Pay Day Power Politics - All Is Fair In A Budget Crunch

State Controller refuses to cut pay, defies Governor, Courts

Arnie takes meat axe to payroll - low pay, slow pay, no pay

Highly qualified employees of the Golden State are wondering
why they bothered to stay in school.

A California appellate court cleared the way on Friday for
Governor Arnold Schwarzenegger to pay most state employees
the federal minimum wage of $7.25 per hour.

Locked in an impasse with state legislators who refuse to
contribute any further resources to a $19 billion budget
deficit, the Governor had ordered state Controller John
Chiang to cut wages of affected employees to the federal
minimum on the first day of the new fiscal year.

But Mr. Chiang, the official in charge of meeting the
state's payroll, continues to defy the Governor's order, in
spite of court opinions that say the order is legal.

The delay is costing the state $50 million per day,
according to Aaron McLear, a spokesman for Mr.
Schwarzenegger.

Nevertheless, the controller continues to refuse, saying it
is "practically infeasible to do so" because not all
employees would be affected by the order and the state's
computer system will not be able to handle the mechanics of
such a task until a system upgrade is completed in the year
2012.

At the center of the legal issue is a 2003 California
Supreme Court holding that state employees do not have the
right to their full salaries if a state budget has not been
enacted.

To further confuse the issue, not all employees would be
subject to the wage cuts during the budget crisis.

About 37,000 members of employee unions had just negotiated
new contracts with the state, including Highway Patrolmen.
They will receive their full pay day, regardless of whether
the Controller follows the Governor's order.

Salaried managers, who are not paid on an hourly basis,
would get $455 per week, while doctors and lawyers and other
professionals would be paid nothing under current employment
laws.

Everyone agrees the wages would be made up, if and when the
state comes up with a budget.

Mr. Chiang is resistant to face exposure to the liability he
foresees for breaking federal wage laws, which he says are
contrary to the courts' opinions.

"I will move quickly to ask the courts to definitively
resolve the issue of whether our current payroll system is
capable of complying with the minimum wage order in a way
that protects taxpayers from billions of dollars in fines
and penalties," Mr. Chiang told the media in a prepared
statement.

He is up for re-election this year.

According to records obtained by The Associated Press, his
campaign has received about $190,000 from public employees'
unions.