When California Controller John Chiang decided on Tuesday that
legislators would not be paid, he did so by connecting two provisions in the
Constitution – one approved in 2004 (Proposition 58) that required budgets
to be balanced – and the other approved
last year (Proposition 25) that prohibited legislative pay if the budget
is not passed by June 15.
Many lawmakers have taken issue with the controller’s decision,
and some have threatened to sue to get their pay reinstated.
The dispute over what constitutes "fiscal balance" has been with
us for a long time, even before Prop 58. California’s state budgeting
process has always been based on an agreement between the legislature
and the governor about what fiscal balance means in a given year, with the Legislative Analyst’s Office (LAO) providing commentary.
That LAO commentary often deals with identifying
"threats" to fiscal health – sometimes through the courts – and the
ability of the administration to achieve savings in the adopted budget.
In the case of the former, the legislature and the administration
bet on winning any lawsuits. In the case of the latter, the legislature often
overstates savings that could be achieved by budgetary actions and sounds alarm
bells when that over-statement turns into real shortfalls.
In this year’s budget, rather than relying on a five-party
agreement (four legislative leaders and the governor), Governor Brown is
acting like the new sheriff in town, refusing to take the legislature’s view of
what constitutes "fiscal balance." Enter the Controller, playing the role of
deputy sheriff and taking the argument one step farther. In this case, Controller
Chiang has woven two related provisions together to determine whether
legislators get paid: the requirement that budget be balanced (Prop 58) and
that the budget must pass by June 15 (Prop 25). Because the legislature accomplished
the latter and missed the former, Chiang is enforcing Prop 58’s budget
balance requirement through the non-payment provision in Prop 25.
Controller Chiang has taken the obvious next step in this dispute,
concluding that the revenues in the budget sent to the governor last week
were not sufficient to meet the level of spending included in that budget.
Hence, the budget is out of balance, and lawmakers have not fulfilled their
Prop 58-mandated duty.
An underlying problem is that we do not
have an adequate definition of what constitutes fiscal balance. This action will
either turn the Office of the Controller into a new force for fiscal prudence
as deputy budget sheriff or establish a new venue for fiscal mischief stuck
between the legislature and the governor. Time will tell.
Fred Silva is senior fiscal policy advisor for California Forward