Schwarzenegger orders cuts amid fiscal crisis

SACRAMENTO " Gov. Arnold Schwarzenegger on Thursday, trying to avoid a "full-blown" financial crisis in California, eliminated 22,000 part-time and temporary positions 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 is a stark illustration of the cash problem facing the nation's most populous state.

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 contractors, the higher education system and legislative employees.

Democratic and Republican lawmakers remain poles apart 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 for emergency response than it had budgeted.

"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 22,000 that will lose their jobs immediately include retired state employees who work under contract, temporary and part-time workers such as those who fill in at the Department of Motor Vehicles, seasonal employees and student assistants.

Schwarzenegger also cited a 2003 California Supreme Court ruling allowing him to slash the pay of regular full-time employees when the state lacks a budget. By law, those workers must be paid at least the federal minimum wage of $6.55 an hour and would be reimbursed once a budget is approved.

"I want to apologize to all the state employees for having to do that," he said.

But the governor also said he was left with no other option, saying the state was running out of cash.


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