The situation in California is getting interesting. Three days ago I wrote Schwarzenegger Needs To Face Reality: California Is Insolvent.



In a better late than never scenario, Schwarzenegger is getting tough. The LA Times is reporting Schwarzenegger plans to slash state workers' pay till budget passes.



Gov. Arnold Schwarzenegger is planning to cut the pay of about 200,000 state workers to the federal minimum wage of $6.55 an hour until a budget is signed, according to a draft of the governor's order obtained by The Times.



Administration officials said Schwarzenegger is expected to sign the order early next week as part of an effort to avert a cash crisis. The controversial move, likely to be challenged in court by public-employee unions, would save the state about $1 billion a month, the officials said.



Workers would be repaid their lost earnings once a budget was in place.



The order also calls for the state to immediately lay off 19,000 part-time workers, stop overtime payments for almost all employees and cease all hiring until a budget is enacted. The deadline for passing a budget was July 1, and without one California may be unable to borrow billions of dollars needed to keep the state solvent.

Too Bad It's Not Permanent





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