Two budget-related developments yesterday bring a
small amount of clarity to the political positioning on achieving a deal. But
their long-term effect is to re-allocate political power.

Controller John Chiang released
a legal opinion interpreting the section of Proposition 25 that would halt salary and expense
payments to the Legislature if it fails to transmit a budget to the Governor by
June 15. His lawyers concluded that even if the budget is timely passed and
sent to the Governor, if it is not a balanced budget, then legislators
would forfeit their pay until they pass one that is balanced. This twist arises
from an earlier measure, Proposition 58 in 2004, which requires that the
Legislature may not send to the Governor, nor may the Governor sign, a budget
that would spend more than the revenues estimated for the year. Until the
Controller’s memo, this constitutional provision had no teeth. Now that
provision has been given real force, and the arbiter of whether a budget is
balanced – and therefore whether the Legislature will be paid – will be
Controller John Chiang.

Within several hours of this disclosure, Senate Pro
Tem Darrell Steinberg announced that his SB 653 would be folded into a budget trailer
bill. His proposal would provide broad local taxing authority (contingent on
existing voter approval requirements) to counties and school districts, which
would substantially increase the level of uncertainty surrounding economic
development. The significance of including the language into a budget trailer
bill is that those bills are granted immunity from referendum, even if passed
by a simple majority vote. This was another consequence of Proposition 25 that
was warned against, but pooh-poohed by proponents.
This maneuver has ramifications that extend well beyond today’s budget
controversy, and could presage the demise of the people’s cherished referendum
power, 100 years after it was first granted.

The consequences of Proposition 25 on the power
dynamics in California government go far beyond just passing the state budget.
And we’re only beginning to see their boundaries tested.

Loren on Twitter: @KayeLoren