Morning Splash: SJ OKs Budget; Calif Dems Set to Pass Budget; Bankruptcy Court Blasts DOMA

Ten percent pay cuts from city workers -- including a last-minute deal with police -- helped ease San Jose's layoff toll as a divided City Council voted Tuesday to approve Mayor Chuck Reed's budget proposals for closing a $115 million shortfall. But because employee concessions saved just $39 million, 100 cops and hundreds of other city workers will still have to be laid off to bridge San Jose's 10th straight budget deficit. The 7-4 council vote after four hours of debate showed divisions on the council over how to save more police jobs amid an alarming spike in homicides. The number of killings -- 27 so far this year -- is running at more than double the city's rate over the past decade.

With no bipartisan deal in sight, legislative Democrats are poised to approve a majority-vote budget today that cuts deeper into universities, raises car registration fees and extends a quarter-cent sales tax. According to an Assembly budget aide authorized to brief the press, the spending plan closes a remaining $9.6 billion deficit through accounting maneuvers, cuts, additional fees, delayed payments and a revamped plan to sell state properties. Several solutions could face legal challenges that threaten their viability.

A federal judge refused Tuesday to set aside a former colleague's ruling overturning California's ban on same-sex marriage and said the jurist's long-term relationship with another man was not a legitimate reason to accuse him of bias. "It is not reasonable to presume that a judge is incapable of making an impartial decision about the constitutionality of a law solely because, as a citizen, the judge could be affected by the proceedings," Chief U.S. District Judge James Ware said in rejecting conflict-of-interest charges against his predecessor, Vaughn Walker.

The latest legal manifesto for gay rights comes from an unlikely source - a 20-judge federal bankruptcy court, which unanimously declared that a law denying federal benefits to same-sex couples is unconstitutional... The law that the court said is unconstitutional is the 1996 Defense of Marriage Act, which allows only male-female couples to claim federal marriage benefits and authorizes states to deny recognition to same-sex couples legally wed elsewhere.

Customers of the East Bay's largest water district will pay 6 percent more next month, and a similar increase a year from now. East Bay Municipal Utility District directors approved the hike in a unanimous vote Tuesday. In the district's previous budget, it anticipated rate hikes of 5 percent this year and next, but the board determined that was no longer adequate because a decline in water sales dented revenues.

Hundreds of city workers face potential layoffs in the coming weeks, and dozens of local union members let their anger be known as they stormed a City Hall meeting Tuesday afternoon, interrupting discussions about the city's contracting. Three civilian unions representing a total of more than 3,400 city employees have been negotiating with the city since April. Their contracts have expired and Mayor Jean Quan has called on them to make contributions to help solve the $56 million projected deficit Oakland is facing in the fiscal year that starts July 1.

San Francisco cab drivers, upset by what they consider onerous credit card fees and intrusive industry oversight practices, are planning a strike. Tariq Mehmood, the driver spearheading the efforts, said cabbies will either circle their cars around City Hall in protest or keep the vehicles parked

A joint federal and state investigation of the San Bruno natural gas explosion increases PG&E's chances of being heavily fined for the accident, and the utility could get stuck with nearly $2.4 billion in costs it won't be able to pass on to its customers, a research firm concluded this week. PG&E divulged in a filing on Monday that the U.S. Department of Justice, California attorney general and San Mateo district attorney notified it last week that they had formed a task force to look into the Sept. 9 accident, which killed eight people, injured 65 others and damaged or destroyed 108 homes.

Board of Supervisors President David Chiu's mayoral campaign paid for a new poll of likely voters - and it likes what it sees. But two other candidates should like the results, too. State Sen. Leland Yee, City Attorney Dennis Herrera and Chiu have pulled ahead of the pack, according to the survey. Former Supervisors Michela Alioto-Pier and Bevan Dufty are nipping at their heels. Bringing up the rear are Supervisor John Avalos, former Supervisor Tony Hall, Assessor Phil Ting and venture capitalist Joanna Rees.

The Internet just got a lot faster -- at least after a Google search. And offices across America probably will get just a bit louder. Leveraging its prowess in computer science, Google announced an array of new mobile and desktop search features Tuesday, including the ability to speak a search query to a desktop computer and run a search query on any personal photo stored on a user's computer. The features also include a new interface for mobile searches that makes it easier to find information about nearby restaurants, coffee shops and other businesses.

The Sonoma County Board of Supervisors gave a chilly reception Tuesday to a proposal to cease all maintenance on 100 miles of rural roads. The staff of the Department of Transportation and Public Works presented the move as a way to help close a $43 million gap in the county general fund.

A coalition led by a group of Stanford University lawyers intends to put an initiative on the November 2012 ballot to reform California's Three Strikes Law, the harshest such sentencing law in the nation. The group has secured at least one major financial backer, David W. Mills, a former investment banker and Stanford Law School professor. It also hired San Francisco political consultant Averell "Ace" Smith to lead what is expected to be a fiery campaign.

Yesterday, music streaming service Pandora priced its IPO at $16 per share (valuing the company at $2.6 billion). The company originally set the range of its IPO at $7 to $9 per share, at a market cap of $1.3 billion; but upped the range last week to $10 to $12 per share, giving the company a valuation of $1.9 billion. Today, Pandora debuted, under the symbol ‘P’ on the New York Stock Exchange, opening at $20 per share (up 25 percent), valuing the company at $3.2 billion. Within minutes of trading, shares reached as high as $25, giving the company a $4 billion valuation.

Stanford University will receive a major donation of 121 works of painting and sculpture by 86 artists, including Jackson Pollock's "Lucifer," from a family of Peninsula art collectors. Added to existing art holdings, the gift moves Stanford to the front rank among universities with teaching museums.