Bloomberg News

California May Withhold Lawmaker Pay If Budget Not Passed

June 02, 2011

(Adds salary range in fifth graph.)

June 2 (Bloomberg) -- California lawmakers will permanently forfeit their pay starting June 16 if they fail to pass a balanced budget by that date, state Controller John Chiang said.

Chiang, a Democrat, said a ballot measure approved by voters in November clearly calls for lawmakers to lose their salary and reimbursements for expenses from June 16 until a balanced budget is sent to the governor. Lawyers for the Legislature have said that a budget bill approved in March may have met the requirement, though it didn’t erase what is now a $10 billion deficit.

“Presenting the governor with a balanced budget by the constitutional deadline is the most-important, if not most- difficult, job of the California Legislature,” Chiang said today in a statement.

Governor Jerry Brown, also a Democrat, and Republican lawmakers are at an impasse over how to fill the gap. Last year, the fiscal 2011 spending plan was a record 100 days late amid a similar deficit stalemate with then-Governor Arnold Schwarzenegger. Brown wants the Legislature to approve asking voters to extend more than $9 billion of expiring tax increases to offset cuts to schools and public safety.

California lawmakers earn $95,291 a year. Legislative leaders make as much as $109,584.

IOUs Possible

Chiang has warned that California may run out of cash to pay bills by July absent a budget. That may force him to issue IOUs again, as he did in 2009.

California’s constitution says lawmakers must send a budget to the governor by June 15, about two weeks before the fiscal year begins. The Legislature has met that deadline five times in the last 30 years. Until this year, there wasn’t any penalty for missing it.

Voters in November passed Proposition 25, which lowered the threshold to pass a budget to a simple majority from a two- thirds requirement. It also stripped lawmakers of salary and per diem pay for every day they are late in passing a spending plan. Chiang has withheld their pay during previous years, though they were reimbursed once the budget was passed.

While Democrats control both chambers of the Legislature, Brown needs the support of at least four Republicans to put his tax-extension plan on a ballot because it still requires passage by two-thirds vote.

New Momentum

In March, the governor broke off negotiations on a June ballot citing a lack of Republican support. Last week Brown said talks regained momentum as he has took up demands for pension overhaul, a state spending cap and other measures.

Democrats in March did send Brown budget bills that cut what was a $26 billion deficit to about $15 billion. Since then, better-than-expected revenue from the nascent economic recovery lowered the deficit to about $10 billion.

“We made progress in March, and over the next two weeks we will build on that progress and close out the remainder of the deficit by June 15th,” said Speaker of the Assembly John Perez, a Democrat from Los Angeles.

--Editors: Ted Bunker, Mark Schoifet.

To contact the reporters on this story: Alison Vekshin in San Francisco at avekshin@bloomberg.net. Michael Marois in Sacramento at mmarois@bloomberg.net;

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.


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