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California governor threatening to lay off 10,000 state employees
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08:50, February 12, 2009

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California Governor Arnold Schwarzenegger is threatening to lay off as many as 10,000 state employees if a new budget is not passed this week, it was reported on Wednesday.

The move would save the state 750 million U.S. dollars annually if the jobs are eliminated by July 1, Aaron McLear, Schwarzenegger's spokesman, said in remarks published by the Los Angeles Times.

"This is not a (negotiating) tactic," McLear said. "This is simply out of necessity. The state is running out of money. The governor has very few options at his disposal that he can unilaterally use to cut back on state spending."

The move drew criticism from workers' unions. Yvonne Walker, president of the Service Employees International Union Local 1000,which represents 95,000 state employees, called the layoff announcement a ploy designed to put pressure on lawmakers with whom Schwarzenegger is negotiating behind closed doors.

Her union is in the midst of negotiations with the state over the worker furloughs.

"The governor's announcement today is just another mechanism to instill fear and uncertainty in our membership, so he (the governor) can get in secret what he can't get in an open public forum," she said in a statement published in the paper.

Meanwhile, legislative leaders are working toward a deal that could wipe out the state's 42-billion-dollar deficit with temporary tax hikes on retail sales, cars, gasoline and personal income, the paper said.

While legislative leaders and the governor said they have not agreed on a fiscal plan, Senate President Pro Tem Darrell Steinberg, a Democrat, said negotiations are just about complete and a vote will be held in the Senate by Friday.

He expressed confidence that the plan would ultimately get at least three Republican votes in the Senate and three in the Assembly, the minimum needed for passage, as well as Schwarzenegger's signature.

To resolve the budget deficit, Democratic leaders laid out plans which would temporarily increase sales taxes by one cent, bringing the overall sales tax rate in Los Angeles County to 9.75 percent, and motorists would pay 12 cents a gallon more for gasoline, the paper quoted legislators as saying.

Vehicle license fees would nearly double, jumping from the current rate of 0.65 percent to 1.15 percent of the value of a car or truck, said the paper.

The plan also includes a temporary personal income tax surcharge which will be a quarter-percent of taxes owed, according to the paper.

All of the taxes would be in place for at least two years. They would remain in effect for five years if lawmakers agreed to put tough new spending restraints, demanded by Republicans, on the ballot and if voters approved them, the paper said.


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