California Budget Crisis Diaries: Battles heating up

This story was reported for the San Diego News Network on August 11, 2009.

See original copy of story.

Legislative leaders are still taking in their summer recess away from the Capitol but it’s not stopping some from working hard. In fact, the state’s Democratic leader isn’t close to tanning poolside, nor is he giving the governor a chance to do so. Yup, it’s politics as usual even in the sweet days of summer.

Here’s your update this Tuesday.

Steinberg v. Schwarzenegger… dunh dunh dunh: Last Friday, Senate President Pro Tem Darrell Steinberg (D-Sacramento) announced he would be filing a lawsuit against Gov. Arnold

Schwarzenegger. Steinberg, accompanied by a legal counsel dubbed the “Legislative Counsel Bureau,” said Schwarzenegger’s one-line veto items were against the California Constitution.

The counsel said the governor’s move fell out of bounds with Budget Act 2009, by reducing more funding than agreed upon by the State Legislature.

Steinberg said on Friday that Schwarzenegger “overstepped his constitution authority” and that the people didn’t elect an “emperor.” (No, the Capitol isn’t in Hollywood. Yes, I know that joke was too easy.)

Schwarzenegger’s spokesperson Aaron McLear said his boss was definitely within his rights as head of the state and that the court would uphold his move.

Department of Finance Chief Counsel Jennifer Rockwell elaborated on the move in a column submitted to Fox & Hounds Daily:

“Over the past couple of days, there has been some post-budget chatter around the Capitol on whether Gov. Schwarzenegger has the legal authority to make additional cuts to the budget, such as those he made on Tuesday [August 28] in order to balance our budget and maintain a reserve,” she wrote.

“California’s Constitution makes it clear in Article IV, Section 10 (e) that ‘the Governor may reduce or eliminate one or more items of appropriation while approving other portions of a bill.’ Simply, any time the Legislature presents an appropriation to the Governor he can reduce it or eliminate it. This authority extends to any bill containing any appropriation passed by a majority or super-majority vote – regardless of when it was enacted.”

Riot spurs in state prison: An estimated 175 inmates were injured during a four-hour riot Monday at a Chino, Calif. prison, according to the Associated Press.

Possibly racially-motivated and exacerbated by overpopulation, the inmates tore down doors and damaged other structures in the cells.

The Chino prison holds roughly 5,900 men, while it can only accommodate 3,000. But the prison, along with other state prisons will soon undergo a $1.2 billion cut – releasing nearly 27,000 inmates.

The AP report states that 1,000 men will be temporarily moved to other facilities.

California’s bank statement: State Controller John Chiang released his monthly report Monday, in conjunction with annual figures.

It shows there was a $12 billion decline in revenue. The state started the fiscal year with an $11.9 billion cash deficit, which grew to $16.5 billion on July 31, 2009. Personal income taxes in July declined by $335 million, compared to the same month last year, while sales taxes were up $185 million and corporate taxes were up $18.9 million compared to the same month last year. In total, the state saw a decline of $12 billion in revenue.

In addition, from July 2-31, the state issued $1.493 billion worth of IOUs. Although a budget deal has been reached for weeks, Chiang said the effect it has on the IOUs is still unknown.

“While we have a new budget, [it] that does not mean our Treasury instantly fills with cash. My office has been working around the clock, in partnership with the Department of Finance and the State Treasurer, to determine exactly how the new budget remedies the recent cash crisis,” Chiang said. “I do not want to issue another single IOU, or delay the redemption of existing IOUs for one more day than is absolutely necessary.”

Hoa Quach is the political editor for the San Diego News Network.