Governor signs Executive Order, Controller refuses to comply.

Governor Arnold Schwarzenegger and State Controller John Chaing are locked in a conflict over ways to solve the current budget crisis in Sacramento

The governor signed an Executive Order today freezing 200,000 state employees’ salaries at the federal minimum wage of $6.65 an hour until a budget is signed. The order also terminates the jobs of 22,000 temporary and seasonal employees, student assistants, retired annuitants and permanent intermittent employees.

Chaing send the governor a letter stating his refusal to comply, citing a sufficient amount of money in the budget through September to cover all state expenditures and that the authority to adjust the pay scale of state employees on a variety of levels is neither the governor’s or the controller’s duty.

[view:node_ad=5] 

Schwarzenegger’s Deputy Press Secretary Jeff Macedo said that most state employees would not suffer financial hardship because Golden 1, the credit union servicing state employees, was offering no-interest loans to make up the difference, with payback due the credit union once the budget was signed. Back pay given to employees upon settling the budget will not include interest.

Macedo was quick to point out that legislators and their staff and appointees have not been paid since July 1, the early deadline for budget signing. 

The governor cited restrictions in the state and federal Constitutions for his action, saying the state has no authority to pay a variety of entities, including vendors and contractors for fiscal 2008-2009 expenses, payroll for legislative staff and appointees, transfers for state colleges and universities, highway user taxes, non-federally mandated social service programs and tax relief payments to low-income seniors and the disabled.

Entities essential to public safety are exempt from the restrictions on salary and overtime. State police, Highway Patrol and fire officials will not find themselves affected. The order does apply to workers at the Department of Motor Vehicles in Newhall and employees of the Department of Water Resources. The Vista Del Lago Visitors Center is run by two staff members considered "guides" which are part of the Operations and Maintenance division, which is exempt from the layoff/minimum wage order.