Reporting from Sacramento -- State Controller John Chiang has decided to deny California lawmakers their pay for failing to produce a truly balanced spending plan, infuriating legislative leaders but pumping new life into budget negotiations just 10 days before the start of the new fiscal year.
Indignant Democratic lawmakers, having passed a budget on the June 15 deadline without input from Republicans or Gov. Jerry Brown, said the controller, who issues state paychecks, was engaged in an illegal power grab. Chiang said in his announcement Tuesday that aspects of the Democrats' budget — which Brown had swiftly vetoed — were incomplete and the plan therefore violated a new law that punishes the Legislature for late spending plans.
The impact on legislators' wallets could be severe. Until they approve a budget that Chiang deems balanced, rank-and-file lawmakers, who are paid at the end of each month, will be docked about $400 a day. That sum is the daily portion of their $95,291 salary plus a $142 per diem allowance.
Chiang said the forfeiture is required because the budget that Democrats approved spent more — $1.85 billion more, in his analysis — than it collected in taxes and fees.
"The numbers simply did not add up," said Chiang, who is also a Democrat.
Voters passed a law last fall requiring that legislators' pay be seized for every day that a budget is late. That law, which also enabled lawmakers to pass spending plans with a simple majority vote, does not specify that it be balanced, but Chiang noted that other laws do.
The controller, who called pieces of the Democratic package "miscalculated, miscounted or unfinished," drew plaudits from the public. Commentators peppered his Facebook page with words of encouragement.
"JOHN CHIANG FOR GOVERNOR!" wrote one. "Finally someone who does the right thing!"
But Democratic lawmakers, now slapped twice within a week by powerful officials from their own party, angrily questioned Chiang's authority and motives.
"John Chiang just wants to sit there and beat up on the unpopular kids," Assemblyman Mike Gatto (D-Silver Lake), who at 36 is among the youngest legislators, said in a statement. "I now have to explain to my wife and daughter that we won't be able to pay the bills because a politician chose to grandstand at our expense."
Assembly Majority Leader Charles Calderon (D-Whittier) said Chiang had created a distraction by "playing to the headlines."
"He's now focused all the attention on himself so he'll have the next political move to become governor," Calderon said
Calderon added, "Now it will require a lawsuit to educate him" on having overstepped his constitutional powers. A legislator-backed lawsuit challenging Chiang's ruling is widely expected.
Republicans, who had objected to the Democrats' budget plan because it relied on accounting moves to paper over the state's shortfall, offered a mixed response to Chiang's decision.
"It hurts," said Assemblywoman Shannon Grove (R-Bakersfield), "but I applaud the controller for upholding the will of the voters."
The pay decision appears to have added new urgency to budget talks. Chiang's announcement immediately thawed days of icy silence between the governor and top Democrats. Brown spent most of the afternoon in closed-door meetings with Democrats in the Assembly and Senate.
"I think the decision has been made, and now we have to get the budget done," Brown said as he left a meeting with state senators. Unlike lawmakers, the governor will continue to collect his salary throughout the deadlock.
For months, Brown has unsuccessfully sought GOP support for a fall election on taxes and an extension of some expiring levies to help balance the budget in the meantime. Now, even some Democrats and their labor union allies have become increasingly uneasy about a fall election, fearing that in a small turnout typical of special elections, voters would reject the taxes. They prefer to put off a referendum until a more favorable time, perhaps the fall of 2012, when President Obama will be on the ballot.
Brown told senators that he would present an alternative budget proposal to their leaders as early as Wednesday, according to Senate Budget Committee Chairman Mark Leno (D-San Francisco), who attended the meeting.
Assembly Speaker John A. Pérez (D-Los Angeles), who issued a statement calling Chiang's decision "wrong," said it would empower Republicans who have pushed for deeper cuts, instead of taxes, to close California's estimated $10-billion deficit.
"I believe that's a very unfortunate outcome," he said.
Others raised broader constitutional questions.
Senate President Darrell Steinberg (D-Sacramento) said Chiang's move set a "terrible precedent" and would throw out of whack the balance of power between the branches of government. Governors and finance officials should not have the power to control the pay of 120 independently elected lawmakers simply because they don't like what those lawmakers produce, he said.
Chiang insisted he wasn't seizing undue authority but rather undertaking the humble task of checking the Legislature's math.
"This is simply an addition and subtraction equation," and the Democrats' budget didn't pencil out, he said in a radio interview Tuesday.
Times staff writers Michael J. Mishak and Anthony York contributed to this report.