Controller John Chiang blocked lawmaker pay last year when they failed to pass an on-time budget. He's allowed to do that under Proposition 25.
But the Democrats want the courts to clarify whether the voter-approved measure violates the separation of powers outlined in the Constitution.
"This is fundamentally an issue of separation of powers," Assembly Speaker John Perez, D-Los Angeles, said at a Capitol news conference.
Chiang, also a Democrat, acted under Proposition 25, an initiative approved by voters in 2010. He said he reviewed the budget passed by the Democratic majority and determined it was not balanced. The lawsuit filed in Sacramento County Superior Court says it was and that Chiang overstepped his authority.
He issued a statement after the Democrats' news conference saying he welcomes the court's review.
"The issue before us is not the role of my office, but how to enact the will of the voters," Chiang said. "While nothing in the Constitution gives me the authority to judge the honesty, legitimacy or viability of a budget, it does clearly restrict my authority to issue pay to Legislators when they fail to enact a balanced budget by the constitutional deadline of June 15."
Rank-and-file lawmakers have a base annual salary of $95,291 but can make about $30,000 more through per diem payments. They lost an average of $4,800 in salary and per diem pay before they passed a budget that Chiang said was balanced.
The Associated Press contributed to this report.