We're scrambling to find a way to ignore what may well be the worst budget crisis in California history. But the damn thing has a way of haunting our sleep like some wicked fiscal succubus, lasciviously wiggling her balance sheets and pink slips. Curse you, demon of the night! State Senate President Don Perata and a certain governor keep going back and forth on the numbers, but we're now more than forty days into the crisis, and nothing has budged. Perata has proposed taxing the wealthy to finance starving government services, and Schwarzenegger has tried to blackmail the Democrats into talking turkey on spending cuts by reducing state employee salaries to minimum wage. Last week, the governor appeared to budge a bit when he suggested temporarily boosting the state sales tax, a regressive measure that would hit the poor hardest, but was received by the Dems as a welcome sign that compromise may be possible.
Ah, but then those pesky Republican legislators had to go and refuse to sign onto any tax whatsoever. So we're back to Square One, as Perata told Democratic legislators not to bother trying to attend the historic Barack Obama coronation thingy in Denver. Two key planks in the budget negotiations — an attempt to create a rainy-day fund so this problem doesn't recur in the future, and Schwarzenegger's plan to borrow against future Lottery revenues — require voter approval, and the deadline to put it on the ballot expires August 16. So it's talk, talk, talk, until something gives.
Jerry Brown Gets Jumpy
All this must have Jerry Brown capering about in a fugueish hysteria. The attorney general and Oakland resident has clear plans to run for governor again, and the worse things get, the more dramatic his contrast with Schwarzenegger will be. Especially if he keeps grabbing headlines like the ones he got last week. First, Brown declared that even if voters pass Proposition 8, the initiative to ban same-sex marriage, his office won't sue to retroactively invalidate any marriages conducted before Election Day — a quick and easy way to endear himself to the gay-empathic. Then, like the tough guy he is, Brown filed a massive lawsuit against an Illinois-based travel agency service, claiming that its owners set up a pyramid scheme to sucker people into paying big commissions to set up franchises. His lawsuit seeks $25 million in fines and restitution. See, Brown's a law-and-order guy with a heart!
Feel the Pain!
Meanwhile, the tough times keep a-comin' closer to home. Let's start with the Port of Oakland, which announced plans to lay off roughly one hundred people, or 15 percent of its total workforce. Seems rising fuel prices have slapped around the airlines, and the airlines have cut back on the number of flights coming in and out of the airport. Port officials have estimated that there will be 20 percent fewer passenger seats at the airport, which means a significant drop in revenue. (Union officials counter that the port left itself vulnerable to such tough times by borrowing deep to acquire a fleet of fancy new container cranes.)
Out in the more landlocked regions of the East Bay, Lawrence Livermore Laboratory has reportedly cut around nine hundred jobs since October, largely due to cuts in federal funding.
Just in case you thought the pain was only in the public sector, let's review the private side of the ledger. Jamba Juice, the big Emeryville juice retailer, has seen same-store sales drop 7.3 percent in the second quarter, leading to the ouster of the company's chief executive officer and chief financial officer. The PMI Group, the Walnut Creek mortgage insurance firm and one of the biggest companies in the East Bay, announced an astonishing $246.3 million loss in the second quarter. (Gambling on the housing bubble turned out to be not such a smart idea. Who knew?) Even the tony members of the Blackhawk Country Club have it rough, as managers deal with that irritating drought. They even hauled a drilling rig up to the grounds and $50,000 punching holes in the earth, looking for groundwater they could tap. The facility turned out to be dry as a bone.
Nolo Press, the funky and fun publisher of legal information for ordinary folks, announced they may leave Berkeley when their lease expires. ... The Oakland school district has put another parcel tax on the ballot, hoping to boost teacher salaries but threatening to provoke tax fatigue among voters. ... Outgoing state Assemblywoman Loni Hancock has introduced legislation raising lobbyist fees by a factor of 26 (Wow!) in order to pay for an experiment in public campaign financing. ... Prosecutors indicted Oakland resident Maurice Jackson for allegedly running a Ponzi scheme and bilking gullible investors out of between $1 million and $15 million. .... Three members of Congress have urged the Attorney General to investigate how information about Don Perata's FBI investigation keeps leaking to reporters. ... Tenants at the California Hotel plan to sue the City of Oakland for $53 million, claiming that the city tried to close the low-income residential facility and reopen it as a homeless shelter. ... A local land trust has bought 423 acres of pristine open space near Hercules, forever saving it from development.
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