Budget Stalemate Hits Hard for State Workers, Vendors

California lawmakers are supposed to pass a state budget by June 30th. It's now July 13th, and there's still no budget. No one's given ground, and tempers are starting to flare. KPCC's Julie Small says this is a big deal for anyone who works for the state.

Julie Small: For two days this week, some folks who work in the Capitol lined up to talk to loan officers from a local credit union in Sacramento. They'd set up shop in a conference room.

Armando Viramontes: I came down actually to get paid.

Small: The state won't give legislative assistant Armando Viramontes his July 13th paycheck because he works for a lawmaker.

Viramontes: Unfortunately, ya know, that happens sometimes.

Small: It happens because the law prohibits the state from paying roughly 500 legislators and their staffers until a budget gets passed. So no paycheck today for Viramontes, and none for his boss, either – Assemblywoman and Berkeley Democrat Lonnie Hancock.

Irma Belamontes knows the drill. She's worked a while for Rancho Cucamonga Republican Senator Bob Dutton.

Irma Belamontes: We're not getting paid because there's no budget, so we have to come in and get loans.
Small: Have you been through this before?
Belamontes: Oh, almost every year.
Small: And how long have you been working in the Legislature?
Belamontes: Oh, about 18 years.

Small: Belamontes counts herself fortunate. Most banks offer legislators and their staffers zero-interest loans to tide them over. You heard that right: zero interest. But if you're not a legislative staffer, Belamontes says it's getting tough.

Belamontes: There are people out there who aren't getting paid. A lot of the vendors or people who have contracts with the state, they don't get paid. So I don't know what they do, but they have to really grin and bear it.

Hallye Jordan: The crunch will really come towards the end of the month if the Legislature has not enacted a budget and the Governor hasn't signed one.

Small: Hallye Jordan is with the State Controller's office. She says if the legislators fail to pass a budget by August, state law prohibits Controller John Chiang from paying a lot of people who do business with the state. Lots and lots of vendors.

Jordan: Medical, a lot of the pharmacists on medical prescription drugs. Different companies that provide the food services for prisons. Those vendors – they won't be paid.

Small: The state controller won't be able to pay local governments... or community colleges, or special education, or remedial summer school. But there is a silver lining in all this. Sort of.

Jordan: What's unfortunate is that we've been down this road before, and many of these entities that are not paid without a budget after July 1st have gone through this routine, and have implemented safety nets to help them weather the storm.

Small: Not all the money stops. The state continues to fund any federally mandated programs for the elderly and disabled. And as soon as lawmakers ink a budget deal, the checks start moving again.

Hallye Jordan with the Controller's office says there won't be a ramp-up period. Payments are automatic now, so all they have to do is flip a switch, and the money flows.