Legislators Ordered to Forfeit Pay

JUNE 22, 2011

By KATY GRIMES

Do the job right or don’t get paid. That was State Controller John Chaing’s message yesterday to the California Legislature.

Chiang told media that the math did not add up in the budget passed by the Legislature and found that the budget committed California to $89.75 billion in spending, but only provided $87.9 billion in revenues.

As mandated by Proposition 25, the Legislature must pass a budget by the June 15 constitutional deadline, or forfeit legislators’ pay until a budget is passed. Chiang’s analysis determined that the budget did not meet the requirements of Prop. 25 because the budget wasn’t balanced.

“My office’s careful review of the recently-passed budget found components that were miscalculated, miscounted or unfinished,” said Chiang in a statement. “The numbers simply did not add up, and the Legislature will forfeit their pay until a balanced budget is sent to the Governor.”

The conroller’s Budget Analysis on his Web site calculated that the budget passed was $1.9 billion in the red.

Most interestingly, last week the Howard Jarvis Taxpayers Association delivered a letter to Chiang demanding that he withhold Legislators’ pay for their failure to pass a balanced budget by the June 15 deadline.

It appears that Chiang listened.

In a statement, Jarvis President Jon Coupal said, “If the State Controller is sued by those who failed to do the jobs they were elected to do, we will stand with Chiang. We won’t sit idly by as the Democrat majority shirks their responsibilities to the people.”

And, it’s too late for a “bridge tax” to be passed before the 2011-12 fiscal year begins on July 1, according to the Board of Equalization, which needs at least 15 days to notice taxpayers. The “bridge tax” would keep revenues from Gov. Arnold Schwarzenegger’s 2009 tax increases flowing into the treasury until voters presumably would decide whether to extend the taxes another five years in an election this fall.

They Supported Prop. 25

Just over one year ago, when the YES on Prop 25 campaign was heating up and claiming “the majority vote budget initiative will reform California’s budget process,” Sen. President Pro Tem Darrell Steinberg and Assembly Speaker John Perez, both Democrats, shared their support of the initiative: “I support efforts like this one that lead to California’s budget being approved by a majority vote,” Pérez said. “It’s time to end the gridlock, backroom deals and political games that come with being one of only three states that requires a 2/3 vote to pass the budget.”

“This initiative gives us an opportunity to begin changing the dysfunctional budget process,” said Steinberg. “A majority vote budget is an important first step towards common sense reform that protects taxpayers and ends the budget gamesmanship.”

Be careful what you wish for.

Only this latest budget doesn’t appear to have even come close to the claims of the Prop. 25 backers. “This budget had no reforms, no spending cap, was loaded up with illegal tax increases and was not balanced. And taxpayer advocates say that much of it was unconstitutional, including the tax hikes called ‘fees’,” I wrote last week.

In his veto of the budget passed only the day before, Gov. Jerry Brown said the Legislature had passed a budget that was not “balanced,” and Chiang’s budget analysis shows that is the case.

Proposition 98 guarantees that about 40 percent of the general fund budget goes to K-14 education. Prop. 98, by Chiang’s calculation, mandates $36.8 billion in education spending. But the June 15 budget was “more than $1.3 billion below the requirement.”

Other Shortfalls

Other major shortfalls show an overestimation of $320 million from hospital fees from SB 335; $103 million from SB1X 9 Managed Care Plan Taxes; $300 million AB1X 22 Motor Vehicle Fees; $22 million for increased premiums for Healthy Families; and $209 million for realignment.

After the passage of Prop. 25 last November, many predicted that the removal of the supermajority on budget bills would make it much easier for Democrats to support spending that Republicans would never agree to by a two-thirds vote, leading to more dangerous borrowing, budget gimmicks and tricks, and even bigger deficits.

This latest twist in the drama of California politics is intriguing and will no doubt force legislators to go back to the drawing table and negotiate like adults.

And while the Democratic majority appears to be hamstrung by their own propositions and legislation, Coupal had an interesting spin on the situation: “It is poetic justice that the Democrats in the Legislature and their puppet masters in the public employee unions have been hoisted upon their own petard by Propositions 98 and 25. Now, instead of blaming the controller or the Republicans, they need to do their job and pass a balanced budget based on real revenue. Families, businesses, and the vast majority of other states have done this and they can, too.”