New Year Brings Yet Another Minimum Wage Hike

Minimum wage1Just like earlier this year, because of the enactment of SB 3 (Leno) in 2016, California’s minimum wage is going up again. On January 1, 2018, the state’s minimum wage will be increased for all sizes of businesses as “small employers” will see their first wage hike in recent years.

Under prior state law, the minimum wage for all industries increased to $10 per hour on January 1, 2016. Pursuant to SB 3, the minimum wage for all industries will be increased to $15 per hour by January 1, 2022 for businesses employing 26 or more employees and by January 1, 2023 for businesses employing 25 or fewer employees (referred to as “small employers”).

The law does provide that the scheduled increases may be temporarily suspended by the Governor based upon him or her making certain determinations. Additionally, the law requires the Director of Finance, after the last scheduled minimum wage increase, to annually adjust the minimum wage under a specified formula. In the meantime, the wage will go up incrementally each year.

The following lists the scheduled minimum wage increases for any business that employs 26 or more employees:

* On January 1, 2018 to $11 per hour
* On January 1, 2019 to $12 per hour
* On January 1, 2020 to $13 per hour
* On January 1, 2021 to $14 per hour
* On January 1, 2022 to $15 per hour

The following lists the scheduled minimum wage increases for any business that employs 25 or fewer employees:

* On January 1, 2018 to $10.50 per hour
* On January 1, 2019 to $11 per hour
* On January 1, 2020 to $12 per hour
* On January 1, 2021 to $13 per hour
* On January 1, 2022 to $14 per hour
* On January 1, 2023 to $15 per hour

In February 2014, the Congressional Budget Office (CBO) issued a report regarding the impact of the proposal to raise the federal minimum wage to $10.10 an hour.  The conclusion was that, although some low-wage workers would receive a higher income through the increased minimum wage hike, “some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed, would probably fall slightly.”

To make matters worse here in California, these scheduled increases in the state’s minimum wage not only increase hourly employees’ wages, but also salaried employees’ compensation. In order for employees to qualify as “exempt” under any of the six exemptions in this state, they must meet the salary-basis test, which is two times the monthly minimum wage (as well as the duties test that is not impacted by the wage hike).

With the enactment of SB 3, there will be an increase of over $15,000 in wages per exempt employee in just a few short years. And, businesses will see their workers’ compensation premiums go up, as well as increased costs for uniform/tool reimbursements and overtime.

While the business community had argued that SB 3 should contain a regional minimum wage, this proposal was rejected. Some can appreciate that certain cities and counties in California may be able to afford an increased minimum wagebut other cities and counties are still struggling with high levels of unemployment. Employers in these areas will find it much more difficult to sustain such a dramatic increase in their labor costs.

Chris Micheli is a legislative advocate with the Sacramento governmental relations firm of Aprea & Micheli, Inc.

This article was originally published by Fox and Hounds Daily

Realtors’ ballot initiative could limit property taxes

property taxSACRAMENTO – Property-tax-limiting Proposition 13 has long been viewed as the “third rail” of California politics given its continued popularity among the home-owning electorate. Public-sector unions occasionally talk about sponsoring an initiative to eliminate its tax limits for commercial properties, but the latest Prop. 13-related proposal would actually expand its scope.

The influential California Association of Realtors is launching a signature drive for a November 2018 ballot measure that would greatly expand the ability of Californians who are at least 55 years old and disabled people to maintain their low-tax assessments even if they move to other counties or purchase more expensive new homes.

Prop. 13 requires counties to tax properties at 1 percent of their value (plus bonds and other special assessments), which is established at the time of sale. The owners maintain that assessment even if values increase, as they typically do in California. The proposition limits tax hikes to no more than 2 percent a year. Prop. 13 passed overwhelmingly because many people – especially seniors – were being taxed out of their homes as assessments soared during a real-estate boom.

Under current rules, people 55 and older may keep their low assessments if they move within the same county or within one of 11 counties that accept these transfers. They may do so only once in a lifetime. It enables retired people, for instance, to downsize from a big family house to a condominium without paying a stiff tax penalty.

For example, if one purchased a home in 2008 for $350,000 and that home is now worth $750,000, they may continue paying taxes at the lower assessed value even after they sell the home and purchase a smaller one. The valuation goes with them. But the newly purchased property must have a market value the same or lower than the house that has been sold.

The Realtors’ proposal would, for seniors and the disabled, tie the assessed value of any newly purchased home to the assessed value of the old home. They would be free to take that assessment with them to any of the state’s 58 counties. They could carry it with them as many times as they choose. The reduced assessments would apply even for people who purchase home with market values above the ones that they sold.

As the nonpartisan Legislative Analyst’s Office explains, if the new and prior homes have the same market values (based on sales and purchase prices), the new tax valuation would be the same as the old one. A fairly complex formula would determine the tax rate for purchases that were either higher or lower than the sales price of the prior home.

The initiative addresses a problem faced by many empty-nesters. They are living in large homes where they raised their families and would like to downsize – but to do so would mean a huge tax hit given that their new tax rate would be tied to the purchase price of the new property. In the preponderance of situations, the new purchase price for even a smaller house would be far higher than the price that the seniors paid for the homes where they currently live.

The Orange County Register reports that, if passed, the initiative could spur an additional 40,000 home sales a year. Supporters say that could ease up tight housing markets, but foes argue that the Realtors have an interest in spurring more home sales. County governments – backed by LAO projections – say that it eventually will cost them as much as much as $1 billion a year.

“By further reducing the increase in property taxes that typically accompanies home purchases by older homeowners, the measure would reduce property tax revenues for local governments,” according to that LAO analysis. “Additional property taxes created by an increase in home sales would partially offset those losses, but on net property taxes would decrease.”

The Howard Jarvis Taxpayers Association, which defends the legacy of Prop. 13, disputes the idea of large tax losses, given that younger couples would move in to the homes that older people sell, and they would pay property taxes based on the new market value. In other words, an older couple will sell a house and keep their lower tax rate.

“We believe upward portability makes a lot of sense especially as property values across California continue to rebound,” said HJTA president Jon Coupal in a statement. The statement says he believes the measure would “help California alleviate its current housing crisis by removing a financial barrier that keeps many older homeowners from selling their homes, and many millennials from entering the housing market.”

The Realtors’ association had submitted three different potential measures, including one that would expand portability for people of all ages. But the final measure applies only to seniors and disabled persons. As the saying goes, the best defense is a good offense. Supporters of Prop. 13 have learned that the best way to protect it might be by trying to expand it.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

This article was originally published by CalWatchdog.com

State job-creation incentives fail to produce desired results

JobsIn February 2014, Gov. Jerry Brown’s administration unveiled an Economic Development Initiative to replace an enterprise zone program that had fallen out of favor after nearly three decades. Enterprise zones offered tax incentives to promote the starting of businesses in areas with high unemployment, but many analyses concluded they didn’t have a substantial positive effect. Now a centerpiece of Brown’s replacement initiative is offering up similar mixed-to-poor results.

The California Competes program was initially billed as providing $180 million through the end of fiscal 2014-15 for tax credits to lure businesses to the Golden State or to keep them from leaving. As the Sacramento Bee reported at the time, emergency regulations were hastened into place to get the program up and running.

Panorea Avdis, the chief deputy director of the Governor’s Office of Business and Economic Development, justified the move in a memo obtained by the Bee: “This program must go into effect immediately to help minimize the migration of business to other states and to encourage growth and expansion in this state.”

Four and a half years later, the sense of urgency among Brown aides about getting California Competes started is hard to square with its disappointing results. A recent Legislative Analyst’s Office report offered many criticisms:

– Slightly more than a third of awarded credits – 35 percent – went to companies that primarily competed with other California businesses, meaning the credits create no additional economic activity, lead to an unfair competitive advantage for firms getting the credits and consume state resources that could have been use for constructive purposes.

– There were no metrics to judge the effectiveness of the remaining 65 percent of credits, which went to companies that sold goods or services both in California and out.

– The size of the hiring and investment commitments the companies made per $100,000 of tax credits has declined steadily in recent years, reflecting a lack of enthusiasm about the value of the credits.

– The interest in the program had waned among small businesses, which had 25 percent of available annual tax credits set aside for their use. The LAO noted that in the last fiscal year – 2016-17 – only 49 percent of the credits were awarded, or about $30 million.

LAO says close program, but role in Amazon bid may provide cover

“The executive branch has made a good-faith effort to implement California Competes, but the problems described above are largely unavoidable,” the LAO wrote. “We recommend that the Legislature end California Competes. In general, broad‑based tax relief – for all businesses – is preferable to targeted tax incentives.”

Because the program loses its authority to grant tax credits at the end of fiscal 2017-18, the LAO report may shape the Legislature’s and the Brown administration’s decision on what to do about California Competes. The LAO says if the program is retained, its eligibility rules should be tightened up and other provisions should be revised to make it more likely the credits go to companies facing competition from rival firms in other states.

But at least until Amazon makes its decision on where to locate its second North American headquarters, the LAO’s call to shut down California Competes is unlikely to be heeded. In October, some $200 million over five years in California Competes funding was listed as the single biggest incentive to get Amazon to build its second home in California – topping the long list of tax and regulatory incentives that the Brown administration offered Amazon as enticements.

If California Competes is eventually shuttered, some state politicians are likely to strengthen their calls for the full revival of another economic development program shut down at Gov. Brown’s behest – redevelopment. In theory, redevelopment takes a portion of incoming local government revenue and directs it to projects with the promise to improve the local economy or to provide needed facilities.

Critics of redevelopment say it has a long history of being used for crony capitalism in California and that the diverted revenue often goes to cover routine City Hall expenses. But former Los Angeles Mayor Antonio Villaraigosa has made reviving redevelopment a key focus of his 2018 gubernatorial campaign, arguing that it is essential to building more affordable housing and responding to California’s housing crisis.

This article was originally published by CalWatchdog.com

Jerry Brown, with nothing to lose, defies unions on pensions

Photo courtesy Steve Rhodes, flickr

Photo courtesy Steve Rhodes, flickr

“Freedom’s just another word for nothin’ left to lose,” singer-songwriter Kris Kristofferson philosophized in his classic blues song, “Me and Bobby McGee,” a half-century ago.

Kristofferson’s tune would be an apt anthem for Gov. Jerry Brown as he winds down his own half-century-long career in politics – especially so since Kristofferson once campaigned for him.

Unless something very unusual happens, Brown will never face voters again. Therefore, with nothing politically to lose, he has the freedom to do whatever he wants.

Brown emitted a very strong clue to his unfettered status last week when he filed a brief with the state Supreme Court in a case affecting public employee pensions, in effect asking the justices to make it easier for state and local governments to reduce benefits.

Brown is supporting appellate court rulings that upheld two provisions of the modest pension reform bill he and the Legislature enacted in 2012, one ending “pension spiking” and the other repealing the ability of public employees to purchase additional retirement credits called “airtime.”

However, Brown appears to go even further, suggesting that the court set aside, or at least severely modify, the so-called “California rule.”

That rule, based on a 1955 state Supreme Court decision, is an assumption that public employee pension benefits, once granted, can never be modified, even for future work.

It is a bedrock issue for public employee unions and the union-controlled California Public Employees Retirement System, as demonstrated when they successfully pressured bankrupt cities not to reduce pension obligations, even though a federal bankruptcy judge said they could do so.

Not surprisingly, any Democratic politician who questions the rule’s legal validity or financial sustainability risks union wrath.

It explains why former Attorney General (now U.S. Senator) Kamala Harris and her successor, Brown appointee Xavier Becerra, have been reluctant to buck the unions by vigorously defending Brown’s pension reform and why the governor, with nothing to lose, decided to do it himself.

A key phrase in one of the appellate court rulings, reinterpreting the 1955 Supreme Court decision, frames the issue that the Supreme Court must decide.

“While a public employee does have a ‘vested right’ to a pension,” Associate Justice James Richman wrote, “that right is only to a ‘reasonable’ pension’ – not an immutable entitlement to the most optimal formula of calculating the pension.”

Were the Supreme Court to agree with Brown and uphold the appellate court rulings that seemingly repeal the California rule, it would be a huge setback for the unions – and a black eye for the local unions that opened the legal door by challenging the pension reform’s abolition of much-abused pension spiking and airtime.

A “reasonable pension” ruling would also be an avenue for local governments, which are now struggling to pay fast-rising “contributions” to CalPERS, to reduce the bite by guaranteeing current benefits for work already performed but reducing them for future work.

Conversely, were the Supreme Court to defy Brown and overturn the appellate courts, the California rule would be enshrined, even mild reforms would be thwarted and the state’s unsustainable pension system could either become insolvent itself or force many local governments into bankruptcy.

Obviously, these are big stakes.

This article was originally published by CALmatters

In 2016 John Cox and George Soros Teamed Up

John CoxBefore running for California governor, John Cox was best known for two things, his many failed attempts at running for political office in his home state of Illinois and his plan to increase the number of legislators in California from 120 to over 12,000. A few years ago, when he showed up in California and got involved in politics, most just wrote him off as an eccentric older millionaire with too much time on his hands, but conservative and probably harmless.

Thus, it surprised even this author that as recently as last year, John Cox donated $5,000 to Mayday PAC through Change California Inc., an organization he chairs and controls. On the surface, Mayday PAC claims to be nonpartisan and has a simple goal: get the influence of money out of politics. Anything noble or truthful about the Mayday PAC starts and ends with its mission statement.

One can probably guess there is something rotten at Mayday when an organization with the stated goal of getting money out of politics raises millions of dollars. It quickly spirals out of control from there.

First, a quick look at Mayday’s spending reveals that there is nothing non partisan about them. Mayday is a Democrat super PAC and spends a vast majority of its money supporting Democrats and attacking Republicans. For example, in 2014, Mayday spent $1.4 million supporting Democrats and $4.2 million attacking Republicans. Mayday also spent $1.6 million meddling in Republican primaries, a vast majority supporting Scott Brown’s primary opponent in New Hampshire. Weakening Scott Brown in a tough general election race against an incumbent Democrat Senator.

In 2016, the year John Cox donated $5,000, Mayday spent only $2,250 supporting a Republican. So what was the rest of Cox’s money used to support?

Mayday’s solution to money in politics is just changing where the money comes from. Instead of private donors, Mayday would like taxpayers to fund political campaigns. As it turns out, public financing of political campaigns also happens to be a priority for the George Soros’ Open Society Foundation.

This could be chalked up to coincidence, until you look at Lawrence Lessig, the creator of the Mayday PAC. Lessig is a Harvard professor with a long history of liberal political activism. He is also happens to be affiliated with multiple George Soros backed organizations. For example, he is on the board of MapLight and on the advisory board for the Sunlight Foundation, both George Soros affiliated organizations.

So why did John Cox give money to a leftist George Soros crony? Was he duped or is the eccentric millionaire more sinister than he appears?

Oroville Dam Spillway Cracking After $500 Million Repair

Oroville Dam 2The California Department of Water Resources acknowledged this week that many cracks have appeared in the new concrete of the Oroville Dam spillway, which cost over $500 million to repair.

The State of California is believed to have spent $100 million each month on Oroville Dam during February, March and April in a crisis effort to try to stabilize America’s tallest dam, which suffered a near collapse and forced the evacuation of 200,000 downstream residents earlier this year.

The Kiewit Corporation, which was issued a $275 million contract in April to repair both of Oroville Dam’s main and emergency spillways, poured a 1,700-foot cement top sheet and then roller-compacted and smoothed the spillway’s surfaces shortly before the November 1 contract deadline. The California Department of Water Resources (DWR) inspected the work and certified the first phase of the massive repair job was completed on time.

But the Sacramento Bee reported that cracks were first detected in September “when the first phase was nearing completion.” The Federal Energy Regulatory Commission (FERC), which has federal oversight over the California owned dam, instructed DWR on October 2 to investigate “cracking of the erosion resistant concrete” on the repaired spillway and to recommend any further steps necessary to address infrastructure risks.

The California Division of Dams wrote a letter to FERC on November 7 to reassure regulators that “the presence of hairline cracks was anticipated and is not expected to affect the integrity of the slabs.” DWR spokeswoman Erin Mellon added, “All concrete has this result in the placement. It’s just physics of how concrete works.”

But KQED reported that Robert Bea, a professor emeritus of civil engineering and founderof the highly respected UC Berkeley Center for Catastrophic Risk Management, stated, “Cracking in high-strength reinforced concrete structures is never to be expected.” He added that when large volumes of water cascade down the spillway at speeds approaching 90 miles-per-hour, even small cracks could increase stresses on concrete.

The CCRM has issued several reports documenting that the state was aware of serious cracking in the Oroville Spillway as far back as a 1998 inspection report. DWR did try to patch some cracks and fill up visible voids. But CCRM dam experts stated that finding hollow areas is like trying to find a stud behind a wall by tapping it with a hammer.

Bea’s group is especially alarmed by green grass that has continued to grow on the dam’s abutments during the hot summer and fall. The lush green grass indicates there has been seepage through the dam face for about 50 years. CCRM does not accept DWR’s explanation that the seepage is not a risk, because it is just some “natural springs.” CCRM warns that any seepage through an earth-fill dam should be extremely worrisome.

This article was originally published by Brietbart.com/California

Solutions to Homeless Problem Should Not Target Homeowners

sanfranciscohomelessAs the search for solutions to the homeless problem continues, current property owners and the equity they have in their homes are often cited as targets for funding homelessness relief. What is ignored with these proposed remedies is that homeowners are counting on the equity in their homes to help with retirement or other needs.

Steve Lopez’s Los Angeles Times weekend article took issue with the wealth built up in homes partially because of limited housing stock while renters face difficult options.

While Lopez cited obstacles to housing reforms, he quoted two professors who suggested ways to find funding for homeless housing. One proposal was a “a tiered transfer tax on equity” promoted by Carol Galante of U.C. Berkeley’s Terner Center for Innovative Housing.

Lopez also spoke with UCLA professor Michael Manville who thinks it is okay to tax property because the increased value of the property has nothing to do with the efforts of the homeowner.

Manville, along with colleagues, wrote an opinion piece for the Los Angeles Times last July urging a $3 a day tax on property owners to build a homelessness fund. That $3 a day amounts to $1095 a year, a sizeable chunk of change for many homeowners who can find good uses for that money including maintaining or improving their homes.

Whether the increased property value comes from a wise investment decision or just dumb luck as Lopez writes, the value belongs to the homeowner. While the homeowner lives in the home, the increased property values are merely paper profits. Increased property value does not necessarily reflect an owner’s ability to pay increased taxes. When the increased property value is claimed it can be the lifeline to a comfortable retirement or for other needs.

While the legislature went down this path recently of charging property owners to help the homeless by creating fees for housing related documents, cutting into potential retirement funds with large annual or transfer taxes is a bad idea.

What’s disturbing is that those who enjoy government provided retirement pensions often suggest these proposals that can undermine a homeowner’s potential retirement fund.

Editor and Co-Publisher of Fox and Hounds Daily.

California Lawmakers Have Enabled Culture Of Sexual Harassment

CapitolThe issue of sexual harassment has jumped to the forefront of public discourse in a relatively short period of time, with revelations about alleged sexual misconduct ranging from the inappropriate to the illegal.

The accusations have flown from the studios of Hollywood to the halls of Congress, from film executive Harvey Weinstein to longtime television news personality Charlie Rose; from National Public Radio news chief Michael Oreskes to Senator Al Franken (D-MN); from Congressman John Conyers (D-MI) to Republican Senate candidate Roy Moore.

With each passing day, more stories are coming out, and the California State Capitol, while a relative side-show compared to some of the more newsworthy persons dominating national politics, has been turned on its head.

In mid-October, a bipartisan group of more than 140 women – lawmakers, lobbyists and consultants – signed a letter calling attention to pervasive sexual harassment in California politics. Since that time, two California state legislators – Senator Tony Mendoza (D-Artesia) and Assemblyman Raul Bocanegra (D-Pacoima) — have been embroiled in scandal, with multiple women coming forward making scathing accusations about each.

In the case of the former, Mendoza has denied allegations. Senate President Kevin DeLeon (D-Los Angeles) recently suspended Mendoza’s chairmanship of the powerful State Senate Banking Committee, pending further investigation. With regards to Bocanegra, he has admitted wrongdoing. Facing increasing scrutiny, he has announced that he will be resigning from the legislature – albeit on an arbitrary date he picked in September of next year. Assembly Speaker Rendon (D-South Gate) has removed him from his leadership position, and his committee assignments.

I won’t take the time in this column to detail the specific allegations against both, but suffice it to say they paint an alarming picture of a culture in the State Capitol that has been permissive of such bad behavior, or worse. One can assume that this will only snowball in the coming weeks and months, as more revelations occur. (For example, DeLeon, it has been revealed, was roommates in Sacramento with Mendoza, moving out just days ago – which is significant in that accusations against Mendoza include inappropriate activities taking place in his residence).

The California legislature, however, has taken steps to make sure that the permissive culture of sexual harassment would thrive – embracing the idea that that legislators not only make the law, but are above the law.

For decades, the only way that someone who was harassed or abused could bring it to anyone’s attention would have been to go to legislative leadership – never mind the obvious conflict of interest there. What legislative remedies have been pursued by some have been bottled up in committees. A great example is legislation pursued for years in a row by Assemblywoman Melissa Melendez (R-Temecula) to protect whistleblowers who report unethical or inappropriate behavior. It has never made it to the Governor’s desk.  It should come as no surprise that laws were passed giving all other state government employees whistleblower protection, but the legislature was exempt.

Speaking of exemptions, the Los Angeles Times put in a request for details on any formal investigations of allegations of sexual abuse on the legislature. It received a brief summary indicating that in the last decade there have been 31 such investigations — 15 in the State Senate and 16 in the State Assembly – but the legislature has refused to provide any more detail, and is not obliged to provide any more detail.  That is because the California legislature exempted itself from the Public Records Act, which applies to the rest of state government.

There are some actions that the governor and legislature can take to try to regain some credibility here, and try to end Sacramento’s toxic culture. And while Democrats in the Capitol control all of the levers of state government – and are the only ones that can create laws in a partisan fashion – Republicans have the bully pulpit and can publicly call for Governor Jerry Brown to call a special legislative session to deal with this issue immediately.  In the special session, the legislature should send several bills to Brown for his signature, including:

  • A bill to establish that a law enforcement agency (perhaps the California Highway Patrol) has jurisdiction over investigations of allegations of sexual harassment in the Capitol. The idea is to put someone in charge of such investigations who is not beholden to legislators.
  • The Melendez whistleblower protection bill that has been shoved into a legislative drawer for years.
  • A bill to make sure that the legislature is subject to the California Public Records Act, like every other part of state government.

Finally, there should be a formal investigation into DeLeon’s friendship with his now-former roommate, Senator Mendoza. Perhaps DeLeon’s position should even be suspended pending the outcome.

The idea that DeLeon, as Chairman of the Rules Committee (made up of Democrats and Republicans who are his hand-picked choices), is going to clean up the Senate’s act lacks credulity.

Jon Fleischman is the Politics Editor for Breitbart California.  His columns appear on this page. You can follow him on Twitter here.

This article was originally published by Breitbart California

University of California scandal could lead to race to replace Jerry Brown

Janet NapolitanoUniversity of California Regents have bought UC President Janet Napolitano’s story about how her office came to interfere with an audit of its performance ordered by the state Legislature, with regents saying they were disappointed by the scandal but prepared to move on after reprimanding Napolitano.

But there could be more fallout on two fronts: in the Legislature and in the governor’s race, where the frontrunner, Lt. Gov. Gavin Newsom, is an ex-officio UC regent.

That’s because Napolitano’s story seems so implausible. According to an independent report prepared at regents’ behest by former California Supreme Court Justice Carlos Moreno and the Hueston Henningan law firm, after state Auditor Elaine Howle sent surveys to UC campuses in October 2016 asking for their assessment of UC’s Office of the President, Seth Grossman, Napolitano’s chief of staff, and Bernie Jones, her deputy chief of staff, put out the word that they needed to review the responses. This was done even though Howle had emphasized the responses were supposed to be confidential. Subsequently, three campuses – UC Santa Cruz, UC Irvine and UC San Diego – revised their responses to make them more favorable to Napolitano’s office.

But Napolitano told the Legislature in May, and Moreno’s investigators more recently, that while she approved the plan to have her office review the responses, she did so because she wanted to ensure the responses were correct – not because she wanted to protect her image. She also said campuses had requested help.

Moreno’s report did not suggest the UC president was lying. But it found no evidence that campuses sought help with their responses. And it noted that UC Santa Cruz Chancellor George Blumenthal said that he was chewed out by Napolitano for his campus sending in a response to Howle without running it by her staff. UC Santa Cruz’s response was the harshest of any campus, giving Napolitano’s office one “poor” and three “fair” ratings out of the 10 categories in the survey questions. After Blumenthal’s telephone conversation with what he described as a “furious” Napolitano, UC Santa Cruz changed the “poor” and “fair” ratings to good and upgraded three “good” ratings to “exceptional.”

Napolitano said she remembers her conversation with Blumenthal as being routine, not angry. But Blumenthal’s account is consistent with other findings in the Moreno report, such as Napolitano’s declaration in a text message that Howle was on a “witch hunt.”

The two aides cited in the Moreno report resigned a week before the report’s release and declined substantive comment on the allegations against them.

Lawmakers unlikely to be satisfied with handling of scandal

The Legislature, which passed a bill last session subsequently signed by Gov. Jerry Brown making it a crime for a state agency to interfere with a state audit, could consider follow-up legislation. There’s considerable residual anger overNapolitano’s May testimony to a joint legislative hearing in which she repeatedly denied personal wrongdoing of any kind. Assemblywoman Catharine Baker, R-Dublin, vice chair of the Higher Education Committee, cited that testimony last week in calling for Napolitano to be fired.

In the gubernatorial race, UC-related sparks seem just as likely to fly. While Newsom told the Los Angeles Times that he considered regents’ decision to reprimand Napolitano “insignificant” – suggesting he wanted stronger punishment – he joined the unanimous vote to retain her as UC president.

This is tough to square with Newsom’s reported comments about how he would deal with corruption and ethical issues in state government: “I will not be known for being timid about this or anything else. Gov. Brown says reform is overrated; I say it’s underrated.”

As for Howle’s part, she wants regents to take additional actions beyond reprimanding Napolitano, according to a letter she sent to regents and an internal report by her office that were obtained by the Los Angeles Times.

Howle asked regents to “consider disciplining university employees who repeatedly interfered with a state audit, tried to hide their actions, misled investigators and withheld requested information until threatened with court action,” the Times reported.

At the regents’ Nov. 17 meeting in San Francisco, they began consideration of measures meant to “clarify and strengthen” how UC officials who report both to the regents and to Napolitano must deal with state audits.

This article was originally published by CalWatchdog.com

Bay Area Takes Police-State Approach to Tobacco