California Finances

Workers compensation--an issue few people fully understand but one that can affect anyone who owns a business or holds a job--has become the make-or-break item on which the fate of the state's $56.4-billion budget now depends. Gov. Pete Wilson and his Republican allies in the Assembly are demanding changes in the workers compensation program in exchange for higher income taxes on the wealthy. If they get their way, premiums paid by employers--now among the nation's highest--could drop.

It isn't getting any easier to be an investor in California municipal bonds. On Wednesday, a major Wall Street credit-rating agency downgraded Los Angeles County's $4.4 billion in long-term bonds for the third time since 1992. With memories of Orange County's bankruptcy still fresh, the L.A. County downgrade is certain to fuel nervousness among individual investors--who directly or through mutual funds own the bulk of tax-free muni bonds in California and nationwide.

In a case of politics turned upside down, Republican Gov. George Deukmejian said Tuesday that a proposal by GOP lawmakers to place an 8-cent-a-gallon gas tax increase on the November ballot is "contrary" to what Republicans stand for. At the same time, Assembly Speaker Willie Brown (D-San Francisco) said Democrats, who had embraced similar proposals, are not likely to support placing any gas tax measure before voters this year.

California taxpayers will ultimately spend more than $117 million to correct problems caused by an ill-fated decision to build a section of the Century Freeway too close to underground water, state auditors reported Wednesday. In a 44-page report to the Legislature, auditors blamed the California Department of Transportation for ignoring repeated warnings that a 3.5-mile section of the state's newest and most expensive freeway was threatened by a shallow, and rapidly rising, aquifer.

In response to urgent pleas from Los Angeles-area lawmakers, state officials said Thursday they will convene a cabinet-level meeting to see if they can come up with enough state aid to save the county's 19 juvenile probation camps, which are set to close in May for lack of money.

Stepping up his assault on welfare costs, Gov. Pete Wilson on Thursday proposed steep cuts in basic aid and health care benefits for the state's poor, but tempered his proposals with a preventive health plan for uninsured preschoolers.

State and county officials met at a Los Angeles County youth probation camp in Little Tujunga Canyon on Friday to work on a financial partnership that could keep such camps open for another year. Last year's lean county budget called for closing 18 of the county's 19 camps, which annually house an estimated 4,500 youthful offenders, some of whom would otherwise be placed with more hardened criminals in California Youth Authority prisons.

Last fall's biological warfare experiment against the ash whitefly, which has attacked trees in at least 15 California counties, was successful in killing the destructive pests, researchers reported Monday. However, ash whitefly experts said they need more money to continue the research that could provide a long-term solution to the ash whitefly problem. "We could really be set back if the University of California was unable to continue its research," said Peter J.

The City Council has agreed to participate in a state program that will pay the city up to $57,380 annually to tow away abandoned vehicles. The program makes the city eligible for a maximum of $295,507 in state funds over five years. City officials say wrecked or abandoned cars are a persistent problem in Mission Viejo. "It's something we deal with every single day," said Sheriff's Lt. George Johnson, the ranking police officer in Mission Viejo.

The federal government has notified California officials that the state will have to pay a bigger share of the cost of Medicaid and other joint federal-state health programs for the poor beginning in mid-2002. The state stands to lose more than $400 million it had counted on to help pay for poor people's medical bills, or about 3% of the amount provided by the federal government this year.