrats who control the chamber.

“When we arrive at a responsible plan that can earn the support of the majority of the Assembly and makes sense to the people of California, we will take that bill up on the Assembly floor,” Bass said in a statement.

State off Moody's credit watch list; redemption of IOUs on track for Sept. 4

California’s finances have stabilized enough that today the state was taken off one watch list of debtors facing possible bond-rating downgrades.

Getting off the Moody’s Investor Services watch list means there is less threat of a ratings reduction that would cost taxpayers millions of dollars more when the state borrows money.

Moody’s action came a month after the governor and Legislature plugged a $23.6-billion budget hole by making deep cuts in spending.

"The outlook on the state of California is stable at this time, based on the expectation that the state will deal with any further challenges to its budgetary balance and liquidity without another major cash crisis," Moody’s said.

But the state is not completely out of the woods financially, the agency said: The amended budget "will most certainly leave the state with significant structural imbalance....’’

After California’s bonds were downgraded last month to three levels above junk status, any further rating reduction could have cost taxpayers millions more to borrow with general obligation bonds, which the state plans to do in the fall, said Tom Dresslar, a spokesman for the state treasurer’s office.

Removal from the watch list "reflects confidence that the budget fix adopted by the governor and Legislature solved this year’s problem and improved our cash-flow position,’’ he said.

In another sign that the state is emerging from financial chaos, authorities made it official Friday that $2.15 billion in IOUs issued by the state since July 2 can be redeemed starting Sept. 4, nearly a month earlier than originally scheduled.

Holders of IOUs can redeem them in person at the state treasurer’s office in Sacramento, or via mail. Those who redeem IOUs in person will get their money on the spot; mail will take a week to 10 days.

The mailing address is: State Treasurer’s Office, Attn: Registered Warrant Desk, 915 Capitol Mall, Sacramento, CA 95814.

-- Patrick McGreevy in Sacramento

 

California Assembly to return to prison bill next week

 The state Assembly will return Monday after adjourning late Thursday night without acting on a controversial bill passed earlier by the Senate to cut hundreds of millions of dollars in spending on state prisons.

Legislative leaders are preparing a competing proposal to bring up for a vote early next week.

The plan approved by the Senate, which was championed by Gov. Arnold Schwarzenegger, would reduce the time lower-level inmates spend behind bars and on parole. It stalled as a host of Assembly members vying for higher office refused to take a vote that could portray them as soft on crime.

Fee hikes for state parks take effect today

Higher fees for visiting state parks took effect today, part of the governor and Legislature's recent deal to balance California's budget. The new day-use fees and camping fees for each park can be found at the Parks Department website.

La Habra council set to pass unpaid furloughs for police officers, others

The La Habra City Council is expected to vote tonight on more than $1.5 million in budget cuts that will require unpaid furloughs for municipal employees.

Recent sharp declines in sales and property tax revenues have led to the shortfall in the city’s $33-million 2009-10 budget, said Assistant City Manager Jennifer Cervantez.

About half of the budget cuts will come from unpaid employee furloughs -- 104 hours per person, which amounts to a 5% pay cut. Two-thirds of those savings will come from the Police Department, Cervantez said.

“Although difficult, we commend our members and other city labor groups for agreeing to tighten our collective belts in order to help the city through our national recession,” Jim Tigner, president of the La Habra Police Assn., said in a statement.

-- Mike Anton, reporting from Orange County

Most O.C. courts to close on Wednesday to cut costs

Most Orange County courts will be closed Wednesday as a cost-cutting measure in response to the state’s fiscal troubles, and court employees will be furloughed.

The closures will occur on the third Wednesday of each month until the end of June 2010, said courthouse spokeswoman Carole Levitsky.

There will be only limited services at the Central Justice Center in Santa Ana and the Lamoreaux Justice Center in Orange.

Outside courthouses in Westminster, Fullerton, Newport Beach and Laguna Hills, sheriff’s personnel will be on hand to distribute instructions for those seeking emergency protective and restraining orders.

-- Christopher Goffard, reporting from Orange County

L.A.-area state parks could be shut down under new budget

At least five state parks in the Los Angeles area, including Pio Pico State Historic Park in Whittier and Los Encinos State Historic Park in Encino, are under consideration for closure as part of an effort to offset budget reductions, officials say.

Located about 45 miles apart, Pio Pico and Los Encinos are regarded as “sister parks” because each features 19th century adobe structures surrounded by more than five acres of manicured lawns, vineyards and shady sycamore, oak and ash trees.

They also provide thousands of visitors each year — many of them schoolchildren — with an opportunity to learn about the history and culture of California during the times of such historic figures as Pio de Jesus Pico IV, the last governor of “Mexican” California.

“I don’t think the gravity of this situation has sunken in yet with a lot of people,” Sean Woods, superintendent of the Los Angeles sector of the state parks system, said Wednesday. “But the day of reckoning has arrived.”

State officials have said they plan to close 50 to 100 of the 279 state parks, with the list expected to be made public by Labor Day. The state has never before shut down a state park, officials said.

California state park fees to rise next week

It will cost more to visit many California parks starting Monday.

Day-use parking fees will increase by $2 to $5, depending on the park, and camping fees will rise by $10 to  $21 a night, according to state parks Director Ruth Coleman.

“In these dire economic times, we can no longer afford to keep our fees at their current levels,” Coleman said. “The people of California understand that by charging more, we will be able to keep more parks open and preserved."

A list of parks where fees will rise will be made available when the increases go into effect, Coleman said.

The increases will not be enough to keep all state parks open, so officials are still seeking financial help from businesses and other sources.

The fee hikes and potential park closures are a result of deep budget cuts recently enacted by the Legislature and governor. Those include three furlough days per month for parks workers.

-- Patrick McGreevy in Sacramento

Photo: A trail marker at Mt. San Jacinto State Park. Credit: Beatrice DeGea / Los Angeles Times