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.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

blog comments powered by Disqus
Shine A Light On The Holiday Season With ‘Giving Tuesday’
Food For Families Drive

Listen Live