California can pay workers through October, controller says
John Chiang says there is no need to cut salaries. He is at odds with Gov. Schwarzenegger, who says the state must put employees on reduced pay to survive a cash crisis until a budget is passed.
SACRAMENTO -- California Controller John Chiang today said the state has enough money to pay its bills into October, heightening his conflict with Gov. Arnold Schwarzenegger over whether the state needs to temporarily cut employees' salaries to ward off a cash crisis.
Chiang, a Democrat, had previously said the state did not need to slash salaries, as Schwarzenegger ordered last week, because it had enough money to make it until the end of September in the absence of a budget agreement between the Republican governor and state lawmakers. Today, Chiang revised that projection based on new, better-than-expected estimates of cash flow in the state treasury.
"In light of our cash flow improvements, I respectfully urge the governor to reconsider his executive order," Chiang said in a statement. The updated cash figures also take pressure off lawmakers to quickly pass a state budget. The new fiscal year began July 1 and the state still has no spending plan in place. The potential for a cash crisis in September had brought urgency to negotiations. Administration officials say they are skeptical the latest numbers from the controller's office accurately reflect the state's cash situation and they are carefully reviewing the information.
Schwarzenegger's personnel chief on Tuesday sent Chiang a letter detailing which employees he believes should be subject to reduced pay until the budget impasse is resolved, and who should be deemed exempt because they are critical to public health and safety.
The controller has not yet responded; members of his staff may meet with the governor's aides Thursday, according to Chiang's spokeswoman, Hallye Jordan.
But Chiang, who manages the state payroll, has said he will refuse to comply with the governor's order, arguing that Schwarzenegger lacks the authority to unilaterally reduce employee pay. Administration officials said Tuesday that they expect to file a lawsuit to force Chiang to enact the cuts, which Jordan said would be "a waste of money."
"Costly litigation is something we should avoid, because those are precious resources that should be spent on education, welfare and other services Californians expect and deserve," Jordan said.
A large share of the state workforce would be exempt from Schwarzenegger's order to pay government employees the federal minimum wage until a state budget is enacted, but others -- professionals such as doctors and lawyers -- would get nothing, according to documents provided by the administration Tuesday.
