State Controller John Chiang cannot block lawmakers' pay based on his interpretation of the budget they pass, a Sacramento judge tentatively ruled Tuesday, handing the Legislature a significant win as it enters the busy season for budget writing.
Chiang's unprecedented denial of legislative pay last year, based on his finding that state lawmakers had failed to pass a balanced budget, was popular beyond the Capitol. But it incurred the wrath of legislators who said he had usurped their constitutional power over budget matters. Some lawmakers suggested the controller's 12-day pay drought hurt their ability to pay household bills.
Sacramento Superior Court Judge David I. Brown agreed Tuesday with Democratic legislative leaders in his initial decision, reasoning that Chiang had assumed budget duties reserved for state lawmakers. His ruling essentially says the Legislature can determine for itself whether a budget is balanced under the state constitution.
"A contrary result could threaten to undermine the Legislature's essential function," Brown wrote.
Chiang's pay move came after voters approved Proposition 25 in 2010, a Democratic-backed initiative that allowed lawmakers to pass the state budget on a majority vote, rather than two-thirds. A major selling point to voters: If lawmakers failed to pass a budget by June 15, they would go without pay until they did.
The controller, who cuts paychecks for state employees, cited a pre-existing balanced budget requirement as justification for his role as the gatekeeper of Proposition 25's pay requirements.
Judge Brown will hear oral arguments today and could make his decision final anytime thereafter. Chiang's office said the controller would consult the state attorney general's office before deciding how to proceed, but he criticized the decision in a biting statement.
"The court's tentative ruling flies in the face of the voters' will by allowing legislators to keep their salaries flowing by simply slapping the title 'budget act' on a sheet of paper by June 15," Chiang said. "Adopting an unbalanced and unfinanceable budget may ensure they are paid, but the people of California will be stuck with delayed payments and IOUs once that 'budget' falls apart."
Judge Brown's decision does not call for back pay, nor does it reverse last year's actions. But it could give lawmakers more leverage this year in negotiations with Gov. Jerry Brown, who vetoed their first budget last June and said it was unbalanced and unfinanceable.
"The governor loses what may be his strongest piece of leverage," said Dan Schnur, a former GOP consultant who serves as director of the University of Southern California's Jesse M. Unruh Institute of Politics. "As long as members can define for themselves what constitutes a balanced budget, they no longer have to pay as much attention to what he wants.
Brown this year has called for $4 billion in cuts, including $1 billion in the welfare-to-work program, exhorting Democrats to "man up" by slashing spending. Democratic lawmakers have resisted so far.
But their allies Tuesday downplayed the extent to which the court decision bolsters their cause. Mike Herald of the Western Center on Law and Poverty said the governor and lawmakers share a greater incentive to pass an honest budget on time this year because they need to build trust with voters before they seek a $9 billion tax increase in November.
"I think the governor and Legislature have ample motivation to get the deal done in June to avoid that potential negative perception from creeping in there," Herald said.
Democratic legislative leaders sued Chiang in January over what they considered a disruption in the constitutional balance of powers. They argued that allowing a state controller to judge their budgets for balance would give the controller authority that he does not have and posed the hypothetical of a controller from the opposite party wielding significant power over state spending.
"This was an important constitutional issue which had to be addressed," said Alicia Trost, spokeswoman for Senate President Pro Tem Darrell Steinberg, D-Sacramento, a plaintiff in the suit. "We're pleased with the court's tentative ruling but are withholding further comment until there is a final ruling."
The court decision seems to confirm one of the chief criticisms of Proposition 25 during the campaign that lawmakers have broad say in defining a balanced budget. Opponents in 2010 claimed that lawmakers could pass any budget just to get paid, but Chiang, at least for one year, proved otherwise.
Judge Brown wrote that if Chiang believes that the budget is not balanced, he should challenge the plan in court rather than initiate his own review and withhold legislative pay. The judge said even a governor cannot alter revenue estimates.
The governor had no comment on the decision, said his press secretary, Gil Duran.
Republicans and anti-tax advocates said the judge's decision showed voters were deceived by Proposition 25.
"There were many, many, many of us who said Proposition 25 was a bait and switch, and that's exactly what this is," said Jon Coupal, president of the Howard Jarvis Taxpayers Association, which opposed the initiative.