SAN FRANCISCO, May 25 (Reuters) – Health-conscious Californians may mostly oppose smoking for its costs to public health and the economy but an aggressive tobacco industry campaign and general anti-tax sentiment may block a measure to raise taxes on smokers.

Airwaves in the most populous U.S. state are filling up with advertising for and against Proposition 29, a June 5 ballot measure that would add a $1 tax to a pack of cigarettes, taking the tax to $1.87, mainly to fund medical research on tobacco usage and programs to prevent and control it.

More than $40 million, mostly from the tobacco industry, has been raised to defeat the measure, dwarfing its proponents’ war chest. But proponents are showing an ability to punch above their weight, most recently with a television commercial whose characters satirically explain why they support “Big Tobacco.”

One character says “I support Big Tobacco because they killed my wife and that’s one less mouth to feed.”

More tough TV spots may follow as survey results released this week showed just over half of likely voters supporting the measure – down from just over two-thirds in March.

“Today, 53 percent say they will vote yes, 42 percent say they will vote no, and 5 percent are undecided on the measure,” the Public Policy Institute of California’s survey report said.

The ballot measure in California, the world’s ninth largest economy, is of national importance because other U.S. states often follow its lead in confronting problems in public health, the environment and other areas of public policy.

SAN FRANCISCO (Reuters) – It’s not just employees of Facebook Inc and its original investors who are expecting a big payday from the No. 1 social network’s much-anticipated initial public offering.

Some of Facebook’s wealth is also slated to help fill the cash-strapped coffers of California and the smaller but still needy ones of Menlo Park, the Silicon Valley city where the company is located, although not in the form of taxes.

In a voluntary agreement with the city’s government, Facebook will soon pay a lump sum of $1.1 million, a move Mayor Kirsten Keith hopes will be followed by another $500,000.

The initial outlay to help fund capital projects for the city will be followed by additional annual payments of $800,000 for five years, $900,000 for the following four years and $1 million in subsequent years.

The payments will help Menlo Park respond to Facebook’s expansion and its traffic. The company currently has 3,500-plus employees and plans to develop a new campus – and there is an expectation the growth will lure more business to Menlo Park.

“Whenever you hear Facebook, you’ll hear Menlo Park. That’s just priceless,” Keith told Reuters in an interview. “Other companies will want to be around that.”

Keith says a future “ecosystem” of high-tech firms could establish itself in Menlo Park to develop products and services complementing the social network, providing more revenue to the city.

SAN FRANCISCO, May 15 (Reuters) – Credit analysts left ratings and outlooks on California unchanged on Tuesday despite Governor Jerry Brown revising the state budget gap to $15.7 billion from $9.2 billion a day earlier.

But ratings agency analysts said they want California lawmakers to act decisively on Brown’s plan for closing the deficit, with Standard & Poor’s Ratings Services warning its A-minus rating and positive outlook for the state could change if the legislature approves a budget filled with gimmicks.

California is S&P’s lowest-rated state and the legislature faces a June 15 deadline for approving a spending plan for the fiscal year that begins on July 1.

If lawmakers are “unable to agree upon solutions to the state’s budget deficit that we view as credible, we may revise the outlook back to stable,” S&P said in a statement.

“Furthermore, we could change the outlook to negative or lower the rating if we believe the state’s credit quality weakens through the budget process,” S&P said.

California is the most populous U.S. state. Its economy is the ninth largest in the world and just smaller than Italy’s economy.

Brown on Monday enlarged the state’s projected budget gap for the coming fiscal year to reflect the effects of a slow economic recovery and weaker-than-expected revenue.

SAN FRANCISCO (Reuters) – California Governor Jerry Brown on Monday unveiled a revised state budget plan that calls for new cuts to healthcare for the poor and elderly and reduced work hours for state employees as part of an effort to close a $15.7 billion budget gap.

Brown had said on Saturday that the projected deficit for the fiscal year beginning in July had increased from the $9.2 billion projected in January due to the slow economic recovery, less revenue and other factors including some cutbacks in social service spending blocked by the courts and federal government.

Since his election in 2010, Brown has been trying to address a chronic budget crisis that stems from the state’s sharp limits on local property taxes and heavy dependence on volatile income and sales taxes.

The California economy is the ninth largest in the world and just smaller than Italy’s economy.

State funding for education and social services has been in decline for years while spending on items including prisons and employee pensions has risen steadily.

Brown has insisted since he took office in 2011 that new revenues would be necessary to avoid additional cuts to schools. His budget proposal is counting on voters to approve a November ballot initiative to raise sales taxes and income taxes on wealthy residents.

The budget plan unveiled Monday calls for $8.5 billion in new revenue from the tax hike, along with $8.3 billion in spending cuts. The proposed general fund budget for the fiscal year beginning on July 1 amounts to $91.4 billion and the deficit is 17.2 percent of that.

SAN FRANCISCO (Reuters) – California Governor Jerry Brown on Monday unveiled a revised state budget plan that calls for new cuts to healthcare for the poor and elderly and reduced work hours for state employees as part of an effort to close a $15.7 billion budget gap.

Brown had said on Saturday that the projected deficit for the fiscal year beginning in July had increased from the $9.2 billion projected in January due to a weaker-than-expected economic recovery, less revenue and other factors.

The new budget counts on voters approving a November ballot initiative to raise sales taxes as well as income taxes on wealthy residents. The plan calls for $8.5 billion in new revenue from the tax hike, along with $8.3 billion in spending cuts.

Polls show support for the tax increase measure, but its passage is far from assured. If the tax increase is defeated, a series of “trigger” cuts totaling $6.1 billion, aimed mostly at school spending, would kick in.

“It’s taken a decade to get into this mess,” Brown said at a Sacramento news conference. “Before I leave here, we will be in solid fiscal balance.”

Under Brown’s new budget plan, spending cuts would hit the state’s health-care program for low-income Californians and the elderly, reducing in-home support services and other medical programs. It would also slash the state’s CalWORKS welfare program by nearly $1 billion.

Additionally, state employee compensation would be reduced by 5 percent by cutting work hours.

SAN FRANCISCO (Reuters) – California Governor Jerry Brown was elected in 2010 on a promise to fix the state’s chronic fiscal crisis. His weekend announcement of a much bigger-than-expected shortfall in the state budget signals how far he still has to go.

In an unusual move that underscored the highly politicized nature of the state budget, Brown took to YouTube on Saturday to deliver the bad news: the state’s projected budget deficit for the fiscal year starting July 1 is now $16 billion, up from the $9 billion anticipated in January.

The Democratic governor also warned of further cuts to an already-battered public education system if voters rejected a tax increase in a ballot initiative this fall.

On Monday, Brown will hold a news conference to detail the new budget deficit and how he intends to close it.

California, whose economy is the largest in the nation and would rank ninth in the world if the state were a country, has struggled for decades with a tax system in which property tax increases are limited by law and tax hikes of any kind must be approved by voter initiatives or a two-thirds vote of the legislature.

High income and sales taxes produce plenty of revenue in good times but fall sharply in a recession, while spending on schools, prisons and medical care for the poor and elderly is hard to adjust.

The deeper deficit forecast reflects the state’s uneven economic recovery: tax collections this year have fallen about $4 billion below projections, though many state legislators and economists had warned that the January revenue estimates were far too optimistic.

SAN FRANCISCO/WASHINGTON (Reuters) – Public employees in San Jose, California’s third-largest city, are gearing up for a marathon court battle if local voters approve a measure in June to overhaul the city’s pension system.

“It’s just a straight-up war with us,” said Jim Unland, board president of the San Jose Police Officers’ Association, the union representing the city’s police force. ” Once the thing passes, we’ll be in court for years.”

San Jose is part of a broader legal and political struggle shaping up across the United States as cash-strapped state and local governments, Republican- and Democratic-led, try to rein in rising pension costs that are gobbling up big chunks of their budgets.

The stakes are high. Local and state officials have to make tough choices between using their shrinking or flat revenues for local services such as police, firefighters and schools, or making up for falling financial returns on pension investments.

The ballot measure being decided by San Jose’s voters would require city employees to pay more toward their pensions or accept a reduced retirement plan.

“There is a strong case for reform in many places,” said Keith Brainard, research director of the National Association of State Retirement Administrators (NASRA), many of whose members are struggling to get public pension funds in balance.

“Since 2009, more than 40 states have made reforms to their pension plans and … in the few remaining others they are working on them,” Brainard added.

SAN FRANCISCO/WASHINGTON, May 8 (Reuters) – Public employees in San Jose, California’s third-largest city, are gearing up for a marathon court battle if local voters approve a measure in June to overhaul the city’s pension system.

“It’s just a straight-up war with us,” said Jim Unland, board president of the San Jose Police Officers’ Association, the union representing the city’s police force. ” Once the thing passes, we’ll be in court for years.”

San Jose is part of a broader legal and political struggle shaping up across the United States as cash-strapped state and local governments, Republican- and Democratic-led, try to rein in rising pension costs that are gobbling up big chunks of their budgets.

The stakes are high. Local and state officials have to make tough choices between using their shrinking or flat revenues for local services such as police, firefighters and schools, or making up for falling financial returns on pension investments.

The ballot measure being decided by San Jose’s voters would require city employees to pay more toward their pensions or accept a reduced retirement plan.

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Related graphic on funding: r.reuters.com/wyp29r

SAN FRANCISCO, May 3 (Reuters) – The second largest U.S. public pension fund said on Thursday it had sued current and former executives and board members at Wal-Mart Stores Inc , alleging bribery and a cover-up in the company’s expansion in Mexico.

The $153 billion California State Teachers’ Retirement System (CalSTRS), which holds more than 5.3 million shares of Wal-Mart Stores Inc, said in a statement it had filed the derivative lawsuit in Delaware on behalf of the company.

The lawsuit is based on a story that appeared last month in the New York Times that reported Wal-Mart de Mexico , which is 69 percent owned by Wal-Mart, orchestrated a widespread bribery campaign to win market dominance.

The article alleged senior Wal-Mart executives knew about the matter and tried to cover it up.

“By utilizing the derivative action, CalSTRS is seeking to remedy the damages sustained by Wal-Mart as a result of alleged gross misconduct by Wal-Mart’s executive officers and directors,” CalSTRS Chief Executive Officer Jack Ehnes said in the statement.

“The focus of this action, unprecedented in CalSTRS history, is corporate governance reform to ensure that similar misconduct is not repeated in the future,” Ehnes said. “We need truly independent directors who will set the right tone from the top.”

The pension fund has retained the law firms of Girard Gibbs Llp and Labaton Sucharow Llp for the lawsuit, which was filed in the Court of Chancery in Wilmington, Delaware.

SAN FRANCISCO, May 3 (Reuters) – While the city of Stockton, California is attempting to stave off bankruptcy, its local economy is perking up and leading all other metropolitan areas in the state in terms of job growth.

The Business Forecasting Center of the University of the Pacific in Stockton estimates a 5 percent increase in payrolls in the Stockton region for the 12 -month period ending in March.

Jeff Michael, the center’s director, said the city’s economy is finally starting to recover from the knock-on effects of the area’s dramatic housing crash. The region has “clearly joined the recovery,” he told Reuters on Thursday.

Local job growth will run at about 4 percent this year and about 2 percent annually through 2016, he said.

Stockton entered into negotiations with its creditors in March in an attempt to avoid becoming the largest U.S. city to file for bankruptcy.

Stockton, which has a population of roughly 292,000 people,

has suffered years of declining revenue brought about by the housing market crash and is facing a deficit of as much as $38 million on its general fund budget for the coming fiscal year beginning on July 1.