The State Worker

SEIU Local 1000 has filed an unfair practice charge against the state Department of Personnel Administration for failing to ;provide specific information about the 10,000 part-time state workers who were laid off earlier this month.

The union says that DPA promised a complete list but so far has produced info on about 250 terminated workers. That list is part of the union's Thursday filing with the Public Relations Employment Board, which you can access by clicking here.

The complaint says that SEIU needs the information to "represent the affected workers in good faith."

Local 1000 President Yvonne Walker took the criticism further in an e-mail to the State Worker: "The state is either playing fast and loose with labor law or state offiicals have no idea what's going on in their agencies. Either way it's proof the executive order is a mistake."

A DPA spokeswoman said that the department will review the charge.

Gov. Arnold Schwarzenegger's lawsuit to compel Controller John Chiang to issue state worker paychecks with reduced pay has been kicked to the federal courts. The move could delay or kill the state court hearing on the matter that is scheduled for Sept. 12.

In papers filed in U.S. District Court in Sacramento, attorneys representing the California Correctional Peace Officers' Association and the California Statewide Law Enforcement Association have argued that the governor's lawsuit raises issues of federal labor law. As such, the documents say, the matter should be heard in federal court. The Schwarzenegger administration filed its lawsuit in State Superior Court in Sacramento.

Attorney Gary Messing told the State Worker: "We think the federal law is clear, that employees need to be paid on time and paid their full wages."

The "notice of removal" the union attorneys filed means that, for now, the state court date is off because the case is now in the federal court's hands.

"It puts a question mark over that Sept. 12 date," DPA spokeswoman Lynelle Jolley told the State Worker this morning. "DPA is opposed to moving it to the federal court."

If, as expected, state officials argue to keep the lawsuit in the state court, the federal court will have to decide whether to keep the case or send it back.

You can read the court documents by clicking here.

Here's a deal from the Nut Tree aimed at making your day a little brighter.

The reinvigorated theme park/shopping center/restaurant spot in Vacaville is running a special for state workers, "Executive Order F-U-N 08!" The deal offers badge-showing state workers a free unlimited ride pass (a $10.95 value) and 50 percent off unlimited passes for accompanying family members.

The promotion runs through Oct. 2. We pressed Nut Tree spokeswoman Marissa Hicks about whether the fun order would be extended if lawmakers don't get a budget deal done by then.

"We'll see. We're playing it by ear," she said. "You'll be the first to know if we do."

Hicks didn't say it, but she probably hopes The Nut Tree doesn't face that decision. Her husband's a state worker.

You can read the Nut Tree press release by clicking here.

Image: cable-car-guy.com

Click here to read a piece in today's Wall Street Journal about how CalPERS is watching closely what action the government may take to prop up Fannie Mae and Freddie Mac, two key players in the nation's home mortgage banking system.

This paragraph from the story tells the tale:

As of last week, Calpers held 4.2 million shares of Fannie Mae, which were valued at $26.1 million, but the pension fund held 4.5 million shares of the lender valued at $292.6 million as of June 30, 2007. Its 3.9 million shares of Freddie were valued at about $16.3 million last week, but the fund held 4.2 million shares valued at $252 million as of July 30, 2007.

Ouch.

State Treasurer Bill Lockyer filed this letter today in Sacramento Superior Court regarding Gilb v. Chiang. The letter supports Controller John Chiang's position that state workers should receive their full wages.

In Gilb, the governor sued to compel Chiang to cut paychecks that would provide only the federal minimum wage to hundreds of thousands of state workers. A court hearing is scheduled for Sept. 12.

Who would have thought a few weeks ago that the court action might mean anything to state employees? We figured that a budget would be in the books well before then, making moot the argument between Schwarzenegger and Chiang. But now it's possible that the Legislature could recess without an agreement -- and if the impasse drags on, that could give the court battle some real meaning.

We're hearing plenty of response to our column in today's Bee about state workers' reaction to CCPOA's recent political moves.

The online comments reflect what we're hearing in phone calls and reading in e-mails: Slams on the correctional officers union, defense of CCPOA or general outrage at a budget and wage bargaining system viewed as deeply flawed and needlessly expensive for taxpayers. (We would point out, in fairness, that state workers pay taxes too.)

A few people have asked for more information about what California correctional officers make. You can click here for Bureau of Labor statistics that look at May 2007 national and state trends. About halfway down the page you'll find a table with the top-paying states for the occupation. California, with an annual average wage of $62,230, pays more than any other state. The national average is $39,970.

Here's the question: Is it fair to compare Calfornia correctional officers' wages to those in other states or the nation?

We've talked to officers who argue that it's not. California tends to stick prisons in remote parts of the state that require workers to make long commutes. The state's cost of living is higher than, say, Alabama. And inherently dangerous prison work is made more dangerous in California because of overcrowding.

What do you think?

In the last week or so, we've had some spirited debate over the wisdom of public-private partnerships. Now here's another log to throw on the fire. As The Bee has reported and as Gov. Arnold Schwarzenegger's press release notes, the high-speed rail bond proposition he signed on Tuesday includes provision for public-private partnership. The press release characterizes AB 3034, which you can read by clicking here, as containing "taxpayer protections and financial guidelines" that will ensure accountability.

If you missed it, Capitol Bureau reporter Andy Furillo's story in today's Bee reports that CCPOA has donated $577,000 to a political committee controlled by Sen. Don Perata. The union says it donated the money to fight Proposition 11, the redistricting initiative, but Capitol observers quoted in the story think it's a play to get last-minute legislation passed that would give CCPOA 31,000 members a pay boost.

The newspaper also editorialized on the subject. You can read that opinion piece here.

Correctional officers have been working for two years under the terms of a last, best and final offer made by the state after the two sides deadlocked.

So what do you think about this? Does this have any impact on other bargaining unit talks? Does it cast state workers in a negative light? Is CCPOA doing the right thing or the wrong thing here?

According to a front page story in today's Wall Street Journal, the Pennsylvania legislature will soon vote on a $12.8 billion deal struck to lease the Pennsylvania Turnpike.

From the story: A green light in Pennsylvania could bolster the political will of officials in other states trying to hash out similar deals. That in turn could jump-start projects in waiting, from Florida's Alligator Alley to Chicago's Midway Airport.

... Proponents say the lease approach could provide financial relief to state governments struggling with foreclosures, ballooning pension obligations and reduced tax bases. That's not to mention crumbling roads -- and lately, a drop in tax revenue to pay for repairs, owing to high gasoline prices that have reduced driving. The U.S. needs about $1.6 trillion in investment over the next several years to bring infrastructure conditions to acceptable levels, according to the American Society of Civil Engineers.

... Detractors, from the Turnpike Commission itself to labor unions, question whether the state is selling too cheaply. They also worry that jobs will be lost -- under the proposal, union contracts are guaranteed only until 2011 -- and that tolls will rise.

With California facing at least $500 billion in needed infrastructure repairs and upgrades, it's easy to envision public-private partnerships becoming a bigger part of the political dialog here, particularly if proponents of the idea can point to a Turnpike success story. And if the Pennsylvania proposal fizzles or becomes a fiscal boondoggle later, look for PPP opponents to jump all over it as a high-profile lesson of the ills of such deals.

SEIU CalTrans workers are planning to march this morning in Oakland, according to this press advisory.

We're reminded of the recent post on our blog by c2396, who criticized the union for "leafletting, picketing, old-school baloney from 1937. Lousy pay raises, too."

On the other side, dishpanhands, a State Worker regular, supports the union: "I say stop the bickering and step up. It is always easier to stand on the outside and complain, than to dive in the do the real work."

Our unsolicited suggestion to the unions: Stop protesting, as the advisory states, the governor's "ill-advised and illegal effort to use state employees as pawns in his budget game with the Legislature," and start protesting what this is doing to the state and its residents, as your recent radio spot points out. Try protesting for California instead of against the politicians. Maybe then you'll get some traction.

The State Worker can't help but notice that while California is deep into its second month without a budget and state employees continue to work with the threat that their wages might be reduced to the federal minimum, lawmakers still have plenty of time to party for money.

Our colleagues at Capitol Alert keep a running calendar of state political events, including fundraisers. This week looks pretty light -- no doubt because of competition from the Democratic Party's convention in Denver -- but last week was full of $1,000- to $25,000-donation events.

Last Tuesday, for example, Republican Sen. Roy Ashburn of Bakersfield kicked off the morning at Gallagher's on K Street with a 7:30 a.m. fundraiser that cost attendees $1,500 to $3,000. Assembly Speaker Karen Bass, D-Los Angeles, ended the day with a $2,000 to $25,000 fundraiser at Residence Inn at Capitol Park. You can find all 14 events that day by clicking here.

While the press is focused on the deadlocked budget talks between the Legislature and the governor, other negotiations of far greater weight for state workers continue over workers' pay and benefits.

We're hearing from a variety of sources that the prospects look dim for much of a pay boost, despite the fact that many state jobs, particularly in skilled positions, pay far less than similar work in the private sector. You can see a 2006 state wage study by clicking here.

Now comes the next contract for nearly all of the 21 bargaining units that represent 83 percent of the state work force. Meanwhile, this story in the Modesto Bee, indicates that unions representing local public employees there aren't pushing very hard for raises, but are trying to hold down employee health benefit costs and protect jobs.

Given California's cash crunch, it's hard to envision state worker negotiators having much bargaining leverage with things like a cost of living adjustment or base pay. Do you agree? Are there other concessions that negotiators should probe?

In a story broken by our colleague, Andrew McIntosh, "the state is not refunding bureaucrats for travel expenses they incur using their state credit cards, from air fare to car rentals to hotel rooms and conference room rental fees."

You can read the rest of the story by clicking here.

And click here to read the memo from AMEX that threatens, "to suspend service should the impasse become protracted."

The state Controller started printing August paychecks this afternoon. The State Worker was on hand to verify on video that, indeed, it's business as usual for the state payroll despite the ongoing fight between Controller John Chiang and Gov. Arnold Schwarzenegger over whether state workers' pay can be reduced to $6.55 until a budget is passed.

The Controller's office processes about 260,000 checks and pay stubs each month. About 70 percent of state workers have direct deposit.

As members of the media huddled about the the 11-year-old printer to get shots for newspaper, TV and blog, the machine heaved and jammed several times. A department official said that the unit, "has outlived its useful life," and is due to be replaced soon. It will have to be switched out by 2010, when the manufacturer discontinues providing parts.

As this new survey announcement notes, your workplace can be a daily version of the Olympics: a team sport with everyone pulling together for a common goal -- or a relentless battle between individual competitors grabbing for the gold.

A new survey found that almost half (46 percent) of senior executives interviewed said they believe employees are more competitive with each other today than they were 10 years ago.

The study was conducted by an independent research firm and developed by OfficeTeam, an administrative staffing service. Researchers conducted telephone interviews with 150 senior executives from some of the largest companies in the United States, according to the press release.

The executives were asked, "In your opinion, are employees more or less competitive with their co-workers than they were 10 years ago?" The tally of responses:

Significantly more competitive.................................12%
Somewhat more competitive....................................34%
No change.............................................................24%
Somewhat less competitive.....................................23%
Significantly less competitive.....................................3%
Don't know...............................................................4%

The OfficeTeam survey focused on the private sector, but would the results have been the same for California state workers? Or do civil service rules for promotions tend to tamp down individual competitiveness?

The State Worker has fielded a few calls about the status of a bill that would allow private workers and businesses to open retirement accounts administered by CalPERS. You may recall that Assembly Bill 2940, by Assemblyman Kevin de León, wasn't too popular with CalPERS at first. The Los Angeles Democrat promised to tweak it, and the fund took a neutral-with-changes position.

Many state workers worried about the bill. Would it divert CalPERS from its mission to benefit public employees? How would the fund keep public and private money from commingling? Who would bear the start-up costs?

Aside from the fact that the state's budget impasse has locked down nearly all other legislative business, AB 2940 looks dead -- at least for this legislative session. Although the Assembly passed the measure in May, it's now stuck in the Senate Appropriations Committee's infamous suspense file where many bills go to die a quiet death. You can read the bill's language and its legislative history by clicking here.

We talked this morning to de León spokesman Dan Reeves. He said the outlook for getting a deal done this term is unlikely, especially given the Legislature's focus right now on the budget. Will de León revive the idea next year?

"Absolutely," Reeves said.

Thursday's column looks at whether CalPERS' compromise with the Professional Engineers in California Government over public-private partnership investments is in keeping with the fund's duty to act in the best interest of its members.

It's a vexing subject: Is CalPERS obligated to protect state worker jobs by avoiding investments that might shove some work, such as road engineering, from the public to the private sector? Or must it go after maximum returns that benefit all its members, even if some member jobs are affected?

On Monday the fund tried to cut the issue down the middle by passing an investment policy that allows PPP investments only if CalPERS members' jobs aren't affected.

The space that we get in the column is precious, and much of what we hear and learn gets left out. But as a visitor to the blog, you get a little something extra here: notes and quotes that column-only readers don't see. A few lines from our notebook:

Pat Macht, CalPERS spokeswoman
Telephone interview, 8/19/08

On how long CalPERS worked on the PPP policy: Staff worked on it for six months. We worked with the unions. We had many meetings with all the stakeholders to make sure that this investment class is congruent with the values of the fund. We met with PECG several times over that period.

On the fund's reaction to the PECG's intent to sue: When we learned of the threat of a lawsuit we met with them to see if we could add language to answer their questions and concerns. That meeting resulted in the policy that was passed on Monday.

On whether CalPERS has any other investments that with similar limitations: The only other outsourcing policy is in private equities. We don't allow investments that would take public jobs and privatize them. (Macht gave two hypothetical examples. The fund would not invest in a concession company, for example, that took over concessions at a public park operated by public workers if those jobs would be taken private. Another example: a transportation company that took over operating a school district bus service and privatized the drivers' jobs.)

On the Professional Engineers challenge to CalPERS' PPP investment policy: The whole model of CalPERS is to develop policies after providing anyone the chance to challenge them.

On what the impact of the public-private partnership investment policy could have: We believe that this could become a model for other pension funds.

On whether the compromise with the union sets a negative precedent: We don't believe that it does, not at this point. But we need some experience with this kind of investing. Hopefully this is a win-win for everybody.

Jason Dickerson, principal fiscal and policy analyst at California Legislative Analyst's Office
Telephone interview, 8/18/08

On CalPERS tension between preserving state engineers' jobs and making the best investments to benefit all members: I think it's an interesting issue. The state Constitution says that the CalPERS board has to put the interest of members above all else.

That sets up a tension: Is the best interest of members for CalPERS to make money on investments for retirement or is it to better their members' lives more generally? The purpose of this discussion, the question is should CalPERS preserve and increase employment of members? This is really a tension about CalPERS' constitutional duty.

Paul Meyer, executive director, American Council of Engineering Companies of California
Telephone interview, 8/19/08

On his reaction to the agreement between CalPERS and PECG: It was a little startling. One would think that with the dire infrastructure needs in this state that PECG and CalPERS would welcome more involvement, not curtail it.

How he believes the agreement will affect CalPERS investment opportunities: If you're putting restriction on how the projects are going to be delivered, that discourages investors. Typically you see multiple investors on these kinds of projects, a lot of competition. But these barriers could narrow the field. PECG has been very aggressive in hamstringing (public-private) projects. That scares investors. PECG will interpret (the CalPERS' new policy) in a way that will not be helpful.

On what he wishes CalPERS would have done: I would have hoped that they would have just explained to PECG, "We're going to invest in new projects, not anything on (any state) project lists. If it's a new project, how can it hurt you? You've already got plenty of work to do. There are a million other issues, go worry about something else."

Bruce Blanning, executive director, Professional Engineers in California Government
Interview at CalPERS headquarters, 8/18/08

On the union's concern over PPPs: We had a real concern that these investments would allow CalPERS to take employees' retirement contributions and use the money to take their jobs. The real issue was should you take employees' retirement money and use it to outsource their jobs?

On public-private partnerships: PPPs are a huge waste of taxpayers' money. It's always twice as much as keeping these things public. (He cited a statistic from a recent state study that found state engineers cost about $121,000 per year, while positions contracted out cost about $217,000.) PPPs have no meaningful oversight, which leads to greater waste.

On recent high-profile public-private partnerships involving C.C. Myers, the company at the center of the I-5 fix: People see the I-5 project, the McArthur Maze project, the Bay Bridge project and say, "Myers did it!" What the public doesn't understand is that CalTrans designed those projects. Every case where projects have been done quickly, public engineers have been involved.

Here's an e-mail sent this afternoon by Lynelle Jolley of DPA:

Judge Frawley agreed to expedite the hearing schedule in our lawsuit, but the first date won't be til Sept. 12. Based on the Controller's statement that he won't comply with the White v Davis Supreme Court ruling absent a court ordering him to, it appears workers will get regular paychecks for August (which come out at the end of this month). We estimated savings for this month of $764 M had the state payroll been reduced according to our Aug. 5 pay letter to the Controller.

And for the story on August pay by my colleague at The Bee's Capitol Bureau, Jim Sanders, click here.

What's cheaper, public or private?

That thorny topic is one strand of the tangled issue we address tomorrow's State Worker column about CalPERS' decision to invest in public-private partnerships that build roads, water projects, communications facilities, bridges and such -- as long as the private part doesn't step on public jobs.

We won't take the time to unwind CalPERS' infrastructure investment policy again -- you can read those blog posts here. But now take a look at the dueling info presented by the Professional Engineers in California Government and the American Council of Engineering Companies of California.

The state engineers contend that public workers the cheaper way to go, and they have numbers to back them up. They point to this estimate by the the Assembly Budget Subcommittee ("Contract positions are budgeted at about $217,000 and state staff positions are budgeted at about $121,000 -- including benefits and standard operation expenses and equipment." and this document by the Senate Committee on Budget and Fiscal Review: "State staff cost $121,000 (including all benefits and the standard cost of operating expenses and equipment) and contract out resources cost $217,000 per FTE. ... By whatever measure is chosen, state staff are less expensive than contract-out staff."

The council, which represents private engineering and surveying firms, counters with several studies that show other states and countries use PPPs to great effect. One it commissioned says, "We find that ... the amount the State must pay to utilize an in-house engineer ranges from $173,434 to $209,212, while the amount paid for an outside engineer averges $193,000."

So who to believe?

Has CalPERS set itself up for trouble? The fund's decision on Monday to embrace public-private infrastucture investments has been a hot topic among pension experts, particularly its eleventh hour agreement with the state engineers' union to avoid putting money into projects that could impact public employee jobs.

In an insightful blog entry analyzing CalPERS policy, Susan Mangiero, head of Pension Governance LLC, wonders, "if CalPERS and infrastructure fund managers will soon find themselves at loggerheads."

Mangerio, a charter member of the State Worker's BrainBank of go-to experts, outlines several concerns in the blog, including how the fund will determine whether so-called PPP investments displace public employee jobs, the cost of making those determinations and whether the policy sets up conflict between the interests of the state engineers and all CalPERS members. You can read her analysis here.

It's a complex topic, but one that deserves your attention if you contribute to the fund. Many experts believe that CalPERS and other benefit administrators are moving toward these kinds of investments to further diversify their portfolios.

If you want to get up to speed on CalPERS' new infrastructure investment class and how it reached a compromise with he 13,000-member Professional Engineers in California Government, click here for yesterday's State Worker entry. You can read CalPERS PPP policy here.

The Service Employees International Union, Local 1000, which represents nearly 100,000 state workers, has been running this radio spot, hoping to build public pressure on Schwarzenegger and a few key Republicans to get a budget deal done.

The spots are running in districts where the union thinks it has the best chance of flipping Republican legislators to compromise, according to union spokesman Jim Zamora. Click here for the SEIU's list of markets and stations broadcasting the ad.

All of this recalls a point the State Worker suggested a few weeks ago, that California's public employees have a PR problem. It was a touchy subject that prompted a flood of e-mail and online debate. If you missed the column, you can click here to read it.

Is the SEIU radio ad campaign an example of good state worker PR? A waste of union dues? Do you think this spot is having its intended affect on the budget impasse?

CalPERS this morning voted to invest in public-private projects, so-called "PPP" deals that blend private companies and big government bucks for things such as roads, water projects and bridges. The policy allows investments in those kinds of projects, but requires that the "transactions have no more than a de minimus adverse impact on existing jobs."

The Professional Engineers in California Government last week had threatened to sue CalPERS over PPPs, because, it says, such projects outsource of their jobs to private firms and offer a poor return on investment.

But after intense eleveth-hour talks, CalPERS and the union on Friday reached an agreement on "language for the proposed policy (that) will ensure that the members' jobs will not be outsourced to private firms when investing in public-private partnerships," a union spokeswoman told the State Worker.

To read the specific section engineered into the policy, click here and look for the underlined passage under "Domestic Public Sector Jobs."

Or get a cup of coffee and read the entire 27-page policy here.

Did CalPERS cave in? The American Council of Engineering Companies of California thinks so. You can read their letter in response to our blog report by clicking here. The key paragraph:

This "restraint of trade" is not in the best interest of the taxpayers who will eventually be forced to foot the bill, nor is it in the interests of Californians who expect the highest efficiency, most fairness and the highest returns from their tax dollars and their retirement investments.

What do you think? Is this an example of a union protecting its members at the possible expense of other CalPERS members' retirement? Or is the union right and correctly acted to keep its members' contributions to the fund from going to investments that would put state engineers out of work?

The Los Angeles Times reports that more than 200 DMV workers in Southern California called in sick on Friday, shutting down at least two offices in Los Angeles County. Click here for the story.

UPDATE: The State Worker put out calls late Friday about whether any NorCal DMV offices had seen sick outs or closures. The word so far: Nope.

But maybe you've heard differently or even called in "sick" yourself. Tell us about it here.

Scott Reid, chief deputy director at Consumer Affairs, sent the following message about the arrest of a fellow state worker to all Department of Consumer Affairs Workers late Friday afternoon.

Bee reporter Andrew McIntosh obtained a copy and broke the story online. You can read his report here.

Here's Reid's memo:

Administrator/DCANotes

08/15/2008 04:21 PM

To: DCA A - B, DCA C - D, DCA E - F, DCA G, DCA H, DCA I-L, DCA M - O, DCA P-Q, DCA R, DCA S, DCA T-Z
cc

Subject: Privacy Incident Update

On Tuesday, June 10, we notified you of an unauthorized transmission of personal information involving DCA employees. At that time, we provided you with information about how to prevent identity theft and place fraud alerts on your credit reports.

On Wednesday, June 17 we informed you that DCA would be entering into a contract with a credit monitoring service to help protect you against possible identity theft, and on Wednesday, June 24, we informed you that we had, in fact, secured a contract with CSIdentity to provide free credit monitoring services and $25,000 of identity theft insurance.

Rest assured that since the discovery of the breach, the Department and its Division of Investigation (DOI) has worked diligently to determine the facts surrounding this unauthorized release of personal information and committed to taking whatever steps were necessary to hold accountable the party or parties involved.

Many of you had questions surrounding the circumstances of the breach and wanted to know what had happened and why. Regretfully, while we were able to share some limited information, much of what we knew was part of on ongoing investigation and unfortunately could not be shared without risk of compromising the inquiry.

The Department is now in a position to share with you that the investigation has been completed and the results have been turned over to the Sacramento County District Attorney's Office.

The investigation concluded that a former employee in DCA's Office of Human Resources (OHR), inappropriately e-mailed a file containing the names, position numbers, salaries and Social Security numbers of all DCA employees to a private e-mail address. This occurred on Friday June 6, her last day of work, and was discovered through DCA auditing software on Monday June 9.

Today, this employee was arrested on five felony charges stemming from the breach and from the discovery of material from other state agencies found during the execution of a search warrant at her residence.

The charges include three felony counts of theft/falsification/removal/destruction of official documents and two felony counts of unlawful access and/or transmittal of computer data.

At this time, the Department has no evidence that the information the employee allegedly compromised from DCA has been in any way misused, however, her actions were very serious and warrant criminal prosecution.

DCA takes pride in the dedication and commitment of each and every one of its employees and holds sacred the trust it enjoys with all Californians. When this trust is violated, there is no choice but to do everything within our power to hold perpetrators accountable.

DCA is hopeful that today's arrest is an important step to restoring this trust and we are grateful and appreciative for all of those who assisted in the investigation.

One of the hot topics hwere at The State Worker -- when we're not focused on the budget crisis and wage issues -- is whether CalPERS and CalSTRS should invest in "sin stocks."

Now Charles Crumpley, editor of the Los Angeles Business Journal, weighs in on the topic with a post on the Fox & Hounds Daily blog:

"Does it seem to you as if the 'socially responsible' investing scheme put the interests of the state workers and teachers ahead of those entrusted to invest the money?" he asks. "To be fair, the funds have performed well in recent years. Despite their self-imposed limits on what they can invest in, they've generally outperformed the benchmarks in past years. But, to be fair, they could have done much better had they not been slowed by the 'socially responsible' yoke."

You can read the piece, which takes some pretty strong shots at former state treasurer Phil Angelides, by clicking here.

And if you'd like to see a list of alcohol, tobacco and adult entertainment stocks contributing to your retirement, click here.

The state engineers union is suing CalPERS to block it from investing in public-private infrastructure projects according to this story.

Except they aren't.

After talking last night and all day today, the two sides reached an agreement. It's a big deal to the engineers, who feel that CalPERS shouldn't invest in projects that hand over to private businesses the kinds of jobs that publicly-employed workers do for the state.

Here's the e-mail from union spokeswoman Lisa Marie Burcar:

Jon:

I just wanted to give you a quick update on the status of our lawsuit against CalPERS regarding their proposed Infrastructure Investment Policy.

Discussions between PECG and CalPERS, which began late last night and continued for the majority of the day, have concluded and led to an agreement in which language for the proposed policy will ensure that the members' jobs will not be outsourced to private firms when investing in public-private partnerships.

Although PECG does not support public-private partnerships because they are proven to be bad investments and are contrary to the public interest, we will be neutral on the proposed policy because of the language that has been agreed upon.

So, at this time we will NOT be filing a lawsuit against CalPERS.

Sorry, Reuters.

Today's State Worker column takes a look at how the state's budget mess is affecting your workplace and makes the point (we hope) that government is often messy because it can't operate like a for-profit business.

Even so, that can't be an excuse for poor planning, misallocated resources or flabby staffing. Government can't operate like business, but it still needs to be diligent about how it spends money.

My colleague Daniel Weintraub in his Sunday feature, The Conversation, observed, "Over the past five years, California's population has grown by 7 percent, and inflation has been 17 percent. But general fund spending has increased by about $26 billion, or 33 percent during that same period." Essentially, spending outstripped population growth and inflation by more than $7 billion over a five-year period.

From your perspective, what is driving this spending growth? What are you seeing in your departments and agencies? And if you have ideas about where the budget should be cut -- or perhaps you'd argue it shouldn't be cut at all -- you can share your insights with Dan by clicking here.

Last Friday the Gov. Arnold Schwarzenegger told the Department of Personnel Administration to distribute a copy of this letter to every state agency and department head in California and then pass it on to every state worker.

Most received it via e-mail according to DPA's Lynelle Jolley, though it was likely printed and distributed to those who don't have regular e-mail access. It begins, "Dear Valued State Worker ..."

What's your reaction to the letter?

Finance Director Michael Genest this morning fired off this letter to Sen. Dean Florez about the impact of Gov. Arnold Schwarzenegger's executive order on correctional employees.

State Corrections workers represented by SEIU Local 1000 have scheduled protests today at 12 prisions and juvenile facilities from Susanville to San Diego. You have to wonder, though, are the demonstrations having any impact?

As we noted in last week's State Worker column, demonstrations don't have much punch without public support. Elected officials already know state workers are mad. But a public outcry over the plight of the state's employees (symbolic?) mistreatment at the hands of the governor and the Legislature would get things moving.

So far, we haven't seen much public outrage other than angry calls and e-mails from folks blaming the "lax" state workforce for the state's financial woes. Hardly the public sentiment that union organizers want to evoke.

One State Worker reader e-mailed, "We have a PR problem because no one knows hoiw much state government does. We don't market ourselves."

Do you agree? Or is the problem, as another reader told me on the phone, "nothing more than the media looking for negative news"?

Here's the SEIU press release:

State prison workers to protest across state

Employees fight governor's wage cut order, budget debacle

State prison workers are joining the growing list of voices calling on the governor to stop threatening state services, and instead work with the Legislature to pass a reasonable budget that keeps California running. Workers will rally outside several facilities from 3:30pm to 5:30 pm throughout California demanding the governor stop using workers as pawns in his budget game.

Under Gov. Schwarzenegger's recent executive order about 150,000 state workers are seeing their salaries cut to $6.55 an hour. The governor has also terminated more than 10,000 state workers. Teachers and instructors at state prisons and juvenile facilities are seeing their salaries cut to zero - until a budget is passed.

SEIU Local 1000 has also filed three court actions challenging the governor's executive order. They include two suits in Sacramento County Superior Court to rescind the layoffs and an unfair labor practice complaint with the state Public Employee Relations Board seeking to overturn the pay reduction order.

Service Employees International Union Local 1000, the largest union of state employees, represents 95,000 state workers, including the overwhelming majority of white collar professionals, information technology workers, clerical staff, printers and custodians. Local 1000 also represents the vast majority of civilian employees in the prison system including teachers, librarians, nurses other health care professionals.

The Bureau of Labor Statistics has released its most recent survey of employee benefits and found that public employees enjoy greater health and retirement perks than their counterparts in the private sector.

Among the most significant findings, according to the bureau's press release:

* Sixty-one percent of private industry employees had access to paid retirement benefits,
compared with 89 percent of state and local government employees. Eighty-six percent of government employees participated in a retirement plan, significantly greater than the
approximately half of private industry workers.

* Medical care benefits were available to 71 percent of private industry workers, compared with 87 percent among government workers. About half of private industry workers participated in a plan, less than the nearly three-quarters of government workers.

* Virtually all full-time employees in state and local government had access to retirement and medical benefits: 99 and 98 percent, respectively. In private industry, only 71 percent of full-time workers had access to retirement benefits and 85 percent to medical care.

* Employers paid 83 percent of the cost of premiums for single coverage and 71 percent of the cost for family coverage for workers participating in employer-sponsored medical plans. Employer share for single coverage was greater in state and local government (90 percent) than in private industry (81 percent). For family coverage, the employer share of premiums was similar for private industry and government, 71 and 73 percent, respectively.

The survey indicates that In some areas, the public/private benefits disparity is fairly narrow. In others, it's quite wide. Do you believe that this gap will continue indefinitely? Or will it close at some point?

You can click here and go to the bottom of the page for more detailed information from the BLS survey.

This from Sacramento Bee Capitol Bureau reporter Kevin Yamamura:

DPA says about 18,000 employees get paid twice a month, but they will receive their full checks this week, apparently because the administration felt the order didn't leave enough time to implement the reduced pay by mid-month. They will see a reduction starting with their end-of-month paychecks.

Here's the controller's breakdown. It doesn't add up to 18,000, but the numbers represent the bulk of the employees paid two times per month:

5,300 CalTrans

3,200 Department of Developmental Services

3,200 Department of Mental Health

3,400 Parks and Rec

The Department of Personnel Administration, acting on behalf of Gov. Arnold Schwarzenegger, just released its lawsuit filings against Controller John Chiang. The six documents filed in California State Superior Court in Sacramento argue that Chiang must follow Schwarzenegger's executive order to cut state workers' pay. The list and links follow.

The State Worker wants to get your reaction. What in these pages is worth noting? What arguments are valid? Which ones aren't? Does it bother you that the administration has taken this step? Or do you discount the whole thing as political posturing and figure that things will work out before paychecks are issued?

The lawsuit -- 12 pages

Declaration of Julie Chapman, deputy director of Labor Relations -- 7 pages

Declaration of Michael Genest, Department of Finance director -- 4 pages

Declaration of David Gilb, DPA director -- 5 pages

Declaration of Jerri Judd, DPA Personnel Program manager, Labor Relations Division -- 5 pages

Complaint for injunctive and declaratory relief -- 29 pages

Don Scheppmann, Chief of the Personnel/Payroll Services Division in the State Controller's Office "returned serve" to the Department of Personnel Administration with a three-page letter, which you can read here, responding to three concepts that DPA presented last week for carrying out the governor's order to cut state worker hourly pay to the federal minimum.

Scheppmann's letter raises 10 specific questions about the DPA;s ideas and asks for a response. It also challenges the executive order's legal groundwork and notes that the part-time state workers who were let go last week didn't get their full pay upon termination as required by law.

What the letter from one high-ranking bureaucrat to another doesn't mention is how things are going for your state employees in the trenches. What are you seeing? How is your work being affected by the governor's mandate and the uncertainty surrounding its impact?

We're looking for stories that we can share in this Thursday's State Worker column . We want to show readers how state workers are handling the political tennis match and how it's impacting services and working conditions. You can e-mail your story to Jon Ortiz via the link below.

We hear that the controller's payroll staff met Friday with Dept. of Personnel Administration folks to chat about how or whether the state can carry out the governor's executive payroll reduction order.

DPA laid out three concepts in a one-page letter that you can read by clicking here.
Controller spokeswoman Hallye Jordan said in an e-mail to The State Worker that, "the concepts were not fully developed, contained little detail and no legal opinions supporting their validity, and frankly, raised more questions than they answered."

Although the controller and the governor remain far apart on whether the executive order is legally sound, Jordan said, "our staff nonetheless said they would analyze the concepts for feasibility, cost and for potential litigation purposes." The controller's staff told the DPA representatives that they would respond this week. here.

Jordan said that Chiang's position remains "unchanged." He will pay "full wages to California's public servants for the salaries they have earned. He believes the Governor's executive order is unnecessary and unfortunate in that it has shifted the administration's attention from resolving the budget stalemate to a potential costly and lengthy legal battle."

The Department of Personnel Administration is telling state Controller John Chiang that there's a way to change payroll to comply with Gov. Arnold Schwarzenegger's executive order without taking six months. The governor wants an answer by Monday at noon, or he's going to court.

Read the DPA letter here.

We've had some questions about the list of departments and offices the governor's office released, describing them as "exempt" from the portion of the executive order that affects workers' pay.

Lynelle Jolley, spokeswoman for the Department of Personnel Administration, shed some light on why there may be confusion about whether EVERYONE in the listed departments would receive their full pay.

Employees in those "exempt" departments who would otherwise be subject to minimum wage would be authorized to receive their normal wages, according to the pay letter. That's because there's a reasonable expectation of overtime in those departments and their functions meet the "critical needs" criteria outlined in the executive order.

However, employees in those departments who aren't subject to the minimum wage provisions of federal labor law (most supervisors, managers, and certain professionals like attorneys and doctors) would not receive their normal wages. Instead, their paychecks will be processed the same as their colleagues in all the other departments, which according to the federal Fair Labor Standards Act would either be $455/week or, in the case of the professional categories like doctor and attorney, zero. All employees subject to reduced wages would receive full pay once the budget's enacted.

(An easy way to know if you're in a job category that's covered by federal law's minimum wage provisions is to ask if you're eligible for overtime pay: if you are, then you're covered by the minimum wage provisions.)

The same Supreme Court ruling that said workers had to at least be paid minimum wage also said employees who work overtime must be paid their regular salary, plus what they make in overtime. So the governor's executive order also bans overtime, except for the departments he has exempted. The list reflects the departments he's exempted from the overtime ban.

Most supervisors and all managers in the listed departments, however, aren't eligible for overtime - and so would still receive reduced paychecks - but at a different level than $6.55 an hour.

Here's the bottom line: if you work in those departments or offices listed, AND you are in a job category eligible for overtime, you will be authorized to receive your regular pay, plus any overtime you actually work.

If your job category isn't eligible for overtime, you will get $455 a week, even if you work in one of the listed departments.

And there is one more twist under federal labor law: there is no minimum salary requirement for certain professional occupations, such as attorneys and doctors. They would not receive any paycheck at all until the budget is signed, even if their department is exempt from the executive order. Full pay would be restored once there's a budget in place.

Jolley said the numbers roughly break down this way: Of the 70,000 employees in the listed departments, about 9,600 are managers and supervisors, and about 1,000 are in the professional category. So about 85 percent of employees in those departments would receive their full checks.

All of this, of course, wouldn't happen unless the disputes between the governor's and controller's offices over the law and the state's computer system are resolved.

For more detail, you can read the pay letter DPA sent to the controller here.

Service Employees International Union Local 1000 filed suit Wednesday in Sacramento Superior Court, alleging that the state mishandled the termination of some temporary and part-time employees last week.

Read the lawsuit here.

The provision of the governor's executive order suspending contracts is being felt in some obscure corners of state government.

Consider the special smog testing program at 30 community colleges up and down the state. Vehicle owners are referred to the special smog centers if, for instance, they failed at a regular station and can't find the part that would reduce their emissions. Or they may have spent the statutory limit of $450 on repairs to pass the smog test, said Department of Consumer Affairs spokesman Russ Heimerich
The Foundation for California Community Colleges has a contract to provide 60 workers for the "referee" program - half at the smog centers, the other half at a Sacramento call center. But the workers were sent home when Schwarzenegger signed his executive order. The 3,000 vehicle owners referred to the smog centers each month now must wait for a budget to get their smog waivers, Heimerich said. Luckily, the Department of Motor Vehicles has granted extensions so the owners won't run afoul of vehicle registration law.

In response to the executive order, the Department of Consumer Affairs suspended its contracts for copier and printer repair, Fed-Ex, and Westlaw legal research. For now, workers whose copiers break have to hunt for one elsewhere, and use the regular mail, Heimerich said. The department's lawyers, who advise 21 consumer boards and 14 bureaus, may have to head to the nearest law library to do research.
"It's an inconvenience," Heimerich said. " But that's the way it's going to have to be until the contract is no longer suspended."

The Department of Public Health suspended contracts, many of them with the University of California, for various surveys and studies, including one on heart disease and stroke prevention and another on the economic toll of second-hand smoking.
"This is all important work," said spokeswoman Suanne Buggy. "What we had to look at what was critical" to exempt from the executive order.

- John Hill, Bee Capitol Bureau
jhill@sacbee.com

The administration told state Controller John Chiang this afternoon which workers are exempt from the minimum wage portion of the executive order.

Here's the list:

California Highway Patrol
Department of Transportation
Agriculture Security and Emergency Response
Veterans Affairs
Department of Developmental Services
Department of Mental Health
Military
Office of Emergency Services
Department of Water Resources
Department of Forestry (CALFIRE)
Department of Parks and Recreation
California Conservation Corps
Office of Spill Prevention
Department of Fish and Game

Computer problems or no computer problems, Dave Gilb, director of the state Department of Personnel Administration, sent this letter moments ago to state Controller John Chiang.

It's the next step in the dispute between the administration and the controller's office over whether state worker pay can or should be dropped to federal minimum wage.

Chiang has said he will refuse to comply with the governor's request. Then the ball will move back to the governor's court for a decision on whether to sue Chiang.

August 5, 2008

The Honorable John Chiang
California State Controller
300 Capitol Mall, Suite 1850
Sacramento, California 95814

Dear Mr. Chiang,

The California Supreme Court held in White v. Davis that in the absence of an approved state budget, the Controller has no legal authority to issue warrants against the State Treasury for employee salaries except as required by federal labor law.

As the Director of the Department of Personnel Administration (DPA), I am charged by state law with the duty to administer and enforce laws pertaining to state employee compensation. In accord with White v. Davis and with my obligations under federal and state law, I am providing you with the attached pay letter concerning the payment of wages.

In general, the attached pay letter authorizes the following wage payments during a budget impasse:

(1) Pay all non-exempt (Workweek Group II) state employees the federal minimum wage of $6.55 per hour.

(2) Pay all Executive, Administrative and Professional (EAP) (Workweek Group E) employees $455.00 per week. This amount represents the minimum salary required by the FLSA in order preserve the EAP exemption.

(3) Delay payment of all wages to employees covered by the Code of Federal Regulation sections 541.303 and 541.304 (Workweek Group SE). These employees are exempt from the salary basis test and are not subject to any minimum salary requirements and therefore will not receive any compensation until after adoption of a state budget.

(4) Continue to delay payment of wages to employees who are not covered by the FLSA including elected officials, appointees of elected officials and their personal and legal staffs, until after adoption of a state budget.

With regard to (1) above, the attached pay letter includes a list of departments and programs not subject to the overtime prohibition in the Executive Order due to the

critical nature of the work performed by these departments and programs. For these departments and programs, there is a reasonable expectation that the non-exempt state employees will work overtime. Therefore, the pay letters are excluding these departments and programs.

The Director of the Department of Finance and I are prepared to work with you to develop and implement the necessary mechanisms to comply with White v. Davis and the FLSA. My office will be contacting your office shortly to schedule a meeting with appropriate staff.

Sincerely,

Dave A. Gilb
Director

cc: Bill Curtis, Chief Counsel, Department of Personnel Administration
Mike Genest, Director, Department of Finance
Dan Dunmoyer, Cabinet Secretary, Governor's Office
Andrea Hoch, Legal Affairs Secretary, Governor's Office

SEIU Local 1000 is out on the west lawn at the Capitol this afternoon, collecting the stories of state workers for its "Value Us" campaign. Union reps are asking workers to fill out a form that answers these questions:

What is your classification?
What is your agency/department?
Explain what you do.
Why does it matter to the public?
Who would be harmed if you didn't do your job?
Describe what you do in one line. (For example: 'I keep the water safe',
I provide health care to veterans')
Is there any way that your job could either generate more revenue, or save money for the state? (If yes, please explain)

They are posting the responses, along with pictures of participating workers, on a board bearing the headline: "We're not pawns in your political game."

Here at The State Worker blog, our favorite entry so far is one by a Department of Justice auditor who described his or her job as intended to "bring ill-gotten gains back to the general fund" by researching false claims against the state.

Other workers have posted pictures of family members they are supporting, or houses they make mortgage payments on.

Union representative Terri Prall said news that the state's computer system is too antiquated to adjust quickly to minimum wage levels hasn't diminished the union's determination to make its point.

"This is something that's going to happen every time the budget comes up," she said. "What happens next year? What happens the year after that?"

The union plans a rally supporting state workers at 4:30p.m. Thursday on the west steps of the Capitol. At that event, they hope members of the public will share stories about what state workers have done for them.

State Controller John Chiang testified this morning at the Senate Governmental Organizational Committee Hearing on the governor's executive order to pay state employees federal minimum wage. This is his statement as prepared:

"As the State Controller, I have been independently elected by California voters and given the Constitutional authority to draw payments from the State Treasury. I also have the statutory authority to manage the payroll for more than 300,000 State employees.
The Governor's Executive order demanding the salaries of more than 200,000 civil servants who are covered by the federal Fair Labor Standards Act be cut to the federal minimum wage is based on faulty legal and factual premises. It undermines my authority as Controller, and it is just wrong.

State Controller John Chiang told The Bee's Capitol Bureau this morning that the state payroll system can't be changed quickly to reduce pay to minimum wage even if he wanted to and the courts demanded it. The story is here at sacbee.com.

The controller's office, in the midst of a project to revamp the system, has compiled a long list of what's wrong with current practice. Here's an excerpt from the web site:  

"The problems with existing systems are summarized in the following areas:

Lack of flexibility - The current systems lack flexibility, making system modifications large, complex efforts. As modifications continue to be made through patches to the system, the estimates for changes become more complex and more costly. The design and complexity of the system, as well as the business practices that the State has established, continue to be major contributing factors to the lack of flexibility in the systems.

Outdated technology in danger of failure - The core systems operated by the SCO are based on outdated technology that is in danger of failure. The SCO operates several statewide, automated systems that are large and complex. The existing systems were built in the early 1970s, prior to collective bargaining. They were developed using design approaches and programming practices that do not take advantage of current technologies, and will not meet the evolving needs of the State. Most of these legacy systems have been subjected to years of continuous and substantial changes and additions. Due to the nature of these aging technologies, the technical staff to support them has become increasingly scarce.

Lack of needed functionality - California's current systems were designed to meet limited objectives at a time when the State had a much smaller workforce, labor and tax laws were not as complex, collective bargaining did not exist, and management information was not as critical. Some examples of the problems with existing functionality are:

• A bi-weekly payroll system does not exist that can be used for large groups of employees. This capability has been requested by the Department of Personnel Administration and unions, and is considered by the SCO as an improvement over the current payroll processes.
  
  
• A statewide automated position management system does not exist in State government. The current systems track positions for the current fiscal year and provides some information for the budget year-end process. The systems require collection and tracking to occur through manual processes or department-created systems. Position information continues to be submitted on hard copy. This effort is labor intensive and inherently inaccurate. As a result, departments struggle with the need to track and manage their authorized, established, filled, and vacant positions.
  
  
• An automated time and attendance system does not exist to capture time at the employee level. Current functionality is limited to total time worked, and does not maintain daily or hourly time. In addition, with the Fair Labor Standards Act, time and attendance has become a major workload problem in some agencies. While most employees are paid on a monthly basis, law enforcement and firefighters can accrue overtime on a 28-day cycle. This option has been adopted for some large bargaining units. As a result, reconciling monthly pay with 28-day overtime periods has become a tremendous workload for departments.
  
  
• Management information capabilities do not exist that deliver information to the operating managers, nor is there a user-friendly means to extract information for departments to manage their human resources or payroll expenditures.
  
  
• Employee self-service features, or virtual human resources, do not exist in the current systems. Such transactions as home address changes, direct deposit enrollment, tax changes, and benefit enrollments must be completed on a hard copy, submitted to the HR office, and either key-entered by department staff or forwarded to the SCO for processing. Pay information is not available online, and employees must ask their HR office for information when it is needed.
  
  
• User-friendly functions do not exist in the current legacy systems. The general design of the system is based on green screen technology, rather than a graphic user interface. The systems do not include any help features or ties to training pages. As a result, use of the systems requires extensive on-the-job and classroom training.
  
  
• An electronic workflow capability does not exist. Thus departments/campuses rely on paper processing and manual entry into the SCO legacy systems."

Legislation: SB 1353

 

What it does: Gives the governor the power to extend differential pay  and benefits up to 60 months for state workers called up to serve in the military. The current maximum is 24 months.

 

Who is affected: Approximately 2,400 state employees who are members of the National Guard and Reserves, although none have exceeded the current 2-year differential pay limit. The bill's analyst says that it is "very unlikely that any of the members who already served two years will be selected again for deployment anytime soon."

 

What it will cost: About $48,000 if those same state employees are again called to serve.

 

Click here for more details and analysis.

In this week's Democratic radio address, Assemblymembers Paul Krekorian (D-Burbank) and Kevin de Leon talk about the Gov. Arnold Schwarzenegger's executive order to slash pay for state workers.

Both say the order will harm middle-class workers and won't help the negotiations for a new budget.

Click on the links to listen to the radio addresses (files are in MP3 format):

Listen to Paul Krekorian

Listen to Kevin de Leon (Spanish)

J. Clark Kelso, the Receiver appointed to oversee and reform California's correctional healthcare system, has exempted most California Department of Corrections and Rehabilitation employees who faced a pay cut to federal minimum wage by order of Gov. Arnold Schwarzenegger.

His rationale, laid out in the following letter, is that "the preservation and protection of human life and safety, as well as the efficacy of numerous federal court orders, requires that all functions and all CDCR staff with responsibility for CDCR Adult Institutions be exempt from the provisions and consequences of the Executive Order."

 

August 1, 2008

 

Dan Dunmoyer, Cabinet Secretary                    Michael C. Genest, Director

Office of the Governor                                      Department of Finance

State Capitol                                                    State Capitol, Room 1145

Sacramento, CA 95814                                      Sacramento, CA 95814

 

Dear Mr. Dunmoyer and Mr. Genest,

After a careful review of the Executive Order of July 31, 2008, S/09/08, and following discussion with my staff and officials from California Department of Corrections and Rehabilitation (CDCR), I have concluded, as the Receiver appointed by the Honorable Thelton Henderson in Plata vs. Schwarzenegger, that the preservation and protection of human life and safety, as well as the efficacy of numerous federal court orders, requires that all functions and all CDCR staff with responsibility for CDCR Adult Institutions be exempt from the provisions and consequences of the Executive Order. My decision encompasses all staff and all functions performed at every CDCR adult prison and at all CDCR offices with regional and statewide responsibilities for CDCR Adult Institutions. My decision also encompasses all aspects of the Order, including exemption from the paragraphs in the Order which direct a reduction in salary for most employees to federal minimum wage levels in order to secure compliance with the California Supreme Court's decision in White v. Davis. 

I have made this determination because of the pervasive interconnectedness between the delivery of prison health care, for which I am primarily responsible, and the multifaceted services and functions performed by CDCR staff responsible for adult institutions. It simply is not possible to neatly disentangle the delivery of prison health care from the many other functions and services provided by the CDCR, including its custody functions as well as all of its attendant executive, administrative and support systems (e.g., fiscal, accounting, procurement, human resources, information technology and so on). Thus, all correctional, medical, mental health, dental, and executive and administrative staff with responsibility for adult institutions, and all related functions, shall be exempt from the Order to ensure the preservation and protection of human life and safety within California's adult prisons and to preserve the efficacy of multiple federal court orders. 

I render this decision under authority granted me by the Plata Orders of February 14, 2006, January 23, 2008, and the Court's Order approving the Turnaround Plan of Action, filed June 16, 2008. Furthermore, I base my decision on the following joint Federal Court "coordination orders": 1) Order filed May 29, 2007, 2) Order filed February 28, 2007, 3) August 24, 2007, and 4) Order filed February 26, 2008.  

Please be assured that both my staff and those employees who report to Secretary Cate appreciate the serious nature of California's current budget crisis and the need for immediate fiscal restraint. I will continue to work closely with Secretary Cate to appropriately manage expenses and limit immediate expenditures consistent with our constitutional obligations.

Sincerely,

J. Clark Kelso

Cc:       State Controller John Chiang

            State Treasurer Bill Lockyer

            Matt Cate, Secretary, Department of Corrections and Rehabilitation

            Dave Gilb, Director, Department of Personnel Administration

The governor's office passes along a transcript of an interview with former Gov. Pete Wilson, who talked about the executive order with KCBS radio Thursday: