Jul 24, 2008 4:21 pm US/Pacific
Official, State Employees Oppose Calif. Wage Cuts
SACRAMENTO (CBS 5 / AP) ―
State Controller John Chiang said Thursday he would not go along with Gov. Arnold Schwarzenegger's plan to temporarily cut 200,000 state employees' pay to the federal minimum wage to ease California's revenue problems.
Chiang said he would continue to pay state workers their regular salaries, which was likely to trigger a court fight.
Schwarzenegger threatened late Wednesday to defer wages beginning Aug. 1 — paying the federal minimum wage of $6.55 an hour until lawmakers finally reach a budget deal.
"Because the Legislature has failed to produce a budget over a month past their deadline and because we don't have a rainy day fund, the governor is looking at a number of options to make sure the state does not run out of cash," said Schwarzenegger spokesman Aaron McLear.
On Thursday, hundreds of state workers rallied at the state capitol in opposition to the idea.
State employees would receive their full salary retroactively once a budget deal is signed into law. The wage reductions would save the state an estimated $1 billion a month.
Schwarzenegger has repeatedly expressed frustration that Democrats and Republicans have been unable to compromise on a solution to the state's $15.2 billion budget deficit for the fiscal year that started July 1.
As legislative leaders have continued to meet, Schwarzenegger has ratcheted up his rhetoric over the stalled talks.
Legislative leaders in both houses have said they are working to meet an Aug. 1 deadline. Without a spending plan in place by then, the state will have to start negotiating on expensive loans to address the cash shortfall that will affect state coffers by the end of September.
A state Supreme Court ruling in 2003 prevents the state from completely suspending workers' pay. Federal labor law requires the state to pay at least the federal minimum wage. Employees who work overtime are entitled to their full pay.
(© 2008 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
