California Governor Jerry Brown has vetoed a budget sent to him by the Democrat-controlled legislature.
For the first time in recent memory, California lawmakers passed a budget by the June 15 constitutional deadline. If they had missed the deadline, under a new law, they would have forfeited their pay until an agreement was reached.
Gov. Brown rejected the budget less than 24 hours later, claiming it relies on "gimmicks," which don't address the structural problems in California's finances.
"The budget I have received is not a balanced solution," Gov. Brown said. "It continues big deficits for years to come and adds billions of dollars of new debt. It also contains legally questionable maneuvers, costly borrowing and unrealistic savings."
So will California lawmakers, the highest paid in the country, stop collecting their salaries until a new budget is approved?
No. Controller John Chiang told CNBC Wednesday that as long as a budget which appeared "feasible" was passed by midnight, legislators would have met their constitutional duty.
Late Thursday, Chiang said he would review the rejected budget. “I remain resolute in my commitment to enforcing the public’s will to permanently withhold legislative pay for every day a balanced budget is not passed after yesterday’s deadline," Chiang said in a release. "I will move quickly to complete our analysis of whether the budget bills passed Wednesday meet the constitutional definition, or fall short, which would require my office to forfeit their pay under Proposition 25. We are awaiting the final budget bill language before we begin our examination." Chiang says lawmakers are scheduled to be paid June 30.
The budget sent to Gov. Brown was approved by a simple majority, instead of the previous two-thirds necessary. This lower standard was also part of the new law, which would have cut off pay.
A simple majority allowed Democrats to push through a budget of cuts, taxes and deferrals, which Republicans refused. The governor had earlier been working with Republicans to put the tax question to voters. Republicans wanted to include ballot measures on a spending cap and public employee pension reform. Talks fell apart, and the Democrats moved ahead with their own plan.
The veto means Gov. Brown and lawmakers have two weeks to come up with a budget to close a $9.6 billion deficit. Otherwise, the governor says he'll be forced to make "deeper and more destructive cuts to schools and public safety—a tragedy for which Republicans will bear full responsibility."
So, as of Thursday, there is no budget and legislators are still getting paid. A law designed to demand pay for performance may not have worked out as voters intended.