SACRAMENTO — California’s judicial branch could receive a $41 million IOU from the state next week if lawmakers don’t close a $24 billion budget deficit within days, Controller John Chiang said Wednesday.
“Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression,” Chiang said in a prepared statement.
Without enough cash on hand, the state will start withholding $3.36 billion in payments as soon as next Thursday for student aid, assistance to the poor and disabled, mental health services and trial court operations, Chiang said.
The controller’s office was quick to add that judges and state employees, including those working in California’s courts, will continue to be paid as required by state law. But payments for court operations will be held, Chiang spokeswoman Hallye Jordan confirmed, although neither she nor judicial executives could immediately say what programs or services would be affected.
A likely recipient of IOUs would be court-appointed appellate counsel. These privately employed defense attorneys are all too accustomed to frozen payments from the state, although they’re usually faced with the prospect in late summer when the Legislature is late in adopting a budget.
Any IOUs issued in July would be payable, with interest, in October.
This year, California’s sinking economy and cash-flow troubles have led Gov. Arnold Schwarzenegger to demand a quick $24 billion in cuts, transfers and other accounting maneuvers to the spending plan adopted in February for the coming fiscal year. Legislative Democratic leaders say the deficit is actually closer to $19.5 billion and that the extra $4.5 billion sought by the governor accounts for reserves.
Either way, Republicans on Wednesday shot down Democrats’ initial proposal for roughly $11 billion in cuts. And the governor has said he will not sign any legislation that doesn’t include a complete $24 billion no-new-taxes “solution.”
The lack of an agreement has delayed judicial leaders’ own plans to implement a statewide, one-day-a-month closure of courthouses. Court executives are waiting for specific closure language from the Legislature, which will only be adopted as part of a budget package that addresses the deficit. Even then, each court must negotiate any possible worker furloughs with local labor groups.
Los Angeles County Superior Court leaders have already announced plans to close most courthouses every third Wednesday of the month starting in July.Other courts may follow suit and decide on closures independently, said Ron Overholt, chief deputy director of the Administrative Office of the Courts. That’s fine, he said, as long as courts keep at least a skeleton crew available to issue temporary restraining orders and necessary arraignments.
The AOC is now looking at launching its once-a-month closure plan in August because the state’s delay in action has led courts to already start scheduling calendars for July, Overholt said.