Uncertainty reigns as Jerry Brown vetoes 'questionable' California budget

Gov. Jerry Brown vetoed the California budget handed to him Wednesday, potentially isolating himself in continuing efforts to fix California's fiscal crisis.

Democratic lawmakers, who hold wide majorities in the Assembly and Senate, passed California's first on-time state budget in a quarter century Wednesday. In so doing, they avoided the penalties of Proposition 25 – an initiative passed by voters in November that decrees that lawmakers forfeit their pay for every day after the June 15 deadline that a budget is not passed.

But Thursday morning, Governor Brown, also a Democrat, lambasted the budget as financial gimmickry.

“Unfortunately, the budget I have received is not a balanced solution," he said in a statement released on YouTube. "It continues big deficits for years to come and adds billions of dollars in new debt. It also contains legally questionable maneuvers, costly borrowing, and unrealistic savings. Finally, it is not financeable, and therefore will not allow us to meet our obligations as they occur. We can – and must – do better. A balanced budget is critical to our economic recovery.”

Still unresolved is whether lawmakers can continue to receive their paychecks, because they passed a budget – even though it was vetoed. The answer to that question could determine the ultimate fallout from Brown's veto, since Democratic lawmakers might ramp up pressure on Brown to sign a less-than-ideal budget if they aren't getting paid.

In any case, the next two weeks will be crucial.

"Brown is sticking by his pledge to accept only a realistic, gimmick-free budget,” says Jessica Levinson, political reform director for the Center for Governmental Studies. “While some may say Brown is a glutton for punishment, only the next few weeks will show whether his veto will ultimately force the legislature to pass a budget more in line with his proposals.”

Should legislators be paid?

The matter of legislators' pay will be determined by state Controller John Chiang. In a memo released to the press Thursday, he said he is analyzing "whether the budget bills passed Wednesday meet the constitutional" requirements of Prop. 25.

But the memo perhaps offered clues about how his office is leaning. The memo said: "Proposition 25 only references the Legislature’s passage of a budget; it is not affected by the Governor’s signature or veto."

The vetoed budget was balanced with a mixture of taxes, cuts, and various other accounting and policy maneuvers including the delay of billions in bills, forgoing debt repayments, and counting on revenues that may or may not come in.

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