After declaring a state of financial emergency on Wednesday, Governor Arnold Schwarzenegger ordered 150,000 California state employees to take three days off each month to relieve the rapidly diminishing state coffers.

Starting in August, state employees will be forced to take unpaid furloughs till the state budget is  resolved. State employees had just finished a mandatory furlough on June 30 for the previous fiscal year, which had also required them to take three days off every month.

“Without a budget in place that addresses our $19 billion budget deficit, every day of delay brings California closer to a fiscal meltdown,” said Governor Schwarzenegger in a press statement. “The State Controller has indicated he could be forced to issue IOUs starting in August in order to avert a cash crisis. Our cash situation leaves me no choice but to once again furlough state workers until the legislature produces a budget I can sign.”

This is the fifth week the state has continued to scramble to try to figure out a budget for the new fiscal year.

CAL Fire and California Highway Patrol employees are exempt from the furloughs. The only state employees exempt from the furlough are unions who have signed contracts with the Governor’s administration. These contracts would include a cutback in pensions and concessions.

However, the judge also said that he would make a final ruling near the end of summer. Hopefully, by that time, the state will have passed a new budget.

“Reducing pay and then restoring it in a timely manner once a budget is enacted cannot be done without gross violations of law unless and until the state completes its overhaul of the state payroll system and payroll laws are changed,” Chiang said a statement.

This is not the first time Chiang and Gov. Schwarzenegger have gone head to head on whether or not to reducie state worker pay to minimum wage. In 2008, Gov. Schwarzenegger ordered to enforce minimum wage on state workers, citing a 2003 State Supreme Court ruling which found that the state could not pay normal wages without legislative appropriation or a passed budget. The controller again refused to comply, but by the time a court ruled affirming the administration, the budget had been passed and the order was moot.

                                        

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How serious can the deficit be? Politicians don’t worry about a waste of $400 million annually!

A financially disastrous decision made years ago to transfer parole violators from county jails to prison for violation disposition increased the violation rate from 20% to 35%. That decision costs the State about $400 million annually in prison operating costs and $2.7 billion for construction of 9,150 prison beds. If the State contracted with counties for parole supervision, violation rates would return to the national average of 20%, eliminating those costs. Oregon and Minnesota have contracted with counties for parole since the 1970s. Previous attempts to authorize county operated parole in California have been defeated due to union opposition. The politicians could save billions if they could resist union opposition and finally pass the required legislation. They won’t because taxpayers don’t have nearly as much influence as public employee unions. They need to stand up to the correctional employee unions!

rich mckone , July 30, 2010

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