On politics in the Golden State

Category: John Chiang

John Chiang reelected California controller

Democrat John Chiang was reelected to a second term as state controller, once again besting Republican Sen. Tony Strickland (R-Moorpark). Chiang, who once worked as an attorney in the controller's office, returns to the job for another four-year term, according to early vote tallies. 

The controller is the state's fiscal steward, monitoring cash flow and writing all of the state's checks. The controller also sits on the Franchise Tax Board, the Board of Equalization and the State Lands Commission.

Chiang received strong backing from organized labor during his campaign, while Strickland received the backing of Republican gubernatorial nominee Meg Whitman and business groups. Chiang made headlines earlier this year when his office investigated the finances of the city of Bell at the request of Bell's interim city manager.

Chiang's office later posted a list of salaries and pension benefits for local government officials across the state. Strickland criticized Chiang's office for reacting slowly to the Bell scandal and said his office demonstrated a lack of leadership in its handling of the situation.

-- Anthony York

Photo credit: Armando Arorizo /Bloomberg


Bill Lockyer reelected California treasurer

Prop. 19 headed for defeat

Prop. 19 had youth and Bay area support

Strickland mailer misleads over CalPERS crack down

Picture 10

Republican Tony Strickland’s campaign for state controller has stuffed voter mailboxes with a mailer accusing incumbent Controller John Chiang, a Democrat, of not doing enough to stave off corruption at CalPERS, the state’s giant pension fund, on whose board Chiang sits.

“John Chiang should have done something about it – but didn’t,” the mailer says, touting Sen. Strickland, as the man who “authored the law” to crack down on investment problems at the pension fund.

But the legislation Strickland cites, AB 1743, was actually sponsored by Chiang and state Treasurer Bill Lockyer and introduced by Assemblyman Ed Hernandez (D-West Covina). Strickland signed on as a co-author weeks after the bill's introduction.  The bill, signed by Gov. Arnold Schwarzenegger, requires any middlemen seeking a pension fund investment to register as a lobbyist, among other provisions.

"I think it's shameless," said Chiang campaign adviser Parke Skelton. "It's absolutely insane that Tony Strickland would be citing a bill sponsored by John Chiang as one of (Strickland's) accomplishments."

Republican consultant Joe Justin, who designed the Strickland mailer, disagreed that the mailer was deceptive. “Are you asserting what I wrote was not truthful?” Justin said.

Justin did not dispute that Chiang had sponsored the legislation and that Strickland later signed onto as a co-author. But he said Chiang, as a board member of the California Public Employees’ Retirement System, had not done enough  to root out corruption at the pension panel.

“This is someone who was in the room when millions of dollars was changing hands,” Justin said.

Skelton said "no one played a more aggressive role" in addressing conflict-of-interest problems at CalPERS than Chiang.

 -- Shane Goldmacher in Sacramento

(Image of the mailer provided by the John Chiang campaign)

State releases new local-government salary database

The state launched a website Monday on which Californians can see how much money cities and counties pay their workers, but dozens of municipalities have failed to file the information and could face fines of up to $5,000 unless they comply.

The website was created by State Controller John Chiang in response to the Bell salary scandal. Users can search for the salary, pension benefits and other compensation for more than 594,000 city and county employees throughout California.

“The absence of transparency and accountability invites corruption, self-dealing and the abuse of public funds,” Chiang said. “This website will help taxpayers scrutinize local government compensation and force public officials to account for how they spend public resources.”

Chiang said that next, he is requiring 828 transit, waste disposal, fire and police protection special districts to provide the same information by Dec. 13 and that he will expand the website by June to include payroll data on the other 2,535 independent special districts.

He acknowledged that some local government agencies have been slow to respond. The website lists 66 cities and counties that had not yet met the requirement for submitting payroll information.

As of Monday, filings had not been received by cities including Long Beach, Calabasas, South El Monte and Vernon, Chiang’s office said. The Los Angeles Times has created its own database of city manager compensation, located here.

[updated 6:09 p.m.] Later in the day Monday, Long Beach officials submitted their payroll information to the controller’s office. The city manager’s office said in a statement released after hours: ``Long Beach has historically made salary information available, and is one of the few cities that publish salary details in its annual budget. However, the State Controller asked for data in a different format, which took time to compile for each of the City's 6,000 employees. Additionally, Long Beach is unique in that we are only one of five cities in California with a fiscal year that begins in October, and our finance staff has been required to first and foremost attend to implementing the city's budget.’’


--Patrick McGreevy


Controller: Tax receipts up, fiscal outlook still poor

State Controller John Chiang said Monday tax collections outpaced expectations by $1.1 billion in September, but warned that the uptick is more likely a result of shifting tax laws and deadlines than an improving economy.

Chiang also said $8.3 billion in unpaid invoices piled up during the budget impasse – bills that are all now coming due – even though the state will have only $3.5 billion to pay the bills by the end of October. As a result, billions of dollars in welfare, school and community college payments are being deferred.

"It’s difficult to celebrate a budget deal that does so little after so long," said Chiang. "The latest casualties of this historically late budget include the many schools, taxpayers and daycare providers whose payments will now be delayed so that long-suffering Californians who received nothing from the state for the past 100 days will finally get some financial relief."

-- Shane Goldmacher in Sacramento


Controller: State risks $2.7 billion more in unpaid bills without budget

As the California budget impasse enters its fourth month, State Controller John Chiang's office has estimated that he will be legally unable to pay another $2.7 billion in state bills in October with a spending plan.

The report was posted on his website.

More than $6.3 billion in bills went unpaid in July, August and September, Chiang has estimated.

In addition, billions more in IOUs loom as a possibility this month. Chiang said in early September.

Gov. Arnold Schwarzenegger and top lawmakers announced a "framework" of a budget accord last week, but closed-door talks since have produced no significant movement. The leaders are gathering again Friday afternoon in hopes of sealing a budget deal that then must be approved by two-thirds of both the state Assembly and Senate.

--Shane Goldmacher in Sacramento


Controller: State IOUs on hold until at least October

California is expected to have sufficient cash in its dwindling treasury to avoid issuing IOUs this month, the state’s controller said in his monthly cash report on Thursday.

State Controller John Chiang had previously warned that without a state budget in place he would be forced to issue scrip instead of paying the state's bills in late August or early September. But rising tax collections and an unexpected drop in state spending have provided a slight cash cushion.

Garin Casaleggio, a Chiang spokesman, said the controller’s office had been planning this week to set interest rates for, and begin issuing, IOUs on Sept. 23.

“August revenues and a dip in spending have given us a small reprieve,” Casaleggio said.

California is already falling behind on some of its bills due to the lack of a budget. An estimated $3.35 billion in bills went unpaid in July and August, according to the controller's office. Another $3 billion will go unpaid this month. Businesses that contract with the state are getting stiffed, as are community colleges. Health clinics that serve the poor are no longer receiving state funds. And college grants for low-income students are on hold.

The state’s leaders, meanwhile, remain frozen in a political deadlock that already has dragged on 10 weeks into the new budget year. The 2010 budget is already the second latest in California history, and the ongoing gridlock in the Capitol threatens to topple the record for tardiness, set in 2008.

On Thursday, Gov. Arnold Schwarzenegger was set to depart the state for a six-day trade mission to Asia.

-- Shane Goldmacher in Sacramento


State misses $2.5-billion payment to schools because of budget delay

California's top fiscal officials Monday ordered the deferral of $2.5 billion in payments to the state’s public schools next month to conserve cash and stave off the need to begin issuing IOUs.

The state’s budget is 54 days late, and that delay has stretched the state’s depleted treasury to the breaking point. Issuance of scrip could come within weeks.

The deferral announced Monday “was not taken lightly,” state Controller John Chiang, Treasurer Bill Lockyer and Department of Finance Director Ana Matosantos wrote in a joint letter to the Legislature.

The payment delay –- which comes atop another $2.5-billion deferral in July –- was not unexpected, said Kevin Gordon, an advisor to school districts on state financing. Lawmakers approved the deferrals back in February.

“There was early warning to school districts about what the state's intentions were … giving districts enough time to make other arrangements,” said Gordon, president of School Innovations and Advocacy, an education consulting firm.

But the deferral will force districts to borrow more funds to cover their bills until the state pays up, driving up costs and taking money from classrooms, said Rich Pratt, assistant executive director of the California School Boards Assn.

“The more you borrow, the more interest you have to pay,” Pratt said.

State officials acknowledged the added hardship. “The lack of a state budget is levying additional fiscal stress on schools … deferral of state payments will further exacerbate the situation,” Chiang, Lockyer and Matosantos wrote.

Fiscal officials also ordered that a $400-million payment to counties be delayed; $700 million in county funds were pushed off in July.

The latest skipped payments to counties and schools must be repaid within 90 days, said H.D. Palmer, a spokesman for the Department of Finance.

-- Shane Goldmacher in Sacramento


State controller: IOUs in 'two to four weeks'

State Controller John Chiang said California was only "two to four weeks" away from issuing IOUs for the second consecutive year as the state budget is now more than a month and a half overdue.

Chiang, speaking at the Sacramento Press Club, called the crisis "100% avoidable" and hoped not to revisit what he called "a shameful chapter of California history."

"The only thing standing in our way is an absence of leadership," Chiang said.

But he parried away questions about what he would do to solve the state's $19.1-billion deficit, declining to take a position on more taxes or the Democratic legislative leadership's tax-swap proposal.

-- Shane Goldmacher in Sacramento


State risks $2 billion in unpaid bills if budget stalemate contines

State Controller John Chiang says more than $2 billion in state bills will go unpaid if lawmakers do not reach a budget accord by the end of August.

In a chart on his website, Chiang detailed which payments his office would and would not make in the event of a prolonged stalemate.

Schools, health programs, welfare payments and transportation projects would be among the state programs that would not receive scheduled payments.

"We can avoid or reduce additional financial pressure on our schools, community colleges and private businesses that provide state services if a budget is enacted in a timely manner," Chiang wrote.

-- Anthony York in Sacramento

First Take: Bell pension fallout. Ballot props could mean budget trouble.

CalPERS officials knew about high salaries in the city of Bell but did nothing to stop them.

The California state controller is now requiring that all cities disclose the amount paid to top city officials in financial disclosure reports.

Shane Goldmacher reports that two measures on the November ballot could blow a new, billion-dollar hole in the state budget.

Los Angeles city pensions could consume one-third of the city's general fund by 2015.

A judge has changed the official ballot description of a measure that would suspend the state's greenhouse gas law.

Steve Lopez says its a great summer for ethics watchdogs and newspaper columnists.

-- Anthony York

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