In the twisted world of Sacramento budget politics, the Democrat legislature is mad at the Democrat Governor for vetoing their budget and the Democrat State Controller for docking their pay, The Republicans support the Governor and controller, and the people are vindicated.

Even though Governor Brown rejected his party’s budget on June 16 – the day after it was passed – the state senators and assembly members weren’t too worried. Since they met the constitutionally mandated June 15 budget deadline, they still expected to keep their paychecks. (See related article below)

However, Democratic State Controller John Chiang didn’t see it their way. He decided to cut off their paychecks anyway. That, in turn, really turned up the heat on the warring factions, and was another example of what really gets some people in Sacramento moving – their paychecks. Yesterday, the bombs and missiles were flying fast and furious in Sacramento. But, first, Chiang’s statement:
“My office’s careful review of the recently-passed budget found components that were miscalculated, miscounted or unfinished,” said Chiang. “The numbers simply did not add up, and the Legislature will forfeit their pay until a balanced budget is sent to the Governor.”

Proposition 25, titled the “On-Time Budget Act of 2010,” was approved by voters November 2, 2010. The initiative lowered the vote requirement for passing a budget from two-thirds to a simple majority without lowering the two-thirds vote required for tax increases. It also forfeits Legislators’ pay and living expenses incurred from June 16 until “the day that the budget bill is presented to the Governor.”

Nothing in the Constitution or state law gives the State Controller the authority to judge the honesty, legitimacy or viability of a budget. The Controller can only determine whether the expected revenues will equal or exceed planned expenditures in the budget, as required by Article 4, Section 12(g) of the Constitution: “. . .the Legislature may not send to the Governor for consideration, nor may the Governor sign into law, a budget bill that would appropriate from the General Fund, for that fiscal year, a total amount that. . .exceeds General Fund revenues for that fiscal year estimated as of the date of the budget bill's passage. That estimate of General Fund revenues shall be set forth in the budget bill passed by the Legislature.”

“While the vetoed budget contains solutions of questionable achievability and some to which I am personally opposed, current law provides no authority for my office to second-guess them in my enforcement of Proposition 25,”said Chiang. “My job is not to substitute my policy judgment for that of the Legislature and the Governor, rather it is to be the honest-broker of the numbers.”

Using this standard, the Controller’s analysis found that the recently-vetoed budget committed the State to $89.75 billion in spending, but only provided $87.9 billion in revenues, leaving an imbalance of $1.85 billion.

The largest problem involved the guaranteed level of education funding under Proposition 98. The June 15 budget underfunded education by more than $1.3 billion. Underfunding is not possible without suspending Proposition 98, which would require a supermajority (2/3) vote of the Legislature.

The budget also counted on $320 million in hospital fees, $103 million in taxes on managed-care plans, and $300 million in vehicle registration charges. However, the Legislature never passed the bills necessary to collect or spend those funds as part of the State budget.
[End Chiang statement]

The Governor didn’t have much to say about Chiang’s move, but here’s the statement:
SACRAMENTO - Governor Edmund G. Brown, Jr. today [June 21, 2011]issued the following statement in response to Controller John Chiang's decision to withhold Legislators' pay:

"The Controller has made his determination. We should all work together to pass a solid budget.”

Governor Jerry Brown

Here’s what our own West OC State Senator Tom Harman told OC180NEWS:
“I remain committed to passing a balanced budget that includes the structural reforms I believe are necessary to solve California’s fiscal problems. The Controller has made his decision and we will continue to work towards a good, solid spending plan for California – we will just do it without pay.”

Next, we got this reaction from West OC State Assemblyman Jim Silva:

“The Controller has made his decision,” Silva told OC180NEWS. “Last week’s budget invited litigation and used questionable assumptions, which is why I voted against it and applaud the Governor’s veto.”

According to an article published yesterday in the Los Angeles Times, but a bit light on a demonstrated basis for their conclusion, the Times wrote “Commentators peppered his [State Controller John Chiang] Facebook page with words of encouragement.” The Times gave only one example – “JOHN CHIANG FOR GOVERNOR!" wrote one. "Finally someone who does the right thing!”

Whether or not the legislators agree with the budget veto, withholding their paychecks really got everybody fired up yesterday. Senator Harman, Who was one of a small group of Republican Senators involved in the budget negotiations on reforms with the Governor, issued this statement:
“The Governor abruptly walked away from all negotiations in March and declared them over. For him to say there was any possibility at that time for meaningful reform would make him a “revisionist.” Public employee labor unions stood firmly opposed to any pension reform or spending cap and the Governor declared negotiations over.

“Yes, the Governor has been consistent with his view of solving the budget deficit – roughly $10 billion in spending cuts and more than $50 billion (over five years) in new taxes. Hardly a balanced approach to those of us opposed to increasing taxes on hard working Californians.”

[Here one might question Harman’s numbers. As we understand it, the $10 billion in cuts would continue on just like the taxes, so it’s a bit unfair to use an annual number for the savings and a five year number for the taxes, and then say they are not balanced.

Also, Harman’s characterization that the taxes at issue are “tax increases,” should be clarified. There is a group of temporary tax increases which are scheduled to expire this year. If the legislature does not take action, taxes will go down a little. So, Republicans call extending the current tax rates a tax increase and Brown calls it tax extensions because his proposal is limited to continuing existing tax rates.]

Harman’s statement continues:
“Republicans have also been consistent with what is needed to address the state’s budget problems: a spending cap, pension reform and regulatory reform that would bring much needed jobs back to our state.”

“Where are we now? California is in a crisis and the Governor is unable to convince legislative Democrats to support these necessary reforms. Rather than pointing fingers, and revising history, the Governor should acknowledge his party’s refusal to let the people of California have their voices heard on a package of reforms.

“Unfortunately, this institution is so deeply flawed that special interests continue to undermine good public policy. The people of California are being ignored and I firmly believe that they should have a voice in their own state government. It seems to me the Democrats are afraid of what the public will say.”
[End of Harman statement]

Well, Governor Brown certainly was not going to take that kind of talk without a response.

“The Governor’s plan to fix California’s budget has been consistent since January 10: a balance of deep spending cuts and a vote on temporary tax extensions. Republicans blocked a June vote on a balanced budget, which created the need for a bridge to protect schools and public safety from devastating cuts.

“For them to claim otherwise now is simply untrue. Today they’ve again shown what they’re best at—grandstanding without solving problems. We could have had regulatory reform, a spending cap and pension reform—without a bridge—in March.

“If they think the state budget can be balanced without tax extensions, then they should show that plan to the people.”
Gil Duran, Press Secretary, Governor Jerry Brown