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A group of San Francisco first-graders took an unusual field trip to City Hall on Friday to toss rose petals on their just-married lesbian teacher - putting the public school children at the center of a fierce election battle over the fate of same-sex marriage. The 18 Creative Arts Charter School students took a Muni bus and walked a block at noon to toss rose petals and blow bubbles on their just-married teacher Erin Carder and her wife Kerri McCoy, giggling and squealing as they mobbed their teacher with hugs. Mayor Gavin Newsom, a friend of a friend, officiated. A...

California's finances have tanked so badly that Gov. Arnold Schwarzenegger is considering calling an emergency session of the Legislature within the next month to reopen the very budget that lawmakers just passed - 85 days late. On Wednesday, the "Big Five" - Schwarzenegger, Democratic Senate leader Don Perata, Assembly Speaker Karen Bass and the legislators' Republican counterparts - Senate Minority Leader Dave Cogdill and Assembly GOP leader Mike Villines - are scheduled to sit down to formulate a strategy if they need to reopen the budget. The threat appears to be threefold:A. The national credit crunch: The price of short-term...

Sacramento, Calif. (AP) -- Gov. Arnold Schwarzenegger and California's top finance officials reacted cautiously Friday to congressional approval of the $700 billion Wall Street bailout package. They have been worried that the credit market will hurt the state's ability to get short-term loans to cover basic operating expenses, a step California takes each fall until the bulk of its tax revenue arrives in the spring. Even with the bailout plan passing, Schwarzenegger predicted a difficult path ahead in the financial markets. "California's not out of the woods yet," he said during a news conference in San Diego, noting that California...

Sacramento, CA (AP) -- Gov. Arnold Schwarzenegger has signed legislation making California the first state to require restaurant chains to reveal how many calories are in their standard menu items.

The three-judge decision earlier this month that jeopardizes tuition breaks for thousands of California's illegal alien college students may be legally correct. But it's likely to lead to a self-defeating economic strategy the nation will regret. The ruling, by members of the 3rd District Court of Appeal in Sacramento, upholds the contention of out-of-state students and their parents that under federal law, the University of California, California State University and the California community colleges may not give illegal alien students benefits they don't grant citizens and legal residents from other states. They call it an "illegal alien tuition scheme." UC...

Could more Republican members of the House of Representatives act like adults, please? If they can bring themselves to do so, the House may yet do the responsible thing and pass the financial bailout bill that failed on Monday. If not – well, let's not dwell on such a depressing prospect. What happened Monday was depressing enough. No one should have any doubts about who is responsible for the failure to pass the compromise plan worked out by the Bush administration and members of the Senate and House. For this package to work, both Democrats and Republicans have to have...

New fallout from the state's historic budget standoff came Friday in the form of gubernatorial vetoes, as Gov. Arnold Schwarzenegger blocked 18 bills and blamed his actions on the 85-day budget delay. The Republican governor signed a uniform veto message for 18 of the 27 bills he vetoed Friday that suggested he did not have enough time to review low-priority bills. Among the vetoed proposals were requirements that pet stores use humane methods in euthanizing rodents and restrictions on uses of human remains in exhibitions. "The historic delay in passing the 2008-2009 State Budget has forced me to prioritize the...

Senate Republicans on Friday blocked a plan by Democrats to pump $56 billion in government spending into the economy through public works projects, help for the jobless and money for states struggling with their Medicaid bills. The 52-42 tally fell well short of the 60 votes needed to defeat a GOP filibuster. The White House promised a veto anyway, saying the measure would not work and would cost too much. The House was expected to have better luck with a companion $61 billion House plan later in the day.

Until Wednesday afternoon, when GOP presidential nominee John McCain announced that he was heading to Washington to work with congressional leaders and the Bushies to craft a better bailout bill, both McCain and Democratic candidate Barack Obama clearly had believed that the last place they wanted to be seen was in Washington. More specifically, the last place McCain and Obama wanted to be seen was in the Senate, where they work. You see, the Senate, according to the latest CNN/Opinion Research poll, enjoys (if that's the word) a 22 percent approval rating, 78 percent disapproval. (The numbers for President Bush,...

During the annual – or, perhaps, perennial – impasse over the state budget, those in and around the Capitol play a little guessing game, called the budget pool, on when it will be enacted. Gov. Arnold Schwarzenegger signed the budget Tuesday with none of the usual hoopla, symbolizing official embarrassment over both its record tardiness and its failure to close the chronic deficit. And now there's a new guessing game: How long until it falls out of balance? The answer: One nanosecond. Or as state Controller John Chiang says, "Today we adopted a $103.4 billion budget that was out of...

Gov. Arnold Schwarzenegger signed a $103.4 billion general-fund spending plan Tuesday in his office with little fanfare, officially ending the state's longest-ever budget delay at 85 days. The Republican governor vetoed $510 million in line-item expenditures. Schwarzenegger's signature ensures the state will begin paying nursing homes, community colleges and state vendors for services. It remains unclear when the state will begin rehiring the 10,000 temporary and part-time workers Schwarzenegger terminated July 31. "While California is certain to face a difficult budget situation again next year, this budget does not take money out of people's paychecks or borrow from voter-approved local...

I understood the Bush administration's decision to promise up to $30 billion to facilitate the fire sale of Bear Stearns. I got the administration's decision to spend as much as $200 billion to stabilize mortgage giants Fannie Mae and Freddie Mac, which are worth about $5 trillion. Ditto the $85 billion federal bailout of AIG. As for this Bush administration "troubled asset relief plan" to authorize Treasury Secretary Hank Paulson to spend another $700 billion bailing out investment firms has too many question marks, I am not sold. Yes, I've talked to experts who believe the package is necessary to...

Frustrated by the longest budget impasse in California history, Democratic leaders are planning another ballot measure to end the two-thirds vote requirement in the Legislature to pass a state budget. Voters, by a 2-to-1 margin, defeated a similar effort in 2004 that would have also lowered the vote threshold to raise taxes from two-thirds to 55 percent. But incoming Senate President Pro Tem Darrell Steinberg and Assembly Speaker Karen Bass say this year's budget – now 84 days late – underscores the need to re-visit the issue in 2010, or next year if there's a special election. California is one...

A California appellate court ruling last week supports a lawsuit challenging a state law that grants illegal immigrants heavily subsidized tuition at California public universities and colleges. The court found that the 2001 law conflicts with federal law. As I read the ruling, I asked the question the judges cannot answer - as it is a policy issue best left to elected lawmakers: Why would a state subsidize the college tuition of students who cannot work legally in the United States when they graduate? Does California not have enough educated, angry people? Or does the state have so few angry,...

Yes, that was a puff of white smoke floating over the Capitol Thursday afternoon; nearly 100 days past the state constitutional deadline for enacting a state budget and after false starts and detours too numerous to list, Gov. Arnold Schwarzenegger and legislative leaders agreed on a spending and revenue package. Unless there's another political hitch – and one can never discount that possibility – the deal will be ratified by the Legislature today and legislators can go wherever they go when they're not fouling up things in Sacramento, including an assemblyman who's scheduled to marry a television anchorwoman on Sunday....

Like nine other states, California allows students who attend high school in the state for three years and graduate to pay in-state tuition at public universities. Yet a group of out-of-state parents doesn't like the law. The gripe? AB 540 allows kids whose parents entered the state illegally to pay in-state tuition. So they filed a lawsuit in Yolo Superior Court. Lawmakers passed AB 540 because they want kids who were brought to California through no decision of their own and who have little or no connection with their parents' country to be educated, productive members of society. The Superior...

McClintock's grim take on the budget: 'We have now reached the terminal stage of a bureaucratic state' Tom McClintock, who has been the most consistently accurate analyst of the state's budget nightmare of recent years, was one of 11 no votes on the budget in the Senate. Here are his remarks before his no vote: According to the State Controller's reports, last year, our tax structure produced $96 billion in actual revenues - a record year. We budgeted $103 billion and spent $107 billion. In short, our spending exceeded our revenue by $11 billion and exceeded our adopted budget by...

Arnold Schwarzenegger has talked a good game about ending "crazy deficit spending" for five years, but he's been curiously unwilling to confront the Legislature over the state's hopelessly tangled budget. Belatedly, however, Schwarzenegger may be discovering his inner action movie hero, declaring "enough is enough," vowing to veto the ill-conceived budget that lawmakers approved early Tuesday morning, demanding big changes, and even threatening to reject "hundreds of bills" unrelated to the budget if the Legislature overrides his veto. It sets up a historic confrontation between the governor and legislators of both parties who have, it would appear, set aside their...

The murky fate of San Francisco's would-be greenest building shows that when it comes to issues like climate change, political leaders are willing to go only so far. They happily announce new initiatives or tell people what to do. But when faced with large investments that might stimulate large-scale change, the rule of thumb is: Take a pass unless someone else picks up the tab. At least that's the case with the headquarters the San Francisco Public Utilities Commission was all set to build in Civic Center - one short block from City Hall - a 12-story billboard of sustainable...

Sacramento, CA (AP) -- A state appeals court has reinstated a lawsuit challenging a policy that allows some illegal immigrants to pay lower in-state tuition to attend California's public colleges and universities. The 3rd District Court of Appeal in Sacramento said Monday that a lower court erred in dismissing the suit brought by 42 students who paid far more to attend college because they were out-of-state residents. At issue is a 2002 law that made any California high school graduate who attended at least three years of high school in the state eligible for in-state fee breaks, regardless of immigration...

Sacramento, Calif. (AP) -- Gov. Arnold Schwarzenegger says he will not sign the compromise budget proposal California lawmakers are considering unless they make more changes. His letter to the four legislative leaders says he wants more money put in a rainy day fund and tighter controls on when that money could be spent.

All of a sudden, lawmakers are in a rush. They've had 11 weeks to pass a budget. Now they are preparing to slam one through as soon as this evening. Why the hurry? They don't want the sunshine. The "get-out-of-town" budget deal they've hatched seems to be so based on shaky presumptions and gimmicks that lawmakers don't want to give the public and the media time to vet it. Otherwise it would implode. It should. Precise details are still sketchy, but to reduce the bulk of the $15.2 billion deficit, lawmakers would make about $9 billion in spending cuts. The...

Legislative leaders said today they at last have a compromise deal on an 11-week-late state budget that calls for no tax increases, no borrowing from local governments or other state special funds -- and which makes no one happy. Emerging from a weekend meeting in the office of Senate GOP leader Dave Cogdill, the quartet declined to give specific details of their compromise plan, saying they wanted to talk to their respective caucuses first. But they said the plan closes the $15.2 billion gap in the $103.4 billion budget for the fiscal year that began July 1 with $9 billion...

First of all, I'm not sure in which forum to post this. I do not keep up with all the bills passed in the California State Legislature. But this just came in my email, so I checked it out. Dear Friends: This is an issue that is pretty much going under the radar, and I think we all need to make this telephone call. This is real. I just called. It took less than 30 seconds. It is just a recording and pressing 2 to say NO. Please read it!!! AB 2567 has passed the California Assembly and the Senate...

California lawmakers keep breaking records. Earlier this month, the Legislature surpassed the mark for state budget futility. Now Californians have given their legislators the worst rating in recorded state history. A Field Poll released Thursday showed only 15 percent of registered voters give the 120 lawmakers passing marks, while 73 percent disapprove of their job performance. "This is the lowest job (approval) rating recorded for anybody from any institution," said Mark DiCamillo, director of the 62-year-old Field Poll. "No one has ever gotten this low. Even Richard Nixon." The record budget standoff – now 74 days into the fiscal year...

Sacramento, Calif. (AP) -- The summer's been a bummer for Arnold Schwarzenegger. Although he still likes to say being governor of California is the best job he's ever had, Schwarzenegger has faced near-constant criticism from all sides in the state's drawn-out fiscal crisis. It's the same type of crisis he promised to lead the state out of when he jumped from Hollywood into politics five years ago, replacing former Gov. Gray Davis and promising to "blow up the boxes" of state government. Forget the GOP national stage for the moment: Schwarzenegger put off any plans to appear on the campaign...

California has two kinds of state employees: Sacramento workers and everyone else. It makes a difference, says Christine Valle, a Southern California state worker. "Having always worked in San Diego, going to Sacramento becomes a trip to a different mental dimension. The thought process is very different, much more self-centered, much more protectionist, much more political in the sense that everyone asks, 'How does this decision or action look?' " Anyone who works in a large organization confronts that question. Bureaucracies, public or private, can be dehumanizing. Huge agencies and businesses often have rigid rules and ruthless politics that can...

Ever since the California Taxpayers' Association endorsed Gov. Arnold Schwarzenegger's proposed budget -- which includes a temporary 1-cent sales tax hike -- conservative Republicans have gone on the offensive to discredit the 82-year-old taxpayers organization. The president of a rival taxpayer association said the group had been "rolled" by the governor. A regional vice-chairman of the Republican Party mocked them as "TaxCal." And on Tuesday, 31 of the 32 Assembly Republicans co-signed a letter blasting the group for making "a cynical political calculation" in supporting the governor's plan, which calls for the a permanent quarter-cent sales tax decrease after the...

When a ragtag band of conservative Republican activists first served notice on then-Gov. Gray Davis that they intended to recall him from office in the spring of 2003, the Democratic chief executive didn't take them seriously. But a few months later, with the help of money from a millionaire Southern California congressman, the recall effort had qualified for the ballot. By November, Davis was gone. Now Arnold Schwarzenegger is facing a similar but even more credible threat. And he is not taking it lightly. Nor should he. But if the group that is out to get Schwarzenegger follows through on...

Authorities on Tuesday arrested the president of a state workers union local on suspicion of possessing child pornography and violating his probation as a sex offender. Jaime E. Feliciano, 49, works at the state Insurance Department as a research program specialist, according to public records. Sacramento County Sheriff's Department spokesman Sgt. Tim Curran said authorities recently received a tip from police in Reno that Feliciano had inappropriate contact with a juvenile there. Curran said the tip was turned over to the high-tech crime task force, which is led by the Sheriff's Department. Task force members carried out a compliance check...

Majority Democrats today predictably voted down Senate Republicans' state budget plan which relied on borrowing and deeper cuts in lieu of new taxes. With 27 votes needed for approval in the 40-member Senate, 13 Republicans supported the measure and 21 Democrats opposed it. Lawmakers now have defeated three plans put forward -- a version of Gov. Arnold Schwarzenegger's proposal, one by legislative Democrats and today's GOP plan. The state has gone 70 days into the fiscal year without an approved budget, blocking billions of dollars in state payments to community colleges, health and social service providers and vendors who do...

Gov. Arnold Schwarzenegger has tried to cut state worker pay to the federal minimum wage until a state budget is done. He's tried laying off more than 10,000 part-time and temporary state workers. He's tried calling on voters to demand action from their legislators. He's tried calling for bipartisan cooperation. He's tried suggesting that lawmakers are cowards. He's tried abandoning his determination not to raise taxes. He's tried threatening to veto all bills. Still, California is officially in uncharted budget territory, without a spending plan for the 2008-09 fiscal year that began July 1. In search of a way to...

There's little doubt that these are tough economic times for most Americans. But of all the people affected by such a downturn, perhaps no one suffers more than low-wage workers who struggle even in good times to make ends meet. Their challenge in acquiring and maintaining assets – a house, a business or even a savings account – makes them even more vulnerable when times get tough. Millions of American households have no checking or savings account of any kind. The "unbanked" typically don't know if they qualify, how to open accounts or even if they should. Without bank accounts,...

VALLEJO — A federal judge ruled Friday that Vallejo is eligible for municipal bankruptcy protection, setting the stage for a major battle over possible dissolution of city employee union contracts. The decision came less than a week after the close of a monthlong court clash between the city and union attorneys. City insolvency challengers, including three major unions, had argued that the city did not meet the legal requirements for bankruptcy protection. U.S. Chief Judge Michael McManus soundly rejected that contention in a 52-page ruling. With bankruptcy protec-tion, the city may adjust its debts without immediate reprisal from its creditors....

Sacramento - -- The state Senate will vote today on a budget by Senate leader Don Perata that's similar to Gov. Arnold Schwarzenegger's latest spending plan for California that's 60 days late. But whether Perata will get two Republican votes needed in addition to unanimous support from Democrats to meet the two-thirds requirement in the Senate remains unclear. One significant issue is the Oakland Democrat's proposal to increase the sales tax by a penny per dollar for three years. Republicans have said they will not support any tax increases to help erase the $17.2 billion budget gap that includes $2...

Sacramento -- Gov. Arnold Schwarzenegger, who promised not to sign any bills until lawmakers reach a budget deal, reversed his position today and signed a bill for a statewide bullet train system that he strongly supports. The governor also wants to make exceptions for three other proposals that he has been promoting: budget reform; changing the state lottery to allow California to borrow against future ticket sales; and a bond proposal for water infrastructure. The high-speed rail legislation will replace a $10 billion bond measure on the November ballot with a revised version of the proposal that makes the bullet...

Oakland's finances appear to be far worse than suspected.Former City Manager Robert Bobb, who has parachuted into town at the request of Mayor Ron Dellums to try to sort out the fiscal mess, has discovered that Oakland's reserves have been drawn down by as much as $48 million in the past year, and accounting for most of the missing funds hasn't been easy.Just last year, Bobb said, the city reported a reserve of between $60 million and $70 million, but as of June, the account had dipped to $22 million. Bobb said that as far as he's been able to...

Gov. Arnold Schwarzenegger went public Wednesday with yet another state budget proposal, one that he said reflects a true compromise between Republican and Democratic goals for a spending plan. The proposal includes a three-year, one-cent increase in the sales tax, an effort to build a bigger state savings account for rainy days, and more spending cuts than he proposed when he released his last set of ideas in May. With no budget agreement in sight in the Legislature 51 days into the fiscal year, Schwarzenegger said the lack of a budget is "shameful." "Many Medi-Cal hospitals are not getting paid,...

SACRAMENTO — Assemblyman Sandre Swanson is convinced that the only way to avoid lengthy budget stalemates in the future is to strip the minority party of what he calls its out-sized influence. The Oakland Democrat is among a handful of East Bay lawmakers who want voters to overturn the constitutional requirement that two-thirds of the Legislature must approve the budget. Now in its 50th day, the budget standoff is threatening to spill into next month as both parties remain far apart on finding a solution to the state's estimated $15.2 billion deficit. "It just has to change, and citizens will...

SACRAMENTO (AP) -- California's Republican lawmakers on Sunday rejected a Democratic proposal for $6.6 billion in tax increases on the wealthy and corporations despite an offer to boost the state's rainy day fund. The failed vote now pushes California's budget impasse into its eighth week with no compromise in sight. The 45-30 vote in the state Assembly was the first since the state began its new fiscal year July 1 without a budget. It came after four hours of debate during which 49 of the Assembly's 80 members spoke. Democrats offered a revised tax plan that's smaller than the $8.2...

With a budget vote looming, Assembly Democrats this afternoon released a summary of the key proposals they will push.The Assembly is scheduled to vote today on a new budget, 48 days after the state began the new fiscal year with no spending plan.Republicans are not expected to support the budget proposal because its centerpiece is an income tax increase on California's wealthiest residents. Today's vote is politically important, nonetheless, because it could show whether any Assembly members are wavering on their party's position. The state Senate is not expected to meet.Assembly Speaker Karen Bass characterized the budget proposal as a...

California's unemployment rate soared to 7.3 percent in July, with nearly 400,000 more workers in the jobless ranks than a year earlier, indicating that we still haven't hit bottom in this recession. What started out as a sudden meltdown in the housing industry has spread to many other sectors, most obviously retail sales. Auto dealers are closing their doors throughout the state, and the Mervyns department store chain has sought bankruptcy protection, to cite but two examples. Steve Levy, who runs the Center for the Continuing Study of the California Economy, has devised a "misery index" of unemployment and inflation...

If you've been paying attention to California's chronic budget problems, you know that they fundamentally stem from a disastrous decision in 2000 by then-Gov. Gray Davis and legislators of both parties to squander a one-time windfall of revenue on permanent spending increases and tax cuts that could not be sustained over the long haul. It was, however, just one of three similarly irresponsible decisions during Davis' governorship, which was cut short by his recall in 2003. A second was to sharply increase state worker pensions on the assurances of the union-dominated California Public Employees' Retirement System that they could be...

California taxpayers could be on the hook for a staggering $388 million because of a state tax collection agency's vigorous pursuit of a former California taxpayer. In a case that one tax expert called "completely unprecedented," jurors in a Clark County, Nevada District trial awarded Las Vegas inventor Gilbert P. Hyatt $250 million in punitive damages Thursday for the "outrageous conduct" of Franchise Tax Board auditors in an investigation that began in 1993. The award was on top of $138.1 million jurors gave Hyatt last week for "invasion of privacy" and "emotional distress." . . . "As far as I...

Cancel those Sunday plans: The Assembly and the Senate have tentatively scheduled floor votes on a budget bill that day. It does not mean a deal is imminent. Lawmakers want a floor vote by this weekend to meet a deadline set by Secretary of State Debra Bowen for placing measures on the November ballot. Many see the deadline as a moving target, however, and believe the vote Sunday may be the first in several floor exercises before a final deal is struck. Assembly Speaker Karen Bass, D-Los Angeles, said lawmakers plan to vote Sunday on a modified version of the...

Republican lawmakers have it within their sights to enact what could be the most far-reaching reform of state budgeting in modern times. The deal on the table would create a real rainy day fund, setting aside monies during boom years to use when state tax revenues fall. The effect would be to slow the growth of state spending and reduce pressure to raise taxes – a top priority for the GOP. The deal would also give the governor new authority to cut certain spending in midyear if revenues were to dip below a set threshold. For Republicans, this would be...

Senate President Pro Tem Don Perata began Wednesday saying he had made enough concessions to secure a budget deal with the governor and called for Republicans to sign on. But the day ended with little progress, as Perata concluded that negotiations remained at "impasse." So goes the topsy-turvy world of California's budget standoff amid a $15.2 billion deficit. "We're huddling now and trying to see what our next step will be," Perata told reporters Wednesday afternoon. Hours earlier, Perata described a compromise with Gov. Arnold Schwarzenegger that would temporarily increase the state sales tax by 1 cent and restrain future...

The federal receiver in charge of California's inmate health care system is asking a judge to seize $8 billion from the state's treasury over the next five years. Court-appointed receiver Clark Kelso on Wednesday said he needs the money to build new medical units for 10,000 sick or mentally ill inmates.

It's still a long way from being fully cooked, but the fuzzy outline of a deal on the much-delayed, deficit-ridden state budget is becoming visible as the deadline for placing measures on the November ballot draws near. Secretary of State Debra Bowen says Saturday is the deadline, but Capitol types believe it could be stretched a week or two. And the deadline, whenever it may be, is an important ingredient in any budget deal, because at least one of the pending elements would have to be placed before voters. The central element is what Gov. Arnold Schwarzenegger calls "budget reform"...

Vallejo, already in an economic tailspin, has lost about 20 percent of its police force since the city began its slide into bankruptcy. About 25 of its 150 or so sworn officers have retired or left for other cities, afraid their pensions or salaries may be slashed if a federal bankruptcy court allows the city to void its union contracts. "It's a tragic loss for this city," said Vallejo police Lt. Don Hendershot. "We've lost a lot of dedicated, experienced officers. It's very sad seeing these guys go, but I understand why they're leaving." The North Bay city of 117,000...