California meltdown

In our last column, Gov. Arnold Schwarzenegger and state Controller John Chiang were in a legal tussle over whether the former could force the latter to pay state employees minimum wage during the budget impasse. We pick it up on:

Tues., July 13: Chiang files opposition papers against the minimum-wage order, stating it is unfeasible for his 60-year-old payroll system to manage.

Thurs., July 15: California Watch reports that the state has reinstated Medi-Cal optometry services cut last July. The action violated federal law.

Fri., July 16: A Sacramento County Superior Court judge denies the governor’s request to compel Chiang to pay state employees minimum wage.

Thurs., July 22: In a bit of good news, the Sacramento Bee reports that mortgage defaults hit a three-year low in the second quarter of the year.

Mon., July 26: Warning that “every passing day of political paralysis leads us closer to a completely avoidable fiscal meltdown,” Chiang urges the governor and lawmakers to pass a budget. The state will go into the red by the end of October, he says.

Thurs., July 29: The Sacramento Bee reports that Gov. Schwarzenegger plans to bring back a scaled-down version of furloughs; 144,000 state workers will be affected. The decision is challenged in court and eventually goes to the state Supreme Court.

Fri., Aug. 6: Gov. Schwarzenegger states, according to Capitol Alert, that he and legislative leaders have agreed on all but about $4 billion to solve the $19 billion budget gap. At issue, though, are deep cuts in welfare-to-work and in-home services.

Tues., Aug. 10: Congress gives final approval to a $26 billion jobs bill that will send at least $2.5 billion to California to pay the salaries of school teachers and help balance the budget. On the same day, President Obama signs legislation that includes $16.1 billion in additional federal Medicaid funding; California will receive $1.28 billion.

Tues., Aug. 10: Chiang reports that state revenues were down from estimates in July by $91 million, while spending was up by nearly $1 billion.

Fri., Aug. 18: The state Supreme Court says that it will take the furloughs issue under review, giving the governor the green light to implement them on Aug. 27. On the same day, Chiang says he will soon begin printing IOUs if a budget isn’t forthcoming.

Mon., Aug. 23: State fiscal officials announce a plan to defer payments to schools and counties one month earlier than previously planned. On the same day, the state announces it has suspended Medi-Cal payments to more than 1,000 clinics and health centers because of the state’s overdue budget.

Thurs., Aug. 26: Capitol Alert reports that the “Big Five” Capitol leaders are meeting today—for the first time since June—to discuss the budget.

Tues., Aug. 31: In what was widely acknowledged to be a “drill” on the last day of the legislative session, Democrats and Republicans both submitted budget proposals to a vote. Neither drew two-thirds support in either house. It was the 62nd day without a budget.