With No Budget, California Governor Puts State Employees on Minimum Wage

July 2, 2010

California is two days into Fiscal Year 2011 with no budget in sight. (Illinois approved a skeleton budget yesterday, Pennsylvania approved one with a $850 million hole still in it, ditto for Rhode Island with a $100 million hole.) Even New York has a budget after going for months since its fiscal year started on April 1.

Governor Arnold Schwarzenegger is taking an action that will be noticed:

Roughly 200,000 state workers will receive minimum wage paychecks next month under terms of an order issued Thursday by the Schwarzenegger administration.

According to a letter delivered to Controller John Chiang in late afternoon, July pay for most hourly state employees will be withheld to the minimum allowed by federal law – $7.25 an hour – and then restored once there’s a budget.

Chiang, whose office cuts state paychecks, said Thursday that he won’t follow the order unless a court tells him to.[…]

Schwarzenegger is invoking a 2003 state Supreme Court decision as grounds for the order. The ruling in White v. Davis held that without a state budget with money appropriated for payroll, wages can be withheld to the federal minimum. Back pay would be issued once a budget is enacted.

The threat of minimum wage has prodded several unions into contract talks with Schwarzenegger. Last month six unions – representing doctors, highway patrol officers, firefighters and psychiatric technicians, equipment operators, and health and social service professionals – tentatively agreed to pacts lowering retirement benefits for new state hires and increasing what all their members will pay into their pensions.

Reducing the state’s cost for pension benefits has been a policy centerpiece for Schwarzenegger. In exchange for those concessions, he promised the six unions that they would be shielded from minimum wage.

Read more at the Los Angeles Times: http://www.sacbee.com/2010/07/02/2864614/governor-puts-200000-state-workers.html#ixzz0sWzqBTiA


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