California’s 3rd Appellate District court in Sacramento ruled state Controller John Chiang must comply with an order by Governor Arnold Schwarzenegger to lower the pay of almost 200,000 state workers to the federal minimum wage of $7.25 until a budget is passed.
The state’s fiscal year began on July 1. The dispute between the governor and the Democrat controlled California legislature is over a deficit for the current fiscal which is is expected to be $19.1 billion.
California would save approximately $1.2 billion a month due to the reduction, according to the state Department of Finance. Once a budget is finished and signed into law, state workers may be due back pay.“This underscores the fact that everyone loses when we have a budget impasse,” Schwarzenegger’s press secretary, Aaron McLear, said in a statement. “Every day the Legislature fails to deliver a budget costs the state $50 million.
Although the state is obligated to honor federally mandated wage minimums, this ruling appears to grant them the right to abrogate employment contracts with private citizens in order to relieve itself of liabilities. It would seem that California only needs to honor debts when they can and not when they are due.
Douglas A. McIntyre