Gov. Arnold Schwarzenegger announced Wednesday that he would not sign any bills lawmakers send him until they pass a budget and would veto measures already on his desk before they can become law.
"There is no excuse for the Legislature's failure to reach a compromise and to send me a budget," Schwarzenegger said at a news conference, more than a month into the new fiscal year. "Until the Legislature passes a budget that I can sign, I will not sign any bills that reach my desk."
Under state law, bills sitting on the governor's desk for more than 12 days would automatically become law. Schwarzenegger said he would keep that from happening by exercising his veto if necessary: "I will veto anything on my desk."
"Some good bills will fail," he said. "But we do not have the luxury of stretching out this process any longer."
There are 13 bills on the governor's desk now, all of which originated in the Senate. Senate leaders said they would withdraw them before they could be vetoed. The bills could be resubmitted before the Aug. 31 end of the legislative session.
Last week, Schwarzenegger ordered officials to drop the salaries of most of the state's 235,000 workers to the federal minimum wage of $6.55 an hour until a budget is passed; then they would be repaid. The governor also laid off more than 10,000 part-time and seasonal workers, saying the state was experiencing a cash crunch
Legislators are currently going without their salaries but will get back pay when a budget is in place. The governor said Wednesday that state law should be changed to force lawmakers to forfeit that money.
"They shouldn't be paid, and they should never get that money back," Schwarzenegger said.
Senate President Pro Tem Don Perata (D-Oakland) predicted that the governor's plan not to sign bills would backfire.
"My fear is that simply creates another tension between the administration and the Legislature that is really unnecessary," Perata said. "It's like we are escalating the wrong war."
Republicans, who are in the legislative minority, were less troubled.
"Great," said Sen. Jeff Denham (R-Atwater). "Many of the bills the Legislature passes do California more harm than good."
Eight of the 13 bills before Schwarzenegger were written by Republicans.
They would, among other things, exempt law enforcement from a ban on weapons in state game refuges; deny dental licenses to people federally registered as sex offenders; and allow the Purple Feet Wine Boutique and Tasting Room to sell beer and wine at functions sanctioned by the city of Dana Point.
Others would revamp the California Seed Advisory Board and allow public safety officials to wear military decorations on certain holidays.
A Democratic bill would update state law enforcement training programs to include a course on interacting with autistic people.
Schwarzenegger continued to warn Wednesday that the state is in danger of running out of cash if a budget is not approved soon. Administration officials say that, without a spending plan, Wall Street may refuse to provide the short-term loans that California typically relies on to remain solvent until the usual flood of tax receipts arrive in the spring.
But California Controller John Chiang said Wednesday that the state has enough money to pay its bills into October, based on new, better-than-expected estimates of cash flow in the state treasury.
Chiang said the state worker layoffs and salary decreases are therefore unnecessary. The controller, who manages the state payroll, has said he will not execute the governor's pay cuts.
"In light of our cash flow improvements, I respectfully urge the governor to reconsider his executive order," Chiang said in a statement.
The controller's assertions also take some pressure off lawmakers to quickly pass a budget.
Administration officials say they are skeptical that Chiang's assurances accurately reflect the state's cash situation. They are vowing to sue the controller if he fails to implement the salary reductions.
Chiang's spokeswoman, Hallye Jordan, said a lawsuit would be "a waste of money."
"Costly litigation is something we should avoid, because those are precious resources that should be spent on education, health and welfare and other services Californians expect and deserve," Jordan said.
State officials Wednesday also provided updated statistics showing that Schwarzenegger would exempt nearly 60,000 employees, more than a quarter of the 235,000-member workforce, from pay cuts. These employees perform critical services such as firefighting, law enforcement and mental health care, the officials said.
In addition, tens of thousands of prison employees could be declared exempt by J. Clark Kelso, the court-appointed receiver for prison medical care.
Under the governor's order, all other rank-and-file workers would be paid $6.55 an hour; 29,000 managers would receive $11.38 an hour, the minimum they can be paid under federal guidelines, according to state officials; and nearly 8,000 professionals such as lawyers and doctors would receive nothing.
Administration officials had earlier said engineers would receive no pay; on Wednesday, however, they said engineers legally must be paid.
Times staff writers Patrick McGreevy, Michael Rothfeld and Nancy Vogel contributed to this report.