With Friday budget deadline looming, California legislators have more at stake than paychecks

SACRAMENTO -- Confronted with a $15.7 billion budget deficit, legislators are under pressure to produce an on-time and balanced budget this week, but it isn't just to keep their paychecks coming.

A ballot measure approved by voters in 2010 requires that legislators forfeit their pay for every day they miss after the June 15 midnight constitutional deadline.

But a court ruling earlier this spring took the teeth out of the law by giving legislators wide latitude to define whether their budget is balanced or credible -- making it unlikely that they'll miss a single paycheck even if they present Gov. Jerry Brown with a budget that's full of gimmicks.

A bogus budget, however, could spell doom for a tax hike Democrats and Brown are seeking in the fall.

"The governor cannot go to voters and say, well, we have this thing filled with smoke and mirrors, but we need your money," said Tony Quinn, a former Republican staffer who co-edits the California Target Book, which analyzes state politics. "I think Jerry Brown sees himself in a rather precarious position with the voters. I can't imagine that he'd go along with pretending he has a balanced budget when it's not."

Legislators met in session for an hour Monday, but won't return to the floor until Thursday. In the meantime, Democratic legislative leaders say they will work toward an agreement with Brown. If they can't, said Senate President Pro Tem Darrell Steinberg, D-Sacramento, "we will

put up a strong, credible budget that doesn't have gimmicks and has a substantial reserve."

Republicans, who used to hold the budget hostage with demands that took negotiations well past the June 15 deadline, are completely out of the picture now. The same 2010 ballot measure that punishes legislators for being late with the budget, Proposition 25, also gave Democrats the ability to approve a budget on a strict majority vote. Democrats hold wide majorities in both houses of the Legislature.

But because they still need a two-thirds vote for taxes, Democrats have had to seek big cuts while hoping that voters approve taxes in the fall. Brown has proposed slashing $8.3 billion and borrowing $2.6 billion from special funds, while he's assuming $5.9 billion in new revenues from his tax proposal for the 2012-2013 budget.

Still, as Democrats craft their final budget, the huge gap between spending and revenues is forcing them to look for ways out of some of the hard cuts that Brown wants to make to prove Sacramento is being fiscally responsible.

Democratic legislators have said they will not go along with $2 billion in cuts from health care and social service programs that could devastate the poor, disabled and elderly. They have suggested buying down some of the cuts by diverting to social programs at least some of the $1 billion that Brown wants for reserves.

Their job is made all the more difficult by the low regard voters continue to hold legislators with: only 19 percent approve of the job lawmakers are doing and two-thirds have no faith in their ability to handle the state's deficit, according to a Field Poll published last week. Brown's approval rating is down to 43 percent from 45 percent in February, and 43 percent -- up from 32 percent -- have little confidence that he'll be able to solve the budget puzzle.

A year ago, Brown vetoed a budget -- the first ever budget veto in California's history -- that he said was filled with gimmicks. That led to state Controller John Chiang's decision to withhold legislators' pay for 12 days before they came to a final agreement with the governor. They escaped the dilemma by assuming $4 billion in revenues from the then-growing economy. The money never materialized and legislators were forced to make $1 billion in so-called trigger cuts.

The governor has said he needs a disciplined package to be able to continue to get low interest financing from Wall Street -- and voter approval of his tax measure, which would hike the sales tax by one quarter cent and boost income taxes on couples earning $500,000 a year or more.

"The governor made it clear that we need a credible, balanced budget, and a budget that makes real cuts," said Gil Duran, Brown's spokesman. "We made tremendous progress going from negative to stable to positive in the state's credit outlook. It certainly would be good to keep the momentum going."

Though the Legislature must get a budget in by Friday, it's more about persuading voters they're doing their job than avoiding a stoppage in pay, Steinberg said.

"The pay issue is not relevant to me," Steinberg said. "Obviously, I'm not independently wealthy, so I rely upon my paycheck. .. But (the threat of withholding pay) should be a lever only if the Legislature just decides 'we're not doing anything,' or 'we don't care' about the June 15 deadline.

"But when we put together a budget with deep cuts and a budget that is in balance, even if subjectively the governor or anybody else might disagree on the margins, that's a different story."

Contact Steven Harmon at 916-441-2101. Follow him at Twitter.com/ssharmon. Read the Political Blotter at IBAbuzz.com/politics.

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