KPCC: Stories by Julie Small

California budget cuts: $2 billion extra in budget cuts likely

Wed, 16 Nov 2011 18:32:17 -0800

Now that California is facing a $13 billion projected deficit, it's also likely to face at least $2 billion more in budget cuts.

State finance director Ana Matosantos responded to a report today by agreeing that some of those cuts will go through. Department spokesman H.D. Palmer explains.

"We believe it’s likely that some of the trigger cuts will go into effect on Jan. 1. The question is: does it go beyond the first tier of $600 million dollars in pre-approved reductions?" he said.

If revenue falls more than $2 billion, the state may cut $600 million in state funds for public universities and programs for developmentally disabled people. If revenue comes in lower than that, public schools and community colleges would lose nearly $2 billion.

We'll know more after the finance department releases its revenue forecast in mid-December. That forecast will include some of the holiday shopping tax receipts. The forecast with the highest revenue projection will determine just how deep the trigger cuts go.

When lawmakers passed the budget in June, they hoped the state would rake in an extra $4 billion. But they built in a backstop: $2 billion in cuts that go into effect if the revenues fall more than $2 billion short. Legislative Analyst Mac Taylor predicts that’s the scenario California’s now facing.

"Certainly the $4 billion was something that even the legislature and the governor knew was risky. That’s why they put the trigger reductions in. And while the trigger reductions don’t mitigate the entire loss of the revenue they do mitigate a large chunk of it," he said.

Taylor says the sluggish housing market, the dip in construction and stubbornly high unemployment have slowed the state’s recovery.

Analyst: California faces $13 billion deficit; $2 billion in trigger cuts

Wed, 16 Nov 2011 10:14:32 -0800

An exterior of the state capitol building in Sacramento, California. Credit: David Paul Morris/Getty Images

California's nonpartisan budget analyst says the state is projected to face a $13 billion budget shortfall next year. That projection includes $2 billion in savings from trigger cuts.

The Legislative Analyst's Office released a gloomy state fiscal outlook Wednesday. It says tax revenue will fall short of the state's earlier projections, which could trigger midyear cuts to public schools, colleges and health care programs.

The legislative analyst says that the deficit is due to a "slow, arduous recovery." The Legislative Analyst's Office blames weak housing and construction for California's ongoing fiscal woes. One bright spot: Growth in tech services and exports.

Under the current budget, a series of automatic cuts will take effect if the analyst or the governor's Department of Finance project revenue is lower than lawmakers anticipated when they passed the budget last summer. Those automatic cuts include cutting up to a week from the California school year.

The $86 billion state budget was based on a combination of spending cuts, fee hikes and projections of higher tax revenue in the months ahead. Republican lawmakers had warned that the revenue projections were overly optimistic. The state Department of Finance will determine the final amount of the cuts based on its own revenue projections due out by mid-December.

Here is a look at the so-called trigger cuts:

— $100 million to the University of California.

— $100 million to California State University.

— $100 million to the Department of Developmental Services.

— $100 million for In-Home Supportive Services; also imposes a 20 percent reduction in service hours.

— $72.1 million to juvenile justice; increase county charge for youth offenders sent to the adult prison system.

— $30 million by increasing community college fees by $10 per unit.

— $23 million by cutting child care assistance.

— $20 million to the Department of Corrections and Rehabilitation.

— $15.9 million in state grants for local libraries.

— $15 million in Medi-Cal cuts; extends a cut to providers in all managed care plans.

— $15 million by eliminating grants to district attorney's offices for a trend referred to as "vertical prosecution."

— $10 million by eliminating IHSS anti-fraud efforts.

If revenue falls short by more than $2 billion, as now appears likely, the following cuts will be made:

— $1.5 billion in K-12 funding, which could reduce the school year by seven days.

— $72 million to community colleges.

— $248 million by eliminating home-to-school transportation.

This story incorporates information from the Associated Press.

California lawmakers may find out extent of budget cuts Wednesday

Tue, 15 Nov 2011 20:47:59 -0800

Teachers and students from California demonstrate at a "state of emergency'' rally to protest potential statewide cuts of up to $4 billion in education spending, in L.A., Calif. on May 13, 2011. Two revenue projections to be released Wednesday morning may determine the extent of budget cuts to the state. Credit: MARK RALSTON/AFP/Getty Images

State lawmakers may find out soon whether a shortfall in state revenues will trigger billions of dollars in budget cuts. The non-partisan agency that analyzes fiscal policy for legislators releases revenue projections for the fiscal year Wednesday morning at 11:30 a.m.

To pass a balanced, on-time budget this year on a simple majority vote, Democrats projected that the state would pull in an extra $4 billion in tax revenues by the end of the fiscal year. They also agreed to spending cuts if those revenues fall at least $1 billion short.

Finance Department spokesman H.D. Palmer says California will base its decision whether to pull the trigger on two revenue projections, one issued by the legislative analyst and another released by his in about a month.

"The higher of those two forecasts will be used to determine whether or not the pre-approved trigger cuts get made in part, in whole or at all, starting in the beginning of next year," Palmer said.

A shortfall of $1 to $2 billion triggers $601 million in cuts – mostly to public universities. A shortfall of $2 billion or more triggers an almost equal amount in budget cuts to public schools. If those cuts happen, the budget authorizes school districts to shorten the academic year by up to seven days.

California $1.27 billion short of projections. Now what?

Mon, 14 Nov 2011 17:20:55 -0800

Credit: Paul J. Richards/AFP/Getty Images

California state finance officials reported Monday that state revenues have fallen short of projections by more than $1.27. The shortfall could trigger cuts to higher education, health care and schools, but only if state economists think the gloom will last until June.

State lawmakers enacted automatic spending cuts as part of this year’s budget plan. Those cuts kick in if it looks as if state revenues will stay $1 billion below estimates through the end of the fiscal year. But during eight other months in that year — including income tax filing deadline April — California can collect more taxes.

State finance spokesman H.D. Palmer says that’s why Sacramento will base the decision about cuts on more than cash in hand.

"The important thing to understand is that the decision on the trigger cuts is not going to be based on where we are on cash either today or the middle of next month." says Palmer. "It is going to be based on a revised revenue forecast for the entire fiscal year."

California’s Department of Finance plans to issue a revised revenue forecast in about a month. The non-partisan legislative analyst releases its revenue forecasts on Wednesday. The finance department will use the higher of those two forecasts to determine whether to pull the trigger on automatic spending cuts. If that happens, the cuts take effect next year.

California Supreme Court hears battle for redevelopment dollars

Thu, 10 Nov 2011 18:24:30 -0800

A woman walks into the State of California Earl Warren building Jan. 22, 2007, in San Francisco, Calif. The Supreme Court heard arguments on Thursday regarding the placement of property tax revenue. Credit: Justin Sullivan/Getty Images

The California Supreme Court heard arguments Thursday in a case that will determine the fate of more than 400 redevelopment agencies across the state.

Earlier this year, the state legislature voted to dissolve those agencies as a way to save nearly $2 billion. In a separate measure, they voted to reconstruct them – for a price. Cities and counties are challenging both moves.

Redevelopment agencies take a portion of local sales tax each year that would otherwise go to school districts and local agencies. The state government has been making up the difference,s and now the state wants the money back. Justice Joyce Kennard summed up the conflict.

"A fight, between the state and the schools on the one side and the redevelopment agencies on the other side, in getting control of the property tax revenue, [...] put in very, very simple terms," Kennard said.

In June, state lawmakers thought they got control over all property tax revenue in California when they voted to get rid of redevelopment agencies. But lawmakers let those agencies stay alive if the cities that run them voluntarily transferred a collective $1.7 billion in property taxes to school districts this year, plus $400 million every year after that. Attorney Steve Mayer for the California Redevelopment Association told the justices that lawmakers didn’t give redevelopment agencies much of a choice.

"The state makes a big deal of saying these payments are voluntary. But in fact, they’re no more voluntary than a bank robber's decision to turn over the money when the note says, 'Your money or your life,'" Mayer said.

Mayer said state lawmakers violated Proposition 22, a constitutional amendment passed by California voters last year to bar the state from raiding local funds to balance the budget. Justice Kathryn Werdegar asked Deputy Attorney General Ross Moody whether a bill that allows the "voluntary" transfer of local funds to the state violates Prop 22. Moody said he didn’t think so.

"Before Proposition 22, what would happen is, every once in a while when the state was short in funds, they would pass a law that said 'Redevelopment agencies, give us some money,'" he told Justice Werdegar. "For a few years it was happening regularly."

"Wouldn't one assume therefore that Prop 22's intention – and indeed, its statement of purpose — is that the state can’t do that and that's ingrained in the constitution?" Werdegar asked in reply.

The justices spent little time debating the state's right to dissolve redevelopment agencies – something the legislature voted to do in the 1940s and presumably can now undo. But the justices raised many questions about the "voluntary" program that lets the agencies live on if they surrender tax revenues to save the state billions of dollars.

California Supreme Court hears redevelopment challenge

Thu, 10 Nov 2011 08:02:08 -0800

The California Supreme Court building. Credit: Justin Sullivan/Getty Images

The California Supreme Court wades into a battle Thursday over hundreds of local redevelopment agencies and the billions in tax dollars they control. Earlier this year the Legislature dissolved the agencies in a move that local governments say is illegal.

For more than 50 years these redevelopment agencies have used a portion of local property taxes that would otherwise go to the state. More than 400 of them use the money to invest in construction and renovation projects to fight blight and create jobs.

Last June state lawmakers voted to dissolve redevelopment agencies and use their $2 billion in funds to help balance the state budget.

H.D. Palmer with the Department of Finance says the state has that right. "Redevelopment agencies were created by an act of the Legislature back in the 1940s and similarly they can be dissolved by an act of the Legislature."

In other words, what the state giveth, the state can taketh away.

Chris McKenzie, though, who heads the League of California Cities, says the state can’t take away the will of the voters who passed Proposition 22 last year. Prop 22 prevents Sacramento politicians from taking money from local governments to balance the state budget.

"The voters said ‘thou shalt not take the funds either directly or indirectly,’" McKenzie said. "And the Legislature and the governor set up a system by which they indirectly divert the funds in violation of the constitution."

The League of California Cities and the California Redevelopment Association have jointly sued the state. The California Supreme Court is expected to issue its decision in the case by Jan. 15.

California public pension initiatives target current employees

Wed, 02 Nov 2011 17:12:04 -0700

A new group advocating government pension plan reform announced Wednesday that it’s filed papers with the state to begin qualifying two initiatives for next year’s ballot.

Sponsors say their reforms go farther than those proposed by Gov. Jerry Brown last week.

The California Pension Reform’s initiatives would require current government employees to contribute more to their retirement funds — 3 percent more every year until those pensions become solvent. Currently, most government pensions are underfunded — a result of increased benefits and decreased tax revenues and market returns. By one estimate, the state’s facing up to $500 billion in unfunded pension liabilities. Initiative organizer Dan Pellissier says pension obligations also threaten cities and counties.

"The cost of pensions especially at the local government level is starting to take away much of the money they need for the essential government services that the public relies on the government to provide," he said.

The ballot measures would also cap government contributions to current employees’ pensions at 9 percent as long as those pensions are less than 80 percent funded.

Current employees would end up paying most of their retirement costs. Brown’s had proposed to split pensions cost equally between workers and employers.

The initiatives’ sponsors includes the former Director of Finance under Gov. Arnold Schwarzenegger and former U.S. Secretary of State George Shultz. The group also proposes reductions to benefits for future employees, shifting them to lower cost, higher risk 401K-style retirement accounts and raising retirement ages for all new public employees. Brown’s plan focused mainly on reducing pension costs for new hires.

California high-speed rail price tag more than doubles to $98.5 billion

Tue, 01 Nov 2011 13:34:32 -0700

An artist's rendering of California's high speed rail. Credit: California High Speed Rail Authority

California’s high speed rail network could cost $98.5 billion to complete — that’s more than double what voters heard three years ago when they approved the project. The California High Speed Rail Authority released the estimate as part of the final business plan at a press conference in Sacramento today.

Initial estimates were made in 2008; the new estimates have been adjusted for inflation. Completion of the high-speed rail system, which will run from San Francisco to Anaheim, has been pushed to 2033.

Reason Foundation Vice President of Policy Adrian Moore co-authored a 2008 study that predicted the rail’s massive increase in price. After looking at the construction and utilization of high-speed rail systems around the world, researchers suggested the cost to be upwards of $80 billion.

“At that time, what the High-Speed Rail Authority plan was saying was that California was planning to build by far the most efficient high-speed rail system ever in the world, the cheapest high-speed rail system ever in the world and by far the highest ridership ever in the world," Moore told KPCC's Larry Mantle on Tuesday's "AirTalk." "And we said, ‘We don’t think any of those three is very likely to happen.’”

Daniel Krause, executive director of grassroots organization Californians for High Speed Rail, said that the projection is unrealistic. “We’re concerned that the skeptics up in the state Legislature have, essentially, browbeaten them into being so conservative that they’re blowing the number up to a much higher level than we were anticipating,” Krause said.

The construction phase could bring about 100,000 jobs to California. The Associated Press reported that a one-way ticket between San Francisco and Los Angeles would average $81 in non-inflation adjusted dollars, with express trains completing the trip in less than three hours. The business plan estimates a net operating profit of $352 million a year, with ridership between 7.4 million to 10.8 million riders by 2025 for an initial southbound phase.

A voter-approved $9 billion state bond cannot be used without matching funds from other sources, but Krause said officials have already obtained between $3.3 billion to $3.5 billion in federal money for construction in the Central Valley, as well as another $400 million for the Transbay terminal in San Francisco. He said the money will be sent back if the project is stalled.

“No money, no jobs being created in the economy if we decided not to move forward," Krause said. "We can’t afford not to move forward right now."

Krause went on to say that the indirect cost to society, relating to health and safety, would lessen substantially. Reason Foundation’s Moore said the state has more pressing issues to prioritize.

“Right now the state is cutting things in budget that are hurting people directly. Do we want to spend $100 billion on a train that, the success which is at best highly questionable, when we don’t have the money right now to do the things that most people consider are fundamental?” he said. “All of these benefits from high-speed rail only happen if the project really happens — that the whole thing is built. And given that we have $6 billion out of 100 I’m not sure that’s going to happen.”

KPCC's Andrea Wang, Steve Proffitt, Larry Mantle and Madeleine Brand contributed to this story.

$100 billion: The projected cost of California's high-speed rail

Mon, 31 Oct 2011 19:54:34 -0700

An artist's rendering of California's high speed rail. Credit: California High Speed Rail Authority

The new business plan for California's high-speed rail system shows the nation's most ambitious state rail project could cost nearly $100 billion in inflation-adjusted funding over a 20-year construction period but also would be profitable even at the lowest ridership estimates and would not require public operating subsidies, according to a draft copy of the plan shared late Monday with The Associated Press.

The report estimates the actual cost at $98.5 billion if the route between San Francisco and Anaheim is completed in 2033. The plan assumes private investment will account for roughly 20 percent of the total cost, with much of the rest coming from additional borrowing.

The initial estimate to build the system when voters approved bond funding for it in 2008 was $43 billion. In non-adjusted, 2010 dollars that amount is now $65.4 billion, showing the costs have risen significantly.

"This is us telling it like it is to the public — no sugar-coating, no baloney," said Dan Richard, one of two appointees Gov. Jerry Brown made to the California High-Speed Rail Authority last summer.

The business plan will be publicly released Tuesday during a news conference at the California State Railroad Museum in Sacramento.

It also calls for retaining the most controversial aspect of the proposed rail line — starting construction in the Central Valley. Critics want to start in more populated areas of southern or northern California in case money runs out before the full system is finished, which they worry would create a "train to nowhere."

But $3.5 billion in federal funding is contingent upon the Central Valley route, and construction must begin before October 2012. That does not leave enough time for new engineering proposals and environmental reviews to be conducted elsewhere, the plan says.

The new business plan says the system will be built in sections than can operate independently and make money, even if no more track were ever built, Richard said. Planners hope each new section will generate momentum — and private investment — to complete subsequent sections.

The business plan also says the high-speed rail system will use existing rail lines to carry passengers on the final legs into San Francisco and the Los Angeles basin. Doing so instead of building new high-speed lines not only saves money but makes the project more politically palatable by reducing neighborhood objections.

Gov. Brown proposes new pension plan for Calif. workers

Thu, 27 Oct 2011 17:46:53 -0700

California Governor Jerry Brown Credit: Justin Sullivan/Getty Images

Gov. Jerry Brown provided details Thursday on his new pension plan for California state workers, which includes combining benefits with a 401 (k)-style plan.

Brown's plan for this new hybrid system calls for trimming generous public employee pension benefits that have saddled California and local governments with billions of dollars in unfunded liabilities, according to a draft of the plan obtained by The Associated Press Wednesday.

"I've laid out what I think is a minimum that every plan in California ought to meet and the minimum protects the taxpayer while being fair to the employees," Brown said.

Brown's plan deals mostly with new state hires by raising the retirement age from 55 to 67 for civil workers. Public safety officials who can now retire as young as 50 would have to work longer, but the calculation would be based on their ability to perform.

The governor also wants current and new hires to start paying a greater share of pension costs; some contribute nothing toward their benefits. The new plan would require employees and employers to contribute equal amounts to retirement plans.

By shifting to a mandatory "hybrid" system, employees with at least 30 years of service would replace about 75 percent of an employee's salary through retirement funds and Social Security, according to the draft.

"It's time to fix our pension systems so that they are fair and sustainable over a long time horizon," Brown said in a prepared statement to the AP. "My plan raises the retirement age and bans abusive practices like "spiking" and "air time" while mandating that public employees pay an equal share of pension costs."

The administration estimates its proposal would save about $900 million annually.

The Los Angeles Times reports that Brown's new 12-point plan is a necessity, Brown said, as the state can no longer afford to support the current pension system.

Brown's plan would require approval from the Legislature, where union-allied Democrats are likely to balk at some of the significant rollbacks, and where Brown failed to win consensus on pensions with Republicans last spring.

Appearing on KPCC's Patt Morrison Show, State Senate Pro Tem Leader Darrell Steinberg told David Lazarus Thursday that some lawmakers are concerned with Brown’s proposal to raise the retirement age for new state hires from 55 to 67.

“There’s some legitimate questions about the retirement age, especially given the fact that people are living longer, thankfully," he said. "At the same time, though, there are a lot of professions where retiring at 62 or 67 doesn’t make sense because of the physical wear and tear on people.”

"The governor has indicated that labor will not like many of his proposals," Dave Low, chairman of the union coalition Californians for Retirement Security, said in a prepared statement. "He is right."

Several parts of the plan would also require voter approval, including extending many of its provisions to employees at California's public university systems, and Brown's goal to add two independent, public members to the board of the California Public Employee Retirement System, the nation's biggest public pension fund.

The board has come under scrutiny during an influence-peddling investigation by the attorney general's office alleging fraud and kickbacks through middlemen known as placement agents who seek investment business.

The plan also would end so-called pension "spiking" that lets employees boost their payouts by including overtime and other benefits, and end the practice of buying additional service credits to inflate pension checks.

Corrections begins trimming staff as state prisons shed inmates

Tue, 25 Oct 2011 06:00:05 -0700

A guard stands at the entrance to the California State Prison at San Quentin. Credit: Justin Sullivan/Getty Images

This week, about 26,000 workers at state prisons and parole offices will get layoff warnings, as the state hands responsibility for low-level felons to the counties and the California Department of Corrections begins to downsize.

The Department of Corrections employs 68,000 people to guard and care for more than 145,000 inmates – plus thousands of parolees. But soon, the department won’t need as many guards as it begins to whittle down the number of prisoners they oversee.

Corrections personnel chief Robert Downs can’t say yet how many workers will lose their jobs, though he expects to cut 3,000 positions by February.

"And because of that, we’ve started out by noticing any employee with less than 10 years service to cast a wide net," he says.

Downs says most will be prison guards since they hold most of the jobs, but layoffs could include administrators, custodians, cooks, dentists and psychiatric staff.

Six unions agreed to a deal that gives senior Corrections employees first crack at vacancies, although there are only 800 vacancies now.

They can also work as fill-ins so prison staff don't run up costly overtime.

Feds halt release of Prop 8 trial video

Mon, 24 Oct 2011 14:42:07 -0700

Hundreds of Proposition 8 opponents fill Civic Center Plaza during a rally to celebrate the ruling to overturn Proposition 8 August 4, 2010 in San Francisco, California. U.S. District Judge Vaughn Walker announced his ruling to overturn Proposition 8 finding it unconstitutional. His decision was later overturned. Credit: Justin Sullivan/Getty Images

A federal appeals court in San Francisco decided Monday to keep a video recording of last year’s trial on Proposition 8 out of public view.

Earlier this year a lower court judge ordered the release of the video of the trial that led a federal judge to strike down California’s ban on same-sex marriage.

The video will remain temporarily out of the public view, pending appeal, after the decision by a three-judge panel. Supporters view the decision as a victory for Prop 8, which banned same-sex marriage three years ago. Supporters of Monday's decision say releasing the trial video could place their witnesses at risk of harassment or worse.

Attorneys for two gay couples who’d challenged Prop 8 say the video is a court record and therefore a public record. The federal appeals judges will decide whether to unseal the trial video after they decide whether to reverse the decision to nullify Prop 8. A hearing for the appeal is set for early December.

Second California prison hunger strike ends

Thu, 13 Oct 2011 17:39:00 -0700

Demonstrators hold up a sign during a rally in front of the State Building in San Francisco in July to support prisoners at Pelican Bay State Prison during the first hunger strike this year. Credit: Paul Sakuma/AP

California prison officials say the second inmate hunger strike this year has ended. It lasted nearly three weeks but unlike the one last summer, this one wasn’t peaceful.

Inmates began refusing food on Sept. 26 to protest conditions in Security Housing Units called “the SHU.” More than 11,000 inmates joined the hunger strike. Some of the prisoners have gone without food for 18 days. They sent the department a letter on Oct. 11, and corrections officials began discussions with the inmates after that.

"I think everyone finally understands that changes to the department's policy does take time," said Department of Corrections spokeswoman Terry Thornton. "Now that the inmates understand this, the department is continuing on the same course that we've been continuing on for all these months."

She said fights broke out on Tuesday among California inmates housed at an Oklahoma prison run by CCA, a firm that operates prisons in several states.

"Fortunately CCA staff did respond and quelled the disturbances. However. 46 inmates did suffer injuries. Thirty were treated locally, 16 taken to area hospitals for treatment. Six of those 16 are still in the hospital and three of those six are still in critical condition," Terry said.

Thornton says corrections is investigating other incidents in which inmates who didn’t join the hunger strike face retaliation by strike organizers or their associates. The hunger strikers want prison officials to ease tough restrictions on inmates in security housing units.

Corrections officials transferred some of the Pelican Bay hunger strikers to Corcoran State Prison yesterday for medical treatment.

Crackdown on California pot dispensaries begins

Fri, 07 Oct 2011 12:26:27 -0700

Medical pot advocates protest outside the U.S. Attorney's office in Sacramento on Oct. 7, 2011 as officials inside held a press conference on their plans to crack down on medical marijuana dispensaries in California. Credit: Julie Small/ KPCC

Fifteen years ago, California voters passed Proposition 215 and legalized limited sales of marijuana for medical use. A quartet of federal prosecutors say that since then the state has become the nation’s number one supplier of marijuana, medical or otherwise, and they plan to seize those profits and jail the growers and sellers.

U.S. Attorney Benjamin Wagner, who represents California's Central Valley, said not all of the thousands of storefront pot dispensaries operating in the state are being targeted. Instead, federal officials are initially going after pot shops located close to schools, parks, sports fields and other places where there are a lot of children, and what Wagner termed "significant commercial operations." He said that includes farmland where marijuana is being grown.

There is a simple explanation for the multiple retail marijuana stores that are located on a single block, the eight stores that are located in one building and across the street for a school and the huge billboards that advertise doctors who are willing to write recommendations for individuals," said Andre Birotte, who oversees California’s Central District, which includes Los Angeles, Orange and Riverside Counties. He says that federal judicial district has a thousand medical marijuana dispensaries, more than any other district in the state.

Birotte says the reason is money — and lots of it. He and the other U.S. attorneys say organized crime has hijacked the state’s medical marijuana law to make billions in illicit profits.

Laura Duffy, the U.S. Attorney for the Southern District of California told KPCC's Patt Morrison Friday that, overall, the effort aims to shut down retail pot dispensaries. "These are businesses that are, in large part, visited by healthy young people who have gone out and paid for doctor recommendations to obtain marijuana. These are a lot of youth and recreational drug users," she said.

Duffy said the crackdown isn't aimed at people who have a legitimate need for medical marijuana. Her sentiment has been echoed by Birotte. He says all for-profit, commercial marijuana operations are illegal, no matter where the dispensary is located. “While California law permits collective cultivation of marijuana in limited circumstances, it does not allow commercial distribution through the storefront model we see across California,” he said.

Duffy says the industry enables other crimes, including human trafficking: "The façade of so-called medical marijuana has become a local law enforcement nightmare," she said.

A marijuana store called the Green Camel Collective on Vanowen Street near Whitsett Avenue was padlocked and closed for business on Friday. FBI agents raided the small shop this week. They seized about 24 pounds of marijuana and nearly a pound of hashish. Federal prosecutors say the operators ran an enormously profitable illegal enterprise. A business owner near the shop, who didn’t want to give his name, said federal agents took away about 10 people in handcuffs, including a teenage boy and a middle-age man who ran the operation.

William Panzer — who co-authored California’s medical marijuana law — told Morrison the federal government is taking aim at more than commercial store fronts. A battle, he said, is being waged against marijuana as a whole: "This war against cannabis has been going on since 1937, driven by society reasons, driven by political reasons, and what’s horribly absent is science, is rationality, common sense."

The United State Attorney's Office released a press release detailing their enforcement plans for commercial marijuana operations in the Southland. Specific targets include a South Orange County building that the U.S. Attorney's Office says houses eight marijuana stores, as well as a trafficking ring that sold marijuana at a San Fernando Valley storefront and allegedly sent marijuana to customers as far away as New York.

The U.S. Attorney's Office announced warning letters are being sent to the operators and landlords of 38 marijuana stores, civil forfeiture lawsuits are being filed against three properties, and an indictment charging six people with marijuana trafficking that generated $15 million in profits over eight months.

The warning letters tell the stores that they are in violation of federal law and that they have two weeks to discontinue selling or distributing marijuana through their stores. The letters are being sent to stores in Orange County, Riverside County and the Inland Empire. According to the release, "The areas in which the initial warnings have been sent are all areas where local officials have taken steps to eliminate marijuana stores and have asked the federal government for assistance."

The six being indicted worked for a now-defunct North Hollywood marijuana store, NoHo Caregivers. They allegedly sold marijuana at their store, sold marijuana to other stores and sent marijuana to affiliates in New York and Pennsylvania. They distributed between 600 and 700 pounds of marijuana per month, according to the indictment.

The indictment says that the defendants used encrypted BlackBerry devices, but investigators intercepted email communications detailing the store's distribution and payments for the marijuana. One email exchange between the two lead defendants included them discussing "the amounts of marijuana they intended to distribute monthly over the coming year and estimated that they would each receive over $194,000 in profits per month."

The four U.S. attorneys in California, the first state to pass a law legalizing marijuana use for patients with doctors' recommendations, held a joint news conference Friday to "outline actions targeting the sale, distribution and cultivation of marijuana."

A joint conference by U.S. attorneys is highly unusual, according to reporter Michael Montgomery of the California Report, who spoke with KPCC's Madeleine Brand. The U.S. attorneys have not previously spoken with a single voice like this, Montgomery says.

Their offices refused to provide details in advance about what moves the officials are taking or how many of the state's hundreds of storefront pot shops would be affected. Montgomery said that there may be a flood of letters sent to property owners around the state next week. It remains to be seen whether only a few will be targeted, or if letters will be sent to dispensaries around the state. A potential threshold is dispensaries that sell more than 400 pounds per year, according to Montgomery, which would include a lot of dispensaries.

The U.S. attorneys sent a letter earlier this year to law enforcement saying that enforcing marijuana laws related to both growing plants and distribution had become a problem, according to Montgomery.

Particularly in the Central Valley, it's been difficult for officials to prosecute as it's been hard to prove whether those growing the plants are doing so legally or not. As many as a million plants are being grown in the open in California, Montgomery says. Law enforcement has to prove that it's not going to legitimate dispensaries; however, there's a much lower threshold of proof to seize property.

The Associated Press obtained copies of the letters that a prosecutor sent to at least 12 San Diego dispensaries. They state that federal law "takes precedence over state law and applies regardless of the particular uses for which a dispensary is selling and distributing marijuana."

Barack Obama initially promised a different tact than his predecessor when elected, as did Obama's Attorney General Eric Holder. The move comes a little more than two months after the Obama administration toughened its stand on medical marijuana. For two years before that, federal officials had indicated they would not move aggressively against dispensaries in compliance with laws in the 16 states where pot is legal for people with doctors' recommendations.

The Department of Justice issued a policy memo to federal prosecutors in late June stating that marijuana dispensaries and licensed growers in states with medical marijuana laws could face prosecution for violating federal drug and money-laundering laws. The effort to shutter California dispensaries appeared to be the most far-reaching effort so far to put that guidance into action.

Greg Anton, a lawyer who represents dispensary Marin Alliance for Medical Marijuana, said its landlord received an "extremely threatening" letter Wednesday invoking a federal law that imposes additional penalties for selling drugs within 1,000 feet of schools, parks and playgrounds.

The landlord was ordered to evict the 14-year-old pot club or risk imprisonment, plus forfeiture of the property and all the rent he has collected while the dispensary has been in business, Anton said.

Kris Hermes, a spokesman for the medical marijuana advocacy group Americans for Safe Access, said the warnings are part of what appears to be an attempt by the Obama administration to curb medical marijuana on multiple fronts and through multiple agencies. A series of dispensary raids in Montana, for example, involved agents from not only the FBI and U.S. Drug Enforcement Agency, but the Internal Revenue Service and Environmental Protection Agency.

Going after property owners is not a new tactic though, Hermes said. Five years ago, the Department of Justice under President George W. Bush made similar threats to about 300 Los Angeles-area landlords who were renting space to medical marijuana outlets, some of whom were eventually evicted or closed their doors voluntarily, he said.

"It did have an impact. However, the federal government never acted on its threats, never prosecuted anybody, never even went to court to begin prosecutions," Hermes said. "By and large, they were empty threats, but they relied on them and the cost of postage to shut down as many facilities as they could without having to engage in criminal enforcement activity."

The idea of civil forfeiture is new for the U.S. attorneys, though, going after the property belonging to those leasing land to growers, according to Montgomery. He says that the U.S. Attorney's Office presents a more significant and serious challenge to medical marijuana in California than the DEA due to their enforcement powers.

While California's medical marijuana dispensaries face renewed opposition from the federal government, federal and local officials aren't planning on going after those who've been prescribed marijuana, Montgomery said.

The San Diego medical marijuana outlets put on notice were the same dozen that city officials sued last month for operating illegally, after activists there threatened to force an election on a zoning plan adopted to regulate the city's fast-growing medical marijuana industry, City Attorney Jan Goldsmith said. A judge on Wednesday ordered nine of the targeted shops to close, while the other three shut down voluntarily, Goldsmith said.

One question is whether the federal government will pursue more mainstream dispensaries, such as the Harborside dispensary in Oakland, while they've previously only gone after outlier dispensaries that would likely have also been in violation of state as well as federal law, Montgomery said. California's large marijuana economy includes large dispensaries that cater more to recreational users than to serious cancer patients, Montgomery said.

KPCC's Mike Roe and Madeleine Brand contributed to this story. This story incorporates information from the Associated Press.

Correction: An earlier version of this story incorrectly stated that Prop 215 passed 5 years ago. We thank our commenters for pointing out the error.

Feds to California: Shut down pot dispensaries

Thu, 06 Oct 2011 17:03:38 -0700

Dave Warden, a bud tender at Private Organic Therapy (P.O.T.), a non-profit co-operative medical marijuana dispensary, displays various types of marijuana available to patients on October 19, 2009 in L.A. Credit: David McNew/Getty Images

Federal officials are threatening to shut down California’s medical marijuana dispensaries. They say that whatever the state’s determined, selling pot violates federal drug laws, and they'll lay out a plan for the shut down tomorrow.

The four U.S. Attorneys in California sent letters this week to medical marijuana sellers or their landlords ordering them to shut down within 45 days.

They threatened to prosecute medical marijuana dispensaries or confiscate their property. California law allows licensed dispensaries to sell marijuana for medical use. But the federal prosecutors say the law conflicts with federal law - and when that happens, the federal statutes prevail “regardless of the particular uses for which a dispensary is selling pot.”

The federal attorneys plan to announce a statewide crackdown on medical marijuana business at a press conference.

The Associated Press obtained copies of the letters that a prosecutor sent to 12 of San Diego's dispensaries. They state that federal law "takes precedence over state law and applies regardless of the particular uses for which a dispensary is selling pot.

The move marks an escalation of the conflict between the federal government and the medical marijuana industry as well as the efforts of cities statewide to regulate pot dispensaries.

In a recent development, a California appeals court deemed Long Beach's ordinance for medical marijuana dispensaries illegal, ruling that the law was in direct conflict with the federal Controlled Substances Act.

Brown signs bill to criminalize smuggling cell phones into California prisons

Thu, 06 Oct 2011 13:39:56 -0700

File photo: The California Institution for Men prison fence is seen on August 19, 2009 in Chino, California. Credit: Michal Czerwonka/Getty Images

Gov. Jerry Brown signed a bill Thursday morning making it a misdemeanor to smuggle cell phones into California prisons.

The new law carries a punishment of six months in jail and up to $5,000 in fines for each device. Inmates found with contraband phones will lose time credits they earn for good behavior and may have to serve their full sentences as a result.

California’s Department of Corrections confiscated 11,000 cell phones from inmates last year. Prison visitors — men and women, young and old — smuggled them in. So did prison workers.

But they faced minor consequences. The department could ban visitors and fire workers, but the only way to prosecute someone was to prove the cell phone was used to commit a specific crime.

Corrections says inmates have used cell phones to order hits, run drug rings and threaten victims, witnesses and judges.

Gov. Brown also issued a companion executive order today to get Corrections to increase searches of prison staff and inmates and to beef up technology that can block cell phone signals inside the prisons.

California prosecutors, public defenders grapple with 'realignment'

Tue, 04 Oct 2011 06:41:13 -0700

In this photo taken Tuesday, Sept. 27, 2011, double-tiered bunks are seen in one of the cells at a formerly closed housing unit at the Rio Cosumnes Correctional Center, in Elk Grove, Calif. that will be reopened to handle the increase of inmates sentenced under the new prison realignment program. Credit: Rich Pedroncelli/AP

This is the first week for “realignment” in California’s criminal justice system. Realignment sends fewer criminals to state prison. It’s an effort to save the state money by stopping the spinning door that has ex-cons end up back in prison again and again. Realignment is also aimed at cutting the prison population to meet a federal court order.

Whatever the motivation, it’s a big change for prosecutors and public defenders.

Inside an Alameda County courtroom, Superior Court Judge Morris Jacobson is about to sentence a carjacker.

The victim is undergoing chemotherapy and couldn’t make it to the courtroom, so Judge Jacobson reads her letter. "You held me at gunpoint, stole my car and all my belongings and then wrecked my car. To this day..."

The man in the red jail coveralls listens, but shows no emotion."On violation of penal code section 215, carjacking, I’m going to sentence you to the mid-term of five years in state prison," Jacobson says.

The carjacker was out on parole when he stole the car. He joined the 70 percent of convicts that commit new crimes within three years of leaving prison.

Gov. Jerry Brown thinks counties can change that if they keep their low-level felons instead of sending them to state prison. That’s what he calls “realignment.”

Nancy O’Malley says it works in Alameda County. She’s the district attorney there, and she says less than a third of felons on probation in her county commit new crimes.

"So we’re doing something right," O'Malley says. "So what I think is the rest of the state is adopting our philosophy of keeping them local and trying to help them figure out how to turn their lives around. Give them as many opportunities as we can. And for those that choose not to or don’t for whatever reason, attach the punishment to it."

Under California’s new law counties keep nonviolent, non-sexual and non-serious felons. Steal a car, swipe something from a store, sell drugs — you get time in county jail.

Public defender Brendon Woods say it’s better than state prison. "Prison is no joke. Prison is tough. You learn how to survive in a different way in prison. I’ve heard people describe it as a war zone."

Woods' office looks out onto the Alameda County courthouse blocks away. He says a lot of his clients are kids that need a push in the right direction.

"You’ve got some young kid who’s been selling drugs," Woods says. "He’s got one foot in the community where he’s trying to do the right thing, and one foot in the criminal element. You send that kid to prison, he’s going to come out a lot worse. He’s going to come out with two feet in the criminal element. Realignment will try to stop that and put that person on the right path."

Riverside County Public Defender Christine Voss says her office used to have a hard time getting prosecutors to consider alternative sanctions, "And we tried an enormous number of cases as a result because we were not able to settle them."

Riverside County has sent a high percentage of its low-level felons to state prison compared to other counties. Last year, they sent up 4,000 felons.

"People had previously thought, ‘OK, we’ve given up on this person. They’re going to state prison. We’re now done with them,’" Voss says. "And our lawyers will not be in that situation anymore. They’re going to stay local and they’re going to have what we’re calling ‘split sentences,’ where people go to county jail for a period of time and are released on supervision after that. And they may have terms and conditions that we may be involved in influencing."

But Riverside County District Attorney Paul Zellerbach says in his county, there’s no room in the jail. "There’s a good possibility the court will sentence someone for two or three years; they’re going to be required to serve that sentence locally; the jail has no custody; so the next day, they’re released on ankle bracelet and go back home."

“Ankle bracelets” means electronic GPS trackers. Zellerbach says county sheriffs will use a lot of them because they’ll have to release a lot of people from jail that usually wouldn’t get out right away — like arrestees waiting for trial.

"Let’s say someone was a victim of a crime and they had at least hoped and expected that person to be locked up and held in custody until the trial," Zllerbach says. "Maybe they’ll be out the next day in their neighborhood."

Zellerbach also worries that prosecutors won’t be able to snag serious criminals on parole violations anymore. Before, a parole violation would get a felon six months in state prison; now, it’s a probation violation that comes with only 90 days in county jail.

But Riverside County’s Paul Zellerbach and other district attorneys have a plan: they say they’ll file more new charges to get the more dangerous probationers off the streets.

Infographic by KPCC's Lily Mihalik.

It's official: Hunger strike back on at California state prisons

Thu, 29 Sep 2011 17:00:10 -0700

A demonstrator holds up a sign during a rally in front of the State Building in San Francisco on July 1, 2011 to support prisoners at Pelican Bay State Prison. Inmates in an isolation unit at Pelican Bay State Prison are on a hunger strike to protest conditions that they describe as inhumane. Advocates say several dozen inmates in the Security Housing Unit declined to eat their morning meal on Friday. The unit holds about a third of the 3,100 inmates at the Northern California prison. Credit: AP

Prison officials in California Thursday confirmed that more than 4,000 inmates have been on a hunger strike since Monday.

It’s the second time this year that inmates have refused food to protest the prison system’s use Security Housing Units — known as “the SHU” — to control prison gangs.

Each day, inmates in the SHU at Pelican Bay State Prison near the Oregon border get 15 minutes to shower, and a little over an hour to exercise in a concrete yard.

They spend the rest of the day — nearly 23 hours — locked in their cells. No phone calls. No physical contact with visitors. The Department of Corrections says the SHU was designed to punish and control inmates that run prison gangs. Inmates say it’s a form of torture to coerce them to “rat” on other prisoners so they can get out of the SHU. To protest, about 6,000 inmates at Pelican Bay and elsewhere refused meals in July. Their hunger strike ended after three weeks when prison officials agreed to change in SHU policies. But now, hunger strike leaders say Corrections has dropped the ball.

"Everything we said we’d do, we’d done and now they’re striking and I don’t know why," says Corrections Secretary Matthew Cate.

Corrections Secretary Matthew Cate says his department delivered on promises to supply inmates in the SHU with exercise equipment inmates, warmer winter clothing, art supplies and proctors for exams. He says Corrections is also considering plans to revise policies on gang management, as promised. Cate says he plans to isolate the leaders of this latest hunger strike and write up all inmates who participate.

"My plan today is everybody who disrupts our prisons will get a disciplinary sanction," he says.

Since Monday, inmates at eight prisons have joined the hunger strike. Most of those who refused food this week are housed in prisons with security housing units or administrative segregation units. They’re less isolated but still restrictive, and they’re meant for inmates that violate prison rules.

California prisoners again refusing to eat

Tue, 27 Sep 2011 18:11:07 -0700

A prisoner at Pelican Bay State Prison. The prison has been along the focuses of previous hunger strikes because it houses prisoners under very strict confinement conditions. Credit: Julie Small/KPCC

Thousands of inmates in California prisons refused meals on Tuesday. They hope to persuade corrections officials to stop isolating inmates for years and sometimes decades so they won’t commit crimes in prison. It’s the second time this year inmates have refused food to protest the policy, but officials are classifying it differently.

The state Department of Corrections and Rehabilitation won’t call this week’s protest a “hunger strike” yet.

"We have thousands of inmates in several prisons who are refusing meals," said spokeswoman Terry Thornton, who added that the department will only consider inmates who refuse all meals for three days in a row as hunger strikers.

During a previous protest in July, the department defined strikers as inmates who declared their intentions and missed one day of meals. Six thousand inmates joined that strike. But Thornton says many of them started eating again after a day or two, or repeatedly went on and off their fasts.

"We saw inmates who were refusing to eat state-issued food but they were eating their canteen food. Or sharing food with other inmates, or drinking Ensure. I mean, are you really on a hunger strike if you’re drinking Ensure?" Thornton said.

Corrections spent $300,000 monitoring the July hunger strike and providing medical attention to participants. Thornton says her department is monitoring this strike, too.

Prison medical staff will pay close attention to inmates who go without food for three days. It’s already monitoring inmates with chronic health conditions who could suffer complications if they don’t eat. Inmates and their supporters say the strike is back on after corrections officials didn’t follow through on promises to change the way they placed prison gang members in isolation units. Those conditions gave rise to July’s hunger strike.

Educators to sue CA to recoup billions

Tue, 27 Sep 2011 16:56:22 -0700

The Los Angeles Unified School district, along with school administrators and educators across the state, say they’ll sue California for diverting billions from public schools.

Those pressing the suit have scheduled a Wednesday press conference in Sacramento to release more details about the case.

California voters passed Proposition 98 in the late 1980s to protect funding for public schools. The constitutional amendment requires the state to spend about 40 percent of general fund revenues on K-12 schools and community colleges. Education leaders say that didn’t happen this year because lawmakers diverted about $5 billion of state sales tax to county governments.

Lawmakers diverted that money to fund the governor’s realignment program that shifts responsibility to local authorities for the incarceration and post-release supervision of low-level felons.

The one-time diversion reduced the amount of state revenues available to schools. Educators estimate they’ll lose $2 billion in this year’s budget because of money going to counties. The California School Boards Association, the Association of California School Administrators and school districts, including Los Angeles Unified, plan to sue to get the money back.