Saturday, July 17, 2010

Madness As Usual

Here we are, the third week in July, and once again California doesn't have a state budget. The state legislature and the Governator are still light years from reaching any kind of agreement, which in this state is hardly new news.

Last year, to "save costs", Arnold Schwarzenegger forced state employees into a 15% pay cut by mandating a 3 day a month furlough. That order expired at the end of the fiscal year (June 30). This year, the governor came up with a new plan: reduce state workers' pay to the federal minimum wage until a budget is passed and signed. He admits that the move won't actually save the state any money (workers would get their pay back once a budget is signed), but he wanted to bring pressure on the legislature to get a budget passed. He claims state law allows him to use state employees as a pawn in the budget battle, and, unfortunately, he may be right.

There's just one problem: the state controller claims that because of the outdated computer system he has to work with, the order cannot be implemented. Yesterday, a Sacramento Superior Court judge ruled that John Chiang's argument had some validity and blocked the implementation.

From the Los Angeles Times:

More than 200,000 state employees will receive their full wages in July and August after a state judge on Friday denied an injunction sought by Gov. Arnold Schwarzenegger to cut their pay.

The Schwarzenegger administration had asked the court to order that the employees' pay immediately be reduced to the federal minimum wage of $7.25 an hour because there is no state budget in place.

The governor has maintained, and two courts have agreed, that state law requires the reductions as California enters the third week of the fiscal year without a spending plan. But state Controller John Chiang, who prints the paychecks, has insisted that he cannot implement the order because of the state's outdated computer system.

Judge Patrick Marlette of Sacramento County Superior Court said that although Chiang was breaking state law by failing to issue the smaller paychecks, he could not discount the computer argument as "frivolous."

The judge's ruling gives both state employees and the state legislature a little breathing room, which is certainly welcome, but the issue still looms for most, but not all, state employees. You see, those unions which met with Schwarzenegger earlier in the process and agreed to reduce state pension contributions for new hires were exempt from the pay cut. So were state legislators and state officials. (That doesn't matter to the governor who is very proud of the fact that he accepts no salary from the state because he is so wealthy he can serve without pay.)

So it's back to the budget table for those who purport to govern our state. Legislators will go back to trying to find where to cut services and costs because raising taxes and cutting business subsidies are off the table. With state unemployment still in double digits, there is little hope that state revenue will rise in the forseeable future.

Dysfunction, thy name is California.



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