COVER STORY  |  EDITORIAL  |  PREVIEW  |  THE HUM  |  CALENDAR

March 25, 2004

---

Chesbro holds forth
State legislator on Davis, Arnold and the budget crisis

---

It's getting ugly
Layoffs inevitable as Supes order across-the-board county cuts

---

Science winners go to state
29 projects by local students will compete

---

A new beginning
New owners for Arcata Theatre

---

Calling for peace
Eureka Peace March

THE WEEKLY WRAP

GOLDEN HANDSHAKE: Back in January, the Journal reported on rumors that the Pacific Lumber Co. was planning to lay off about 400 employees. At the time, company spokesperson Erin Dunn refused to confirm or deny, saying only that the company did not "comment on rumors." Since then, the company has announced that it plans to build a new, high-tech production line in Scotia and that it will close its Carlotta mill. On Monday, Palco made another announcement: It is offering a severance package to some 475 production employees if they choose to leave the company voluntarily -- not a layoff, exactly, at least not yet. According to a press release and local news reports, the package includes a cash payment, six months of medical insurance, "job-searching skills" and continued participation in the company's pension and children's scholarship plans.

ACTIVISTS WIN A ROUND: The legal team representing nine forest activists who were pepper-sprayed in 1997 won another big legal victory Monday, after the U.S. Supreme Court declined to hear an appeal brought by Humboldt County's attorneys. The court's action meant that Judge Vaughn Walker -- whom the activists have accused of bias -- will be prevented from conducting the trial in the case, scheduled to begin on Sept. 7 at the Federal District Court in San Francisco. The activists' lawsuit against the county seeks damages for three incidents in which sheriff's deputies swabbed pepper spray directly into the eyes of protesters. Walker dismissed the suit in 1998, after a jury that heard it reached a split decision; the 9th Circuit later ordered it to be re-tried.

A STEP FORWARD: The beleaguered North Coast Railroad Authority received a welcome bit of news from the Federal Emergency Management Agency Tuesday. Mitch Stogner, executive director of the state agency that owns the defunct Northwestern Pacific Railroad, learned that FEMA had decided to sign off on the authority's plan to re-open the southern half of the line, from Napa County to Willits. The move should free up $7.9 million in disaster relief funding that has been promised to the NCRA for years. With funds on the way, Stogner said trains could be rolling by this fall. Service to Humboldt County is still on the back burner, as the untold millions required to fix up the Eel River Canyon section of the line are still nowhere to be found. Still, Stogner said that the recent news should give a boost to the project. "We believe the best argument for service north of Willits is to get service on the south end of the line -- to show we can run trains."

FASTING FOR THE FOREST: Earth First! activist Naomi Wagner, who this week began a 40-day jail sentence for resisting arrest during a logging protest in Freshwater last March, said she will fast during her imprisonment. Joining the 58-year-old Wagner in the fast, outside the courthouse, will be fellow activist Jeanette Jungers, a Eureka teacher. "We are fasting to focus maximum attention on the fate of the forest, especially the old growth, at the hands of Maxxam/Pacific Lumber Co.," the women said in a statement. If the trees were houses, they said, "they would be protected as historical monuments." Wagner, a Petrolia resident, and Jungers chained themselves to the base of a redwood when the Pacific Lumber Co. began removing tree-sitters from its land off Greenwood Heights Road in March 2003. Wagner was acquitted of trespassing but the appeal on her conviction for resisting arrest was denied.

UNDESERVING PLOVER? Does the federally "threatened" western snowy plover, which nests up and down the West Coast, including on Humboldt County beaches, really need protection? The U.S. Fish and Wildlife Service announced Monday it will take a look at that question under a procedure known as a "12-month status review." The decision comes after the filing of a petition and a lawsuit contending that the plover is genetically identical to populations in the interior of the country that are not imperiled. What impact, if any, the review will have on the management of county parks at Clam and Moonstone beaches, both nesting spots for the bird, is unclear.

BIG TEST: All hail the mighty Lumberjacks! The HSU Men's Basketball team is making its first-ever appearance in the NCAA Division II's national championship tournament, a.k.a. "The Elite Eight." As we went to press, the `Jacks were preparing for their quarterfinals match against the University of Massachusetts-Lowell River Hawks (Wednesday, 8:30 p.m.). If our boys can de-claw the Hawks, they'll move to the semifinals (Thursday, 8:30 p.m.) and then to the championship game (Saturday, 10 a.m.), which will be carried on CBS television. All `Jacks games will be broadcast on KATA Radio, 1340 AM, and streamed live on the Internet at www.hsujacks.com.

NEW BANK OPENS: Redwood Capital Bank, the newest entry into the local financial scene, opened its doors this week, with a gala reception in its brand-new headquarters at 402 G St., Eureka, Tuesday evening. For Redwood Capital CEO John Dalby, the enthusiasm for the new venture among local investors proves that people want a locally owned bank. "[The investor base] is very thinly spread across the community," he said. "Virtually every investor is either in this community or has very strong ties to the community." Redwood Capital's opening comes hard on the heels of the sale of Humboldt Bank -- where Dalby was formerly an executive -- to Oregon's Umpqua Bank.

LEAD CANDY ALERT: The public health department issued a warning this week that an imported chili-based candy from Mexico called Chaca Chaca may contain "excessively high" levels of lead that could cause serious health problems. At particular risk are children and pregnant women. Lead can damage the brain and nervous system, resulting in learning disabilities and behavioral problems that can last a lifetime. The FDA has placed the candy on "import alert" to detain future shipments from Mexico into the United States. The only way to know if your child has lead poisoning is to have the child's blood tested, health officials said.

CORRECTION: A news item in last week's issue misidentified the Humboldt County Office of Education's spokesperson. She is Janet Frost. In addition, last week's chart showing the final 2003 Academic Performance Index scores for local schools may have been confusing for some readers. The column of figures labeled "% English Language" should have read "% English learners" -- in other words, the percentage of students at the school for whom English is a second language. [The online version has been corrected]

Chesbro holds forth
State legislator on Davis, Arnold and the budget crisis

by KEITH EASTHOUSE

State Sen. Wes Chesbro was in town last week to chat with the local press and to honor Dr. Ann Lindsay as the "Woman of the Year" in his district for her work in improving access to health care.

A resident of Humboldt County for the past 32 years, Chesbro was elected to the State Senate in 1998. He is chairman of the Senate Budget Subcommittee, which oversees the budgets of state agencies dealing with health and human services, labor and veterans affairs -- and which earlier this month rejected Gov. Arnold Schwarzenegger's proposed enrollment caps on state health programs.

In a visit to the Journal's office in Arcata, he fielded questions that primarily had to do with the new governor and the ongoing state budget crisis. The Arcata Democrat, who entered politics 30 years ago when he was elected to the Arcata City Council, began the interview with a bit of criticism of himself and his party.

WC: The problem with the Democrats' position has been that we've always put taxes first and said we'll solve the budget deficit by taxes. That hasn't worked. The Republicans wouldn't vote for it and the previous governor got recalled because of the increase in vehicle license fees. I don't think people are against taxes because they don't think we need money to pay for services. It's because they've lost faith in government. So our first priority needs to be to work with the governor to come up with ways to reduce the cost of state government and reduce the cost of providing services rather than reducing the services. People don't believe we've done a good enough job of reducing the overhead in Sacramento.

[At a recent hearing of the Budget Subcommittee] we looked at an AIDS drug assistance program and other health care programs, such as Healthy Families for children. The governor has proposed to cap those programs. So [what that means is if] you are diagnosed with AIDS or HIV and are not already in the program, then you have to be on a waiting list. Which of course with an illness like AIDS means a quick deterioration and probably death--so [the governor's caps have] life and death consequences. And assuming [the ineligible] person loses their employment, they become Medi-Cal recipients and we wind up having to pay for the catastrophic results of not managing their disease through the program. So [the caps are a] bad proposal.

But in a budget crisis if you don't like what the governor is proposing, you have to come up with your own solution. So we discovered that there was a more efficient way of administering the prescription program that would save more money than keeping people out of the program. We also found that there was drug rebate money from the pharmaceutical manufacturers that was owed the state for a number of these programs -- and that we could collect and actually expand the program slightly and reduce the general fund contribution to pay for it.

So we're looking to make state government more streamlined, to reduce the cost of state government, before we start talking about reducing services to people or raising their taxes.

KE: What's wrong with enrollment caps?

WC: They treat people in the same circumstance differently. They mean that a person who was accepted into a program because he was born on one date will be eligible while someone who's born on a different date will be ineligible. It's just an arbitrary cut-off of services. It's not fair and in many cases will cost us more money in the long run.

The other budget strategy I've begun to work on is an outgrowth of something I was doing during better times, when we had money and were expanding programs. I came up with the concept of minimum funding levels for small rural communities because in a number of programs the per capita distribution of money was insufficient to do anything with. An example is [a state program] that helps local law enforcement hire police officers. Cities like Arcata and Ferndale and Trinidad weren't getting anywhere near enough money to hire police officers, so we established a $100,000 minimum funding level.

This last week we've begun to apply that in a budget deficit situation. In terms of cutting funding, how can we build in floors so that funding doesn't drop below the level that's necessary to offer services? Take child care. The child care programs in Humboldt County would not receive enough money to survive just by the economies of scale. If you take a set percentage cut and apply it to Los Angeles County, to millions of people, the impact is spread out. In a small community, the impact might be so extensive that the program gets eliminated altogether. In my position as chair of the Budget Subcommittee, I'm hoping to insert that minimum funding level protection for rural programs. It doesn't mean they won't be reduced. It just means they won't be reduced below the levels where they can't survive.

KE: What's it like to be a committee chairman?

WC: I have more statewide responsibilities. And it becomes more of a challenge to represent the specific items in my district. The theory was that I wanted to be chairman so I could better represent my constituents. But in a budget crisis, the Senate leadership expects me to set a good example. So it's frustrating. I can't stand up and say let's cut everything else except for my community. But I can stand up and say let's protect rural communities all over the state because it's not fair to disproportionately impact them.

KE: How has the budget crisis affected you as a legislator?

WC: Instead of coming back to the district and telling people what I'm doing to make their lives better, I have to come back and tell people how I've made things less bad than they might have been. That's not as rewarding for an elected official. I have this daily debate about the wisdom of accepting this leadership role. But at the end of the day I always come to the same conclusion -- which is if I have a chance to be, even under horrible budget circumstances, in the room on behalf of constituents and helping make the decisions, or outside the room frustrated with a lot of other people, I would [prefer the former].

KE: Give me your appraisal of Gov. Schwarzenegger.

WC: I didn't vote for him and neither did my district. But in this crisis I feel it is my obligation to work with him. He has in word and deed shown a willingness to compromise.

KE: Could you give an example?

WC: The best example was last December, when we were negotiating over Proposition 57, the bond measure. He originally proposed a $20 billion bond to be paid back over at least 50 years and to have it paid for by the general fund, which was the most expensive way to do it. So we negotiated him into a bond that will be paid off as early as eight years from now. It's a $15 billion bond and it will be paid back by a quarter-cent of the existing sales tax dedicated to pay it back so we'll get better terms on interest rates. Basically, with this compromise, the cost of borrowing was dramatically reduced from his original proposal.

Another example is his mid-year budget cuts, in which he proposed drastic reductions to developmentally disabled folks. What really changed his mind was that everywhere he went people in wheelchairs showed up with picket signs. And he backed off that position in January.

I think he's the kind of guy who lives a fairly protected and privileged life as a celebrity and now a governor. So he doesn't come in contact with real world impacts very often. But perhaps through his wife [former television personality Maria Shriver], when he is presented with information about the impacts, he is willing to reconsider.

KE: How has the recall of Gray Davis changed the political landscape in California? Was it people power in action or was it some perversion of people power?

WC: It's still a little early to give a complete political analysis. But the general perception is that it was a unique set of circumstances. You had a fairly unpopular Democratic governor caught in the energy crisis and then a huge budget deficit. And voters were confronted with an opportunity to switch to what appeared to be a very powerful personality who they thought might act more decisively. But my own feeling is that it reflected a lack of trust in state government. It was focused on Davis. But there was a broader lack of trust.

KE: Why? Who betrayed the trust?

WC: Part of it was the extreme partisanship on the part of many legislators [from both parties]. Voters expect their elected representatives to roll up their sleeves and work together and we weren't doing that. But part of it was what someone referred to as a perfect storm. First the energy crisis. Then the dot com bubble bursting and the income of California investors dropping dramatically, and California's tax revenue dropping dramatically. And also Sept. 11. That's beginning to fade in people's memories, but it had a dramatic impact on people's confidence in everything -- in the economy, in public safety and security, and in the government's ability to do its job. All these things sort of converged. And Gray Davis was an extremely cautious governor who failed to act decisively and restore people's confidence.

KE: If it was a perfect storm then it's not much of a precedent. They don't happen very often.

WC: Well, budget deficits are cyclical. Ronald Reagan experienced one; Pete Wilson experienced one in 1991 and 1992. It wasn't that long ago, in the early `90s, on a percentage proportional basis, that the state economy and the state budget faced very similar circumstances to what we face today. The difference was that the governor then didn't get recalled. Instead, the Legislature was able to come to a bipartisan compromise agreement, and that restored people's confidence even though it caused a lot of pain.

KE: How'd you feel about Prop. 56, which would have made possible legislative approval of the budget with a 55 percent majority, rather than a two-thirds majority? (The proposition was defeated in the March 2 election.)

WC: I didn't take a position on it because I thought people would see it as self-serving. The reason voters rejected it goes back to the trust question. They don't feel we're adequately using the tools they've already given us, so why give us another. The two-thirds majority gives the minority party veto power [over the budget]. And in the past the minority party has used that to negotiate a compromise. The current minority party, however, unified around the idea of saying no. I think that dynamic has changed. The Republicans didn't have any incentive to make Gray Davis look good. Now there's a Republican governor who has a great stake in solving the problems and so they have much more motivation to compromise to help him to do that.

KE: But what kind of attitude was that, to make Davis look bad?

WC: Obstructionist and irresponsible.

KE: To what extent is there bitterness on the part of Democrats over Davis' fate?

WC: I don't think we can afford to be bitter. But the fact that we already cut $12 billion out of the budget last year and have borrowed far more than we should is a direct result of Republicans' unwillingness to compromise. And so it makes it on the part of some of my colleagues, and to a degree me, too, it makes the challenge of solving the problem again almost totally with cuts much more difficult.

KE: Aren't we in such a predicament that we have to do both, cut spending and raise taxes?

WC: That's how Ronald Reagan solved the problem. And that's how Pete Wilson solved the problem. And ultimately the answer is yes. But the governor's position as he's expressed it to me, when I've met with him, is that the issue isn't so much that people don't think government needs the money. It's that they don't trust us with the money. So we have to demonstrate an ability to be bipartisan and to compromise, and then they'll be more willing to consider taxes. I agree with him. And that's one of the reasons I'm being as kind as I am in my comments about him. I think it's a mistake to go to our corners and start shooting at each other.

It's getting ugly
Layoffs inevitable as Supes order across-the-board county cuts

by EMILY GURNON

Resigned to the county's grim budget fate, the Board of Supervisors on Tuesday unanimously ordered department heads to slash 20 percent from their budgets for the coming fiscal year, to eliminate two code enforcement positions, to look into combining the sheriff and coroner's offices, and to consider putting a 1 percent sales tax measure on the November ballot.

The across-the-board cuts are certain to mean layoffs and reductions in services throughout the county.

The spending cuts are necessitated by the estimated $8 million budget deficit the county faces in the coming year out of a total county budget of $210 million.

"We're at that edge where we're now cutting bone," said Supervisor John Woolley. "That's what this is all about."

Other cuts approved by the board, to take effect July 1, include:

The outright elimination of $182,750 that the county gives to local substance abuse programs;

A dramatic reduction in facility maintenance spending, from $265,000 to $50,000;

A $134,441 cut in tourism promotion;

Elimination of the county's $91,600 contribution to the budget of the Youth Services Bureau, which helps homeless teens.

Elimination of the $65,000 contract for predatory animal control.

There was relatively little board discussion about the cuts, which were recommended by County Administrative Officer Loretta Nickolaus and a budget task force that included Nickolaus, some department heads and supervisors Woolley and Bonnie Neely.

Supervisors Jill Geist and Jimmy Smith both expressed reservations about the decision to eliminate the two code enforcement positions. One of the officers has already resigned effective June 30.

The two officers work to get rid of neighborhood blights like drug houses, trash accumulation and abandoned vehicles. "It's such a critical service that we are able to provide," Geist said. She also said she hated to see cuts to the Youth Service Bureau, which helps homeless teens, among other things.

Neely and Woolley countered that there was no other choice given the severe budget constraints. "All of these things we consider to be extremely important to the county, but there's no money," Neely said. "We took the tough stand at the committee level" to recommend the cuts, she continued. "There are no heroes in this process. There's no good news."

There are a number of reasons for the dark budget forecast, but they come down to two simple things: less money coming in and more money going out.

The state, of course, is to blame for the loss of millions, including $2.5 million in property taxes in the coming year that are being shifted to Sacramento under the new governor's budget, county officials said.

In the "money going out" category, the Sheriff's Office has estimated it will have a $309,000 shortfall this year, plus a $465,000 shortfall in the jail, because of overtime payments to employees. Sheriff Gary Philp said he could reduce that shortfall by about $300,000 -- but it will mean not filling three positions of retirees, canceling all training outside of regular work shifts, and lowering minimum staff levels.

Asked whether the lower staff levels might force the sheriff to assign more overtime in emergencies -- thereby exacerbating the very problem they were designed to fix -- Philp said yes.

"That is a very real possibility. We think we can achieve this, but are we working short? Yes."

The poor economy will force the county to pay out $2.3 million more to the California Public Employees Retirement System (CalPERS). (Counties and cities statewide must contribute more to the fund if investments are not generating enough to pay what has been promised to workers.) But county budget chief Karen Suiker said that stocks and other investments are looking up, which should decrease the county's required contribution in the years to come. During the boom years of the 1990s, for instance, the county paid out no money to the CalPERS fund, she said.

Another hit to budget coffers came in the form of $700,000 in vacation and sick leave payouts made this year as a result of "golden handshakes" to 12 longtime employees to avert layoffs.

And the governor's recall election cost the county $156,600 in unanticipated expenses. Though officials have written to Sacramento requesting reimbursement, "it'll never happen," Suiker said.

The board also directed Nickolaus to give it more information on a proposed ballot measure for a 1 percent regional sales tax -- a tax that would generate an estimated $6.8 million annually. The measure would be slated for the November ballot, and, if designed as a general tax, would require a simple majority of voters approving it. It would then take effect April 1, 2005.

Officials plan a May 25 public hearing on the budget, with final adoption of the budget slated for June 1.

Science winners go to state
29 projects by local students will compete

by JUDY HODGSON

How are wolves and dogs different and how are they alike? What nutrients are left in the soil once a wildfire roars through? Should straw used to stem roadside erosion be infused with mushrooms for greater efficiency? Can hydrogen replace gasoline to power cars?

These and other questions were asked and answered in last week's Humboldt County Science Fair competition in Eureka, and as a result, 29 projects are eligible to advance to the state competition at the University of Southern California May 24-26.

"It's the most ever. We rank fourth in the state [in number of projects eligible], right behind Los Angeles, Sacramento and Santa Cruz counties," said Melody McGuire, McKinleyville Middle School teacher and coordinator of this year's fair.

Students from fourth through 12th grades compete in schoolwide competitions in an attempt to qualify for the county contest. Only the top winners from grades six through 12 are eligible for the state.

"They look at our percent of winners from previous years and this year, we get to send two more," McGuire said.

Fourteen grand prize winners will have their expenses paid for the trip. They are: Garnet Abrams, Scotia; Victor Blanc, Garfield; Josh Campton, Pacific Union; Chelsea Fusek, Fieldbrook; Carlyn Girard, Jacoby Creek; Jodi Grinsell, Ferndale; Kaela Jorgenson and Etta Grover-Silva, Arcata High; Cody Long, Jacoby Creek; Seth McFarland, Pacific Union; Billy Paris, Green Point; Teiwaz Smith, Arcata High; Amy Wolfberg, Green Point; Angeline Wolski, Arcata High; and Elena Tessler, Pacific Union.

Runners-up may travel to the state, but must be responsible for their own travel arrangements and expenses. County school officials are hoping to find additional funding from local parent teacher organizations or businesses to sponsor additional students.

Runners-up include Benjamin Bairrington, McKinleyville Middle School; Chris Cameron, Jacoby Creek; Austin Campbell-Loya, Sunny Brae; Isaiah Cooper, Sunny Brae; Ben Desch & Kevin Woolley, Sunny Brae; Steven Dewey, Pacific Union; Shane Finley, Garfield; Dorae Hankin, Pacific Union; Sarah Knight and Brittainy Gower, Winship Middle School; Taran Lu, Sunny Brae; Casey Mansfield, Sunny Brae; Lucas Miller, Jacoby Creek; Greg Passani, Jacoby Creek; Michelle Shin and Jason Park, St. Bernard's; and Liberty Williams, Redway.

A new beginning
New owners for Arcata Theatre

The 67-year-old Arcata Theatre, closed for more than two years, was sold last week to Arcata residents Brian and Lara Cox, who outbid two other potential buyers. The cost? Something less than the $485,000 asking price was all Cox, director of the Humboldt County Environmental Health Department, would say. "Pretty cool, huh?" was his wife's comment. "We got it."

Repair of the marquee, damaged last year when a truck backed up into it, is a priority. But first, Cox said, they will "take care of the asbestos problem," a $33,000 procedure that will remove sprayed insulation from the ceiling.

Ever since Bay Area investor Robert White purchased the building from the Minor Theatre Corp. in April 2002, plans for its use -- which ranged from a concert hall to a gymnastics center -- have repeatedly fallen through. What do the Coxs have in mind? "We don't know yet," said Lara, owner of Lola, an Arcata clothing store. "We have a few ideas, but we need to work out a lot of stuff before we say anything. We're asking the public to us and tell us what they want to see there."