SACRAMENTO, Calif. — With California’s cash dwindling and legislators still debating a new budget, Gov. Arnold Schwarzenegger eliminated thousands of part-time and temporary state positions Thursday and ordered that 200,000 state workers receive the federal minimum wage.
His signing of the executive order had been expected since last week but stood as a stark illustration of the cash problem facing the nation’s most populous state. Schwarzenegger apologized to state workers but said he had no choice.
“Today I am exercising my executive authority to avoid a full-blown crisis and keep our state moving forward,” Schwarzenegger said. “This is not an action I take lightly.”
The moves could save hundreds of millions of dollars a month, but whether full-time employees’ paychecks will be cut is in doubt because the state controller, who cuts the checks, has said he will not comply with it.
Lawmakers have yet to agree on a spending plan a month after the state’s fiscal year began, leaving California without the ability to pay for contractors, the higher-education system and legislative employees.
Democratic and Republican lawmakers remain divided over how to close a $15.2 billion deficit, with Democrats favoring $8.2 billion in new taxes on corporations and the state’s wealthiest residents. Republicans want a spending cap and oppose tax increases.
Adding to the fiscal mess has been an unprecedented number of wildfires this year, costing the state far more than it had budgeted.
As of June, more than 30 states faced deficits totaling a projected $40 billion, or more than triple the gap of the previous year, according to the National Conference of State Legislatures.
California is the last state with a fiscal year that begins July 1 that still does not have a budget. Its deficit dwarfs that of all other states.
Schwarzenegger’s cuts exempt public-safety agencies but will have an immediate effect everywhere else: Hiring, overtime and contracting will be halted.
