State Controller Kathleen Connell and the state employees' union pledged to fight the ruling, which stems from a 1998 case pitting Connell against a taxpayer advocacy group. The group contends that state officials can't dole out money if there is no budget in place.
This has the detail:
California: Court says schools to lose if budget is late
This is not a trivial little court case,
The ruling in a 4-year-old lawsuit filed by the Howard Jarvis Taxpayers Association comes as legislators, faced with a record $23.6 billion budget gap, are battling over a proposal by Gov. Gray Davis to raise taxes and cut health and welfare programs.