"We are getting to the point where we are having bills that have been presented to the state that cannot be paid," said Connell, a Democrat who's in charge of cutting state workers' paychecks and paying the state's bills.
The Assembly has been unable to pass the $99.1 billion budget and $3.6 billion in tax increases needed to help balance it. The plan -- crafted by Gov. Gray Davis to close a $23.6 billion budget deficit -- was supposed to go into effect July 1.
Most of the state's 250,000 non-legislative workers are being paid this week, Connell said. But paychecks weren't sent out this month to hundreds of elected and appointed officials, including members of the Legislature, the governor's Cabinet and Connell.
Davis commended Connell Wednesday, saying lawmakers "need to set the example."
"We expect the citizens of the state to get their work done in time; we have to get our work done in time," he said in a statement. Davis also withheld elected officials' paychecks when he was state controller during budget delays in the recession of the early 1990s.
Twenty-five days into the fiscal year, California is feeling the pinch of operating without a state budget.
California is legally unable to pay legislative staff and tens of thousands of private vendors such as those who supply food, equipment and services to the state's hospitals and prisons, Connell said.
"They are truly victims of this budget impasse," she said Wednesday.
The state Senate approved the budget June 29 and then adjourned until August. But the spending plan fell five votes short of passage the following day in the Assembly, the day before the new fiscal year began July 1. Since then, Davis and Democratic leaders have been trying to negotiate for the Republican votes to approve the measure.
Davis accused Assembly Republicans of "putting people's lives in jeopardy."
"If they don't have another plan -- and, to date, they don't -- for a budget, then they should get out of the way, let the budget pass and let the state go on with its life," he said.
Republicans complain the Davis budget relies too heavily on tax hikes and faulty revenue assumptions and will strap California with billions of dollars in deficit for the next half-decade. They say they won't vote for the budget until Davis submits a plan without tax increases.
"It is not fiscally responsible," said Assembly Republican spokesman Peter DeMarco.
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