Controller John Chiang discusses his decision to halt paychecks for all 120 state lawmakers after they failed to come up with a balanced budget by the June 15th deadline, during an interview with the Associated Press in Sacramento, Calif., Tuesday, June 21, 2011. (Photo by AP Photo/Rich Pedroncelli)
SACRAMENTO — California's controller took the rare step Tuesday of halting paychecks for all 120 state lawmakers after he determined they failed to come up with a balanced budget plan to meet a voter-approved requirement to get the Legislature to approve budgets on time.
 
Controller John Chiang said he reviewed the budget approved last week by Democrats on a simple majority vote, and he determined it was not balanced. Chiang, a Democrat, said lawmakers therefore did not meet the requirement for getting paid under Proposition 25, which voters approved in November.
 
Lawmakers can start receiving their salaries and expenses again once they pass a balanced budget. They will not be retroactively paid for the days the budget was late.
 
The decision sparked sharp criticism from lawmakers and could be challenged in court. Assemblyman Mike Gatto, D-Los Angeles, said Chiang decided to withhold pay for political reasons.
 
"I halted a fulfilling private sector career path to enter public service. I now have to explain to my wife and daughter that we won't be able to pay the bills because a politician chose to grandstand at our expense," Gatto said.
 
Under Proposition 25, lawmakers don't get paid their salary or living expenses if they miss their budget deadline. The measure gives the state controller the authority to judge whether revenues matched or exceeded state spending.
 
Chiang's decision marks the first time the California initiative has been put to use.

Each day, California taxpayers save $48,603.50 by not paying lawmakers a salary and per diem. For lawmakers who earn $95,291 a year, that works out to $261 less for each day their salary is cut. For leaders of the Senate and Assembly who make $109,584, that works out to $300 per day.
 
Most lawmakers also lose out on a $142 per diem for travel and living expenses.
 
Chiang, whose office issues paychecks, found the Democratic package did not meet the constitutional requirements for a balanced budget. He said it committed the state to $89.8 billion in spending but provided only $87.9 billion in revenues, leaving a hole of $1.85 billion.
 
"My office's careful review of the recently passed budget found components that were miscalculated, miscounted or unfinished," Chiang said in a statement. "The numbers simply did not add up, and the Legislature will forfeit their pay until a balanced budget is sent to the governor."
 
Chiang's analysis found much of the imbalance comes from underfunding education by $1.3 billion.
 
Underfunding is not possible without suspending the state's education funding law, which would require a two-thirds vote of the Legislature. That was not done in this case.
 
The Democrats' budget also counted on hospital fees, taxes on managed-care plans and vehicle registration charges, but the Legislature never passed the bills needed to collect those revenues, Chiang said.
 
Lawmakers said they believed that action allowed them to continue receiving paychecks. But Gov. Jerry Brown vetoed the package, saying he didn't want to see billions more in borrowing or questionable maneuvers.
 
"The Controller has made his determination. We should all work together to pass a solid budget," Brown said.
 
Democratic lawmakers said they were disappointed by the controller's decision. They said Chiang's decision would not help budget negotiations with Republicans.
 
"The controller is, in effect, allowing legislative Republicans to control the budget process and I believe that's a very unfortunate outcome that is inconsistent with the intent of Proposition 25," Assembly Speaker John Perez said in a statement.
 
Currently the controller's office is sitting on one week's worth of per diem checks. The Senate is claiming about $40,000 owed to 37 senators, according to a copy of the claim released by the Senate. The Assembly has not released its claim for last week.
 
The leader of the Senate had warned Monday that for Chiang to decide whether lawmakers passed a balanced budget sets a bad example for the state's balance of power.
 
"I think it is a bad precedent ... for anybody in the executive branch to question the quality of a budget passed by the Legislature. Because to do so shifts the balance of powers in what is supposed to be coequal branches of government in a way that I think is dangerous," Senate President Pro Tem Darrell Steinberg said.
Brown has signed into law about $11.2 billion in cuts and fund transfers, but the state still faces a $9.6 billion budget deficit through July 2012. He and Democratic leaders want to extend a series of recent tax hikes to help close the shortfall but so far have been unable to get GOP support for that plan.
 
Two Republican votes in each house are needed to meet the two-thirds vote threshold for higher taxes or to place the question before voters.

The state's fiscal year starts July 1.