Metropolitan News-Enterprise


Friday, August 1, 2008


Page 1


Court Officials Say Governor’s Cuts Do Not Apply to Judiciary


From Staff and Wire Service Reports


Gov. Arnold Schwarzenegger’s executive order eliminating thousands of part-time and temporary positions and limiting the pay of up to 200,000 state workers to the federal minimum wage until the Legislature passes a budget does not apply to court employees, representatives of the Judicial Council and the Los Angeles Superior Court said yesterday.

Pointing to language limiting application of the order, which also halts hiring, overtime and contracting, to agencies and departments under the governor’s “direct executive authority,” and to a request in the order that entities not under such authority—such as the “judicial branch”—implement “similar mitigation measures,” a spokesperson for the council said that state courts were not bound by the order.

However, the state courts’ chief administrator, William Vickery—pointing to cost-saving measures the council, the AOC and appellate courts have already implemented—indicated that his office would review the governor’s “request” to determine what further steps it could take to save money.

Los Angeles Superior Court Presiding Judge J. Stephen Czuleger said that he had arrived at the same conclusion last week, but added that the court had been anticipating budget reductions for months and had been working to give itself the “financial latitude” to get through September.

Schwarzenegger’s order is a stark illustration of the cash problem the state faces. Lawmakers have yet to agree on a spending plan a month after the state’s fiscal year began, leaving California without the ability to pay contractors, the higher education system and legislative employees.

$15.2 Billion Deficit

Democratic and Republican lawmakers remain divided over how to close a $15.2 billion deficit, with Democrats favoring $8.2 billion in new taxes on corporations and the state’s wealthiest residents. Republicans want a spending cap and oppose tax increases.

Adding to the fiscal mess has been an unprecedented number of wildfires this year, costing the state far more for emergency response than it had budgeted.

Schwarzenegger justified the move by saying that the state faced a “full blown” financial crisis. Citing his responsibility to ensure that California has enough money to pay its bills, he said that the order will lead to immediate savings.

The order exempts public safety agencies who provide services or functions “directly related to the preservation and protection of human life and safety,” including emergency and disaster response activities and hospitals and the provision of 24-hour medical care, but will have an immediate effect everywhere else.

Positions eliminated under the order include 22,000 retired state employees who work under contract, temporary and part-time workers such as those who fill in at the Department of Motor Vehicles, seasonal employees and student assistants.

But Schwarzenegger’s finance team said of that total, just 10,300 would receive pink slips immediately, and that the others might be deemed crucial to public safety and exempted under a process to be established by the director of the state Department of Finance.

Minimum Wage

Schwarzenegger said that the pay rate reduction was mandated under the California Supreme Court’s 2003 ruling in White v. Davis, 30 Cal.4th 528, where the court held that the federal Fair Labor Standards Act requires the State to pay covered, nonexempt employees the federal minimum wage or, if they work overtime, their full salaries plus overtime, while there is no state budget in place.

By law, those workers must be paid at least the current federal minimum wage of $6.55 an hour and would be reimbursed once a budget is approved.

However, by eliminating overtime, Schwarzenegger’s order virtually ensures that none of the state employees subject to the order can receive their full salaries until such time.

Before he signed the order, Schwarzenegger said he understood the effect it will have on thousands of people and apologized to state employees. But he also said he was left with no other option, saying the state was running out of cash.

Assembly Speaker Karen Bass said she was disappointed with the decision to defer the pay of full-time employees, but added that the action would not deter legislative leaders from working on the budget. She said she hoped they would submit a spending plan to Schwarzenegger “in the next few days.”

However, the implementation of the pay reduction is in doubt, as State Controller John Chiang, who cuts the checks, said that he will not comply.

Chiang, a Democrat, sent a letter to Schwarzenegger yesterday saying he will defy the order and issue employees their regular paychecks, setting up a potential legal skirmish between his office and Schwarzenegger’s.

The controller said the executive order was based on “faulty legal and factual premises,“ and argued that the Supreme Court’s ruling in White merely set a floor, rather than a cap on the actual amount his office could pay state employees during a budget impasse.

He also differed with the Republican administration over the state’s financial condition, maintaining that California has enough money to meet all its expenses through September, and saying that he is authorized to borrow until a budget is approved if it is later determined that the state has insufficient money.

Chiang further criticized the governor’s exemption of public safety employees as a class from the order.

“Your assertion that I do not have the authority to pay some FLSA workers their full pay, but do for others, is not supported by the Supreme Court ruling…,” he wrote. “I either have the authority to only pay minimum wage, or I do not.”

Schwarzenegger was asked yesterday during a news conference whether his administration would sue Chiang if the controller did not comply with the executive order.

“If that’s what it takes,” he said. “I’m here to make sure that our state functions, and whatever it takes, I will do it.”

Schwarzenegger signed the order yesterday because it is the first day of the August pay period. The first paycheck to be affected by the pay reduction will be received by state employees in early September.


Copyright 2008, Metropolitan News Company