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State workers lose jobs amid Calif. budget crisis
California Budget C 6442871
California Governor Arnold Schwarzenegger sets down the pen after signing an executive order eliminating 22,000 part-time and temporary positions and ordered that 200,000 state workers receive the federal minimum wage during a news conference at the Capitol in Sacramento, Calif., on Thursday, July 31, 2008. At the right is Director of California Department of Personnel Administration David Gilb. - photo by Associated Press
    SACRAMENTO, Calif. — Thousands of state workers were told to stay home Friday under an order by Gov. Arnold Schwarzenegger aimed at cutting expenses for California’s cash-strapped government, but a lawsuit filed by a union claims the governor is overstepping his authority.
    Schwarzenegger’s order, signed Thursday as he struggled with a budget stalemate, eliminated 10,300 seasonal, contract and part-time positions. It also ordered that up to 200,000 permanent, full-time state workers will receive the federal minimum wage of $6.55 an hour in their paychecks until the budget is passed. They would then be reimbursed.
    The lawsuit by the Service Employees International Union — California’s largest state-employee union — said laying off workers without notice violates the state Constitution and numerous laws, including those governing seniority.
    Schwarzenegger cannot decide such sweeping employment actions by ‘‘executive fiat,’’ according to the lawsuit filed in Sacramento County Superior Court.
    ‘‘The governor did an end run around the labor process and the government code,’’ union attorney Paul Harris said.
    The SEIU and another union representing state attorneys also filed unfair labor practices allegations saying the administration is trying to illegally influence ongoing contract talks.
    The governor’s biggest headache, however, is coming from another state elected official, state Controller John Chiang. His office cuts the paychecks for state employees and is refusing to comply with the part of Schwarzenegger’s order related to wages, which would save the state far more money than the layoffs.
    Schwarzenegger spokesman Aaron McLear said the governor will do whatever is necessary to make sure the state can pay its bills.
    ‘‘The state Constitution and a Supreme Court decision clearly support the governor’s action,’’ he said. ‘‘He is prepared to defend this in court if necessary to protect the state’s ability to meet its obligations.’’
    Schwarzenegger said his order was needed to avoid a financial crisis until the state passes a budget. Democratic and Republican lawmakers are divided on how to deal with a $15.2 billion deficit for the fiscal year that began a month ago.
    To solve the crisis, Democratic lawmakers want to raise taxes on corporations and the wealthy by about $8.2 billion, while Republicans are pushing for long-term reforms that include a spending cap and a rainy-day fund.
    Schwarzenegger’s order for layoffs covers retired state employees who work under contract, temporary and part-time workers, seasonal employees and student assistants. Many in those categories may be exempted if they are deemed crucial to public safety, but officials said 10,300 would receive pink slips immediately.
    ‘‘Now I can’t pay my mortgage. I can’t pay anything — lights, gas, food,’’ said Celeste Knox, a mother of two who made $15.98 an hour as a temporary office assistant with the Department of Consumer Affairs. ‘‘I’ve just been crying and trying to find a way to make it work. So far I haven’t found one.’’
    The administration estimates the layoffs and suspending overtime will save the state as much as $80 million a month, and that the deferred wages would save $300 million to $1 billion a month. The administration gave state agencies until Friday to compile lists showing how many of their employees were crucial to public safety and should be exempted from layoffs or the minimum-wage order.
    Schwarzenegger’s administration may have to sue the state controller’s office to force it to comply with the part of the order paying employees minimum wage.
    The governor and the controller are clashing over a 2003 state Supreme Court ruling allowing the state to pay workers the federal minimum wage during a budget impasse. Schwarzenegger cited the ruling in his executive order, but Chiang interprets it differently, saying it’s his job to decide how much to pay employees.
    ‘‘The controller will continue to pay full salaries,’’ said Hallye Jordan, a spokeswoman for the controller’s office.
    She said even if Chiang felt the order was legal, it would take months to reprogram the office’s outdated computer systems to handle the across-the board pay cut. ‘‘This is a system that’s over 25 years old,’’ Jordan said.
    Schwarzenegger insisted that his action was designed to avoid a fiscal crisis as the state remains without an approved spending plan. But it also was hoped to pressure state legislative leaders into brokering a budget deal.
    California is the only state with a fiscal year beginning July 1 that remains without a budget.
    Legislative leaders were not meeting to discuss the budget on Friday, but the governor’s office said Schwarzenegger knows they are working to get it done as quickly as possible. Schwarzenegger’s schedule said he was holding private meetings in Los Angeles.
    ‘‘I think the leaders share the governor’s sense of urgency in getting a budget as soon as possible,’’ McLear said.

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