S&P Worried About California Lawmaker Gimmicks To Pass Budget
SACRAMENTO (CBS / AP) — A credit rating agency is warning that California could return to budget gimmicks this summer, in part because a court has removed an incentive for lawmakers to pass a budget that is truly balanced.
Standard & Poor’s released a memo Tuesday cautioning that it could revise its positive outlook on California’s debt if the Legislature fails to balance the state budget. S&P cited concerns stemming from two developments last month.
First, the deficit has grown as income tax revenue in April fell nearly $2 billion below expectations. Then a Sacramento judge ruled the state controller doesn’t have authority to withhold pay from lawmakers.
That ruling undermines a 2010 initiative approved by voters banning lawmakers from getting paid if they fail to pass a spending plan by their June 15 deadline.
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