Tuesday, October 19, 2010

Tuesday Must Read: Big Oil Gives Up on Prop 23; State Pot Crop Worth $14 Billion

By Robert Gammon
Tue, Oct 19, 2010 at 7:03 AM

Stories you shouldn’t miss:

1. Out-of-state oil companies that bankrolled Proposition 23, the anti-green-energy measure, appear to have abandoned it. The Sacramento Bee reports that donations for Prop 23, which would roll back California’s landmark climate-change law, have dried up, as the measure appears headed for defeat. At the same time, big business has shifted its focus to Proposition 26, a measure that would make it harder for the state and local governments to raise revenues needed to fund green-energy initiatives. In other words, if big oil can’t block green-energy, its going to try to starve it to death. Chevron recently pumped $2.75 million into the Yes on 26 campaign.

2. California’s cannabis crop is worth about $14 billion, easily dwarfing the $2 billion value of the state’s wine grapes, the Santa Rosa Press Democrat reports, citing state estimates. However, the passage of Proposition 19, which would legalize small amounts of marijuana for personal use, could significantly lower the value of California’s biggest cash crop because it promises to snuff out the black market. The price of cannabis could decrease by 80 percent, dropping to as low as $38 an ounce, according to a July study by the Rand Corporation.

3. About 4,000 East Bay children from low-income families will lose their state-subsidized child care because of $256 million in last-minute budget cuts by Governor Schwarzenegger, the Trib reports. Statewide, about 55,000 kids could lose child care services by November 1 because of the governor’s line-item veto. However, state Assembly Speaker John Perez is pushing to overcome that veto by finding funding for low-income families through January 1, the LA Times reports. Perez then hopes to pass new legislation restoring the cuts after the New Year.

4. In another example of bad budget planning, California is blocking the growth of small restaurants and bars, and thus prolonging the recession, because of ill-advised cuts at the state Alcohol Beverage Control agency. The Chron reports that mandatory furloughs ordered by the governor are causing a huge backlog of liquor license requests at ABC. As a result, it’s now taking six months or more to get a license, when it used to take only two to three months.

5. A new UC Berkeley study is punching holes in the claim that public employees make more money than workers in the private sector, the Chron reports. The study, which was co-authored by researchers at Rutgers University, shows that private sector workers earn about 7 percent more than public employees with similar educational backgrounds, but that public employees receive benefits worth about 6 percent more. The study also noted that public-employee pensions, a hot-topic in the current election cycle, only make up a small percentage of the state’s budget.

6. And even though Apple’s iPad has suffered disappointing sales this year, the company recorded huge profit gains because of its new iPhone, AP reports. Apple recorded an income increase of 70 percent in the most recent quarter with the sale of 14.1 million iPhones from July through September. However, the company only sold 4.2 million iPads, far fewer than what analysts expected.

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