In a suit filed August 10 in San Francisco Superior Court, Senate President Pro Tempore Darrell Steinberg is seeking to overturn Governor Arnold Schwarzenegger's line-item vetoes of budget provisions totaling $489 million. The case was assigned to Judge Peter Busch, who was appointed by Governor Gray Davis in 2000.
The governor accused Senator Steinberg of attempting to place the budget back in a deficit position. The governor's spokesman, Aaron McLear, said:
"The Governor's constitutional authority to veto appropriations is unquestioned and will be upheld by the courts. Because the Legislature failed to send him a balanced budget after months of debate, the governor was forced to make these difficult cuts. While Democrats are focused on a protracted legal battle to dig the state back into deficit the governor will continue to focus on moving our state forward and getting Californians back to work."
Senator Steinberg said an opinion by the legislative counsel concludes that the governor can veto spending increases, but not cuts. Robin Johansen, an attorney with Remcho, Johansen and Purcell, the law firm commonly used to draft tax increase proposals, is representing Senator Steinberg.
Department of Finance Chief Counsel Jennifer Rockwell said:
"What constitutes an 'appropriation' has been long established in California law. All that is required is a fund source, an amount, and a purpose. That's it. There is no requirement for special words, or particular verbiage, or a special format. Instead, all that is needed is a clear intent by the Legislature to provide that a certain sum of money – and no more than that sum – may be spent out of a particular fund on a particular activity. (Humbert v. Dunn (1890) 84 Cal. 57, 59.) Relying on this more-than-120-year-old definition, the amendment to the budget bill which was sent to the governor … did contain appropriations. Indeed, at the front of this same bill is a statement by the Legislature's own legal counsel that it is 'An act … relating to the State Budget, making an appropriation therefore …'
"In Wood v. Riley (1923) (192
San Diego
Union-Tribune blogger Chris Reed published comments questioning why the
suit was filed in
In other budget developments:
July Revenues Below February Expectations. July's general fund revenues were reported by Controller John Chiang to be $421.4 million below February estimates. To present a true picture of cash activity in July, the Controller's Office adjusted receipts to account for the $362 million in personal and income tax refunds paid with registered warrants in July. The July revenues totaled $4,573,108,000, compared with a February estimate of $4,994,500,000. Mr. Chiang said the Department of Finance has not yet made available revised cash flow estimates based on the July 21 budget revisions.
The biggest change from the February estimate: sales and use tax revenue was 16.9 percent below projections.
The controller also reported that $1,493 billion worth of IOUs were issued during the month of July.
IOUs to End September
4. State Controller John Chiang, in an August 13 press release, announced
that the state will stop issuing IOUs on September 4, about one month ahead of
projections. He said: "While we can finally put an end to this difficult,
and frankly, shameful chapter in the state's history, it does not bring an end
to our fiscal challenges. I urge the governor and Legislature to continue their
efforts to fix the state's structural budget deficit and ensure we are never
again forced to issue IOUs or delay payments to
The Franchise Tax Board announced that it will stop issuing IOUs for personal and corporate tax refunds on September 4.
Cal-TaxReports, August 24, 2009
© 2009 California Taxpayers'
Association.
All Rights Reserved.