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ha_jchiang48617.JPG Controller John Chiang's office said Friday that his office should finish crunching budget data "early next week," after which Chiang expects to conduct a "quick" analysis to decide whether to pay lawmakers under Proposition 25.

In an email from Chiang spokeswoman Hallye Jordan, some interesting points came up.

First, under the 2004 voter-approved balanced budget requirement, the Department of Finance has routinely assessed whether projected revenues equal or exceed budget expenditures. But Finance is not doing so this year because Gov. Jerry Brown vetoed the budget for what is believed to be the first time in state history.

"So it's left to the Controller's office -- solely because of Proposition 25 prohibiting pay to lawmakers after June 15 if they fail to enact a balanced budget," Jordan wrote.

However, Jordan said, "There is no authority to consider the validity of those projections or expenditures, only that they pencil out."

It's not clear whether that means the controller believes he has to trust the projection of the Legislature, but it does suggest he believes his interpretative powers are limited.

Making this issue even trickier is the fact that the Legislature itself inserts its own revenue projection in the main budget bill. Assembly Bill 98, which Brown vetoed, has a provision that says "the estimate of General Fund revenues for the 2011-12 fiscal year pursuant to (Proposition 58), as passed by the Legislature, is $87,803,300,000."

If the controller believes he has no power to challenge this calculation and the budget appropriations add up to less than this amount of money, he could say lawmakers should be paid, then cite his limited interpretive powers. One legislative source not authorized to speak publicly said he believes this provision in AB 98 alone backs lawmakers' case for pay.

The decision will likely be tied up in court. The Howard Jarvis Taxpayers Association sent Chiang a letter Friday threatening to sue if the controller pays lawmakers. But if Chiang doesn't pay lawmakers, it wouldn't be surprising to see at least one lawmaker file suit against the controller.

Update (4:15 p.m.): While salary paychecks aren't issued until June 30, Jordan said the Controller's Office is withholding $142-a-day per diem from lawmakers until Chiang makes a final decision.

Jim Sanders contributed to this report.

PHOTO CREDIT: John Chiang, California state controller at The Sacramento Bee's Capitol Bureau in downtown Sacramento on Wednesday, July 14, 2010. Hector Amezcua, Sacramento Bee.


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