Controller John Chiang halts lawmakers’ pay

State Controller John Chiang, citing his authority as the state’s fiscal steward and an “honest broker of numbers,” has halted lawmakers’ pay, saying the budget they approved last week was $1.85 billion out whack and incomplete. At least one angry Democrat said the move marked an unconstitutional interference in the legislative branch of government. 

His decision, remarkable for its political and policy implications, stemmed from his review of the spending plan that Brown vetoed on June 16, a day after it was passed.  His action, Chiang said, stemmed from his own fiscal analysis and not the voters’ desire to dock legislators’ pay for missing budget deadlines.

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

Senate Leader Darrell Steinberg said Chiang’s decision “sets a dangerous precedent. The impact on legislative members is real, but it pales in comparison to the impact on school children, the elderly, and the men and women who protect our safety. This decision will not change our commitment and obligation to stand for the people we represent.”

“The Controller has never before had a role in crafting the budget,” said Sen. Noreen Evans, D-Santa Rosa. “Through his action today, he has inserted himself into the legislative process and precipitated a constitutional crisis, one where the balance of powers in our constitutional form of government has shifted considerably and the separation between the Legislative and the Executive branches of state government has been breached.”

Chiang said Proposition 25, which requires lawmakers to approve a budget by the June 15 constitutional deadline, did not give him the authority to make a value judgment on the honesty or viability of the spending plan. But, he said, his authority as controller  — the signer of the state’s checks — gives him the power to determine whether incoming revenues and spending are balanced.

By that yardstick, he said, the recently approved budget  was $1.85 billion out of balance.

“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.”

 By that standard, Chiang said the 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, which voters approved in 1988 in order to assure a guaranteed amount of money each year for schools. 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 — a two-thirds —  vote of the Legislature, he noted.

In fact, the budget was approved by simple-majority, partisan votes in both houses.

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,  Chiang said.