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Ruling undermines measure blocking lawmakers' pay

SACRAMENTO, Calif. — A judge's decision Wednesday to side with the state Legislature appears to undermine a voter-approved law that bans lawmakers from getting paid if they fail to pass a balanced budget on time.

Sacramento County Superior Court Judge David Brown affirmed a tentative ruling he issued a day earlier, finding that state Controller John Chiang violated the separation of powers clause of the California Constitution.

Chiang said he was acting under 2010's Proposition 25 when he determined the budget adopted by lawmakers was not balanced. He halted their pay for 12 days last year after deciding they had failed to meet their constitutional June 15 deadline for passing a balanced budget.

Their paychecks resumed after they passed a new budget, but Democratic leaders filed a lawsuit in January, arguing the controller overreached.

Republican lawmakers reacted to the judge's ruling by saying voters were duped by Democrats when they approved Proposition 25. The initiative also lowered the legislative threshold for passing the state budget from a two-thirds vote, which requires votes from both parties, to a simple majority.

"It is obvious that the voters of California were manipulated by the majority party when they asked Californians to support Proposition 25, because the only people who can determine whether a budget is on time and balanced are the legislators themselves," said Senate Minority Leader Bob Huff, R-Diamond Bar.

Democrats applauded the ruling, saying lawmakers are already prevented from passing bogus budgets by the governor's veto authority and by the courts.

"I think the people of California will be glad that the court saw this the right way in the long term. Bottom line is, you can't empower any official to leverage the pay of elected officials to try to achieve a result," said Senate President Pro Tem Darrell Steinberg, D-Sacramento. "There's a real opportunity for mischief."

While the initiative never gave the state controller explicit authority to determine whether a budget was balanced, most voters likely assumed that an entity other than the Legislature would make the call, said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California.

"For people who supported Proposition 25, having the Legislature decide whether a budget is balanced is like letting teenagers decide their own curfew," he said.

Given the public's mistrust of lawmakers, Schnur said the Legislature has an opportunity to improve its standing by designating Chiang or someone else to determine whether the budget it adopts actually balances spending with tax revenue.

Steinberg dismissed that idea, noting that the controller could simply take the Legislature to court.

Democrats had pitched Proposition 25 to voters as an accountability measure that would stop lawmakers from getting paid if they don't pass a balanced budget on time.

The Legislature has met its budget deadline just four times in the past three decades. In recent years, gridlock has plagued the Legislature as Democrats sought sales, vehicle and income tax increases while Republicans pressed for reductions on social welfare programs and expand business tax credits.

As a result the state's credit rating was downgraded, the controller had to issue IOUs and some workers weren't paid.

During 2010, the budget impasse reached a record 100 days and the spending plan that was eventually signed by Republican Gov. Arnold Schwarzenegger did not hold. It was filled with overly optimistic revenue assumptions, cost shifts and one-time money that never materialized.

By the time Democratic Gov. Jerry Brown took office in January 2011, his administration projected a $25.4 billion, or 30 percent, deficit.

In affirming his ruling, Judge Brown found that the controller lacked the authority to decide whether the Legislature's budget is balanced because that power lies with lawmakers.

"If your position is correct, nobody's going to want to run for governor anymore," Brown said during an hour-long hearing. "The big race in California is going to be for controller because the controller is going to be the person. He or she will be the top power in the state. If the controller can look behind everything and anything that's done within its purview and say that it has the right to withhold pay, that causes me some trepidation."

Deputy Attorney General Ross Moody, who represented Chiang, said the judge's interpretation overlooks the voters' demand for a balanced on-time budget from the Legislature.

"You could take a piece of paper and write, 'We estimate revenues will meet spending' and you could wrap it around a ham sandwich and you could send it over to the governor and you can call it budget and you can keep your pay," Moody said. "But it's still a ham sandwich."

Rank-and-file lawmakers have a base annual salary of $95,291 but can make about $30,000 more through per diem payments. They lost an average of $4,800 in salary and per diem pay before they passed a budget that Chiang said was balanced.

The controller said the court's decision "perpetuates a bait and switch on voters." He said he would review his options with the state attorney general on whether to appeal.

"Unfortunately, under this ruling, lawmakers get their checks, and there is no balance," Chiang said in a statement Wednesday.

Associated Press writer Don Thompson contributed to this report.