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State budget battle: Lots of last-minute lobbying in advance of tomorrow's vote on resolving the $40 billion budget impasse. KFI-AM is trying to pressure GOP legislators to vote no by portraying mug shots of potential dissidents perched on a stick. Real nice. From the Sacramento Bee:
Hundreds of calls and e-mails flooded the Capitol on Thursday from friends and foes of the tentative plan to ease the state's fiscal mess through $15.8 billion in spending cuts, $14.3 billion in taxes and $10.9 billion in borrowing. Both Republicans and Democrats were caught in the crossfire. GOP conservatives were incensed at the notion of a colleague supporting tax hikes, while labor and environmental groups were mad at what they consider Democratic concessions.
How much for California?: The fed’s economic stimulus plan appears to be bringing $26 billion, $9.2 billion of which will go directly to the state treasury (mostly for education and health care). Key point: Not all of the federal money can be used to help erase the deficit. Some won't arrive on time. Some is directed to other purposes. From the LAT:
The austere budget package in the works in Sacramento already assumes that the federal assistance will wipe out nearly a quarter of California's deficit. If it falls short of that, Californians are in for even more financial carnage; about $1 billion in extra program cuts and tax hikes would be triggered under the budget plan. The extra cuts would apply to welfare grants, aid to the elderly and disabled, and Medi-Cal. State colleges and universities would also lose money, as would the court system.
Economists are gloomy: A recovery in the second half of the year, a scenario that some analysts had been projecting, or at least hoping for, is looking much less likely, according to a WSJ survey of economists. The average forecast is for growth in the third quarter at 0.7 percent, less than half the rate expected last fall. Good news is that very few economists surveyed expect declining growth through 2009.
Bad times at restaurants: Cheesecake Factory's same-store sales fell 7.1 percent in the fourth quarter, while same-store sales at California Pizza Kitchen dropped 7.2 percent. Restaurant traffic is expected to fall this year by at least 1 percent. Everyone keeps talking about an industry shakeout that will include store closures. (LAT)
Still-higher gas prices: So much for low prices helping to stimulate the economy. The Auto Club's latest survey shows a 9.1 cent increase in the average price of regular in just the past week. In the L.A. area it's now at $2.216 per gallon. The increases are being blamed on lower supply because of refinery issues. Meanwhile, oil has fallen to $34 a barrel.
Grand Avenue update: Local officials might defer or reduce a $250,000-a-month penalty that developer Related Cos. is supposed to start paying Sunday. Related had been expected to start work on the mega-billion dollar development, but it can't get financing. BTW, Grand Avenue once was scheduled to be finished this year. (LAT)
More flak on Live Nation deal: The concert promotion company's biggest shareholder says he may oppose the proposed merger with Ticketmaster if Barry Diller has a leadership role in the new company (he's supposed to be chairman). Sam Shapiro says the companies Diller leads generate poor returns, though Shapiro's son appears to support the merger. (Bloomberg)
Microsoft to open stores: Seems a bit counterintuitive given the current retail bloodbath, but the software giant will be selling computers installed with Microsoft software as well as other company products. (AP)
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.