Post has been updated throughout the afternoon with responses and additional reporting.
A Sacramento Superior Court judge has tentatively ruled that the state controller has no authority to judge whether the state budget is balanced or block lawmakers' pay as he did last June.
In a bitter feud during last year's budget battle, Controller John Chiang determined that the budget passed by legislative Democrats was not balanced. Using new powers he believed he had under voter-approved Proposition 25, Chiang then blocked lawmakers' pay and expense money for 12 days until they cut a budget deal with Gov. Jerry Brown.
In a tentative ruling today, Judge David I. Brown said that the controller does not have discretion to determine whether the Legislature's budget is balanced. Proposition 25 said that lawmakers must approve a balanced budget by June 15 or else lose their pay.
Brown's ruling essentially says that the Legislature can determine for itself whether a budget is balanced.
"A contrary result could threaten to undermine the Legislature's essential function," Brown wrote today.
Chiang's office did not indicate today how it would proceed beyond making the scheduled oral arguments Wednesday in Sacramento Superior Court. Brown could issue a final decision at any time after tomorrow's arguments.
In a statement, Chiang said, "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. 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."
The court decision confirms one of the chief criticisms of Proposition 25 during the campaign - that lawmakers have wide discretion in determining what a balanced budget is. Opponents in 2010 claimed that lawmakers could pass any budget just to get paid, but Chiang, at least for one year, upended that theory.
Judge Brown wrote that if Chiang believes that the budget is not balanced, he should challenge their plan in court rather than initiate his own review.
The decision is prospective in nature, and it does not award lawmakers back pay for Chiang's actions last year. But it could provide additional leverage to lawmakers with this year's budget deadline less than two months away. Democrats have already indicated they do not want to cut as deeply as the governor wants.
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.
Judge Brown agreed with their arguments. He referenced decisions and constitutional provisions that described the budget bill as a "legislative function." Brown observed that Chiang last year criticized lawmakers for not spending money he thought was required for schools and for relying on revenues without approving the laws required to raise the money.
The judge said even a governor cannot alter the Legislature's revenue estimates.
"Yet under Defendant's interpretation, he has the power to do what the Governor cannot," Judge Brown wrote.