CSUN University News Clippings

Governor to request 5 percent pay cut for state workers

(May 29, 2009)

By Kevin Yamamura and Jon Ortiz
Published: 05/29/09

Gov. Arnold Schwarzenegger will ask for a 5 percent across-the-board pay cut for state workers to save $470 million in next year’s general fund budget and to preserve cash, a spokesman said Thursday.

The cut will be included in an additional $3 billion worth of reductions the administration will propose to the Legislature today, according to Schwarzenegger press secretary Aaron McLear.

The administration said the latest round of cuts is necessary because the economy has deteriorated since the governor first proposed ways to close a $21.3 billion gap between state revenues and spending earlier this month.

The pay cuts would affect 235,000 workers under the Republican governor’s control. The state’s judicial and legislative branches would be exempt because they are autonomous, but McLear said employees who work for constitutional officers would receive a pay cut.

“Voters gave the leaders of this state a mandate to cut government spending, and that’s exactly what we’re doing,” McLear said, referring to voters’ rejection last week of three ballot measures that would have raised $6 billion in cash.

The pay cuts would come on top of the governor’s proposal to maintain two-day-a-month furloughs and lay off 5,000 state workers. Under the latest plan, workers would receive no time off in exchange for the 5 percent salary reduction.

Between the furloughs and pay cut proposal, affected workers would receive 14.2 percent less pay than a year ago.

Yvonne Walker, president of Service Employees International Union Local 1000, which represents 95,000 state workers, said she didn’t think the Democratic-controlled Legislature would support the governor’s plan.

“I would hope that (the governor) isn’t serious, but if he’s not, then why would he put something like that out there and panic people?” Walker said in a Thursday evening telephone interview. “That’s not good governance. That’s not being a good employer.”

Instead, Walker said Schwarzenegger should lay off nonunion workers hired through personal vendor contracts or close unspecified corporate-tax loopholes.

As the economy has crumbled, the state’s projected general fund spending has gone from $103 billion last September to less than $80 billion for the coming fiscal year.

The pay cut would save $470 million by reducing pay for 100,000 general fund employees, as well as $415 million by trimming salary for special fund workers. The latter move would not have a direct impact on the general fund, but it would preserve cash as the state struggles to pay its bills.

California is seeking a federal loan guarantee so it can borrow $10 billion to $23 billion later this year. The state traditionally borrows money to help with cash flow.

Bruce Blanning, executive director of Professional Engineers in California Government, said Schwarzenegger’s proposal to include workers in departments outside the general fund would do nothing to solve the state’s budget problems. And many of the 11,000 or so engineers in the union work on infrastructure projects, so cutting their pay punishes a professional group whose work “creates jobs and brings in federal money” for California, Blanning said.

Schwarzenegger plans to address a joint session of the Legislature Tuesday to discuss his proposals to solve the state’s new $24.3 billion deficit.

Besides suggesting a 5 percent pay cut for state workers, he proposed this week eliminating welfare grants for poor families and closing a low-cost health care program for children of low-income earners.

The governor will hold a “Big Five” meeting with Democratic and Republican legislative leaders after the joint session to begin negotiating the budget. He and the leaders hope to reach agreement next month so the state can make cuts before the current budget year ends June 30, and the state can borrow cash from investors in July.

Schwarzenegger wants the Legislature to impose the pay cut outside the contract-negotiation process, an option recommended by the nonpartisan Legislative Analyst’s Office last week. All unions but one representing California Highway Patrol officers are without a contract at the moment. McLear said the Governor’s Office believes lawmakers can supersede contract provisions to impose a 5 percent pay cut – even for the CHP.

Schwarzenegger has suggested a long list of cuts for state workers over the past year.

His first move came last July with an order that state worker wages be cut to the federal minimum of $6.55. That same order laid off about 3,500 part-time employees, students and retirees who returned to state service. A court challenge kept him from reducing pay.

As the state’s finances worsened, Schwarzenegger in November proposed furloughing state workers one day per month.

The Legislature didn’t go along, so in December he ordered furloughs for two days each month starting in February. The hourly reduction translates into a 9.2 percent drop in pay. Meanwhile, the administration persuaded lawmakers to enact new workplace rules that tighten overtime accrual and erased two paid holidays.

As the February furloughs kicked in, the governor warned that about 20,000 of the state’s least-senior employees might be laid off.

Roughly 6,000 of them have since moved out of general fund positions into other state or private jobs, the administration said. Earlier this month, the state issued 5,000 layoff notices telling state workers that their positions will be eliminated.

A 5 percent pay cut on top of previous cuts to state workers’ pay and benefits would be hard for many to absorb, said Brady Oppenheim, spokeswoman for the California Association of Psychiatric Technicians. The union’s 7,000 members work in state prisons, mental hospitals and developmental centers.

“It all adds up to reduced services and safety in our 24-hour facilities,” Oppenheim said.

Publication: Sacramento Bee