If California's cash crunch wasn't taken seriously before Wednesday, it should be now, especially in Sacramento.
Gov. Arnold Schwarzenegger hints that as early as Monday he'll issue an order slashing pay for 200,000 state workers down to the federal minimum wage of $6.55 per hour.
Doing so would free up about $1 billion the governor claims the state will need to make debt payments and pay for other essential obligations in September.
If Schwarzenegger were to issue the order Monday, the pay cut would not be immediate. State workers are paid at the end of the month, so full-time employees wouldn't feel any reduction in salary until the end of August. If lawmakers were to reach a budget deal before then, state employees would receive their full salary.
Even so, the order Schwarzenegger is contemplating is brutal. Along with the general population, many state workers are struggling to pay mortgages and cope with higher prices for food and gas. Contrary to public perception, only a small percent of these workers make six-figure salaries. According to The Bee's state employee payroll database, more than half of all full-time state workers make less than $60,000 a year.
The governor's order also is of questionable necessity. Controller John Chiang disputes the state's cash reserves will run dangerously low in September, despite claims to the contrary by the governor's Department of Finance. Schwarzenegger's aides say the order is just one of several options he is considering, but so far they haven't disclosed what those other options might be.
If the governor is to fend off cynicism his pay-cut order is just a ruse – leaked to the press to rile up public employees, who then will exert pressure on Democratic lawmakers – he should be more forthcoming and lay out his various options.
Without such details, the governor risks a further erosion of his popular support. He'll need that support if he hopes to help seal a budget deal, and do it before the state goes broke.
All that said, it's a bit hypocritical for Democrats and Republicans to be describing the governor's proposal as "reckless" and "drastic."
What's reckless is Democrats constantly supporting ever-higher salaries and benefits for state employees, regardless of the state's financial situation.
What's drastic among Republicans is their apparent willingness to slash core social services and education programs, just so they can keep their promise not to not raise taxes.
Whether or not Schwarzenegger follows through with his order, the state faces a cash crunch. His Finance Department fears reserves could drop so low by late September that "checks could bounce" and the state's credit rating would suffer.
Given that threat, the governor must plan for contingencies. Payment of overtime and hiring practices must be curtailed if not suspended indefinitely. Travel must be cut back and expenses slashed.
At the same time, the governor and other leaders must end the political theater and find a way to marry revenue with spending, not just this year but in future years. It's time for the curtain to fall on the Kabuki. This drama is getting old.
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