Post Recall Madness--Let the Screwing Begin

[RainyDay]

Ahhhhnold's number one advisor is former governor Pete Wilson, the man who brought California energy deregulation and nearly bankrupt the state as a result. That's the energy deregulation that has already led to 2 or 3 energy companies getting a slap on the wrist from FERC, Bushie's best pals. I've already received my big fat $18 refund from PG&E while Kenny Lay is luxuriating in his Dallas penthouse.

So today, the headline reads:

New push to deregulate energy
Schwarzenegger electricity plan fuels fears of another debacle

And why not? Any electorate ignorant enough to recall the governor and replace him with the team that help create California's current budget crisis is dumb enough to stoop over for a good screwing by the energy companies FOR THE SECOND TIME. Maybe this is what Enron needs to pull it back on its feet. Pete Wilson must be laughing his ass off. He can't believe that Californians are so easily manipulated and so down right fucking stupid.

New push to deregulate energy
Schwarzenegger electricity plan fuels fears of another debacle

Zachary Coile, Chronicle Political Writer Saturday, October 11, 2003

---------------------------------------------------------------

Gov.-elect Arnold Schwarzenegger is preparing a push to deregulate the state's electricity markets -- a move embraced by business leaders and some energy analysts but criticized by many Democrats and consumer advocates as a return to the failed policies that sparked California's energy crisis.

Although the new Republican governor-elect will be consumed at first with tackling the state's budget woes, his advisers say he will push changes next year aimed at lowering energy costs for industry and large power users while encouraging energy firms to build more power plants to help meet rising demand.

The actor-turned-politician made little mention of his plan to reduce state regulation of energy markets during the recall race, devoting his time instead to bashing Gov. Gray Davis for saddling the state with expensive long-term contracts for power. But with many of those contracts set to expire in the next two years, the governor-elect will have to present his solutions or risk facing his own energy crisis.

"We will need more power, and we have to make some serious decisions about how that's going to happen," said Severin Borenstein, director of the University of California Energy Institute. "For the next six months or so, we're in good shape, but if we put it off for a year or a year and a half, then we're going to be under real pressure."

Schwarzenegger's energy strategy is being driven by some of the same members of former Gov. Pete Wilson's team who led the push for energy deregulation in the mid-1990s. The governor-elect, for example, picked for his transition team Jessie Knight, a former Wilson appointee to the Public Utilities Commission and a leading proponent of deregulation.

Consumer groups already are warning that the proposals made by Schwarzenegger during the campaign would expose electricity users to greater fluctuations in prices while limiting state oversight of power trading -- a combination that could allow the type of market manipulation that plagued California during the state's energy crisis in 2000-01.

DEREGULATION HAS BEEN COSTLY
"Deregulation has already cost the state $50 billion, give or take," said Mike Florio, senior attorney for The Utility Reform Network. "Why on earth anyone would want to do that again is mystifying to us."

Florio also said he was suspicious of Schwarzenegger's idea because former Enron Corp. Chairman and CEO Ken Lay met with the actor and others in the spring of 2001, when Lay was pushing deregulation in California. Schwarzenegger has said he doesn't remember details of the meeting.

But supporters of Schwarzenegger's energy proposals say they steer clear of the flaws that bedeviled the 1996 deregulation plan passed by the Legislature and signed by Wilson. Most importantly, the governor-elect would not restrict utilities from entering into long-term contracts for power. The restriction imposed by the 1996 deregulation plan forced Pacific Gas & Electric and other utilities to buy at peak prices on the spot market. The earlier deregulation scheme also included a rate freeze that barred utilities from passing along the increased costs to customers.

Under Schwarzenegger's plan, large industrial and commercial energy users would be allowed to sign contracts and buy cheap power from private generators instead of the utilities. Called "direct access," this central provision of the Wilson plan was abandoned during the energy crisis. While large users who were in the program were allowed to stay, the state barred any new businesses from contracting out for power.

2 MARKETS FOR ELECTRICITY

The proposal would create two markets for electricity: Residential users and small businesses would continue to get power from the state's utilities, while large users could take their chances with private energy firms.

Erik Saltmarsh, director of the state's Electricity Oversight Board, said the plan carries risks for large users if they make deals with energy-trading firms that later go belly up -- such as Enron.

"There is a certain amount of fairness in saying, 'Let them take the risk,' " Saltmarsh said.

PUC Commissioner Jeff Brown opposes the plan, saying it would leave residential users and small businesses to pay off the billions of dollars of debts racked up by PG&E and other utilities during the energy crisis.

"If you have customers, usually large-scale customers, depart from the utilities, it leaves everyone else behind paying the bill," Brown said.

Jan Smutny-Jones, executive director of the Sacramento-based Independent Energy Producers, an industry group, said any business that joined the "direct access" program would likely pay a surcharge to cover the past debts.

Republicans have long argued that consumers would have reduced their power usage during the energy crisis if they had been forced to pay the high prices that utilities were incurring on the wholesale market. So Schwarzenegger is calling for a system of "real-time pricing" where large users would pay more for power during peak periods and less during off-peak times. Sophisticated meters already installed at most industrial sites could even shut off power when supplies are too tight.

BUFFER AGAINST BLACKOUTS
The plan would also mandate that utilities meet minimum reserve requirements to provide a buffer of extra energy in the system to avoid blackouts.

"Most of the plan is quite encouraging," Borenstein said. "It seems to recognize that there are benefits from using market incentives in some places, but it also recognizes that there are risks and those risks need to be dealt with."

The Republican governor-elect also embraced a proposal by the Federal Energy Regulatory Commission to consolidate local grid operators -- such as California's Independent System Operator (ISO) -- into a regional organization that would oversee power transmission across a number of Western states. Proponents claim that standardizing the transmission system would encourage energy firms to invest in new plants, preventing supply shortages.

But the proposal, which has been debated as part of the federal energy bill in Washington, has faced heavy resistance from lawmakers in Western and Southern states, who fear a loss of control over the power grid.

"The states don't want to go there," said PUC Commissioner Loretta Lynch, a Democrat. "The Western governors are against it, the Southern governors are against it. The only people who are for it are the energy companies and deregulation ideologues."

Democratic lawmakers in Sacramento are already warning that they would block any effort to push another deregulation plan through the Legislature.

"Not only is the Legislature in no mood for it, the Legislature's position is really a reflection of the fact that the public is in no mood for it," said state Sen. Joseph Dunn, D-Garden Grove (Orange County), who is planning an initiative for the November 2004 ballot to regulate energy firms that do business in California. "The polling shows that 75 percent of Californians want to re-regulate the electricity system."

Schwarzenegger will also face opposition from the state PUC, which is stacked with five Davis appointees. However, two of the most pro-regulation commissioners -- Lynch and Carl Wood -- end their terms at the end of next year, allowing the governor-elect to shake up the commission.

E-mail Zachary Coile at zcoile@sfchronicle.com.

[graypencil]

I'm speechless!

fool me once, shame on you ..

fool me twice, at least use some KY jelly first

[Tanager]

Originally posted by graypencil
I'm speechless!

fool me once, shame on you ..

fool me twice, at least use some KY jelly first

You should ask for a kiss and a cigarette when he's done, too.

[RainyDay]

Soon you will be hearing the misinformed whining about how the Democrats are thwarting the will of the people on the vehicle license fee. But, as has been reported repeatedly before the election, it will take an act of the State Legislature or a voter approved ballot measure to overturn the hike in fees. As has been reported for many weeks, the enabling legislation that permitted the reduction in fees in 1998 had an escape hatch in the event of a downturn in the state's econmony. The 1998 reductin in fees was due to the booming the economy. The VLF is now set at an artificially low level, a 1998 level. Gray Davis did not break the law or create new law when he reinstated the full VLF. Most of the funds from the VLF go to local governments. It will be interesting to watch this little drama unfold.

[RainyDay]

NOTE: Santa Clara County is where San Jose is located and is the heart of Silicon Valley.

KCBS RADIO

Santa Clara County Leaders Prepare to Cut Services and Lay People Off
Source: kcbs
Publication date: 2003-12-16


(KCBS) - The Santa Clara County Board of Supervisors faces unprecedented budget cuts as board members meet for their last scheduled meeting of the year. Jim Taylor in the KCBS Santa Clara County Bureau says the Board actually opened its meeting with a prayer.

"We pray for our Santa Clara County Board of Supervisors. Give them understanding hearts and minds, wisdom to make good decisions, especially with budget cuts from vehicle license fee reductions and the downturn in our economy."

The sluggish economy led to a $200-million budget deficit. The repeal of the Vehicle License Fee increase and failure of the legislature to act to backfill those reduced funds has led to another $90-million loss.

"The loss of that money is just going to kill us. It really is," said Supervisor Blanca Alvarado. "We're facing one of the most momentous times in county history. We have seen the rising of the waves for some months now, and we're about to be hit by a big tsunami."

Layoffs and service cuts are expected.

"We've got tremendously good mental health services," said Alvarado. "At a time when there is so much anxiety and stress, those mental health services are going to be indispensable, but we're going to have to cut."

Supervisor Don Gage said the cuts are devastating.

"What we're looking at is a reduction in service. If you do service, there will be layoffs that go along with that," he said. "The services that people were getting several years ago, they will never see again."

Gage told KCBS he thinks this will be the way things are for a long time.

"There doesn't seem to be any great hope that it will change anytime soon," he said. "All the previous years I have been on the board have always been years where there was plenty. We were never really in a cutting mode. Now, all we're really going to be doing is cutting every year, which is unpleasant."

Counties and cities all over the state hope the legislature will act soon to backfill the money lost when the Vehicle License Fee increase was repealed.

Republican lawmakers wanted to act on a bill to cover the fee reduction. But democratic lawmakers said they wanted to focus on the larger budget picture before promising money when they were not sure where it would come from.

(12:10pm, gcb)

[RainyDay]

SF Chronicle

POLITICAL WATCH
Groping issue won't go away

Wednesday, December 10, 2003


--------------------------------------------------------------------------------



Quote: "After consulting with legal counsel and advisers, the governor has concluded that given the political nature of the allegations, an investigation would only provide more fodder for his political opponents."

-- Rob Stutzman, spokesman for Gov. Arnold Schwarzenegger.

News Flash: On the same day he announced he was dropping plans for a promised investigation of pre-election charges that he had groped or harassed 16 women over several years of his acting career, the governor was hit with a libel lawsuit by one of the women, who claims she was falsely tarred as a felon by the Schwarzenegger campaign staff.

Background: After issuing general apologies to anyone he had offended by bad behavior toward women on "rowdy" movie sets, Schwarzenegger promised the now-abandoned inquiry upon his election. Movie stuntwoman and libel plaintiff Rhonda Miller says that, after her groping complaint, she was defamed and lost her livelihood when Schwarzenegger spokesman Sean Walsh steered news media to the online criminal record of a similarly named woman.

Upshot: The independent inquiry had offered the governor an opportunity to clear the air. With his decision to scrap the investigation, Schwarzenegger is obviously hoping the issue will just fade away. It won't, as long as new lawsuits emerge and old rumors persist.

[RainyDay]

LA TIMES

December 14, 2003 E-mail story Print

Steve Lopez:
Points West
Mud Splashes Back at Governor


Victory in hand, Gov. Arnold Schwarzenegger still has a problem, and I don't just mean budget cuts. I'm talking about what can be called a Paula Jones situation.

You could see the lawsuit against him coming from a mile away, and last week it landed in Los Angeles County Superior Court with a thud that rattled all the way to the governor's office in Sacramento.

The story begins Oct. 6, the day before Schwarzenegger won the election, when a Hollywood stand-in and stunt double named Rhonda Miller claimed she had been sexually harassed by Schwarzenegger on the sets of "Terminator 2" and "True Lies." Miller, 4 feet 11 and 100 pounds, said she had resisted and run screaming from Schwarzenegger.

After the October news conference, she headed home to Burbank to care for her 87-year-old mother. Before she got there, she turned on the car radio and found out what can happen when a no-name takes on a powerful celebrity, particularly when he happens to be running for office.

"I couldn't believe what I was hearing," said Miller, 53, who was being called a convicted felon on a radio show.

When she got home, she turned on the tube and saw the same allegations regurgitated on local and national TV, and there was even more on the Internet. She was a forger, a prostitute, a drug pusher, a thief and more.

Miller was horrified, particularly because none of it was true. Her daughter, a teacher, heard the news and called to ask what was going on.

Here's the answer:

The Schwarzenegger team, reeling from sexual harassment allegations by a parade of women, went after Miller with a vengeance.

Schwarzenegger denied Miller's claims that he had lifted her shirt, photographed her breasts and sucked on them, or that he had harassed her again on the set of "True Lies." His campaign staff also produced two crew members from "Terminator 2" who denied Miller's claims.

Then came the rough stuff.

Sean Walsh, a Schwarzenegger campaign spokesman, sent an e-mail to editors and reporters, directing them to the Los Angeles County Superior Court Web site.

Type in the names "Rhonda" and "Miller," Walsh suggested.

The result?

A rap sheet popped up, dealing a crushing blow to Miller's believability.

Just one problem.

It was the wrong Rhonda Miller.

When you typed in her name along with the correct birth date, you got nothing, because Miller's record, at least in Los Angeles County, was clean.

Whoops.

Last week, Miller filed a libel suit against Schwarzenegger, his campaign organization and Walsh, for attempting to destroy her reputation. Her attorneys are Paul Hoffman and Gloria Allred.

Miller hasn't found work in Hollywood since accusing Schwarzenegger and then getting trashed by his campaign. She just started a travel job, selling vacation packages.

She said she couldn't sleep the night she was accused, because she was reeling from a double whammy.

First she gets pawed and feels powerless to do anything about it. And then she gets crushed like a cockroach for speaking up in support of other women whose claims of harassment were being challenged or dismissed as fun and games.

"I didn't go anywhere," Miller told me of the days after she was made out to be a lowlife. "I didn't want to go outside, and I basically stayed in the house…. I felt sick and disgusted."

Defamation cases can get pretty complicated, particularly when you factor in the unpredictability of juries. But unless Schwarzenegger knows something about Miller he hasn't told us about, he appears to be in a bit of a pickle.

It doesn't seem to help that, back in October, when Walsh was asked about the hatchet job on Miller, he said he had "worded that e-mail very carefully."

What's that supposed to mean?

Seems to me a jury could interpret that to be an admission that the Schwarzenegger camp was up to no good, and decided to see how many news organizations would take the bait.

Or, legally speaking, that the Schwarzenegger campaign had malicious intent or acted with reckless disregard for the truth.

Schwarzenegger attorney Martin Singer put up a good front by saying he was confident the libel suit would be thrown out. But if he's wrong, none of the options look good.

The governor can claim he knew nothing about the e-mail, and hang Walsh out to dry. But Walsh was his employee, and Schwarzenegger certainly didn't do anything to call the dogs off of Miller.

The governor can get out his checkbook and try to make Miller go away, but that could be seen as an admission of a despicable character assassination by a man who promised to get to the bottom of all the groping allegations against him.

(Schwarzenegger's investigation of himself has been called off, however, an unsettling development that leaves us wondering if the real groper is still on the loose.)

Schwarzenegger could take his chances in court, but that could be disastrous.

When I interviewed Miller in Allred's office, Allred was wearing an alligator pin the size of a possum. As a general rule, you should avoid courtroom confrontations with a lawyer brandishing a reptile.

She'll be tenacious, says GOP consultant Arnie Steinberg. She's also a highly partisan Democrat, Steinberg said, and may have an agenda beyond the defense of her client. Allred, of course, denies that this is about politics.

We'll see.

This isn't a perfect parallel, but President Clinton's fibbing during a deposition in the Paula Jones sexual harassment case torpedoed the president in the Monica Lewinsky scandal.

"As Jim Carville made clear subsequently, the biggest mistake President Clinton made was not settling right away with Paula Jones," says Democratic consultant Bill Carrick.

"That way you stop a process that just keeps devolving into a bigger and bigger mess."

Gov. Schwarzenegger and his entire campaign team could be dragged in for depositions on the general theme of, "What did you know about smearing Miller, and when did you know it?"

Allred's not the only one up to her neck in alligators.

[RainyDay]

OAKLAND TRIBUNE

Article Last Updated: Tuesday, December 16, 2003 - 6:14:35 AM PST

12/16/2003

City, counties to sue state over car-tax revenue cut

Governor Schwarzenegger may hold news conferences this week to reaffirm his vow to reimburse local governments

By Steve Geissinger - SACRAMENTO BUREAU

SACRAMENTO -- Cash-strapped cities and counties -- from the Bay Area to Southern California -- said Monday they will launch a court battle to win back $4 billion in car-tax funds for public safety and other key services now that lawmakers have failed to act.

At the same time, Gov. Arnold Schwarzenegger, who cut the unpopular car tax and is awaiting legislative action on replacing the lost funds, has told city officials he may hold news conferences this week to reaffirm his vow that the state will reimburse local governments.

Without swift state replacement of the revenue, cities and counties must sharply pare what they call already slim budgets for the ongoing 2003-04 fiscal year. The first drastically reduced monthly state payments to local governments came last week.

"Cities and counties from last Wednesday forward are using their credit cards to pay the state's bills," said Pat Leary, a spokeswoman for the California State Association of Counties.

"You will probably be seeing something relatively soon in the way of a lawsuit," she said.

Megan Taylor of the League of California Cities said she expected attorneys to take "at least another week or so" to prepare for the filing of the lawsuit.

Their comments came after a marathon meeting Monday in which local government officials not only mapped out their legal strategy but also plotted plans to maintain public pressure on Schwarzenegger and lawmakers to make up the lost funds.

The city and county groups are working toward a joint lawsuit, though officials in numerous individual jurisdictions, including Berkeley and Los Angeles, have expressed interest in waging their own legal battles.

Local government associations said their lawsuit will center on assertions that the state is legally obligated to pass along the car-tax revenue to cities and counties or make up any reduction in the flow of funds.

Lawmakers recessed Friday after approving a deficit recovery package that will put a $15 billion state bond and new spending restrictions before voters in March. Though the Legislature is scheduled to return in January, it may not swiftly address the issue of reimbursing local governments.

The Republican governor, making good on a campaign promise, rolled back vehicle license fees by two-thirds and vowed to make up the lost revenue to cities and counties.

But the Democrat-dominated Legislature blocked the effort because majority leaders are awaiting Schwarzenegger's 2004-05 spending plan -- due next month -- before addressing his proposals to reimburse local governments and to make $1.9 billion in midyear cuts in social programs and other services.

Assembly Minority Leader Dave Cox, a Sacramento Republican who authored one of the reimbursement bills, said Monday he found it ironic that Democrats representing struggling cities voted against taking up his measure.

Local government officials said they expect Schwarzenegger to include the car-tax reimbursement for the current and coming fiscal years in the budget he will pitch to lawmakers.

Cities and counties would prefer that the matter be settled in the Legislature, rather than the courts, since legal battles are time-consuming, costly and uncertain.

But even if lawmakers move toward reimbursing local governments, the governor's spending plan would fall apart if voters reject Schwarzenegger's proposed $15 billion deficit bond in March.

If the state fails to replace the lost car-tax revenue, Alameda, Contra Costa and San Mateo counties will be among the hardest hit in the Bay Area. Alameda would lose $78.3 million by the end of this fiscal year. Contra Costa would lose $49.7 million and San Mateo, $36.9 million.

Cities within those counties, depending on population, will be deprived of anything from tens of thousands to tens of millions of dollars. The city of Oakland alone will lose more than $17.4 million it was expecting for the fiscal year that began July 1.

Contact Sacramento Bureau Chief Steve Geissinger at sgeissinger@angnewspapers.com .

[RainyDay]

SACRAMENTO BEE

Daniel Weintraub: Arnold's 'never again' reserve falls short of billing

By Daniel Weintraub -- Bee Columnist

Published 2:15 a.m. PST Tuesday, December 16, 2003

Gov. Arnold Schwarzenegger says the new budget reserve plan he negotiated with the Legislature will prevent the state from ever again descending into the kind of deficit spending spiral in which California finds itself today.

But a close look at the details of the proposal, which will go before voters on March 2, suggests that it falls well short of accomplishing the goals Schwarzenegger was trying to achieve.

Schwarzenegger is seeking three things: a balanced-budget requirement, a real reserve to guard against economic downturns and new powers for a governor to cut spending if a deficit emerges after the annual budget has been adopted. But all three elements in his plan are flawed, perhaps fatally so.

First, the balanced-budget requirement doesn't actually require that lawmakers approve a balanced budget.

The state has used borrowing of all kinds the past few years to avoid facing a crucial fact: spending was outpacing revenues. When borrowing from special state funds and future revenue streams was no longer sufficient to paper over the deficit, the state finally made it official and decided to sell a bond to cover its red ink.

The new measure would explicitly outlaw that sort of deficit bond without a vote of the people. It also makes a stab at banning other sorts of borrowing. But it focuses only on deficits already accumulated. It does not outlaw borrowing to paper over a deficit. That's a loophole large enough to let future legislators and governors drive a California-sized mortgage through.

Next, the measure seeks to establish a new reserve forcing the state to sock away money in good times that can be used to prevent shortfalls when the economy slows. That makes sense. But the version approved by the Legislature won't work as advertised.

First, the reserve is on the small side. It is set to grow eventually to 5 percent of state spending or $8 billion, whichever is larger. Given current projections, that means the reserve might be in the 7 percent range when it first reaches full capacity, then decline toward 5 percent over time. Ten percent, or even 15 percent, would have been better. But the size isn't the only issue.

The real problem is that there are no restrictions on how and when the money is used. The governor could suspend transfers into the reserve at any time. And the Legislature could transfer money out of the reserve and back to the general fund at any time. This is an invitation to mischief. It could even make the effects of the next downturn worse than the one we just experienced.

Suppose, in an economic expansion, state revenues and spending both are growing at a rapid clip, say 10 percent per year. Suddenly the economy slows, and revenue growth drops to 5 percent -- not exactly an emergency but cause for a change in policy direction.

Under this plan, the governor and the Legislature could drain the reserve and use the extra money to keep spending at a 10 percent growth rate for one more year. If revenues fell flat the year after that, the reserve would be empty and spending would still be growing at a far faster clip than could be sustained.

The result: a massive shortfall. The reserve would not have prevented a deficit but actually helped create a larger one.

The way to avoid this unintended consequence is to allow the reserves to be spent only under truly adverse conditions. One option could be when revenues decline from one year to the next, a relatively rare phenomenon. A more realistic approach would be to allow use of the reserves only when revenues fall short of what it would take to sustain -- but not expand -- current services for another year.

The final piece of the new anti-deficit plan was supposed to provide a way for governors to cut spending when a deficit emerges after the annual budget has been enacted. A sensible approach would have been to allow the governor, in a fiscal emergency, to make spending reductions the same way he does now when he signs the budget, and then subject those cuts to a legislative override.

Instead, the final version of the bill allows the governor to call the Legislature into special session and demand that lawmakers address the problem. If they do nothing for 45 days, lawmakers would be prohibited from conducting other business. But as long as they passed any bill to address the shortfall, they could continue as usual, even if the governor vetoed their approach. In practice, such a provision is unlikely to yield anything very different from the stalemates we see today.

The state got into its current fix by committing a one-time revenue windfall to ongoing programs and tax cuts. The way to prevent a repeat is to recognize the distinction between ongoing and one-time revenues and to restrict the ability of policymakers to make long-term commitments with short-term resources.

Nothing in the plan to which Schwarzenegger and the Legislature agreed would accomplish that goal. The measures it employs instead are likely to be poor and ineffective substitutes.
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About the Writer
---------------------------

The Bee's Daniel Weintraub can be reached at (916) 321-1914 or at dweintraub@sacbee.com. Readers can see his daily Weblog at www.sacbee.com/insider

[BFrank]

Well, Rainy, the only thing that keeps me sane is knowing that we, in the Bay Area, voted AGAINST the recall.

[Mike Schwartz]

A bird's eye view and a simple observation on DMV registration fees.


With all this *screwing* and *raping* talk in reagrds to these goverment issues.

The DMV hike that the new Guv took down WAS in fact a tax poorly disguised as some kind of *much needed increase*

BS!! Californians have been laying down for the most outrageously high DMV fees for the longest time. The current rolled back registration is 2,3,4,5X what others across the USA pay. There are more motor vehicles in CA than any other state has citizens. If the DMV and Caltrans can't live on that money, than those 2 state run industries need to be gutted from the ground up.

Also, we're OVERtaxed when we go out to buy a car.
Californians pay tax on the entire price of the car they buy, regardless if they are trading in a car, even those titled and paid in full.

EXAMPLE:
In NY [so we don't give an example from a place that doesn't have high taxes] you go in to buy a $30,000 car... the car you trade in is agreed to be worth $15,000...deduct your trade equity and pay tax on the remaining amount of $15,000.

But the same car in CA for the same price and have the exact same trade value and YOU MR.MRS.MS, CALIFORNIA RESIDENT get to pay sales tax on the entire $30,000 purchase price and because times are hard [boo-hoo,sniff,sniff,we're the only ones] you now get to pay about $700 registration fee on that new car you just bought [which is good for the local & national economy] FOR ONE [1] YEAR instead of around $230 for one year which is the highest in the nation.

On the DMV fee chart that was recently repealed if you bought a car for $0-$46, the REGISTRATION ON THAT CAR WOULD HAVE BEEN $46.00 FOR ONE YEAR.

Is anyone who is not from California gasping at the sight of those charges?
I know I did when I first moved here........but you get used to it.

WELCOME TO CA. where we used to welcome you and your car that you brought with you from your previous state and charged you a $300 IMPACT FEE, and were ordered to register the car within 10 days of residency...so it used to be like BOOM.....CAR $800 including the state's pre-determined registration fee based on value of the car according to CA_DMV.

Does lube come in 55 Gal. drums??

Actually, once upon a time, Florida had those same impact fee's(for those coming in from out of state).

Then the courts ruled them to be illegal, and most people got refunds from the state.

[RainyDay]

Originally posted by Mike Schwartz
A bird's eye view and a simple observation on DMV registration fees.


With all this *screwing* and *raping* talk in reagrds to these goverment issues.

The DMV hike that the new Guv took down WAS in fact a tax poorly disguised as some kind of *much needed increase*

BS!! Californians have been laying down for the most outrageously high DMV fees for the longest time. The current rolled back registration is 2,3,4,5X what others across the USA pay. There are more motor vehicles in CA than any other state has citizens. If the DMV and Caltrans can't live on that money, than those 2 state run industries need to be gutted from the ground up.

The DMV registration fee increase was 100% consistent with state law. The law that permitted a rollback in fees also provided for reinstating the higher fee in the event of state budget shortfalls. That is the law. Gray Davis didn't pull a fast one. He did exactly what the law allows.

The DMV registration fees go to local government, not to Caltrans. State transportation funds come largely from the federal government's Highway Trust Fund and state gas taxes. That's why local cities and counties are planning to sue the State in order to receive the DMV funds. What local governments are claiming is that it is illegal for the State to confiscate DMV fees. That's why cities and counties are cutting police and fire services, because DMV fees are used primarily for public safety.

This is why I am so angry about these issues. People don't understand how their taxes are collected and distributed but they are so sure thay are being overtaxed. Then they vote for an idiot who has no better understanding of these issues.

[RainyDay]

Basically, the Governator campaigned on a promise to cut local fire and police services and the people of California said, "Yeah, cool!"

In today's LA TIMES:

December 17, 2003

City, Counties Vote to Sue State

Local governments seek to recover $4billion in revenues lost in the reduction of the car tax.

By Sue Fox, Jessica Garrison and Andrew Blankstein, Times Staff Writers

After weeks of fruitless lobbying in Sacramento, leaders of a dozen California counties and cities voted Tuesday to sue the state over Gov. Arnold Schwarzenegger's car tax reduction, a cut that plunged local governments $4 billion into the red.

Among those directing their attorneys to prepare lawsuits: Los Angeles County, which stands to lose $760 million a year if the state does not make up the lost revenue; and the city of Los Angeles, which could lose $150 million annually. The counties of Contra Costa, Humboldt, Orange, Riverside, Sacramento, San Diego, Santa Barbara, Tuolumne, Tulare and Yolo also decided to sue, according to the California State Assn. of Counties.

Los Angeles Councilman Jack Weiss, a former prosecutor who pushed for legal action against the state, put it bluntly: "Sacramento, either we see your dollars in our police stations and firehouses … or we will see you in court."

The showdown between local and state government has been simmering for months.

During his whirlwind campaign this fall, Schwarzenegger promised voters that he would reverse the state's tripling of the vehicle license fee, a tax that has supported local governments for about 70 years.

He did so Nov. 17, his first day in office.

Much of the money being refunded to motorists was earmarked for police and fire protection, but it also pays for health programs, parks, libraries and other services.

The governor has repeatedly vowed to make up the difference to cities and counties, but the fractious Legislature — already grappling with a multibillion-dollar deficit — has not agreed to come up with the money.

Many legislators have already left Sacramento for the holiday break, and local governments are losing about $11 million a day.

In Riverside County, which stands to lose $80 million a year, Board of Supervisors Chairman John Tavaglione called on the governor to defend local governments more forcefully.

"It's time for him to knock some heads together in Sacramento," he said.

The governor's office, as it has in the past, faulted the Legislature for "misprioritizing" cash so that local governments came up short.

"It's unfortunate that the cities and counties have chosen this route, since the governor agrees with them and stands with them," said Vince Sollitto, a Schwarzenegger spokesman. "The administration will, of course, defend the taxpayers of the state against these suits."

Sollitto said the governor would continue to press the Legislature to allot $4 billion from the state's general fund to make local governments whole.

If filed en masse, the lawsuits against the state would mark a bold approach for local officials, who typically collaborate with their Sacramento counterparts to get things done. The idea, as explained by Los Angeles County Supervisor Zev Yaroslavsky, is to force the state to produce the money that the governor said would be available for local governments when he cut the car tax.

"No one wants a lawsuit," said Los Angeles City Atty. Rocky Delgadillo. "Government suing government is a terrible waste of time and a last resort…. However, the Legislature cannot be allowed to balance the budget at the expense of safe streets."

Former Los Angeles Superior Court Judge Eli Chernow said that, if state law guarantees cities and counties funding — and they argue that it does — it is "quite possible they can make a compelling case that the state did promise" adequate funding for police and fire services.

Senate President Pro Tem John Burton, the San Francisco Democrat whose support would be crucial to any deal, dryly congratulated cities and counties for their legal maneuvering.

"Good for them. Why not? Good for them," Burton said. "They ought to sue everybody, including the governor. I hope they just sue everybody."

"It's unfortunate that it's come to that, but you can't blame them," said Senate Republican Leader Jim Brulte (R-Rancho Cucamonga), who supports reimbursing local governments for the lost car taxes.

In Los Angeles, ominous forecasts of service cuts came fast and thick Tuesday. County officials warned of severe budget reductions that would close parks and senior centers, yank sheriff's deputies off the street, free criminals from jail and pull lifeguards from beaches.

Flanked by Dist. Atty. Steve Cooley and Los Angeles Police Chief William J. Bratton, county Sheriff Lee Baca scolded state lawmakers for failing to adequately fund public safety, which he described as one of government's primary functions.

If the vehicle license money is not restored, Baca said, his department could lose 1,500 deputies next year. He said he would be forced to release all inmates convicted of misdemeanors from the county jails, even as the department's ability to investigate murders, rapes, drug-dealing and gang crime was severely impaired.

The county Fire Department, meanwhile, may have to close fire stations or lay off lifeguards, leaving about 13 miles of shoreline unguarded, said Fire Chief Michael Freeman.

"Simply stated, people are going to drown, and many Los Angeles County beaches are going to be dangerous places to visit," Freeman wrote in a memo to county administrators.

In the district attorney's office, Cooley said his budget could be pared by $40 million next year, leading to layoffs of 150 prosecutors, two dozen investigators and 75 support workers. The Probation Department would lose $60 million, potentially forcing the closing of nine probation camps serving 2,000 minors.

The projected effects of the budget cuts go far beyond public safety programs. Dozens of county parks and nature centers could be closed, including the Whittier Narrows Recreation Area, South Coast Botanic Garden and Los Angeles County Arboretum, officials said. All recreation programs would be eliminated, according to a preliminary list drafted by the county Department of Parks and Recreation.

Even the county's ailing public health system would not escape the knife. The Department of Health Services, which runs six county hospitals and a network of clinics, would lose nearly $207 million through June and about $230 million the following fiscal year if the state did not make up the lost revenue.

The effects would be somewhat more muted for the city of Los Angeles, which could lose $105 million through the end of the fiscal year in June.

Proposals under consideration include trimming library and park hours, postponing repairs to city sidewalks and dropping plans to add extra firefighters and police officers. City officials began to prepare a list of employees by seniority, in case layoffs were necessary.

Officials also planned to meet with the city's labor unions today to seek money-saving concessions. In the long term, Bratton warned, residents will get what they pay for in the form of fewer officers and rising crime rates.

So far, none of the gloom-and-doom scenarios have swayed a Legislature that has struggled with difficult choices all year.

"Of course we want to give the cities what they want, but I'm not going to take eyeglasses from some 80-year-old, half-blind senior citizen," said Assembly Speaker Herb Wesson, a Los Angeles Democrat. "I can't in good conscience do that."

--------------------------------------------------------------------------------
Times staff writers Seema Mehta and Patrick McGreevy contributed to this report.

[RainyDay]

Robbing Peter to pay Paul. This just gets better everyday. More proof that the Governator never had a budget plan in place. In today's LA Times:

December 18, 2003 E-mail story Print

Gov. to Speed Local Funds

Schwarzenegger says he will bypass lawmakers to replace lost car-tax revenue. But Democrats question where the money will come from.


By Evan Halper, Peter Nicholas and Nancy Vogel, Times Staff Writers

SACRAMENTO — Under pressure to pay cities and counties the billions they stand to lose from the car-tax cut he enacted last month, Gov. Arnold Schwarzenegger thinks he has found a way to circumvent the Legislature and order the payments to continue immediately, administration officials said Wednesday.

The governor will invoke an obscure state law that administration officials say allows his director of finance to order emergency payments for various programs when they run over budget.

The law typically has been used to fund cost overruns in the state prison system and health-care services. The administration is arguing that the money local governments could lose this year from the car-tax cut is also an emergency that must be dealt with immediately.

If the tactic succeeds, the governor and Legislature would have to cut $2.65 billion from other programs by June 30 to keep the budget in balance. Schwarzenegger will propose today that the car-tax money be made up by $1.9 billion in current year cuts that his administration presented to the Legislature last month, and $1 billion in higher-than-expected tax receipts as a result of the improving economy, aides said.

Cities and counties have warned that the loss of the vehicle license fee money could result in immediate layoffs of police officers and firefighters and in station house closures, jeopardizing public safety. A dozen local governments have authorized their attorneys to file lawsuits against the state to get the money.

Schwarzenegger's policy decision was announced by a senior administration official at a news conference that had been billed as an informational briefing. Rob Stutzman, administration communications director, said his aides did not want to identify the senior official who spoke at the briefing because it was intended for background purposes only.

Democrats immediately challenged the idea to make payments to local governments.

"It's of doubtful legality," said Senate President Pro Tem John Burton (D-San Francisco). "He's skating on very thin ice."

The governor, Burton said, "made promises to the locals, so I guess he's trying to keep them. But when we go to appropriate $3 billion in a deficiency, I don't know where he's going to get it."

Burton, the most powerful Democrat in the Legislature, said he was angry when he learned that state Finance Director Donna Arduin briefed the press on the move before discussing it with legislative leaders.

"My biggest beef is the lack of courtesy," he said. "What it does, it doesn't augur well for future relationships…. The major part of this I learned from the press."

Before making the tax cut, Schwarzenegger had promised that cities and counties would not lose any money through the action. But legislative leaders refused to appropriate the makeup funds without an agreement on what programs would be cut.

Assemblywoman Jackie Goldberg (D-Los Angeles), who serves on the joint legislative budget committee, called the move "a very dangerous precedent and a very dangerous thing that he's doing."

Goldberg said that, typically, the committee's staff would review requests for money from departments that have run short.

"I've never heard of a governor doing anything without at least sending it to the legislative committee," Goldberg said.

But officials at state Controller Steve Westly's office said they would send local governments the checks after Schwarzenegger makes the order today.

"The state has a legal obligation to continue the backfill and to ensure that local governments are kept whole," said Rick Chivaro, chief counsel to Westly. "The administration's proposal accomplishes this legal objective through the end of this fiscal year."

In recent days, local officials have mounted a strong lobbying effort aimed at getting Schwarzenegger to keep his promise and to warn of the consequences.

Several mayors said Wednesday that they were invited to Sacramento today to be briefed on the plan. Los Angeles Mayor James K. Hahn's office said he was coming to the capital today for a briefing from Schwarzenegger on plans for repaying the car tax money.

Fresno Mayor Alan Autry said he had received no official word or invitation. But Autry, an early supporter of Schwarzenegger's campaign who had criticized the governor earlier this week for a lack of action, exulted when informed of the decision late Wednesday night.

"Let me tell you something — that's leadership," Autry said.

Some Republican legislators also were pleased.

"I'd say it's a pretty smooth response on a very vital issue," said Assemblyman Tim Leslie (R-Tahoe City).

Administration officials say that the potential loss of revenues to local police and fire services — and the failure of the Legislature to appropriate the money — constitute a legitimate emergency, and that they are left with no choice but to take action.

The law defines an emergency as "conditions of disaster or extreme peril that threaten the health or safety of persons or property."

Under the administration's interpretation of the law, the controller must start sending the checks to the cities and counties beginning with the next scheduled payment Dec. 26, and the Legislature has until March 1 to pass a bill with cuts in government services or tax increases to make up the $2.65 billion the move will cost the state.

The governor's plan would cover payments to local governments through the end of this fiscal year. In January, he will propose a budget for fiscal year beginning July 1 that starts with a $14-billion deficit; about $4 billion of that is the full-year cost of the car tax payments.

The governor also will use a new law written into the budget this year to cut various state programs by 5% on his own authority. Those cuts, which will trim only $150 million of the cost of the $2.65-billion payment the governor is ordering, are to be unveiled today. The rest of the cuts require legislative approval.

Administration officials said the end result of the combined actions will be that local governments will not lose a penny of their vehicle license fee payments. Initially, projections showed the loss to local governments would be $3.6 billion this year. But a dip in car sales earlier in the year resulted in fewer vehicle license fees being paid than originally projected.

On Dec. 26 local governments will receive $40 million if the administration is successful with this action.

Budget analysts, meanwhile, said the governor's move could prove legally problematic.

"This would certainly be unprecedented," said Jean Ross, executive director of the California Budget Project, a group that researches the effect of budget actions on low-income Californians. "I don't believe that the authorization [to make emergency payments] was intended to take care of situations of this magnitude."

[RainyDay]

More proof of the Governator's duplicity in today's LA Times:

December 18,

Schwarzenegger Taps Insiders at Fundraiser

By Dan Morain, Times Staff Writer

SACRAMENTO — In the political equivalent of a premiere, Gov. Arnold Schwarzenegger, who campaigned on a promise that he would not solicit special interest money, turned to Capitol insiders for donations Wednesday in his first Sacramento fundraiser since taking office.

To attend the event at the Sheraton Hotel two blocks from the golden-domed Capitol, donors paid up to $21,200 — the maximum that individuals can give to Schwarzenegger's gubernatorial campaign committee. That sum entitled them to two tickets, a photo with the governor and dinner with him and about 100 other contributors. For $500, individuals could attend a reception.

There was no red carpet, but several television cameras were on hand to record the arrival of roughly 600 lobbyists, clients and others who came to the event. As the contributors filtered in, a small gathering of protesters from the Foundation for Taxpayer and Consumer Rights, a consumer group based in Santa Monica, demanded access in return for a payment. Their offering: 21,200 green jelly beans. They didn't get past the hotel's front door.

Money from Wednesday's event will add to the $2.24 million Schwarzenegger has raised since ousting Gov. Gray Davis in the Oct. 7 recall election. More than half of that sum came from Davis' traditional donors — oil companies, developers, a major lender and an array of other interests.

"Anyone who believed candidate Schwarzenegger's claims that he would be different has got to very disappointed," said Jim Knox, director of California Common Cause.

By comparison, Knox noted, Gov. Pete Wilson raised $1.2 million during his first six months in office in 1991. Gov. Gray Davis raised $6 million in his first six months in 1999.

The events' sponsors included the California Manufacturers & Technology Assn. and developer Alex Spanos, owner of the San Diego Chargers football team. Spanos, his family and executives in his firm have donated $344,000 to Schwarzenegger since the recall campaign began in the summer.

"Networking opportunity," lobbyist J. Kevin Pedrotti said, explaining why he was attending on behalf of one of his clients.

Pedrotti noted that he was not attending on behalf of the Indian tribes he represents that own casinos. Schwarzenegger has said that he will refuse money from public employee unions and Indian tribes that own casinos, noting that he would have to negotiate with them over labor contracts and compacts governing gambling.

He also has a policy of not accepting money from trade groups that represent a single industry — such as the California Restaurant Assn., the California Motor Car Dealers Assn., and the California Realtors Assn. But although he turns down money from such groups, he does accept money from companies and from individual members of the groups.

Since the election, donors with significant interests in real estate and construction have given at least $472,000 in contributions to Schwarzenegger. Companies involved in financial and insurance industries have given him $444,000. Professionals, such as lawyers, accountants and dentists, have given $147,000. Companies involved in health care and pharmaceuticals have donated $144,000, and $105,000 has come from the entertainment industry.

Among the individuals who helped finance Davis' campaigns and are now making contributions to the new governor is San Diego Padres owner John Moores. Along with his wife and individuals from his firm, Moores has given $63,000 to the Republican governor since the recall. Moores and his wife had given $225,000 to Davis before the $21,200 limit took effect. Davis appointed Moore to the UC Board of Regents.

And Schwarzenegger has taken at least $113,000 from firms that have contracts with the state. Many of his donors employ lobbyists who push for and against legislation each year.

"If anyone thinks that by contributing $50,000, someone is going to have a leg up, it's ridiculous," said Marty Wilson, one of Schwarzenegger's top political aides.

The fare for Wednesday's event was a cut above most Sacramento fundraisers. The $500 reception featured sushi, lamb chops and shrimp scampi, plus an open bar.

"The wine wasn't as bad as it is at most fundraisers," said John Mockler, who long had been an education lobbyist.

The entertainment also was better than most — provided by the governor himself.

Samples: "Schoolkids can't spell simple words like 'Schwarzenegger.' … This is the time of year when people talk about heavy-set men with large red noses — but enough about Sen. Edward Kennedy," the uncle of Schwarzenegger's wife, Maria Shriver.

The governor also made reference to the fact that the event was attended by "special interests." He noted that he spent much of the recall campaign denouncing them — and he thanked them.

"He's a lot funnier than any recent governor," said lobbyist Bob Naylor, a former Assembly Republican leader whose firm, Nielsen Merksamer, has a client list that ranges from oil giant BP to tobacco companies and several counties.

Some candidates turn down money from tobacco companies, gun manufacturers or the oil industry. Although Schwarzenegger accepts money from oil companies, he is the rare, or perhaps only, California officeholder who refuses money directly from trade groups that represent such mainstream businesses and professions as homebuilders and physicians.

"I don't understand it," said Steve Thompson, who oversees governmental affairs for the California Medical Assn., whose donations have never before been turned down. He said he had offered a contribution on the group's behalf shortly after the recall election, but was rejected.

"Frankly," Thompson said dryly, "our feelings are hurt that we can't attend a political fundraiser because we get so few invitations."

One of the sponsors of Wednesday's event was the California Manufacturing and Technology Assn. — a trade group.

Schwarzenegger's aides noted that the association represents such broad-based firms as aerospace giant Northrop Grumman, the pharmaceutical firm Baxter Healthcare Corp. and the makers of Budweiser beer, Anheuser-Busch Cos. The group's interests are varied, ranging from the cost of electricity, health care and workers' compensation insurance to tax policy.

Schwarzenegger political advisor Wilson said the governor's ban on money from trade groups remains in place "for now," leaving open the possibility that the policy could change.

He described the original decision to reject such money as a "judgment call," adding that a "single-issue trade group would be more closely aligned with voters' perception of what is a special interest."

The fundraiser in Sacramento was the fourth the governor has held since taking office five weeks ago. He plans to hold a fifth next month in San Francisco. Initially, Schwarzenegger's aides said the money would be used to help Schwarzenegger pay off a $4.5 million bank loan he took out to help fund his campaign.

On Wednesday, Wilson said no decision has been made about the debt's repayment. At least some of the money is being used to "pay off bills left from the campaign" and to pay accountants and attorneys who will represent the governor in routine state audits of candidates' campaign accounts, he said.

Some lobbyists took a pass on Wednesday's event. One, who spoke anonymously to avoid offending the governor, said it would be a "pretty typical political evening," only more crowded and with less opportunity to talk to the man in charge.

"It is going to be a mill," he said. "You'd be talking to the same people you talk to all the time." Besides, he added, his corporate clients that are big businesses "don't need to stand in a photo line" to be heard.

[RainyDay]

The man has no budget plan. In today's LA TIMES:

December 19, 2003 E-mail story Print

Schwarzenegger Seizes Reins of Power in Capitol

December 19, 2003

Cities, Counties Regain Billions; Gov.'s Aide to Cut Education

By Evan Halper, Jeffrey L. Rabin and Nancy Vogel, Times Staff Writers

SACRAMENTO — Gov. Arnold Schwarzenegger on Thursday went around the Legislature by issuing an executive order authorizing the restoration of billions of dollars that local governments lost when he cut the vehicle license fee last month.

At a news conference where he was flanked by dozens of enthusiastic local government officials, the governor announced that he was invoking an obscure budget law to make the payments directly out of state coffers without legislative consent. And he criticized lawmakers for recessing for the holidays without taking action to restore the payments.

"Even though time is running out for local governments and they are stranded with no money, our Legislature has left town," he said. Since the legislative leadership had not acted, he said, "I am acting without them."

The governor also announced that his finance director, Donna Arduin, would use expanded power given to her in this year's budget to make $150 million in cuts to higher education and other programs on her own authority.

Those cuts will not go far toward offsetting the $2.65 billion in car tax revenue that cities and counties counted on for public safety and other programs until Schwarzenegger rolled back a fee increase enacted by former Gov. Gray Davis.

But the governor proposed that the sum be made up by combining some of the $1.9 billion in midyear cuts that he had already requested with a windfall of $1.8 billion in accounting changes and projected revenue that the state expects to receive by June as a result of improvement in the economy.

The proposed cuts face resistance, however, within the Legislature, which is dominated by Democrats. And even if Democrats were to vote for them, they would do little to help Schwarzenegger resolve a projected deficit for next year that will grow from $10 billion to $14 billion as a result of the continuing car tax loss.

While Schwarzenegger portrayed his action as another sign that he was restoring fiscal responsibility to state government, the state's credit standing suffered yet another major downgrade Thursday.

Fitch Ratings, which advises investors on public and private financing issues, downgraded the state's credit three notches to BBB.

The move now puts California just above junk bond status with all three of the major bond-rating houses.

Earlier downgrades by Standard & Poor's and Moody's Investors Service added $55 million to the price of short-term loans that the state has secured to remain solvent through June, officials said.

Democrats quickly warned that the governor's action — called a deficiency request in legislative parlance — may be illegal, and that it is irresponsible of him to order the payments without a plan to bring the budget into balance.

"Is it an appropriate issue for a 'deficiency'? People really doubt that," said Senate President Pro Tem John L. Burton (D-San Francisco).

Burton suggested that lawmakers might call officials from every city and county to testify before the Legislature about why they are in dire need of the funds.

"The question would be, if it's a deficiency, the Legislature still has to vote on it, which means they still have to come to us and they will explain each and every locale that's in peril if they want to get this money," he said.

Schwarzenegger said lawmakers had left him with no choice but to make the move. He argued that the car tax hike enacted in October had to be reversed because it was illegal, and local governments should not suffer because of that.

To authorize the restoration payments, the governor invoked a provision of budget law that allows him to order emergency appropriation for cost overruns in critical government services.

Past governors have generally reserved that approach for unanticipated growth in the prison population or health-care rolls.

But Schwarzenegger argued the $2.65 billion that local governments stand to lose this year as a result of his car tax cut also constitutes an emergency that must be dealt with immediately.

State Treasurer Phil Angelides, a Democrat, called the governor irresponsible for obligating the state for billions of dollars more in payments without a plan for balancing the budget.

"To say I'm going to take $2.7 billion in a state that is already $14 billion underwater is disingenuous," Angelides said. "The money will come from somewhere. He just isn't telling the people where it is going to come from."

The governor refused to discuss how he would deal with the rest of the deficit.

"This is really not a press conference about my budget," he said. "The budget will come out Jan. 10 and we will have plenty of time to talk about it and argue with legislators."

The governor is constitutionally required to present the next year's budget by Jan. 10.

Through the day, Democrats endeavored to understand the legal implications of the governor's move. Some argued that he does not have the authority to appropriate money without them.

Schwarzenegger said he was on firm legal ground.

He said administration lawyers and the controller's lawyers had looked at the law "and it was very clear I have the power to do that."

The governor was indeed given a boost by state Controller Steve Westly, a Democrat, who broke with party ranks to support the payments. Only days ago, officials in Westly's office said Schwarzenegger could not make the payments by executive order.

But soon after administration officials shared their plan with the media on Wednesday evening, Westly's office announced its support.

The controller was the lone Democratic state official to stand with the governor at the news conference.

"The Legislature has given the governor the legal authority to do this, and my office will issue the payments," he said.

Local officials applauded Schwarzenegger's move. Los Angeles Mayor James K. Hahn, who had harsh words for the governor over the potential loss of car tax payments only a week ago, praised the governor.

"We haven't seen this kind of bold leadership in Sacramento for a long, long time," he said.

Oakland Mayor Jerry Brown, a former Democratic governor, also lavished praise upon Schwarzenegger.

The $150 million in cuts that Schwarzenegger announced will affect a wide range of programs, from social services to higher education.

California State University officials said Thursday that they would reduce enrollment during the coming year by 4,000 students as a result of $23.7 million in midyear spending cuts announced by Schwarzenegger.

The retrenchment will cut enrollment from 409,000 to about 405,000 students. CSU officials said that they would begin the cutbacks immediately and that most of the system's 23 campuses are likely to shut off new admissions for the spring term. University of California programs will be cut by $29.9 million, including a reduction of $12.2 million for outreach efforts.

At the same time, Schwarzenegger reversed himself on cuts to the developmentally disabled that his administration had earlier proposed — and which brought thousands of protesters to the Capitol. The governor called that proposal "a mistake on my part."

[RainyDay]

Cali's bond rating first dropped when the recall initiative was certified last summer. Now this. Yassah, this here recall has done California all kinds of good. Call him Arnold Without A Plan. Or Arnold Without a Clue.

In yesterday's Daily News, in LA:

Article Published: Thursday, December 18, 2003 - 8:27:15 PM PST

Bond rating agency drops state's status to 'BBB'

By Don Thompson
Associated Press

SACRAMENTO -- A second Wall Street rating agency cut California's bond rating to near junk-bond status Thursday, even as Gov. Arnold Schwarzenegger said he would use his emergency powers to cut the budget to send more money to cities and counties.

Fitch Ratings lowered the state's bond rating three notches, from A to BBB. Anything below BBB- is considered to be below investment grade, or "junk bonds."

The service also put the state on a "rating watch," meaning an additional downgrade is likely within months.

Its decision affects nearly $30 billion in general obligation bonds as well as obligations issued by several state and local building and financing authorities, though it left nearly $2 billion in self-supporting veterans bonds at an A rating.

Schwarzenegger said he was not concerned by the downgrading and expected the rating agency to change its decision as his budget plan develops.

The firm cited "California's widening budget gap, its intention to increase the amount to be raised from deficit funding and the magnitude of measures necessary to restore balance."

In his first act as governor, Schwarzenegger added $4 billion to the state's budget deficit by rolling back a vehicle license fee, or car tax, that went to fund city and county services. As a result, Fitch said, "the planned deficit funding of $10.7 billion has been enlarged to $15 billion."

Schwarzenegger also persuaded state lawmakers to ask voters to approve a $15 billion bond measure on the March ballot, up from about $13 billion in legally questionable borrowing previously approved by the Legislature.

However, Fitch noted in its announcement, "The decision to submit the bonds and the balanced budget proposal to the electorate injects another element of uncertainty." Democratic Treasurer Phil Angelides already has been urging voters to reject the bond measure.

The firm did not address Schwarzenegger's unilateral budget reshuffling Thursday. The governor's emergency authority allows him to shift up to $2.7 billion from the state's general fund to local governments. However much Schwarzenegger actually transfers will increase the state's budget deficit, currently projected at about $8 billion by the end of the fiscal year in June.

On Dec. 9, Moody's Investors Service similarly took California's bond rating another step closer to junk bond status. Moody's action, in turn, mirrored a downgrade last summer by Standard & Poor's.

California has suffered with the lowest credit rating among all 50 states for most of the last year.

Lower credit ratings could cost taxpayers millions of dollars in higher interest costs on the billions of dollars the state will likely need to borrow in the coming months.

If the state's credit falls below junk bond status, many major pension funds and other big mutual funds will be unable to buy California bonds, causing the state to pay even higher interest rates among smaller investors and even risk not being able to raise all the borrowed money it might need.

[Dr Dave]

California moves toward junk bond status. As California goes, so goes the Nation. Oy.