Gov. Arnold Schwarzenegger did as he’d promised today and signed an executive order freezing state hiring, suspending all overtime pay, lowering the pay of more than 200,000 state employees to the federal minimum wage of $6.55 per hour, and laying off as many as 22,000 temporary state workers. Here’s how he explained it (roll your cursor over the viewer to find the “play” button):
State Senate President Pro Tem Don Perata, D-Oakland, had this to say:
“This regrettable action undermines the state’s shaky economy, inflicts hardship on 200,000 hard-working Californians who have nothing to do with the state’s budget stalemate and reduces services to everyone who visits a DMV office, expects safe highways or needs other state assistance.
“Cutting state services reduces the quality of life for all Californians; that’s why the Democrats have a plan that avoids gutting education, health care, higher education and transportation by balancing the budget with a mix of cuts and new revenue.
“The Governor’s suggestion that the Legislature did nothing on the budget prior to May 14 shows how little attention he has paid to this process. The Senate held 67 subcommittee and full budget committee hearings going through the Governor’s proposal line by line. In mid-February, we took $7 billion in bipartisan budget actions – enough to solve half of the state’s deficit.
“On May 14, the Governor proposed a revised budget with a $7 billion hole in it. The Budget Conference Committee fixed this by balancing the budget in six weeks.
“If the Governor disagrees with the conference committee’s plan for filling the hole in his budget, we’re open to his suggestions on possible alternatives.
“On Monday, the Senate will hold a hearing examining the far-reaching impact of the Governor’s executive order.
More responses, after the jump…
From Assembly Speaker Karen Bass, D-Los Angeles:
“I’m disappointed with the Governor’s decision. It is an unwise and unfortunate move to cause economic strife to public servants and their families who are working hard and playing by the rules. We are not going to let this decision get in the way of our mission which is to deliver a budget that reflects the values of Californians. We are continuing to make progress and I remain hopeful we will have a budget on his desk in the next few days.”
“In reviewing the matter, the California Supreme Court specifically declined to rule on the amount of salary that could lawfully be paid during a budget impasse. In its ruling, the court concluded that ‘in order to comply with the FLSA [ ], the state, during a budget impasse, must timely pay nonexempt employees who do not work overtime at least at the minimum wage rate.’ (italics added) But the court declined to specify whether the federal minimum wage or full salary is appropriate…”
“Also, contrary to your statement that the State is at risk, due to the budget impasse, of having insufficient cash to pay state expenditures, it should be pointed out that there is enough cash to meet all expenditures through September.”
“In closing, I must reiterate that any attempted adjustments to the payroll system would result in payroll problems that would continue for months after a budget is enacted. I also am compelled, as the State’s chief fiscal officer, to remind you that such a drastic cut in pay would cause huge fiscal harm to the families of more than 200,000 devoted civil servants. The loss of spending dollars will increase the loss in consumer confidence, and further deteriorate California’s fragile economy. The Sacramento Bee on Thursday published an article noting that the pay cuts to the 112,500 state workers in the region would cost the area $15 million a day.
“For these many reasons, I have no intention of complying with the Order and encourage you to continue to work with the Legislature on passing a budget and with my office to ensure we have sufficient funds to meet the State’s financial obligations and pay for the education, health and public safety programs Californians expect and deserve.”