King Chiang, Dethroned

Because I suspect almost no one else will, let me congratulate three associate justices of California's Third District Court of Appeal—M. Kathleen Butz, Cole Blease, William J. Murray, Jr.—for knowing an unconstitutional abuse of executive power when they see it. On January 24 they affirmed an earlier trial court decision declaring that state Controller John Chiang has no authority to dock the Legislature's pay for failing to pass a budget he judges to be unbalanced, as he did in 2011.

"Where the Legislature is the entity acting indisputably within its fundamental constitutional jurisdiction to enact what it designates as a balanced budget, the Controller does not have audit authority to determine whether the budget bill is in fact balanced..." Justice Butz wrote for the court. "As a result, the Controller is not a party to the enactment of the budget bill."

The decision should come as no surprise. Anyone who bothered to look at the state constitution could see it did not give Chiang the monarchal authority he asserted in 2011 (a category that excludes, alas, most of the state's pundits, who cheered the controller's abuse of power).

The appeals court ruling echoes the analysis I offered at the time: that Proposition 25, which provides for docking legislators' pay if they fail to pass a timely budget, does not give the controller any power to second-guess whether a passed budget is balanced; that the constitution grants the Legislature sole authority for determining projected budget revenues; that the governor's line-item veto power on spending is the executive check on legislative fiscal irresponsibility.

By clarifying the law today, the court has spared California much future anguish. Had it affirmed Chiang's claim of power, it would have added more opportunity for political mischief and grandstanding by future controllers to an already absurd system of budgeting. In California, it counts as a victory for good government whenever a court knocks down an attempt to make things worse.

Defining Failure Down

One of the consequences of having the least functional governing system in the world is that the bar for determining what constitutes success gets set very low. Even the most ordinary and trivial things in California get counted as a victory.

A case in point is George Skelton’s column in the Los Angeles Times, triumphantly announcing “that Proposition 25 [the majority-vote budget measure] worked. California’s Capitol has become less dysfunctional.”

Yes, the Legislature and governor have enacted a budget before the July 1 start of the fiscal year, a rare event in Sacramento over the last quarter of a century. It’s good to have a budget in place as the fiscal year begins. It lets the state borrow the operating cash it needs and avoids the messy business of delaying payments to vendors and local governments that happens when a budget isn’t enacted before the fiscal year begins.

But as nice as it is to have a timely budget, it’s more critical to have a good one, and to have political accountability for the result. Looked at in that light, California’s first experience with the Prop 25 system has been a rocky ride:

  • As you might expect in cases where it takes a majority to pass a spending plan but a two-thirds supermajority to pass the taxes to fund that spending, the budget is dubiously balanced. It depends on school funding provisions that probably do not meet the state’s Prop 98 constitutional minimum but won’t be challenged because the California Teachers Association (CTA), the group most likely to sue, was in on the deal. It assumes $4 billion in revenue that the state in all likelihood will not collect. This assumption is offset by provisions that will trigger additional mid-year cuts, largely to higher education and schools. But the budget also contains language that prevent school districts from taking steps to reduce staff to meet these anticipated trigger cuts. To the extent the state budget is balanced, it is at the cost of driving many school districts into insolvency through payment deferrals and restraints on their ability to reduce costs.

  • Prop 25’s debut was marked by the Controller John Chiang’s unconstitutional announcement that it somehow gave him the power to withhold legislators pay even though they had met the measure’s requirement that they pass a budget by June 15. Chiang contended that he had the authority, nowhere present in the constitution, to check the Legislature’s arithmetic to determine whether the budget was balanced. By the criteria he used on June 21 in withholding pay, the arithmetic is still dicey. But Chiang will now resume legislators’ pay. Why? Maybe the budget is only unbalanced when CTA doesn’t like it.

  • Once again, California has a budget for which no one is clearly accountable. Democrats passed it, but none of the Democratic lawmakers who voted for it, nor the governor who signed it, wanted this budget. It was the best they could do without extending the 2009 temporary taxes, for which there were no Republican votes. But neither did GOP legislators want this budget; they all voted against it. Some of them are already complaining of cuts that harm pet projects in their own districts. So who do we now hold accountable? The people who voted for the budget they didn’t want, or the people who made inevitable the budget they didn’t vote for and claim not to like?

  • And if there is any budget for which we Californians would want to hold accountable, it is this one. It is disastrous for California’s future. It hacks $1.75 billion out of higher education. It will most likely slash the length of the school year, already the shortest in the world. It will take away services from hundreds of thousands of the blind, disabled, elderly, developmentally disabled, and the working poor.

If that is what the media now count as California getting “less dysfunctional,” we’re in much deeper doo-doo than I ever imagined.

The Budget That Wasn't Phony Enough

Some readers seem to have concluded that my critique of Controller John Chiang’s power grab means I favor a gimmicky budget. Those readers haven’t been reading very closely. So let me spell it out again.

Yes, as I’ve written, the budget passed June 15 is full of gimmicks. That’s a bad thing. It’s also an inevitable thing, given the constitutional whips and chains that prevent a legislative majority from taking the actions, like raising taxes, suspending the Prop 98 school funding guarantee, and moving spending and revenue from programs imposed by initiatives, needed to balance the budget. In California, what is constitutionally required (that the Legislature pass a balanced budget) is not constitutionally permitted.

But as I’ve also written, there is a constitutionally approved and timed-honored way of bringing a gimmicky legislative budget into balance: The governor uses his line-item veto to reduce the appropriations in the budget to a level that can be funded with anticipated revenues. Jerry Brown, to no one’s surprise, did not have the political courage to do that. Far from favoring a gimmicky budget, I’ve been pretty much alone in arguing that Brown failed to do what is necessary to have a balanced one.

Those readers seem also to believe that Chiang is standing against budget gimmicks. Again, they have failed to read very closely.

In moving illegally to withhold legislators’ pay, Chiang explicitly denied he was acting against the gimmicks in the budget. “While the vetoed budget contains solutions of questionable achievability and some to which I am personally opposed, current law provides no authority for my office to second-guess them,” he said. He instead relied on an invented authority to check the budget’s internal arithmetic.

Let’s be clear what that means: Chiang would not have taken away lawmakers' pay had they set the revenue estimate high enough to cover his re-estimate of the budget’s spending. In other words, Chiang has punished the Legislature because the budget wasn’t phony enough.

Thanks to Chiang, you can be sure lawmakers will never make that mistake again.

California, State of the Absurd

Just when you think California governance can’t get more bizarre, Controller John Chiang, using constitutional authority he admits he doesn’t have, has decided to withhold pay from legislators for having passed a gimmicky budget, which is the only kind of budget that California’s current constitutional and political balance permits them to pass.

I won’t belabor the legal and constitutional issue, which I analyzed previously, except to note that Chiang himself, in his internally self-contradictory statement, provides no evidence to justify what is, on its face, an abuse of his office and violation of the constitution.

Instead, in the interest of appreciating the utter absurdity of the moment, let’s step back and look at the larger picture.

Let’s assume for a moment that Chiang has the power he has asserted. Let’s also assume, which almost no one disputes, that the budget passed June 15 by the Legislature contained gimmicks to paper over deficits, just as most budgets have for the last decade.

And then let’s ask a question: How could have the majority party in the Legislature passed a budget that would have spared legislators from Chiang’s wrath?

As a matter of normal arithmetic, the easy answer is that the Democrats could have raised taxes to make the budget balance. As a matter of constitutional and political arithmetic, that answer wasn’t available to the legislative majority.

Under California’s system of minority rule on most matters fiscal, it takes a two-thirds vote to raise any tax or fee. And the minority Republicans have been adamant in refusing to do that. You can say that they should compromise (Republicans would say surrender) on taxes in the interests of the greater good. However, that would require those Republicans to do precisely what their own voters sent them to Sacramento not to do. (And what a majority of voters statewide seem to oppose, according to the most recent PPIC poll.)

With taxes constitutionally taken off the table, the normal arithmetic dictates spending cuts. And since the largest share of the state budget goes to schools, that means cuts in school spending.

But again, as a matter of constitutional and political arithmetic, that answer wasn’t available to the legislative majority either. The constitution dictates a minimum level of school funding, which can be reduced only by suspending Prop 98. That also requires a two-thirds supermajority, which is nowhere in sight, in large part because polling shows that Californians overwhelmingly oppose cuts to school funding.

So how could the majority party in the Legislature have passed a budget that would have met Chiang’s approval? They couldn’t have. Under our current constitution and current politics, passing an honest budget is not something within the power of the legislative majority.

And yet John Chiang presumes to punish lawmakers for not doing what we, the voters, have prevented them from doing. With apologies to Gary Shteyngart, welcome to the new Absurdistan.