* Updates

California Dem struggles for cash in US House race -- Janice Hahn, a Democrat in a hotly contested California House race, is spending money faster than she is taking it in, leaving her campaign piling up debt as the election approaches, federal records showed Friday. MICHAEL R. BLOOD AP -- 7/1/11

Did Republicans blow chance at relevance? -- Even before Gov. Jerry Brown held his signing ceremony touting an on-time, balanced, though pain-filled, budget, Republicans had embarked on the PR circuit to celebrate their success in blocking his plan for extending taxes. Steven Harmon in the San Jose Mercury -- 7/1/11

Maria Shriver files for divorce from former Gov. Arnold Schwarzenegger -- "no prenup," TMZ says -- Citing "irreconcilable differences," former California First Lady Maria Shriver has filed for divorce from former Gov. Arnold Schwarzenegger and is asking for joint custody of their minor children, the celebrity news website TMZ.com is reporting. Carla Marinucci Chronicle Politics -- 7/1/11

California school districts push for changes to education bill -- A budget-related bill that Gov. Jerry Brown signed Thursday has sparked a division within the education community as school districts push to reverse new protections for teachers. Kevin Yamamura SacBee Capitol Alert -- 7/1/11

Podcast: Happy New Year -- Your idea of a fun day in July may be sitting poolside with a cold drink. But in Sacramento, it's celebrating the passage of time... in fiscal terms, that is. John Myers Capitol Notes -- 7/1/11

Who decides if the state budget is balanced? -- Lost amid the commotion over the state budget this week was the news that four Republican Assembly members from Orange County wrote Attorney General Kamala Harris, asking her to provide a legal opinion on whether the state controller has the legal authority to decide if the budget is balanced. BRIAN JOSEPH in the Orange County Register -- 7/1/11

Redevelopment an issue in Senate GOP leadership fight? -- Senate Republican leader can be a hard job to hold onto in Sacramento. Malcolm Maclachlan Capitol Weekly -- 7/1/11

$48 million grab from OC becomes law -- Gov. Jerry Brown signed Thursday evening the trailer bills associated with the state budget, meaning the $48 million grab of Orange County money is now officially law. The questions about the action, however, aren’t soon to dissipate. BRIAN JOSEPH in the Orange County Register -- 7/1/11

New Raley's program to raise funds for state parks -- West Sacramento-based Raley's today announced a new partnership with California State Parks to raise funds for Northern California parks, which have been squeezed amid the state's budget problems. Mark Glover in the Sacramento Bee -- 7/1/11

CalPERS to recover $90 million lost in Lehman Brothers bankruptcy -- CalPERS is in line to receive about $90 million in a compromise plan from the Lehman Brothers bankruptcy, court records filed today suggest. Dale Kasler in the Sacramento Bee -- 7/1/11

Feds clarify med marijuana policy: No big grows -- Anyone who cultivates, sells or distributes marijuana on a large scale – including local or state officials in jurisdictions with laws allowing the drug’s medical use – could face federal prosecution, the U.S. Justice Department reiterated this week. Josh Richman Political Blotter -- 7/1/11

Barbara Boxer’s blatant rewriting of history -- Each party in Washington seems to have their own narrative. Sen. Boxer’s comment above, from a long floor speech Wednesday lambasting Republicans for pushing a balanced budget amendment to the constitution, is a case in point. Glenn Kessler in the Washington Post -- 7/1/11

Prince William and Princess Kate headed to Los Angeles -- According to the governor's office, the newlyweds will arrive at LAX on Friday afternoon (exact time not announced), where Gov. Jerry Brown and First Lady Anne Gust Brown will greet them. Later that night, the first couple will attend a reception for the royal couple hosted by UK Consul-General Dame Barbara Hay. Marisa Lagos Chronicle Politics Kate Mather in the Los Angeles Times Judy Lin AP -- 7/1/11

Change.org: Activism or 'Slacktivism'? -- As online advocacy gains a higher profile, critics question its effectiveness. Gerry Shih Bay Citizen -- 7/1/11

Patron Saint of Immigrants Draws Thanks and Prayers -- A statue containing a relic of St. Toribio Romo is wrapping up a Northern California tour. Grace Rubenstein Bay Citizen -- 7/1/11

Silva: Budget making back to the future... -- In an era when more and more Californians are demanding accountability and transparency in government, our budgeting process has slid back into the cloaked era of the past. Fred Silva Fox & Hounds -- 7/1/11

Free music downloads at L.A. city, county libraries -- Anyone with a Los Angeles county or city library card now has access to more than what’s on the shelves. Kate Mather in the Los Angeles Times -- 7/1/11

Al Qaeda-linked website threatens Monrovia drone maker's executives -- Federal authorities have warned corporate executives at a Monrovia-based military contractor that builds drone aircraft that they are among about 60 targets suggested by members of an Al Qaeda-connected website forum. Richard Winton in the Los Angeles Times -- 7/1/11

 

   California Policy and Politics This Morning

Gov. Jerry Brown signs 'honest but painful' budget -- The $129-billion package slashes funds for state commissions and higher education while relying on a $4-billion windfall in revenue. Shane Goldmacher in the Los Angeles Times -- 7/1/11

Jerry Brown signs budget after making more cuts -- California has a balanced budget for the fiscal year that begins today, after Gov. Jerry Brown on Thursday signed the spending plan to close what had been a $26.6 billion deficit when he took office in January. Wyatt Buchanan, Marisa Lagos in the San Francisco Chronicle -- 7/1/11

Jerry Brown signs California budget without fanfare -- The terse signing ceremony, on the final day of the fiscal year, capped a long and arduous path to closing a $26.6 billion deficit that will mean significant cuts in government services and no tax extensions. Steven Harmon in the Contra Costa Times -- 7/1/11

Governor signs budget -- With little fanfare, Gov. Jerry Brown signed Thursday the state’s first on-time budget since 2006. BRIAN JOSEPH in the Orange County Register -- 7/1/11

Budget: Good or Bad, It's Done -- 171 days after Governor Jerry Brown proposed a spending plan to the Legislature, Brown sat at a table in his Capitol office and signed a compromise on-time version into law, one that adheres to most of his suggested cuts, skips his preferred taxes, and banks on a whole lot of unexpected revenue. John Myers Capitol Notes -- 7/1/11

California's $85.9 billion budget: Here are the major provisions -- After a veto fight with his own party and unresolved differences with Republicans, Gov. Jerry Brown signed an on-time $85.9 billion spending plan Thursday that slashes higher education and the safety net while counting on a windfall of tax revenues. The item is in the Sacramento Bee -- 7/1/11

Stone proposes secession -- Riverside County Supervisor Jeff Stone has long criticized California's leaders for the state's fiscal woes. Now, he wants to take things a step further. DUANE W. GANG in the Riverside Press -- 7/1/11

New Inland cities brace for worst in state budget -- Gov. Jerry Brown signed state budget legislation Thursday that Inland officials say will gut the finances of California's newest cities, all of which are in Riverside County: Eastvale, Jurupa Valley, Menifee and Wildomar. JIM MILLER and SANDRA STOKLEY in the Riverside Press -- 7/1/11

Assembly Republicans celebrate 'death' of higher tax rates -- Your wallets will start feeling heavier tomorrow. That was the message from a handful of Republican Assembly members this morning as they applauded their resistance during budget talks to approving temporary tax extensions. Paresh Dave SacBee Capitol Alert -- 7/1/11

California legislators' pay restored dating back to Tuesday -- Controller John Chiang has restored lawmaker pay dating back to Tuesday, the day of the budget passage, according to spokeswoman Hallye Jordan. Kevin Yamamura SacBee Capitol Alert -- 7/1/11

Amazon fights California sales tax requirement -- Saying it won't force California customers to pay sales tax on their Internet purchases, Amazon.com is severing ties with 10,000 small businesses and individuals here who funnel shoppers to the online bazaar through their websites. Marc Lifsher and Andrea Chang in the Los Angeles Times -- 7/1/11

John Chiang-sponsored bills are a tough sell in the Legislature -- Five bills sponsored by Chiang were killed by Assembly Democrats during the past week. The moves highlight the tough crowd that Chiang faces in the Legislature after he cost each rank-and-file lawmaker $4,830 during a 12-day pay block. Paresh Dave SacBee Capitol Alert -- 7/1/11

Walters: True reform would pare California Legislature down to one house -- If we Californians ever get around to truly reforming – in the precise sense – our dysfunctional government, one change should be replacing the two-house Legislature with a unicameral body. Dan Walters in the Sacramento Bee -- 7/1/11

San Francisco Is Awash With Mayoral Candidates -- Depending on how you slice it, there are anywhere from 9 to 37 people running to become mayor of San Francisco, including the city attorney, a state senator and a man whose legislative goals include the establishment of a new professional football team. JESSE McKINLEY in the New York Times -- 7/1/11

'We were used', say farmworkers -- Not 12 hours had passed after Gov. Jerry Brown vetoed a measure that would make it easier for farm workers to be part of a union when a group of farmers came to his office to deliver several boxes of oranges squeezed, to symbolize that they felt used. Araceli Martinez Ortega La Opinión -- 7/1/11 Translated by Google (good, but not perfect).

PG&E: Inspections of underground electrical facilities were falsified -- An internal PG&E investigation has determined that as many as 14 people it relied on to inspect underground electrical facilities may have falsified the checks they were supposed to do in Santa Clara County, San Francisco and the East Bay, the company disclosed Thursday. Steve Johnson in the San Jose Mercury -- 7/1/11

Texas Gov. Rick Perry wows conservatives in the OC: "Heavy on candor, light on pander" -- Republican Texas Gov. Rick Perry was a whirlwind in the Golden State Thursday, racking up the miles, talking up his record -- and meeting with potential supporters and donors. And he's not even running for President -- yet. Carla Marinucci Chronicle Politics -- 7/1/11

Throwdown! GOP presidential candidate Jon Huntsman's team takes on Romney backer Meg Whitman -- It's already getting rough in the 2012 GOP presidential race -- with the campaign of former Utah Gov. Jon Huntsman wasting no time in challenging ex-eBay CEO Meg Whitman -- a big backer and adviser to GOP frontrunner Mitt Romney. Carla Marinucci Chronicle Politics -- 7/1/11

Draft maps: Sanchez regains most of district -- A third version of draft congressional redistricting maps for Rep. Loretta Sanchez largely restores her Latino, Democratic geographic base and removes Little Saigon, which leans Republican. Martin Wisckol in the Orange County Register -- 7/1/11

Janice Hahn, Craig Huey congressional race gets even nastier -- Just when you wondered whether the special runoff election between Janice Hahn and Craig Huey could get any more contentious ... it has. Jean Merl in the Los Angeles Times -- 7/1/11

CalBuzz: eMeg Returns! Diana Lives! Sarah Shrinks! -- We hear our old pal Meg Whitman has told people privately for months that she would generously extend Jerry Brown the courtesy of keeping quiet about the state’s fiscal mess until there was a budget. And eMeg – God, how we miss her! – was good to her word. For about 8 seconds. Jerry Roberts and Phil Trounstine CalBuzz -- 7/1/11

   High Speed Rail

Public relations firm Ogilvy quits high speed rail -- Its job performance coming under increasing scrutiny, Ogilvy Public Relations Worldwide is quitting its multimillion dollar contract with the California High-Speed Rail Authority. David Siders SacBee Capitol Alert Mike Rosenberg in the San Jose Mercury -- 7/1/11

Bullet train will survive mistakes, advocate says -- California’s $45 billion bullet train “is in trouble because of mistakes,” says the former San Francisco lawmaker who has been a driving force for the project for nearly two decades. Lance Williams California Watch -- 7/1/11

   Tax measures

Some state taxes, fees drop while others go up -- Starting Friday, Californians can buy and license a new car for less money than yesterday. How much less? Try $300 on a $20,000 purchase. Michael Gardner in the San Diego Union-Trib -- 7/1/11

With new state budget comes a 1% tax break -- It might be time to buy that Tiffany necklace, Sony plasma TV or Winnebago you've been hankering for. Kurtis Alexander in the Fresno Bee Patrick May in the San Jose Mercury Shane Goldmacher and Esmeralda Bermudez in the Los Angeles Times -- 7/1/11

   Economy - Jobs

66 officers turn in badges in San Jose's first police layoffs -- Amid a homicide surge in what once was dubbed "America's Safest Big City," 66 young San Jose cops turned in their badges Thursday as a $115 million budget shortfall led to the city's first-ever police layoffs. John Woolfolk in the San Jose Mercury -- 7/1/11

California Supreme Court rules against Oracle in overtime spat -- The California Supreme Court on Thursday found that out-of-state residents who work for California companies are entitled to the state's strict overtime and labor law protections, rejecting Oracle's arguments in a longrunning legal feud with a group of former employees. Howard Mintz in the San Jose Mercury Maura Dolan in the Los Angeles Times -- 7/1/11

New Sacramento arena would bring big economic benefits, study says -- Advocates of a new downtown Sacramento sports arena rolled out a study Thursday that puts an eye-popping number on the building's projected economic benefits: $7 billion over 30 years. Dale Kasler in the Sacramento Bee -- 7/1/11

Californians continue to cut gasoline use -- Continuing a long-standing trend, gasoline and diesel fuel use in California declined in both March and the first quarter of this year. Mark Glover in the Sacramento Bee -- 7/1/11

Poor just got poorer -- CalWORKs, the state's "welfare to work" program, took a major hit in the state budget deal that Gov. Jerry Brown signed into law Thursday, reducing grants to their lowest levels in more than 20 years. Cynthia Hubert in the Sacramento Bee -- 7/1/11

   Education

LAUSD finalizes budget, 3,000 layoffs -- After months of debating and lamenting the fiscal crisis, Los Angeles Unified officials Thursday finalized the budget for the 2011-12 school year, using employee concessions and about 3,000 layoffs to help close a $408 million deficit. Connie Llanos in the Torrance Daily Breeze Jason Song and Rick Rojas in the Los Angeles Times -- 7/1/11

Fensterwald: Brown signs trailer bill over objections -- Gov. Jerry Brown last night signed an education trailer bill that critics say will limit school districts’ ability to accomplish what Brown said they should do: “take all reasonable steps to balance their budgets and maintain a positive cash flow.” John Fensterwald educatedguess -- 7/1/11

Fensterwald: Brown vetoes teacher database -- In a compromise with the Legislature, Gov. Jerry Brown has vetoed money for one of two education databases he wanted to eliminate. John Fensterwald educatedguess -- 7/1/11

CSU trustees asked to increase tuition by 12 percent -- California State University has not wasted any time responding to the budget Gov. Jerry Brown signed today, which cuts CSU funding by at least $650 million for the coming school year. Laurel Rosenhall in the Sacramento Bee -- 7/1/11

Rising community college costs making graduation out of reach for many students -- Graduating from a community college - traditionally the only affordable avenue available for underprivileged students seeking higher education - is increasingly becoming out of reach for many students because of rising tuition, according to a new study. Neil Gonzales in the Oakland Tribune -- 7/1/11

UC Berkeley out-of-state student enrollment soars -- The number of out-of-state students is soaring at UC Berkeley, with new figures showing more than a quarter of newcomers on campus - freshmen and transfer students - won't be from California this year. That's up from 23 percent last year, and 15 percent two years ago. Nanette Asimov in the San Francisco Chronicle -- 7/1/11

Largest freshman class expected at UC Merced in fall -- Some might call it a milestone. UC Merced expects its largest-ever freshman class this fall, with more than 1,800 new students indicating they will attend classes. Ameera Butt in the Fresno Bee -- 7/1/11

Fees expected to increase at Fresno State -- Fresno State students likely will pay an extra $294 per semester starting this fall as the university scrambles to compensate for deeper cuts in the state budget that Gov. Jerry Brown signed Thursday. Heather Somerville in the Fresno Bee -- 7/1/11

School district brings back laid off teachers -- Of the 210 school district teachers laid off this year, 88 have been brought back, and officials are hopeful they can bring back more. Debbie Pfeiffer Trunnell in the San Bernardino Sun -- 7/1/11

   Health Care

1.5 million Californians face health insurance rate hikes today -- Health insurance rates for more than 1.5 million Californians covered by some of the state's largest health insurers will go up starting today. Darrell Smith in the Sacramento Bee -- 7/1/11

Childless adults to get new health coverage -- In an early and major step toward implementing the federal health reform bill, about half a million low-income Californians will soon be eligible for benefits that are expected to address their health problems before they reach an emergency room. Daniel Weintraub HealthyCal.org -- 7/1/11

Schools expand drinking water access to meet state deadline -- A state law requiring school districts to provide free, fresh drinking water to students during mealtime takes effect today, but it's unclear whether it will effectively discourage kids from choosing sugary drinks. Kendall Taggart California Watch -- 7/1/11

California and other states consider banning teens from tanning beds -- If a proposed law passes, California teens younger than 18 will need a fake ID to "fake and bake" themselves to a golden brown. Shaya Tayefe Mohajer AP -- 7/1/11

   Environment

Researchers find plastic in more than 9% of fish in northern Pacific Ocean -- Southern California researchers found plastic in nearly 1 in 10 small fish collected in the Pacific Ocean in the latest study to call attention to floating marine debris entering the food chain. Tony Barboza in the Los Angeles Times -- 7/1/11

   Immigration

Immigrant children not served by Health Care Reform will pose health risk for other children -- Up to 220,000 California children could be excluded from health care reform because of immigration issues, according to a study released Thursday by the UCLA Center for Health Policy Research. Jim Steinberg in the San Bernardino Sun Joanna Lin California Watch -- 7/1/11

Rights advocates sue L.A. County Sheriff Lee Baca over immigrant data -- The sheriff says it's his duty to comply with Secure Communities, in which the fingerprints of anyone booked into a local jail are forwarded to ICE for screening. Paloma Esquivel and Robert Faturechi in the Los Angeles Times -- 7/1/11

   Also..

Greuel: Gold Card Desk dismissed more than 40% of citations without explanation -- More than 40 percent of the Los Angeles traffic citations dismissed by City Hall's controversial Gold Card Desk were dropped without explanation, according to a final audit of the program released Thursday. Dakota Smith in the Torrance Daily Breeze Ricardo Lopez and Ari Bloomekatz in the Los Angeles Times -- 7/1/11

Troubled Montebello comes under federal scrutiny -- The FBI and U.S. attorney are looking into potential misuse of $1.3 million in federal funds the city paid to a developer in 2008 to build affordable apartments on Whittier Boulevard. The project was never built. Jessica Garrison, Abby Sewell and Richard Winton in the Los Angeles Times -- 7/1/11

Investors to plead guilty to foreclosure auction rigging -- As home foreclosures hit record levels, a group of California real estate investors engaged in an auction bid-rigging conspiracy that allowed them to boost their profits in subsequent sales, the U.S. Department of Justice announced yesterday. Emily Hartley California Watch -- 7/1/11

San Francisco suit says circumcision ban is unconstitutional -- San Francisco's proposed ballot ban on circumcision would be "patently" unconstitutional and should be stricken from the ballot if a court exempts medical professionals from the ban, the city attorney's office said Thursday. Will Kane in the San Francisco Chronicle -- 7/1/11

Wrongful home foreclosures rare – but devastating -- Kamal Sharma almost lost his house in a foreclosure auction the other day. The funny thing is: He doesn't even owe any money on it. Rick Daysog in the Sacramento Bee -- 7/1/11

California given strict deadline to reduce prison population -- There must be 37,000 fewer inmates by June 2013, starting with a reduction of 14,400 by the end of this year, three-judge panel says. Carol J. Williams in the Los Angeles Times -- 7/1/11

   POTUS 44

Obama's midnight dollar deadline dash -- Campaigning like it was 2008, Barack Obama’s political team raced to collect every possible dollar before Thursday’s midnight deadline in hopes of turning the first meaningful fundraising report of 2012 into a show of force. GLENN THRUSH & CARRIE BUDOFF BROWN Politico -- 7/1/11

   Beltway

Jon Huntsman raises $4.1 million in the second quarter -- Republican presidential candidate Jon Huntsman raised $4.1 million for his campaign in the second quarter, including a large contribution of his own money. T.W. Farnam and Nia-Malika Henderson in the Washington Post -- 7/1/11