Imagine just for a second that the chief financial officer of one of the largest companies in the state advised his CEO to deal with an extreme shortage of cash on hand by essentially doing nothing, and then by asking for a high-risk, high-interest loan that would end up costing the company hundreds of millions of dollars.
That CFO would be fired.
But that’s exactly what John Chiang has done. As Controller, he is the state’s chief financial officer. And his advice: keep paying hundreds of thousands of state workers despite having no cash to do so and no state budget in place authorizing him to cut checks.
The state constitution is clear: if there’s no budget in place, the Controller can’t cut checks.
But Chiang refuses. It’s not clear whether he is saying he can’t or if he won’t. But what is clear here is that there is a huge opportunity here — to make the argument in support of taxpayers’ rights and in support of fiscal responsibility in Sacramento.
It’s great that the Governor has set up this fight because it provides the opportunity to once-and-for-all clarify the responsibilities of state government and government officials in the case of a budget impasse. But we need an organization, maybe a taxpayer group, to step up to the plate.
There are undoubtedly dozens if not hundreds of lawyers already working on this and preparing for a legal battle. My hope is that at least a few of those lawyers have the taxpayers’ best interests in mind. We can’t simply let this situation unfold, we must provide the taxpayers’ voice. If what’s needed is a lawsuit brought against Chiang for ignoring his responsibility to the state constitution and to taxpayers, then that’s what I’d like to see.
The role of the Controller during a budget impasse needs to be made 100 percent clear. That way, whether it’s a Westly or a Chiang or the next Controller, we won’t be faced with this fight year after year. Imagine if from now on, every year, the Controller had to shut down all payroll starting July 1 to ALL state workers if there is no budget. That would be some kind of budget reform and I bet we’d get a better track record than our current 4 on-time budgets in 20 years. And to get to that end, we need an advocate out there on our behalf.
There are a good number of pro-taxpayer groups out there — California Taxpayers Association, Howard Jarvis Taxpayers Association, Americans for Properity, Americans for Tax Reform, the National Tax Limitation Committee — just to name a few — hopefully one or all will think about running with this issue…