Schwarzenegger orders hiring freeze, worker cuts

SACRAMENTO, Calif. — Gov. Arnold Schwarzenegger on Friday ordered a state hiring freeze and payroll cuts to conserve cash as California struggles to deal with a $42 billion budget deficit.

The governor issued an executive order that requires state agencies to reduce payroll by 10 percent, which could lead to massive layoffs. He also ordered the state's 235,000 employees to take two days off a month without pay, starting Feb. 1.

Schwarzenegger also issued an executive order calling lawmakers back into session to deal with the budget for the third time in two months. On Thursday he announced he would veto an $18 billion Democratic deficit-cutting package that he said didn't do enough to address the financial crisis.

In a letter to state workers, Schwarzenegger said California must take emergency steps that will require sacrifices from everyone.

"It is imperative that state government look inside itself and be part of the solution," the governor wrote. "We simply have no other choice."

Labor officials said they were considering filing a lawsuit to prevent job losses.

"We definitely think we have grounds for filing an unfair labor charge," said Jim Herron Zamora, a spokesman for the Service Employees International Union, Local 1000, the largest state employee union. "Our contract doesn't allow him to do this."

Officials warn that the state will run out of cash in February unless Schwarzenegger and lawmakers can reach a deal to close the budget gap with spending cuts, revenue increases or a combination of both.

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Schwarzenegger ordered all state employees to take two days off a month without pay or take a similar salary cut to achieve $1.3 billion in savings through the next fiscal year.

On top of that, the governor directed agencies that get their money from the state's largest budget account, the general fund, to achieve a 10 percent payroll savings. Officials said that could lead to an undetermined number of layoffs.

Department of Personnel Administration spokeswoman Lynelle Jolley said any workers who lose their jobs as a result of the order could seek employment at other state departments that use special state funds.

"We're hoping we can do this with the least number of layoffs possible but the goal is to address this imminent cash crisis," Jolley said.

Lawmakers adjourned for the holidays Thursday after Democrats pushed through a package of spending cuts and tax increases using a creative maneuver to bypass Republican opposition.

Schwarzenegger's decision to veto the package left Democratic leaders scrambling to save their plan. They argued that it met some of his demands for speeding up public works projects and selling surplus state property.

Assembly Speaker Karen Bass, D-Los Angeles, said it was "mind-boggling" that the governor would throw away a package that begins tackling the state's fiscal problems because it didn't contain exactly what he wanted.

"It's like a child telling Santa if you don't bring every single item on the list, then stay out of my chimney," Bass said. "I am hoping that the governor over these next few days will really reconsider saying he will veto the budget."

Bass and Senate President Pro Tem Darrell Steinberg, D-Sacramento, said they would remain at the Capitol to negotiate with the governor or his staff, but would not call the other 118 lawmakers back until a deal could be reached.

Under the governor's special session declaration, lawmakers have 45 days to send the governor bills that address the budget crisis. If they fail to do so, the Legislature may not act on other bills.

The governor had sought what he said was assistance for homeowners facing foreclosure, broad authority to relax environmental regulation on public works projects and more toll roads. Democrats allowed only partial waivers for a limited number of road projects and for certain state properties up for sale.

Additionally, Schwarzenegger requested deeper cuts than Democrats were willing to offer, such as reductions in welfare and senior assistance programs, greater flexibility to reduce school spending, and the elimination of two of 14 state employee holidays.

Environmental advocates also questioned why the governor would toss aside the only deficit-cutting legislation to reach his desk since he declared a fiscal emergency on Nov. 5. Paul Mason, deputy director of the Sierra Club in California, suggested that by demanding environmental exemptions, the governor was betraying his public image as a crusader against global warming.

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Associated Press Writers Samantha Young and Steve Lawrence contributed to this report from Sacramento and Garance Burke contributed from Fresno.

Comments

[BlackYowe]

California always lives on the edge. When will they stop making people Gov. that have no experieince in the real world like Arnie and Ronnie? UGH!!

[mrcontinental]

I have no sympathy for California. This is what you get when you put a clown in office along with GOP reps who only believe in tax cuts. I see rioting and looting in your future.

[hypnotoad72]

$42 bil?! What happened to it being only $22 bil?

Wasn't Gray Davis ousted for poor fiscal management?

[mamacat]

The Republican Governor thinks that it is better to cut workers' pay and even lay them off, than to raise fees on those who can most afford to pay them. Why am I not surprised? When is the last time that a Republican anything thought it was better to make the super-rich pay their fair share than to lay off workers?

[cayuse]

Makes sense to the horse. People have no money to buy things. So give more money to make more things no one can buy. Infact use that money to lay off more workers so more people cannot buy. Guess what it will lower prices and in the end it will all get cheaper for us. Just have patients Reagonomics is dead or dieing.

Leave it to a republican "to lead a horse to water and then think he can force him to drink". No horse sense or Common Sense

[munki]

Our Governor... our legislature...
Did you make California, Inc?
California is such a desirable state by many nationals...
What did we do wrong?
Fundamental issue... Californians and California State officials...
We need to TALK!

[yogajan]

The CA governor has line-item veto rights. So before you blame the problem totally on the legislature, you should ask why Arnie is not introducing good legislation and exercising the veto when he doesn't like what is put on his desk.

For starter, get rid of the tenure system in the Cal State and UC systems. It will get rid of the deadwood who have jobs for life.

[polyticks]

Brilliant suggestion. Let's put you in charge of faculty recruitment for the UC and CSU systems
and watch you convince the best scholars and scientists in the country to move to California, where they won't be able to afford to buy homes, will get paid 15% less than the the national average market value faculty salary, and oh, by the way, did we mention you'll never get tenure because we don't have it here? But the weather's really nice. It will be like the Dust Bowl, we'll have to set up itinerant camps just to handle the academics flocking to California to take us up on these irresistible offers. Then when the two systems completely deteriorate and fall apart as a result, everyone can just send their kids to Stanford, USC, and the east coast Ivy Leagues, no big deal. Perfect solution.

[Mildmannered]

Further to many of the comments below: Yes, we Californians are very proud of our college system (UC's, CSU and community -- as well as our private colleges). Take a look at http://colleges.usnews.rankingsandreviews.com/college/national-top-public -- six out of the top 14 are UC schools.

[SarahSarah]

Maybe they could save a buck or two by releasing some $35,587 a year prisoners...

[Mildmannered]

yes, we should take a look at programs aside from expensive prison incarceration for many of our non-violent prisoners

[polyticks]

That would be Proposition 5, which the California populace in its infinite wisdom voted down just last month. And the Schwarzeneggator was of course opposed to it, because he thinks it's a great idea to spend three times more on the prison system than on the UC and CSU systems, even though he can't afford (and is under court order) to pay for health care for all those non-violent people he thinks it's such a great idea to keep locked away.

[cayuse]

Well running empty C130's sure has raised the price. And I said they did not have Horse Sense

[dlrdmd1]

if you know anything about California you know the Assembly is Democrat controlled and they have not balanced a budget in years. I'm from Cali and this happens every year. If they would cut spending and balance the budget we wouldn't have this mess out here. Don't blame Aaahhnold, put it where it belongs, the legislators who have caused this.

[Mildmannered]

and the republican legislators who are blocking a balanced budget. even though they are in minority a super-majority is required to pass the budget, and they are obstructionists

[TrueIndy08]

right... blame the DEMOCRATS... typical RETHUG.... you people don't know anything about governing.... so please, tell your fellow A-holes to stop blocking everything, grow up, and work to get things done.....

We have a LINE ITEM VETO here in CA.... maybe Arnold should look into that... that would be good for starters!!!

[polyticks]

Arnold single-handedly turned back at least $25 billion in vehicle license fees over the past five years and thought it would be a great idea to borrow another $15 billion on top of the existing debt to pay off our short-term debt obligations back then. And, oh my, look, now there's a $40 billion deficit, how the heck did that happen? Must be the legislature's fault. In fact, you probably voted for the Schwarzeneggator in 2003 and for his brilliant $15 billion loan in March 2004 when he asked you to. So can we say that it's YOUR fault we're in this mess? Everyone in California knows that it's the Republicans who block all the budget deals (including the latest one) because they refuse to accept revenue increases in any form whatsoever --they'd rather ruin the state to prove an ideological point. And since the budget has to pass with a 2/3 majority (another brilliant provision of Proposition 13 that you probably voted for as well, so once again, can we blame you?), a Republican minority can stymie the budget at will.

[barriosbabe]

"Also if your claim that the CSU produces "essentially all the educators" in the state is true, then this explains the low quality education the kids get in K-12. Have you heard "garbage in garbage out"?" - teacake.

What cr@wled up your @zz?

Some of the finest English elementary teachers in California, just to pick an example, graduated from Cal State Long Beach!

Signed, a UC person .......

[newpotusplease]

WEIRD

Gov of Florida Charlie Crist just gave state workers two days off WITH PAY

and Florida has a $2 BBBillion deficit

what does Charlie know that Arnold doesn't?

[dlrdmd1]

Uuuh, he doesn't know how to balance a budget?

[Bitsko]

Ahnuld, you are one ugly Austrian.

[teacake]

Don't blame it on Arnold. Blame it on those who put him in the governor position.

[Karma7]

No sir. Arnold is totally to blame for his own decision.

He could have done the right, smart thing and taxed soda pop and other products that endanger human health, and no one would have criticized him - except for the rich, irresponsible corporations that contributed to his gubernatorial campaign and profit from sale of these products.

Instead he reduces school spending and targets childrens' much needed educational programs, which will negatively affect the future of California's society, and also cut vital assistance programs for the the poor and seniors, which will endanger many lives.

I think Arnold's choice is reprehensible.

[poorman]

Serves you Californians RIGHT for electing this Republican clown MULTIPLE times. Lovely job, Californians !

[TrueIndy08]

I am sad that our state voted for him... I can proudly say I never voted for him and I can't wait to see him go

[polyticks]

You're absolutely right, of course, everyone was enamored (and still appears to be) of his swagger and tough talk -- but it's all talk and no action, he hasn't taken one tough fiscal ACTION in five years, and loves to blame everyone but himself. The man is a demagogue, and some of us have been very clear on this from day one. But we're in the minority.

[Apollonavigator]

It's amazing how few of you understand what is going on in CA. We have a state legislature dominated by (D) where (R) is in the minority. Ans because a super-majority is need on all budget issues, we can not get a budget passed to save our life.
All the (D)s can think of when we have a shortfall is to raise taxes and fees, and all the (R)s come up with are cuts. No middle ground, no compromise. As a result, we have no action at all and no budget. Problems don't get solved and bills can't be paid. The Governor has no choice but to cut spending. He is of course also trying to pressure the lawmakers into some type of action since he has no other ability to force the issue.
The cost of living and of programs in CA are what we as a whole make them to be. There are many programs which should be cut, and many which need more support. But until the legislature get their collective heads together nothing will happen, and the state will go broke.
And yes, it is our own fault for re-electing te same old bums into office.

[hilary916]

So cutting employee pay by 10% is the answer? The Legislature should be cutting their own pay or not get paid at all because of their mismanagement that helped create the mess.

[Apollonavigator]

I agree. So how do we convince the legislature to cut their own pay. The Gov. can't do it, we can't do it. Only the legislators can, and fat chance of that happening.

[julia23]

So I take it you're not in favor of the $173 per day perdium the legislators are getting paid to work on this budget on holiday time?

[Emlyn]

It's too bad that we voters in the State of California cannot vote out that 2/3rds majority that we have to have. It would make it a lot simplier and maybe something could be done. I'm not saying that the Dems are perfect but the Reps stink. Every chance they get, they say that money must be cut from programs for the poor, seniors, disabled, and education but I don't see them closing that loophole where rich people living in California can buy and keep a yacht in Oregon without paying thre State of California Sales Tax. To me that is wrong. Also, everytime the state needs money (which is all the time), they rob the gas tax fund which is supposed to keep our roads safe and in good repair I am so disgusted with the situation and including the Governor. I won't say he is the worst governor we ever had here in California but he sures isn't very good.

[barriosbabe]

People get the corrupt politicians they elect.

[aweissnet]

Yeah, well I think we believe the dems are trying to maintain fairness for the working class and impoverished.

The republicans just want them to die out or live in the sewers.

Example: Additionally, Schwarzenegger requested deeper cuts than Democrats were willing to offer, such as reductions in welfare and senior assistance programs."

Glad the dems are watching our backs.

There are better solutions than putting the more unfortunates on the streets.

[dlrdmd1]

100% correctomundo, my friend

[4TJefferson]

Arnie! I thought the $15 billion dollar bond you got passed a couple of years ago was supposed to solve the "crisis"; what happened? Raise the gas tax in California to offset the $20 billion stollen from California from Enron! Call it the Enron Gas Tax if you like.

[VikingQuest]

California has the highest gas tax in the country by a long shot right now.

[teacake]

California may also have the highest number of super-size, super-gas-guzzling SUVs "in the country by a long shot right now".

[teacake]

Since the fact that you guys out there in California have so many inmates getting fed by tax dollars, why don't you guys send them to work to pay off their 'debts to the society"? Make them G. W. Bush's army and send them to fight Bush's war instead. This way you guys can cut at least 10 billions a year.