Governor Schwarzenegger orders pay cuts, lay-offs of state workers; Consequences, at individual level and society as a whole?

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SACRAMENTO - On Thursday, July 31, California’s Republican Governor Schwarzenegger signed an executive order cutting the pay of up to 200,000 state employees to the federal minimum of $6.55/hour and firing over 10,000 part time and temporary workers until the state’s budget impasse is resolved. The order exempts public safety agencies but will have an immediate effect everywhere else: Hiring, overtime and contracting will be halted, and tens of thousands of employees will feel the squeeze. It covers 22,000 retired state employees who work under contract, temporary and part-time workers such as those who fill in at the Department of Motor Vehicles, seasonal employees and student assistants. The order affects the approximately 10,000 state employees in San Diego and Riverside counties. They work at Department of Motor Vehicles offices, highway offices, state parks and beaches, unemployment offices, fish hatcheries and agriculture inspection stations.

The state controller, who cuts the checks, has said he will not comply with it. State Controller John Chiang, a Democrat, sent a letter to Schwarzenegger on Thursday saying he will defy the order and issue employees their regular paychecks. He said the governor's executive order was based on "faulty legal and factual premises."

Controller John Chiang challenges the governor’s claim of legal authority in ordering the cut, and warns the move will cause payroll problems for months after a budget is finalized. Speaking to 100 union members outside the Ronald Reagan State Office Building in Los Angeles, Chiang called them "innocent victims of a political struggle." "The state of California, the elected leadership, cannot put the important public servants of California in harm's way," he said. "We put people first, we make sure we protect their interests, and that's why I have to tell the governor, with all due respect, I am not going to comply with this order." Even if he wanted to comply, Chiang said, it would take 10 months to configure the agency's outdated computer systems to do what the governor is asking.

The Democratic controller and the Republican administration also differ over the state's financial condition. Chiang maintains that California has enough money to meet all its expenses through September. If it's later determined that California has insufficient money, Chiang said he is authorized to borrow until a budget is approved. Chiang's refusal to comply sets up a potential legal skirmish between his office and Schwarzenegger's. If the administration decides to sue, Chiang said it would be a waste of taxpayer dollars.

Democratic and Republican lawmakers remain divided over how to close a $15.2 billion deficit, with Democrats favoring $8.2 billion in new taxes on corporations and the state's wealthiest residents. Republicans want a spending cap and oppose tax increases. Adding to the fiscal mess has been an unprecedented number of wildfires this year, costing the state far more for emergency response than it had budgeted.

State Treasurer Bill Lockyer this morning criticized Gov. Arnold Schwarzenegger's plan to cut state worker pay via executive order on Thursday. He listed four reasons that the plan is a bad idea: "legal challenges, logistical challenges, bad management, and no political punch".

The workers, members of Service Employees International Union Local 1000, were dressed in purple and chanted in protest against the governor's move. "People are going to get put out of their homes," said Debra Martin, a union steward. The group is filing a lawsuit to fight the governor's executive order. Derek Pettersen, 21, a student who was working full time this summer for the Commission on Teacher Credentialing in Sacramento, was told not to show up Thursday. "It's not my fault that the budget hasn't been signed yet, and I'm the one paying for it," said Pettersen, who will forgo $1,600 if he remains unemployed for all of August. "I don't really understand why I had to lose my job temporarily because someone else isn't doing their job."

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Photos courtesy of Al Seib/LA Times, AP /Rich Pedroncelli, and California State Controller's Office

Original Source: North County Times, LA Times