Treasurer Chiang will run for governor

Good morning! Happy Hump Day. 

It’s Twitterficial. Democratic state Treasurer John Chiang is running for governor, he announced on Tuesday — long expected since even before he said he was “strongly leaning towards running” back in February. 

Assemblyman Mike Gatto and Board of Equalization Chairwoman Fiona Ma, two other prominent Democrats, made Twitter announcements (Twouncements?) for their candidacies to replace Chiang as treasurer. 

CalWatchdog has more.

And for a bonus, the Los Angeles Times looks at who else may round out the governor’s race. 

In other news: 

• The state’s four-year graduation rate rose to 82.3 percent last year, the sixth straight consecutive increase. The San Jose Mercury News has more. 
• Sen. Dianne Feinstein is urging compromise on a package of drought relief bills before Congress, arguing that there’s no end to the drought in sight. The Los Angeles Times has more. 
• The state seems still split on the death penalty. As two competing initiatives struggle for enough signatures to qualify for the ballot, they have gained enough to trigger legislative hearings, reports The Sacramento Bee. 
• A state water agency is seeking its largest fine ever — $4.6 million — against the owner of a small island north of Pittsburg for filling and degrading tidal wetlands. The San Jose Mercury News has more. 

Assembly:

• Full slate of hearings.

Senate:

• Full slate of hearings. 

Gov. Brown:

• At around 7:50 a.m., Brown will speak the 91st Annual Sacramento Host Breakfast. 
• And at 1, Brown will attend the Governor’s Military Council meeting in Sacramento. 

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Treasurer John Chiang made it official that he would be running for governor after announcing he was “strongly leaning towards running” back in February. If these things matter, Chiang drew 81 retweets and 109 likes by 5 p.m.

It’s official. I have opened a committee to raise funds for Governor. Hope to count on your support! #chiang2018 https://t.co/Grg4hVxK33

— John Chiang (@JohnChiangCA) May 17, 2016

Chiang is the second high-profile Democrat to announce his intentions for the state’s most powerful position. Lt. Gov. Gavin Newsom filed his paperwork in February 2015 and has $5.4 million in his account. While that’s a formidable head start, especially more than two years from the election, Chiang could carry over $3.2 million from his treasurer’s account.

Assemblyman Mike Gatto of Los Angeles announced that he’d be running for Treasurer, drawing 15 retweets and 38 likes. Gatto had previously opened an account for lieutenant governor and is sitting on $2 million. 

I'm in! I will be a candidate for Treasurer in 2018.

— Mike Gatto (@mikegatto) May 17, 2016

Fiona Ma, the chairwoman of the Board of Equalization broke the news later in the day. So far, Gatto is winning in both Twitter activity and campaign funds, as Ma only received five retweets and four likes and has a modest half million in her Board of Equalization account. 

Proud to announce my run for State Treasurer in 2018. I hope you will endorse me & join the #MaSquad! Thank you! https://t.co/lItULwZTaK.

— Fiona Ma (@fionama) May 17, 2016

Brown said the six bills had several worthwhile ideas. “Unfortunately, taken together there are various technical and conflicting issues that make the over 50 proposed reforms unworkable. Some prudent prioritization is needed,” he wrote.

Sen. Mark Leno, D-San Francisco, and Sen. Ben Hueso, D-San Diego, who co-sponsored Senate Bill 660, the most sweeping reform measure, expressed disappointment and dismay. So did Assemblyman Anthony Rendon, the Lakewood Democrat who will take over as speaker in coming months.

The measures were intended to limit back-room dealings in which PUC officials and board members met surreptitiously with representatives of the state’s powerful investor-owned utilities. The most notorious example was a 2013 meeting in a Warsaw, Poland, hotel between then-PUC President Michael Peevey and a Southern California Edison executive at which the parameters were set for a later-approved deal in which ratepayers bore 70 percent of the $4.7 billion cost of the shutdown of the San Onofre nuclear plant. Southern California Edison is San Onofre’s majority owner and San Diego Gas & Electric is the minority owner. The meeting and its central role in the bailout approved by the PUC wasn’t disclosed until February of this year.

Ex-PUC president’s home searched by investigators

Peevey is the subject of state and federal criminal investigations over the San Onofre deal and other PUC decisions. He left the PUC under pressure in late 2014. Soon after, his La Canada Flintridge home was searched by investigators looking for evidence of improper relationships with the utilities he used to govern.

Within weeks after the raid, the PUC released emails that raised troubling questions about the cozy ties between Peevey and top officials at Pacific Gas & Electric, the giant Northern California utility. This is from a February CalWatchdog account:

Emails show Peevey pressured PG&E to give money to oppose Proposition 23, the failed 2010 ballot measure opposing AB32; appeared to link his support for rate hikes to PG&E actions on unrelated issues; and was open to PG&E efforts to influence inquiries into a San Pedro pipeline explosion that killed eight people. … He sought to prop up a project by the Hydrogen Energy California (HECA) firm by constantly reminding PG&E how much he had done for it.

The Brown administration promised to work with lawmakers on a more streamlined reform proposal in coming months. But in the meantime, as Hueso told the Union-Tribune, the PUC has “little incentive to work toward a culture of openness and accountability.”

The agency has been accused of being excruciatingly slow in releasing crucial documents, whether to criminal investigators, the Legislature or journalists. It also appears to be shrugging off growing calls to scrap the deal on how to cover the $4.7 billion cost of closing San Onofre.

Michael Aguirre, the San Diego attorney who led testimony against the San Onofre plan last fall, had the sharpest reaction to the governor’s decision. He told the Union-Tribune that “Jerry Brown’s vetoes show he is helping — not stopping– the dishonest practices known to the people of California.”

Brown chose aide to replace Peevey, not outsider

A previous decision by the governor already suggested he doesn’t share the prevailing view in Sacramento that the PUC is badly in need of a culture change. When Peevey was forced out in December of last year, Brown could have appointed an outside energy expert with a history of independence. Instead, he named PUC board member Michael Picker as president. Though Picker has only been on the board since January 2014, he is an energy establishment insider, working for Brown — and with the utilities  — from 2009 as a senior energy adviser until joining PUC management.

Despite continued criticism of PUC secretiveness, Picker’s selection as board president was ratified by the state Senate a month ago.

By Brian Calle

Californians know a thing or two about recalls.

Only two state governors in U.S. history have been removed from office via recall; the first was North Dakota Gov. Lynn J. Frazier in 1921. Of course, the second was California’s Democratic Gov. Gray Davis in 2003.

Public-sector unions in Wisconsin — with their national counterparts cheering them on — hope Tuesday to make Gov. Scott Walker the third governor recalled from office because he dared to challenge union power and influence in state governance.

But compare Walker with California Gov. Jerry Brown — and contrast Wisconsin’s progress since Walker enacted his union-bucking policies with California’s continued decline under Brown’s union-friendly leadership, and you see two different outcomes.

Walker and Brown, who both took office on the same day, Jan. 3, 2011, faced tremendous budget deficits and squawking public employee unions demanding higher taxes. Brown obliged; Walker would not.

Faced with a $3.6 billion deficit, Walker lowered taxes — freezing property taxes and bringing down school property taxes. He also painted a realistic and honest budget picture for his constituents and pushed for painful but necessary reforms that cut collective bargaining rights for government unions and created more competition, like allowing private vendors to bid on health insurance contracts for school districts, which reduced costs.

Seventeen months later, Wisconsin is projected to have a $154 million surplus by the summer of 2013. And, the Wisconsin-based MacIver Institute reported that Walker’s reforms have saved taxpayers $1 billion.

In California, Gov. Brown, returning to the post he left in 1983, sided with unions from day one. Early on, he appointed a California Teachers Association lobbyist, Patricia Rucker, to the state Board of Education. He also presented Californians with an unrealistic budget that projected far more state revenue than what eventually came in.

Partially as a result of such budgeting gimmickry, the state’s projected $9 billion budget shortfall has ballooned to $17 billion.

Brown’s plan to close the gap is to convince voters in November to inflict higher taxes on themselves, an approach blessed by unions. Should his tax increases pass, they would raise only about $8.5 billion, a far cry from the $17 billion needed to close the budget hole. And that means California will continue on the path of dysfunctional budgeting and sidestepping meaningful reform.

Unlike Walker, Brown has yet to challenge the stranglehold that public employee unions have in the state — if anything, he has emboldened them. That is one of the reasons he prefers seeking new taxes to making deeper spending cuts or expending political capital on reforming unsustainable public-employee pensions.

Also, unions had been a pillar of Brown’s political career for decades. They helped get him elected again to the governorship in 2010. Early in his first administration, Brown signed the Rodda Act in 1975, which bestowed collective bargaining rights on California public school teachers.

Walker in many ways is the antithesis of Brown.

As Douglas Belkin and Kris Maher wrote for the Wall Street Journal: “Public-employee unions in Wisconsin have experienced a dramatic drop in membership – by more than half for the second-biggest union — since a law championed by Republican Gov. Scott Walker sharply curtailed their ability to bargain over wages and working conditions.” Specifically, Walker stopped the practice of automatically withholding union dues from the paychecks of employees — the main source of funds for union political operations.

“Wisconsin membership in the American Federation of State, County and Municipal Employees — the state’s second-largest public-sector union after the National Education Association, which represents teachers — fell to 28,745 in February from 62,818 in March 2011,” Belkin and Maher reported.

Examining Brown and Walker’s records, one might argue the recall efforts ought to focus on the former, rather than the latter, as the California governor continues to preside and perhaps enable the Golden State’s fiscal calamity.

Walker’s day of reckoning comes Tuesday, and, fortunately, the latest-available polling data, including a poll from Marquette University, indicated he would prevail, with about 52 percent support.

Brown’s day of reckoning will come in November, when votes are cast on his tax increase ballot measure.

What happens in Wisconsin in a couple days will have significant repercussions for those hoping, eventually, for similar reforms in the Golden State. If Walker keeps his job, other governors, like Brown, well could find themselves with more leverage with their unions. If Walker is recalled, unions nationwide will be emboldened.

Dear Supporter,

Today, I am formally announcing my candidacy for the office of Governor of California, to deal head-on with the challenges facing this state I love. I have lived in California all my life, and I believe the obstacles in our path are substantial, but not insurmountable. If we have a Governor who will truly commit to dealing personally with the tough choices facing our state, and who will get in the trenches side by side with legislators, we can get California working again.

This campaign will not be easy. I will face an opponent with nearly unlimited personal resources to pour into television ads and attacks. I am counting on your support, and your hard work over the next nine months. I believe I have the experience, the understanding of State Government, and commitment required to move California forward. I look forward [to] your help in this important campaign.

Sincerely,

Jerry Brown

And that’s pretty much it. Months and months in the writing, and he still managed to slip a typo in there. Anyway, click here to watch Brown’s official announcement video and here to read the state GOP’s response, such as it is. Oh, and here’s Steve Poizner’s take on Brown’s announcement.

-Anthony Pignataro