California lawmakers lose pay until they pass balanced budget

NEW YORK (CNNMoney) -- California lawmakers will forfeit their pay until they pass a balanced budget, the state controller said Tuesday.

Legislators raced to approve a balanced budget last week to meet a deadline imposed by voters in November. The ballot measure required that the Senate and Assembly pass a balanced spending plan by June 15 or lose their salary and per diem.

Lawmakers agreed on a budget that they said met the requirement. But Governor Jerry Brown swiftly vetoed it as unbalanced. Controller John Chiang agreed, saying the vetoed budget committed the state to $89.75 billion in spending, but only provided $87.9 billion in revenues.

"My office's careful review of the recently-passed budget found components that were miscalculated, miscounted or unfinished," said Chiang. "The numbers simply did not add up, and the legislature will forfeit their pay until a balanced budget is sent to the governor."

California lawmakers have the highest salaries in the nation, according to the National Conference of State Legislators. They earn $95,291 a year, as well as $142 per diem for each day they are in session.

Jerry Brown vetoes California budget

Democratic lawmakers, who control both chambers, quickly defended their actions last week, saying that the controller was wrong.

"We carried out our responsibility to pass a budget reflecting all the options available to close the deficit without new revenues and without cuts so deep as to cost the state jobs and jeopardize our economic recovery," said Assembly Speaker John A. Perez.

Perez said lawmakers will be "taking additional budget action informed by the controller's analysis" in coming days.

California officials have struggled with closing a $26 billion gap since the start of the year. Brown has spent months trying to woo Republican lawmakers to approve his proposal to put a tax extension on the ballot.

Republican leaders, who blasted last week's budget that was pushed through by the Democrats, have refused to put the extension before the voters unless it is accompanied by a spending cap, as well as pension and regulatory reform.

The legislature approved several measures in March that closed $14 billion of the gap. Their job was also made somewhat easier because tax revenues are coming in several billion dollars higher than forecast.

But lawmakers had been unable to solve the remaining budget deficit of more than $9 billion. Facing the loss of their pay, the Democrats' solution was to quickly pass a budget that relied on spending cuts, fund transfers and optimistic assumptions to eliminate that shortfall.

Brown, who has repeatedly said he would not sign a budget that contained gimmicks, vetoed the legislators' plan.

"It continues big deficits for years to come and adds billions of dollars of new debt. It also contains legally questionable maneuvers, costly borrowing and unrealistic savings," said Brown last week, adding that he will continue to negotiate with the Republicans. "We can -- and must -- do better."

His Democratic counterparts in the legislature, however, assailed the governor for not outlining a detailed plan for solving the state's budget mess before the fiscal year ends on June 30. They said his talks with the GOP on extending personal income and sales tax hikes from 2009 have gone nowhere.

"We are too far down the road for the governor to continue avoiding a specific set of proposals of what he intends to do or wants to be done if he can't gain those Republican votes," Senate President Pro Tem Darrell Steinberg said last week.