Chilean miner rescue operation passes two-thirds mark as 22nd man is brought to surface, LT

Published October 13, 2010

| Associated Press

SAN JOSE MINE, Chile –  Chilean miner rescue operation passes two-thirds mark as 22nd man is brought to surface.

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Assembly passes main bill in Calif. budget package

SACRAMENTO, Calif. –  The state Assembly on Thursday passed the main bill in a legislative package aimed at ending California's record budget impasse and closing a $19 billion deficit.

Lawmakers voted 54-1 in favor of the measure, SB870, getting just enough support in the 80-member house to reach the required two-thirds vote threshold. The bill moved to the state Senate, where lawmakers were expected to take it up later Thursday.

California has been without a budget for a record 99 days into the current fiscal year, a delay that has left the state on the brink of issuing IOUs and cutting off funding for road projects.

The budget package contains no new taxes or fees, and just 40 percent of the gaping deficit would be closed by additional spending cuts. The rest would be addressed through rosy revenue assumptions and creative accounting.

The plan also counts on the state receiving $5.3 billion from the federal government, far more than it has received so far.

In addition, it assumes a statewide economic recovery that will generate an additional $1.4 billion in tax revenue.

If those assumptions fall short, the difference will be added to the budget deficit that will greet Schwarzenegger's successor in January.

"In the era of the Great Recession, there is no such thing as a perfect budget," said Assembly Speaker John Perez, D-Los Angeles. "This is a budget that reflects the compromises necessary to find a two-thirds majority."

Senate President Pro Tem Darrell Steinberg, D-Sacramento, predicted Thursday the budget would pass but acknowledged it would likely have to be revisited in coming months.

"We know we'll be back at it, but we also get a fresh start — a new legislative session and a new governor," he told reporters.

Also under the deal, nearly $2 billion in payments to K-12 schools and California's community colleges would be delayed until the next fiscal year.

If approved, the budget would allow Schwarzenegger to claim victory in two of the three areas of reform he demanded as a condition of signing a spending plan.

Lawmakers agreed to ask voters in 2012 to approve a larger rainy day fund to build a cash reserve for future economic downturns. They increased the maximum size of the fund from 5 percent to 10 percent of general fund revenue.

The legislative leaders and most of the state's public employee unions also agreed to pension reforms that included higher retirement ages for state employees hired after Nov. 10 and higher contribution rates for all state workers.

The largest state employees' union, Service Employees International Union Local 1000, reached agreement on a tentative contract late Wednesday.

The budget plan does not include the tax changes the governor had sought, including recommendations released last year by a commission created by the governor and Democratic leaders. Schwarzenegger spokesman Aaron McLear said the governor will keep pushing for tax changes he believes are needed to solve California's long-term budget imbalances.

The national recession has forced lawmakers and the governor to make tens of billions of dollars in spending cuts in the past two years as state tax revenue plummeted. This year's $19 billion deficit amounts to more than 20 percent of the state's $87.5 billion general fund, which was as high as $103 billion as recently as the 2007-08 fiscal year.

Assembly Minority Leader Martin Garrick, R-Solana Beach, highlighted what he described as the budget proposal's three main accomplishments.

The plan "doesn't hurt struggling taxpayers, out-of-work Californians and economic recovery, brings the state closer to living within its means and benefits the state this year and into the future," he said.

As lawmakers work toward a final deal, the state's ability to meet its financial obligations was a mounting concern.

The state needs a signed budget in order to start borrowing money to bridge the cash shortage that is typical each fall before the springtime influx of tax revenue, said Joe DeAnda, a spokesman for the state treasurer's office.

The state will need short-term borrowing as soon as possible, said Hallye Jordan, a spokeswoman for the state controller's office, which will announce Friday if California will need to issue IOUs for lack of cash.

"Bottom line is, we've got $8 billion in payments we couldn't make through October — unprecedented, a three-month delay in our payments," Jordan said. "They'll be payable with the enactment of the budget, and we don't have enough cash flow. We'll have to do something."

The late budget also is making it more difficult for the state to issue long-term bonds to support $7 billion worth of public works projects this fall, he said.

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Israel passes Nazi-seized drawing to owner's heir

JERUSALEM –  A Swiss artist's drawing seized by the Nazis during World War II has completed a 73-year journey from the hands of its original German-Jewish owner to the collection of a Jewish charity in Britain, Israel's national museum said Wednesday.

The convoluted passage of Paul Klee's drawing, from its seizure to the present destination, reflects an ongoing quest by Jewish organizations to restore artwork stolen by the Nazis to their rightful owners.

Klee's 1920 drawing, "Veil Dance," was part of the private collection of Harry Fuld Jr., a Jewish telephone maker who fled Nazi persecution in Germany in 1937.

Fuld had left his art collection with a shipping company, expecting it would follow him to his new home in England, but the collection never left. In 1941, under a law seizing the property of Jewish citizens who had left Germany, it fell into Nazi hands.

After the war, a Jewish organization that seeks out Jewish-owned art seized by the Nazis found the painting and — unaware who it belonged to — handed it in 1950 with about 1,200 other works to Israel's national museum for safekeeping.

And there it remained for 60 years — often displayed in exhibitions — until earlier this month.

Fuld died in 1963, willing his estate to his housekeeper, Gita Gisela Martin, who donated it in 1992 to the U.K. branch of Magen David Adom, the British fundraising arm of Israel's emergency service. Neither knew where the drawing was.

Meanwhile, further research was done in Israel on the drawing's provenance. When the identity of its owner and heirs was established, the Israel Museum agreed to give it up.

Museum director James Snyder said Wednesday that although the drawing was an important part of the museum's 18-piece Klee collection, he was "gratified" to see it go to a charitable cause.

Over the years, the museum has returned some 20 such pieces claimed by heirs, including Edgar Degas' charcoal drawing "Four Nude Female Dancers Resting" in 2005, which belonged to a Dutch art dealer who died while fleeing the Nazi invasion of the Netherlands.

Klee's style was influenced by expressionism, cubism and surrealism. Along with his friend and colleague, Russian painter Wassily Kandinsky, he taught at the German Bauhaus school whose work the Nazis denounced as "degenerate art" and shut down in 1933.

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