After a strange, fast-changing day of sometimes fiery, sometimes teary budget debates in the Legislature, the state moved one step closer Thursday to sending trial courts $41 million in IOUs next month.
A large bipartisan majority in the Assembly adopted an emergency package of three bills designed to generate almost $5 billion in cash by delaying payments to schools, universities and other programs.
Assembly leaders said the accounting moves would have left Controller John Chiang with enough money to pay bills for at least several weeks into July, buying legislators enough time to come up with a larger agreement to close a $24 billion deficit.
But the plan was immediately attacked as insufficient by Gov. Arnold Schwarzenegger, who threatened to the package. He didn’t need to. Senate Republicans voted down all three bills, arguing that the $24 billion problem had must be solved all at once.
“Stop playing games!” Senate Republican leader Dennis Hollingsworth thundered during a floor speech highly critical of majority Democrats.
“I know you are, but what am I?” — after the jump.
“This is not a game,” Senate Budget Committee Chairwoman Denise Ducheny, D-San Diego, shot back as she dabbed away tears.
Leaders of both houses said they would continue meeting daily — through the weekend if necessary — to strike a deal that would garner the necessary two-thirds vote majorities.
Court executives said Thursday that even if IOUs are issued, judges, court employees, interpreters and even court-appointed counsel will continue to be paid as usual. But payments to counties for sheriff-provided security and to vendors that provide basic courthouse supplies are less certain, said Bill Vickrey, chief executive of the Administrative Office of the Courts.
Some trial courts have sufficient fund balances to cover a month of those payments, he said. But others don’t.
When the state issued IOUs, also known as registered warrants, in the early 1990s, many banks honored them and allowed employee-recipients to exchange them for cash. But they’re under no obligation to do so. And this time the IOU recipients will include public agencies, not individual employees.
Any IOUs issued in July will be redeemable in October with interest, Chiang has said.
Also on Thursday, the governor rejected a tentative deal reached between his corrections secretary and the state prisons receiver over the $2 billion construction of two inmate medical facilities. Schwarzenegger said the state cannot afford the tab right now.
The deal’s failure all but dares a federal judge to seize state money to pay for the construction. Northern District Senior Judge Thelton Henderson has raised the possibility of holding Schwarzenegger and Chiang in contempt if they don’t provide construction financing.
— Cheryl Miller
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