State workers, their unions and other officials warned legislators Monday that Gov. Arnold Schwarzenegger's plan to slash state worker pay during a budget impasse will disrupt lives while doing little to ease a supposed cash crunch.
"We are not in a cash crisis," Controller John Chiang told the Senate Governmental Organization Committee. "The need for this is misdirected."
Among the criticisms of Schwarzenegger's executive order slashing state worker pay to the federal minimum wage:
• The state has a comfortable cash cushion and does not need to resort to such a drastic measure.
• Without a budget, the state eventually will have to resort to costly borrowing with or without Schwarzenegger's action.
• The 2003 California Supreme Court decision that Schwarzenegger says drove his executive order does not require paying only the federal minimum wage.
The state has faced other budget impasses since then. But it's never resorted to slashing pay to the federal minimum wage, now $6.55 an hour, because the delays never seemed that they would persist long enough to require it, said Fred Klass, chief operation officer of Schwarzenegger's Department of Finance.
Klass said he heard for the first time at Monday's hearing that the controller believes the state has a $4.1 billion cash cushion, and has not had time to evaluate it.
"Cash numbers are very dynamic," Klass told the committee. "They can fluctuate as much as $2 billion in a single day."
The state tries to keep a $2.5 billion daily balance. Klass said it has dipped below that on some recent days.
He said the governor's executive order will save money and perhaps offset the need for costly long-term borrowing. The last time the state resorted to that kind of loan, he said, it cost $150 million above and beyond interest costs.
But state workers said they are pawns in a political chess game. Workers' lives have been disrupted, especially the 10,133 temporary or part-time workers who were laid off. The Schwarzenegger administration announced the final count Monday and said the workers may be rehired on a case-by-case basis after the budget is signed.
Yvonne Walker, president of SEIU Local 1000, which represents 95,000 state workers, said some have been released, called back in, then let go again. Some have not received final paychecks, she said.
At Department of Motor Vehicle offices, Walker said, the laid-off workers were part of the normal work rotation.
"They're not staffed to run without them," she said. "DMV lines are going to be around the block."
Call John Hill, Bee Capitol Bureau, (916) 326-5543.
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