California governor, controller fight in court over state budget

17:42, July 09, 2010      

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California Governor Arnold Schwarzenegger proposes his 83.4 billion U.S. dollars state budget plan in Sacramento, California May 14, 2010. The plan calls for the elimination of the state's welfare-to-work plan (CalWorks) and state subsidized daycare, freezing local school funding, and more pay cuts for state workers. (Xinhua/Reuters Photo) California Governor Arnold Schwarzenegger and state Controller John Chiang will settle their differences in court over whether the state should cut its pay of the state employees to minimum pay to help solve a serious budget shortage.

Last Friday, Schwarzenegger ordered state Controller John Chiang to reduce payment of state workers to the minimum wage allowed of 7.25 dollars an hour due to the lack of state budget.

Approximately 200,000 workers employed by the state government will see their wage reduced for the month of July. However, 37,000 state workers were excluded from this measure as they have already made tentative labor agreements with the state government.

The California governor cited a Supreme Court 2003 decision that without a budget to allocate money for state payroll, worker's fees can be decreased to minimum federal wages.

California failed to pass a budget as of last Friday for the new fiscal year, as the California Assembly can not agree on one of the three proposals to close the 19.1 billion dollars deficit, one from Schwarzenegger, one from Assembly Democrats, and the other from Senate Democrats.

A state appeals court ruled last Friday that the governor has the authority to lower most state workers' pay to the federal minimum wage if a state budget isn't in place.

The ruling came one day after Governor Schwarzenegger ordered the state controller to cut pay for the state workers to the federal minimum wage of 7.25 dollars per hour.

However, instead of taking the governor's order, John Chiang filed a cross-complaint against the governor's Department of Personnel (DPA) Wednesday, saying an order to reduce pay for state employees forces him "to choose between violating the pay letter or violating various federal and state laws."

Chiang noted that the DPA has not made any serious effort to work with the Controller to reach a resolution of the issues or to provide clarification to the controller regarding his rights, duties and responsibilities in paying salaries of state employees during a budget impasse.

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