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

[teacake]

Perhaps this is a good thing for California. From this "crisis", you guys may have a much needed "reform" and an opportunity to remove the "de adweights" in the state system. Like forest fires, the "old growth" must make room for "new growth". The level of professionalism and the culture that cares about quality must be renewed in California. And a good place to start would be education institutions. For this reason, the CSU system must see a major overhaul, starting from the top with its "old growth" chancellor.

[hilary916]

Do you realize that the CSU/UC is exempt from the governor's order since they're not under his control? They're exempt from his executive order. He's requested that they take paycuts and reduce staff, but do you really think they're going to?

[minimalist syntax]

Believe me, in both the UC and CSU system there have been higher freezes, lay-offs and pay cuts. Some educators have had their teaching load increased. The UC and CSU budget comes from the state. They are making draconian cuts.

[teacake]

While I am not familiar with the system out there in California, I know that CSU is NOT UC. CSU is more like a glorified community college, where quantity is more important than quality. They get their $ from the state based on the FTE (full-time equivalent) enrollment. We have a similar system like that in our home state. But the problem with the CSU system, as we've learned from our visits out there, is they play too much politics at the expense of the health of the students' education. While faculty burn the midnight oil, the administrative staff burn the cash that is intended for education purposes. What ever it is, we are glad our system here is not modeled after the California State University system.

[teacake]

Actually the solution can be rather simple: first, identify where the wastes are. Next, remove the wastes. Problem solved. This is an easy problem because there are so many "dead-weights" in the state system. One trip to a state-run organization of any size or function, one could easily identify these "duds" if he or she opens his/her eyes.

[kellygrrrl]

Heckuva Job Ahnold

[teacake]

From what I've heard, many of state workers are "on vacation" while on the clock any way. While there are a few dedicated workers, it's easy to see there is so much f *a*t that can be cut off a little. There are 23 campuses in the CSU system alone. Each president of a campus gets a salary of over $200,000 a year and a free mansion with all expenses paid, plus a luxury gas-guzzling vehicle provided by the state (fuel and maintenance paid). With all that, they still fail the people of California by lowering the standard of education and creating a culture of corruption. The UC system, on the other hand, is perhaps, the best in the world. We out here on the East Coast, wish to have a system like the University of California.

[VikingQuest]

I worked for the state during summers in college and HS . . .

Why you ask? Because I could be lazy 90% of the time.

[minimalist syntax]

And your laziness is why you no longer work for the state once you moved beyond being a part time worker.

[hilary916]

I'm sure you were a student assistant and had no responsibilities.

[dandypuddin]

Even in jobs where I might be able to slack a little, although I can't remember too many in my life, I never did. It's called work ethic and frankly California did not write the handbook on this. So, your comment that you were lazy on the job 90% of the time doesn't surprise me one bit. Give me good old midwestern work ethic anyday.

[minimalist syntax]

Tr0ll, stop repeating your lies about the CSU's. A few hours ago you told the same story slightly different. The CSU's are excellent universities. They are not research one institutions so they don't turn out PhD's, but they produce essentially all the educators in the state of California. Please give some actual facts as to how they are lowering the standard of education, or is it your illiterate in-laws who are supplying you with all this information as well (as you claimed several hours ago)? All university presidents in public or private institutions live in housing supplied by the state.

[teacake]

Quote: "They are not research one institutions so they don't turn out PhD's, but they produce essentially all the educators in the state of California."

Thank you. You've just proved my point with your own statement.

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"?

[VikingQuest]

I called this long ago:

States and cities will be the next to ask for a bailout because they are just as stupid with the money as any Wall Street firm or Big 3 auto company.

I predicted the most liberal states will need the bailout first: MA, NY and of course CA.

[Rictracee]

no redneck poor red states like Kansas, Alabama, Tennesse and Missippi will need bailout

[Rictracee]

and keep in mind CA is ran by a republican.. so much for it being a liberal state.

[VikingQuest]

Do you actually see Arnold someone that is a conservative? Global warming, open borders, etc.

In most states he would be considered a D.

[hilary916]

He was voted in because of who he is, not his ideology.

[CaliforniaJake]

Schwarzenegger's a typical Republican who doesn't know jack about running the government. For anyone who thinks a Republican cares about the little guy, this is yet another example to prove otherwise.

[VikingQuest]

Are you really that stupid to lay the blame of CA problems on a single man?

Also, Arnold would be considered a Democrat in most states. He just looks like an R compared to the rest of the fools in San Fran.

[minimalist syntax]

Please. Arnold is certainly not a Democrat. However, it is also and perhaps mainly the Republican legislature to blame as they refuse to collect taxes on the wealthy in the state of California. The problem is they want to balance a budget with almost no revenue due to tax policies like prop 13 and hugely reduced intake due to essentially free auto registration fees and the usual ways of arranging for the wealthy to get out of their fair share of taxes. Arnold and the Republicans have been trying to balance the budget on the back of workers on quite a while.

[barriosbabe]

California really is in trouble. I just got off the phone yesterday with a California state employee making 90K per year plus benefits who wanted to harass me as much as possible over a disputed $4.85 fee on a license. I kid you not. I'm not saying waive the fee but you guys have no idea the hassle I've been through. What has that 4 bucks really cost the taxpayers?! Hours and hours and they ay Oh not form X, form Y, so I file form Y then (like the movie Brazil) that is no good either!

I moved my family to Iowa last March.
====

[VikingQuest]

90k for a state employee?

Maybe that is part of the problem.

[teacake]

You are right. There are so many parasites in the state system that this financial crisis could turn out to be a "good thing": the filter out the "fat" in the system. A leaner system is a better system.

My husband and I visit some of California State University campuses last year to check out a college for our daughter (our neighbor's daughter attended CSU Fresno - for a very short time. She hat ed it there). From what we saw and experienced, we would agree with Arnold Schwarzenegger that there should be some serious cut. The CSU system seems to promote the kind of people who are not good role models to our children: they are l-a-z-y, in-competent and corrupt, deeply corrupt. Also, from what I gathered, with only a couple of exceptions, CSU campuses are "safe heaven" for rejects from other institutions.

[minimalist syntax]

I can't believe you were trying to get out of the lousy $4.85 cents you owe the state. California DMV workers are not making 90K a year. That is a fabrication. Lecturers in higher education in the UC system make about 45K a year teach freshman humanities.

[VikingQuest]

What a shock California, look at your budget and see where the money goes:

31% K-12 Education
25.3% Health & Human Services
10.3 Higher Education
9.5% Transportation & Housing
7.3% Rehab & Corrections

Anyone over the age of 24 who isnt a bum, criminal and has their own car doesn't use a dime of this. and that is 75% of your budget.

[jatoner]

what do you expect when you elect a steroid-addled actor with no government experience or ability for governor?

[VikingQuest]

First off, the Gov can be overruled whenever the congress wants to in that state.

Second, feel free to place your blame on one man but this is a failure of the entire government of CA.

[teacake]

Absolutely right. Like the problem we have at the federal level, we cannot blame it on G. W. Bush too much. We should go after those who voted these clowns in the office.

[4real]

How about Arnold donate some of his terminator money. Why did the people of California vote for this guy anyway?

[TallyLass]

I move to Calif two yrs ago and that was my 1st question. Gray Davis (previous gov.) is looking real good right now. Arnold promised to balance the budget, instead just like other rethugs he turned the state over to special interests, with no oversight and no repercussions. I have a friend who is on work comp and she can barely get any medical services, because work comp companies have with Arnold's approval stripped the all consequences for the ins. companies not providing svcs. He's a lousy piece of work. He wasn't qualified to be a dog catcher.

[VikingQuest]

You complain about a couple of million when the problem is multi billions?

[SENATORCALLENBOWE]

HMMMM.WE THINK IF SO YOU SHOULD LOAN US....EXCUSE ME....GIVE US SOME MONEY :) DONT YOU?

[lornejl]

This is where it started, notice a very prominent repubs name in the story..

WASHINGTON, D.C. — After Enron Corp. used its vast web of political connections to win December 2000 passage of commodities trading legislation that helped the company shield its energy trading activities from government scrutiny, California’s energy crisis suddenly took a dramatic turn for the worse as artificial supply shortages led to frequent rolling blackouts, according to a new Public Citizen report released Friday.

The legislation reducing government oversight of energy trading was muscled through Congress — without a Senate committee hearing — with the aid of U.S. Sen. Phil Gramm of Texas.

http://www.citizen.org/pressroom/release.cfm?ID=983

[Carolab]

And it continued with more Enron style selling of municipal bonds in California by Goldman Sachs and other big banks. These bonds were sold again as credit default swaps, just like Enron, and the banks collected big $ off the fees and derivatives sales, then informed their investors to short sell because of risk of default in CA. This resulted in the bonds forming high-risk, driving the price of the default swaps up, and making them pay off higher in case of default. Also, it drove down investor interest in the bonds, resulting in short sales, which drove the interest rates up for borrowing more in California by multiple millions.

There are a several articles in the LA Times about this. Google municipal bonds derivatives in California or Goldman Sachs municipal bonds derivatives in California. This will lead to a few of the articles. You will also see that fraud in muni bond derivatives market has been under investigation for a few years and that Warren Buffett had inserted himself into this market as well.

[johnnygoodwud]

so prisioners get free dental/medical, and alot of us working slobs can't afford health insurance. what's wrong with that sentence? put the inmates to work, no work, no food/medical

[mooph]

Prisoner dental typically consists of pulling teeth -- anything above a cleaning, filling or front cap.

Still, it's more than a lot of people get.

[Freedomscap]

The real estate market in Los Angeles is really off.

[mirandawilde]

Two months without pay for state workers??
What a ridiculous solution. It sounds like a recipe for disaster.
There are so many extraordinarily wealthy people in California- those are the people who should have to make sacrifices first. Instead of a person in the middle class having to go for two months without any pay at all, how about asking people who have multiple million-dollar homes to go without a facial or a massage or mani-pedi for two months?
There is a huge imbalance between the people who can't get their basic needs met and the people who live lives of excessive consumption- such as celebrities and athletes and CEOs- and this crisis is pointing to the fact that those people who make astonishing amounts of money shouldn't, NOT to the fact that the middle class should join those who can't even get basic needs met.

[mooph]

Two days per month. (Maybe just a typo?)

Still sucks. That's what's been done at the small business I work at, too.