Schwarzenegger's pay-cut plan sparks legal controversy

Chris Rizo Jul. 26, 2008, 4:55pm

John Chiang (D)

SACRAMENTO, Calif. (Legal Newsline)-The California state Legislature's non-partisan legal adviser says state Controller John Chiang cannot be forced to implement Gov. Arnold Schwarzenegger's plan to cut state workers to the federal minimum wage of $6.55 an hour.

Legislative Counsel Diane Boyer-Vine wrote Friday that an executive order by the Republican governor could not compel the state controller to begin paying most state workers the federal minimum wage in August.

Boyer-Vine's opinion was sought by state Sen. Dean Florez, D-Shafter.
Although the exact wording of the governor's order has not been finalized, a draft order would cut pay for about 200,000 state workers until a budget is signed, and afterward, the workers would get back their full pay.

For his part, the governor says his proposal is legal. Proponents point to a state Supreme Court decision issued during a budget impasse during Democratic Gov. Gray Davis' administration.

In a unanimous decision stemming from a 1998 lawsuit by the Howard Jarvis Taxpayers Association, the state's high court said state workers who are paid by the hour and don't work overtime in a particular pay period are legally entitled only to the federal minimum wage if the state enters a fiscal year without an official state budget.

Those who would not be affected by the governor's plan would be the state's 120 legislators, 565 political appointees and 2,164 legislative staff.

By slashing 200,000 non-essential state workers' payroll, the state would save up to about $1 billion a month, analysts say.

Chiang called the governor's pay-cut plan a political ploy to pressure lawmakers to pass a state spending plan.

"Forcing public servants to involuntarily loan the state cash by foregoing their hard-earned paychecks puts an untenable burden on our teachers, health care workers and those who provide critical public services. That is just wrong," Chiang said in a statement.

The state controller has said he believes the state has enough cash to pay full salaries through the end of September without a budget agreement.

Chiang, a Democrat, has said he planned to defy the governor's order should Schwarzenegger sign it.

"I have made it crystal clear that we have, and will continue to have, sufficient cash to make all payments, including state payroll, through September," he said. "Cutting workers' salaries will do nothing meaningful to improve our cash position or help us make our priority payments."

The California constitution requires state lawmakers to approve a budget by June 15, in time for the start of the July 1 fiscal year. But typically, the spending proposal becomes marred in ideological differences between Democratic and Republican legislators.

This year, lawmakers are hung up over whether to close a $15.2 billion deficit primarily with spending cuts or tax increases.

Democrats are calling for passage of a $9.7 billion tax package, while Republicans want more spending cuts.

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