Schwarzenegger sues to force state pay cuts

By Chris Rizo | Aug 11, 2008

Arnold Schwarzenegger (R)

SACRAMENTO, Calif. (Legal Newsline)-Gov. Arnold Schwarzenegger on Monday filed a lawsuit against state Controller John Chiang to force him to cut pay to state workers until a state budget is passed.

The lawsuit, filed by the Department of Personnel Administration in Sacramento County Superior Court, argues that the state constitution and sections of stature bar the state from paying its employees in the absence of a budget.

In his July 31 order, the Republican governor directed that the pay of nearly 140,000 state employees be cut to the federal minimum wage of $6.55 an hour.

Under the order, about 30,000 management employees would be paid $455 a week, while another 8,000 state workers without federal minimum wage protection wouldn't be paid at all until a budget was adopted.

In addition to doctors and engineers, lawyers in Attorney General Jerry Brown's office will receive no pay until a budget is signed, under the governor's order.

Chiang, whose office is responsible for paying state employees, has said he plans to flout the governor's executive order, maintaining that the state has enough money on hand to make ends meet well into October without cutting public employee pay.

"Rather than focus on building consensus for a budget that addresses California's long-term fiscal problems, the governor seems adamant on picking a fight over whether state employees are entitled to the wages they have worked for and earned," Chiang, a Democrat, said in a statement.

Don Scheppmann, Chiang's chief of personnel and payroll services division, wrote a letter to the governor Monday, arguing that changing the state's payroll system is not a simple task.

"If they are not performed thoughtfully and accurately, the system changes could subject the state to further litigation and unnecessary costs," Scheppmann wrote.

As Schwarzenegger and Chiang prepare for what could be a protracted court battle, state lawmakers remain deadlocked over how to close a $15.2 billion budget hole. The state has been without a spending plan since July 1, when the fiscal year began.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.

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