After the California Assembly rejected two budget plans Friday,
it appears Monday’s midnight Constitutional deadline will
pass with no budget in sight, leaving state and University of
California officials to grapple with the implications of
functioning without a budget at the start of a new fiscal year.
Last year’s state budget was not signed until September 5
““ the longest California has ever operated without a budget
““ but the state did not stop doling out monetary aid.
This year, however, things will be different.
A lawsuit levied by the Howard Jarvis Taxpayers Association,
designed to coerce the state legislature into following its
Constitution, resulted in the California Supreme Court’s
ruling that state workers cannot be paid more than minimum wage
without a passed budget. Also, the state could not deliver aid
without a budget.
“There will be some very negative consequences if we
operate without a budget,” said Hilary McLean, a spokeswoman
for Gov. Gray Davis. “The governor’s budget is
contingent on passage of budget on time, and each day (that its
passing is) late we lose million of dollars on lost
savings.”
A June 26 Los Angeles Times story reported that without a state
budget, the UC would lose $250 million in monthly state aid.
However, both the California State Controller’s Office and
the UC Office of the President refuted this statement.
“The L.A. Times information is wrong. The $250 million
figure is not accurate,” said UC Spokesman Brad Hayward.
“As for salaries, we have not been given any indication that
UC salaries will be withheld, so our employees do not need to worry
about a lack of a state budget affecting paychecks.”
Hayward said if the delay lasts until September again, it is
possible some state employees would have their paychecks reduced to
minimum wage, but it is not yet known how this could affect the
UC.
In terms of the UC’s non-payroll expenditures ““ such
as paying vendors, or purchasing equipment for laboratories ““
California State Controller Steve Westly said the UC cannot pay for
services in the new fiscal year until a budget is approved.
However, the UC can still pay for items obtained during the
previous fiscal year.
“That’s important because what typically happens is
that the billing cycle lags and we are still paying for goods and
services from the previous fiscal year,” Hayward said.
“We are paying for stuff in July we bought in May or June;
our vendors don’t have to worry for a couple of
months.”
The budget shortfall has reached an unprecedented $38.2 billion,
and Republicans and Democrats disagree as to how this can be
resolved. Although Democrats hold a clear majority in the
legislature, they do not have the necessary two-thirds majority to
pass a Democrat-sponsored budget.
“The current process is right on track, where you have a
budget negotiation and one side refuses to move, even in the
slightest,” said state Sen. Sheila Kuehl (D-Santa Monica).
“I don’t see the budget process wrapping up very
soon.”
The governor’s May Revision to the budget saw no more
cutbacks to the $300 million in cuts to the UC in his January
proposal. In May, Democrats included measures for revenue
enhancement. Republicans have said they will not agree to any tax
increases.
“We’ve been asking them how to reach a balanced
budget,” Kuehl said. “They have no plan.”
But state Senate Republican Leader Jim Brulte of Rancho
Cucamonga said in the same Times article that the Democratic
proposal was “nothing but a continuation of what (Democrats)
all have done for the last three years that has nearly bankrupted
this state.”
When Republicans rejected the May Revision, they also called for
an additional 7 percent in cuts. Because there is a minimum that
must be spent on education and health care, Democrats say a
7-percent cut cannot be made without revenue enhancement.
“(The 7-percent cut) would be more like a 12-percent cut
in unprotected programs ““ like the Cal State University, the
UC, and programs for foster children,” Kuehl said. “The
number of social welfare programs it would affect would be
devastating. It would mean another 30,000 teachers laid off. Or
closing two Cal State Universities.”
Kuehl added that the proposed Republican cut could also have
detrimental effects on the UC system.
“A 12-percent cut in the university would be tantamount to
closing a campus,” Kuehl said. “It would be devastating
to the system.”