Arnold Schwarzenegger is threatening to slash the salaries of California state employees to the federal minimum wage to keep the state solvent amid a deepening cash crisis. The state has been unable to agree how to tackle a 15.2 billion budget deficit. With California running out of money, the governor's spokesman said all options were being considered. The temporary pay cuts would affect 200,000 people and save as much as 400 million a month. "We're in a situation right now where we're about to run out of cash," the spokesman said. "That would put us in a very dangerous position so this is about making sure the state stays solvent. We know it's not going to be popular but we know it's the right thing to do." An executive order has been drafted that would stop California from hiring non-essential workers. Under the -proposal, the state's 20,000 temporary workers would also have their contracts -terminated. Schwarzenegger has been criticized for actively considering the cuts with John Chiang, the state controller, calling the move a "policy ploy". "Forcing public servants to involuntarily loan the state cash by foregoing their hard-earned paychecks puts an untenable burden on our teachers, healthcare workers and those who provide critical public services," he said. Democrat Karen Bass, speaker of the California assembly, said the governor should refrain from "putting public servants in the crossfire of this budget battle". But time is running out to solve the mess. The state's legislature is deadlocked, with Democratic members pushing for new revenue-raising measures and Republicans calling for cuts. The budget was due to be signed off on
July 1. There are concerns that unless drastic action is taken California will not be able to -borrow the money needed to keep the state solvent.
Monday, 28 July 2008 08:23
Schwarzenegger Threatens Salary Slash
Arnold Schwarzenegger is threatening to slash the salaries of California state employees to the federal minimum wage to keep the state solvent amid a deepening cash crisis. The state has been unable to agree how to tackle a 15.2 billion budget deficit. With California running out of money, the governor's spokesman said all options were being considered. The temporary pay cuts would affect 200,000 people and save as much as 400 million a month. "We're in a situation right now where we're about to run out of cash," the spokesman said. "That would put us in a very dangerous position so this is about making sure the state stays solvent. We know it's not going to be popular but we know it's the right thing to do." An executive order has been drafted that would stop California from hiring non-essential workers. Under the -proposal, the state's 20,000 temporary workers would also have their contracts -terminated. Schwarzenegger has been criticized for actively considering the cuts with John Chiang, the state controller, calling the move a "policy ploy". "Forcing public servants to involuntarily loan the state cash by foregoing their hard-earned paychecks puts an untenable burden on our teachers, healthcare workers and those who provide critical public services," he said. Democrat Karen Bass, speaker of the California assembly, said the governor should refrain from "putting public servants in the crossfire of this budget battle". But time is running out to solve the mess. The state's legislature is deadlocked, with Democratic members pushing for new revenue-raising measures and Republicans calling for cuts. The budget was due to be signed off on
July 1. There are concerns that unless drastic action is taken California will not be able to -borrow the money needed to keep the state solvent.
