Controller Shares Consequences
of Late State Budget
State Controller John Chiang, the state’s chief fiscal officer, has released a list of disbursements his office cannot make if a State Budget is not enacted by July 1, the beginning of the state’s new fiscal year. Controller Chiang included this information in a letter to legislators.
Although the Controller states he will do everything within his authority to continue to provide payments for essential services, a number of constitutional and legal restrictions prevent the Controller from making certain types of payments without a budget by July 1. These include payments to:
· School districts for Categorical programs, such as special education and remedial summer school, community colleges, local governments, and other entities not included in the above parameters.
· Vendors for services provided after July 1.
· State elected officials and their appointed staffs for salaries and per diem.
· Counties for state-only programs.
On the flip side, the Controller will continue to make the following payments:
· County payments including vehicle license fees, Proposition 172 (public safety sales tax), sales tax, health and welfare realignment, CalWorks administration, substance abuse treatment, and highway user tax.
· Federally mandated services such as Supplemental Security Income/State Supplementary Payment (SSI/SSP), and In-Home Support Services.
· Debt service and other payments required by the State Constitution.
· Payroll for state employees covered by the Federal Fair Labor Standards Act.
· Vendor payments for services provided in the last fiscal year.
· Expenses with ongoing appropriations from the Legislature, including Medi-Cal, CalWORKs, income tax refunds and payments on claims for unclaimed property.
Please recall that a number of payments that would normally be made to counties in July and August for health and human services programs and the Highway Users Tax Account (HUTA) have been deferred to September. The Controller estimates that his office will be prohibited from making at least $1.25 billion in payments in major budget categories during the month of July if no budget is enacted. For more details of these major categories, visit the Contoller’s Web site. Click Here.
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