Lockyer raises doubts about Assembly budget plan
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State Treasurer Bill Lockyer threw more cold water Monday on the Assembly Democrats’ budget proposal, which relies on a $9 billion borrowing from Wall Street that the treasurer would have to facilitate.
Lockyer, in an interview following a press conference on a new Senate budget proposal, said that last week’s opinion from Atty. Gen. Jerry Brown’s office meant that he could not go to market to sell the bonds the Assembly wants to use to balance the budget.
Assembly Democrats have proposed to borrow $9 billion from California’s bottle deposits fund, and then use the next 20 years of a new oil tax to pay back the loan. Brown’s office said the Assembly’s plan “could be suspect” in court and, therefore, they office could not offer unqualified legal approval. The state constitution was amended in 2004, when voters passed Proposition 58, to prohibit borrowing to “to fund a year-end state budget deficit.”
The attorney general’s opinion is crucial, Lockyer said.
“We can’t borrow without a clean bond opinion from the attorney general. Our role is simple: We get an opinion, we can borrow. We don’t get an opinion, we can’t borrow,” he said.
Lockyer, a Democrat, wasn’t passing judgment on the Assembly Democrats’ goal -- stopping many of the deep spending cuts Gov. Arnold Schwarzenegger has proposed. He said he was ‘glad that they’re focused on trying to preserve vital services.’
[Updated 3:18 pm: Shannon Murphy, a spokeswoman for Assembly Speaker John A. Perez (D-Los Angeles) said, “We remain confident that [our] budget is legally sound.” Once the plan is fully drafted, she said, “We remain hopeful that there will be no real concern of legal challenges.”] -- Shane Goldmacher in Sacramento