Politics & Government

Schwarzenegger's layoff plan could lengthen lines for state services

Beaches at Lake Natoma and Folsom Lake will go without lifeguards. Drivers could wait longer for licenses at the Department of Motor Vehicles.

But state officials said Thursday that they couldn't predict how much state services will suffer now that Gov. Arnold Schwarzenegger has laid off an estimated 10,300 temporary workers.

Schwarzenegger on Thursday also banned overtime, froze state hiring and reduced pay for about 200,000 state workers to the federal minimum wage of $6.55 per hour to preserve cash in the midst of a prolonged budget impasse.

The Republican governor said the state will be less productive because of the layoffs in the executive order he signed.

"I think that whenever you have layoffs and you do that, it will have an impact," Schwarzenegger said. " In the private sector, we read every day stories where companies have to lay off. That means there is less productivity there. So we have to tighten our belt, everyone has to tighten our belt."

The Republican governor intends to reverse those moves once lawmakers reach a budget compromise, rehiring many of the workers and giving employees their back pay. The governor's order exempts workers in crucial health and safety positions.

The state controller estimates that the state employs about 32,000 temporary workers, but Schwarzenegger's Department of Personnel Administration said only about a third of them will receive pink slips.

At the Broadway field office of the DMV, scores of people – some unaware of the furloughs – waited for their turn at the counter. In the coming days, as DMV lays off workers, delays could grow longer.

"They just told me I'll have to wait for 40 minutes," said Dinah Hammond, a Sacramento attorney who was attempting to get registration stickers.

"I'm concerned, but I'm not sure whether there's anything we can do about it," Hammond said.

The DMV has 169 field offices that serve as points of contact for the state's millions of taxpayers, who could find themselves inconvenienced because there will be fewer workers to staff the customer counter. As many as 2,077 DMV employees are eligible for the furlough, according to the State Controller's Office.

"It's too early to tell what the impact will be, and we're still measuring that potential impact," said DMV spokesman Mike Marando. "There will definitely be impacts in the days going forward."

"Everybody hates to go to the Department of Motor Vehicles and complains about the lines," said Assembly Speaker Karen Bass, D-Los Angeles. "How long do you think the lines will be if workers were laid off and they're not there?"

California's budget is now 32 days late as Democrats and Republicans remain divided over how to bridge a $15.2 billion shortfall in a $101 billion general fund budget. Democrats have proposed $8.2 billion in tax increases, while Republicans call for cuts in education and social programs in addition to long-term changes to reduce future state spending.

Schwarzenegger said Thursday the state's financial situation and the fact that no budget has been signed "leaves me with no easy choices, only choices with consequences."

He tried to fault the Legislature for his executive order, stating that "none of this had to happen" and that he had asked legislators to begin negotiating in January.

"I have a responsibility to ensure that our state has enough money to pay its bills," he said.

Schwarzenegger said he understands the action will affect families already struggling financially. "I want to apologize to all the state employees for having to do this," he said. "State employees are working very hard But this is the only way out."

For those embarking on hundreds of professions the state regulates, from barbering to auto repair, the wait time to obtain licenses could stretch, said Luis Farias, a spokesman for the state Department of Consumer Affairs.

Most of those subject to layoffs work as license examiners and proctors, who monitor examinations, Farias said.

Folsom Lake State Recreation Area is gearing up for a weeklong event that begins this weekend at Lake Natoma, said Dan Tynan, the Folsom sector park superintendent. The boating event uses part-time or seasonal employees to work the gates, provide security and lifeguard services, he said.

"It comes at a really bad time," he said of the layoffs. An estimated 200 employees work the 31-square-mile recreation area, which includes Folsom Lake and Lake Natoma. Those affected work in maintenance crews and at park gates, helping visitors. Beach lakes will go without the 10 lifeguards, who are seasonal workers, he said.

While budget delays have become a near-annual rite in the Capitol, Schwarzenegger argues that this year calls for drastic steps because the state has less cash due to a sour economy. The move could save roughly $1 billion per month, and the governor said he believes California will not have a sufficient cash reserve in September without the executive order.

But Democratic state Controller John Chiang disputes Schwarzenegger's view, insisting that the governor's action does little to buy time. Chiang has vowed to defy part of the governor's order by paying state workers their full wages, though he cannot help temporary state employees retain their jobs.

"He reiterated the fact that he's doing this because of cash concerns, but nothing has changed," Chiang said Thursday. "We have sufficient cash in the treasury to make all state obligations due through most of September. In fact, it doesn't save enough to change our borrowing figures."

There remain high hurdles for the federal minimum wage cut to take effect for 200,000 state workers in the August pay period. Since most get paid at the end of the month, lawmakers would have to remain in a stalemate through the end of August. Even then, Chiang has said he intends to issue full paychecks at that time, so Schwarzenegger would have to sue the controller to ensure that workers receive the federal minimum wage.

Chiang said he believes the governor's order may be illegal under a 2003 court decision, White v. Davis, and said the state could incur legal damages if it pays workers the federal minimum wage. But Schwarzenegger has insisted his move is necessary and fully backed by the same decision.

Schwarzenegger said he will sue Chiang "if that is what it takes."

The state already has withheld paychecks from lawmakers, legislative staff and gubernatorial appointees since July 1, the first day of the fiscal year. They receive their full pay – and lawmakers receive their full per diem in addition – once the budget is signed. Schwarzenegger, whose net worth is more than $100 million, does not accept his $212,179 annual salary.

Democrats and labor groups have charged that the governor is using state workers as political pawns, saying his move is designed to pressure lawmakers into quick compromise by expanding the real-world impacts of the budget impasse.

"I don't see why he needed to do this action today," Bass said. "He in his statements said that he believed we would have a budget in the next few days. I'm very hopeful that will be the case."

Assembly Republican Leader Mike Villines, R-Clovis, called the situation unfortunate.

"Nobody wanted to see a day like this, but our job now is to get a budget done," Villines said. "We have felt pressure from Day One, but this does add pressure."