State Budget Update: Standoff Continues As Budget Crisis Deepens

"If I do not get all of the things that we need ... I will not sign a budget, and it could actually drag out until the next governor gets into office," the governor said during an L.A. event last week. Schwarzenegger is holding out for lawmakers to concede on his demands for systemic pension and budget reform before he'll sign a new spending plan. If he makes good on his threat, California may not see an enacted budget for the current fiscal year until January.

Senate President Darrell Steinberg issued a swift response: "If the governor continues to insist on granting billions in corporate tax cuts financed by drastic cuts to public education and programs for working mothers and their children, I am prepared to grant his wish by waiting for the next governor."

State Controller John Chiang meanwhile warned both parties that, without a budget in place, California would face dire fiscal woes by the end of October.

"Every passing day of political paralysis leads us closer to a completely avoidable fiscal meltdown that will plunge the state's credit ratings into junk status, slow the state's economic recovery and force us to again issue IOUs to innocent Californians," Chiang said in a statement.

One of the major challenges facing state legislators in passing a budget is the requirement for a supermajority vote. Currently, only California, Arkansas, and Rhode Island call for a two-thirds vote to approve a budget. Democrats are hoping to change this with Proposition 25, which would change the two-thirds vote requirement to a simple majority vote for passing budgets, but maintain a supermajority threshold to raise taxes.

Additional Reading:

• Los Angeles Times: Schwarzenegger Threatens To Leave Office Without Signing Budget
• Controller Urges Governor, Lawmakers to Quickly Enact a Solid Budget
• California's Two-Thirds Legislative Vote Requirement and Its Role in the State Budget Process