Schwarzenegger formally asks California controller to cut pay

Gov. Arnold Schwarzenegger's administration on Tuesday asked state Controller John Chiang to temporarily cut the pay of roughly 180,000 state employees while exempting about 50,000 workers in a patchwork of departments.

Schwarzenegger's formal pay letter moves him closer to a legal battle with Chiang, whose office said Tuesday he will defy the instructions and continue to pay full salaries to state workers.

The governor signed an executive order last week that terminated 10,133 part-time and temporary employees while banning overtime for most workers and attempting to slash salaries until a state budget is approved.

The pay letter from Schwarzenegger's Department of Personnel Administration asks Chiang to pay about 150,000 state workers the federal minimum wage of $6.55 per hour, or $1,153 per month. It also asks that the controller pay roughly 30,000 managers and supervisors a wage of $2,003 per month, the minimum required to comply with federal law for those workers, according to DPA spokeswoman Lynelle Jolley.

A third category of lawyers, engineers and doctors is due to receive no salary under the letter, though Jolley said it was unclear how many state workers fall into that group. All workers would receive their back pay in full when a budget is signed.

The governor has exempted from the wage cut an estimated 50,000 non-managerial workers in 14 departments who are eligible to work overtime. Some were expected because they serve health and safety functions, such as the California Highway Patrol and the Department of Forestry and Fire Protection.

But the governor also exempted the Department of Parks and Recreation because its rangers serve a safety role while other employees are necessary to keep the parks open and generate revenue during the high tourist season, said Dan Dunmoyer, Schwarzenegger's Cabinet secretary.

The governor did not grant a blanket exemption for the 66,000-employee Department of Corrections and Rehabilitation. The department will instead exempt units and employees on a case-by-case basis, Dunmoyer said.

The non-exemption for corrections employees could invite a challenge from prison medical receiver J. Clark Kelso, who last week said he wanted to exempt 60,000 of those workers from the governor's order under his federally appointed powers. Kelso was not available for comment.

Garin Casaleggio, a spokesman for Chiang's office, said Tuesday the controller has no plans to carry out the pay letter and believes the governor's order does not change the state's ability to pay its bills.

"He will continue to pay state employees their full salaries," Casaleggio said.

Though he has already made up his mind, the controller plans to meet with Schwarzenegger officials before issuing a formal response, Casaleggio said. Schwarzenegger said last week he will sue Chiang's office if the controller refuses to cut pay, and he will likely seek expedited review.

The Republican governor last week signed his executive order with an apology to state workers, blaming the action on the Legislature's failure to reach agreement on a state budget. Lawmakers remained at odds Tuesday over how to close a $15.2 billion budget shortfall.

Democrats continue to seek tax increases on the wealthiest Californians, while Republicans demand a long-term cap on spending in exchange for their votes, a position Democrats fear could threaten education spending. Schwarzenegger privately offered his own plan this week for a temporary 1-cent sales tax increase in exchange for long-term changes in the budget process.

Senate President Pro Tem Don Perata declared Tuesday that talks are officially at "an impasse," while Senate Republican leader Dave Cogdill asked Perata to bring his budget up for a floor vote.

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• Call Kevin Yamamura, Bee Capitol Bureau, (916) 326-5548.