California meltdown

An unpredictably occasional flyover of the state budget crisis

The governor’s effort to pressure state employee unions to agree to pension cuts by reducing workers’ pay to minimum wage—and his meeting fierce resistance from State Controller John Chiang—is the big news about the state budget, which is now two weeks overdue and not likely to come in for months.

Weds., June 16: Leaders of four state employees’ unions representing 23,000 workers reach a tentative agreement with Gov. Arnold Schwarzenegger’s administration to roll back pension benefits for new hires and increase pension contributions to at least 10 percent.

Weds., June 16: Citing concerns about the federal deficit, the U.S. Senate votes to uphold Republican objections to a $140 billion package that would have extended unemployment benefits, provided tax breaks to businesses, and provided $24 billion in aid to states, including $1.8 billion for California.

Thurs., June 17: Capitol Alert reports that Attorney General Jerry Brown has concluded that an Assembly plan to borrow billions against future oil production taxes to help ease the state’s $19.1 billion deficit could be deemed illegal under 2004’s Proposition 58.

Fri., June 18: This is the last “Furlough Friday” for state employees, but not the end of furlough disputes. Roughly two dozen lawsuits are still in the courts, Capitol Alert reports.

Fri., June 18: California State University trustees vote to hike student fees 5 percent in the fall. Gov. Schwarzenegger has called for a 10 percent increase, which means fees could go up yet again.

Mon., June 21: California Healthline reports that, according to Health Access California, around 16 million California adults lack dental insurance.

Mon., June 21: Senate Democrats unveil a plan that would reduce the budget deficit by $3 billion to $4 billion by shifting some program costs to counties.

Mon., June 28: The Sacramento Bee announces that the governor has forged tentative labor deals, like those made earlier, with two more unions representing 14,000 state workers.

Tues., June 29: A record 174 California school districts—16 percent of the total—have been identified as financially troubled, the state superintendent of schools reports. The calculation represents a 38 percent increase from January.

Thurs., July 1: The state budget is due—but nowhere near ready—today.

Thurs., July 1: Gov. Schwarzenegger orders State Controller John Chiang to cut the pay for most state workers to minimum wage, $7.25 per hour, due to the lack of a budget. Chiang refuses, saying to do so would be illegal and, besides, his antiquated computer system is incapable of making the adjustments.

Fri., July 2: The 3rd District Court of Appeals upholds a 17-month-old ruling allowing the governor to reduce state workers’ pay to minimum wage absent a budget.

Tues., July 6: Schwarzenegger sues Chiang to force him to pay minimum wage.

Weds., July 7: Chiang—joined by two state employees’ unions—countersues.

Fri., July 9: Chiang releases June 2010 revenue figures showing that they were below the governor’s estimates by $54.6 million, or 0.5 percent. He warns, “The Governor and Legislature’s lack of urgency in adopting an honest budget could pave the way to a completely avoidable cash crisis later this year.”