Cory Warns Workers of Pay Cut Tied to Prop. 61

State Controller Kenneth Cory has sent letters at taxpayer expense to 500,000 current and retired state employees warning that their pay and benefits could be cut back by Proposition 61, a Nov. 4 ballot measure to limit top state salaries.

Tax crusader Paul Gann, sponsor of the initiative, Monday called Cory’s letter “inaccurate” and said he has asked the controller to send out Gann’s own letter of rebuttal.

Proposition 61 would set the governor’s salary at $80,000 and limit all other state pay to a maximum of $64,000. The initiative could also prevent employees from carrying over sick leave and vacation time from one year to the next.

Cory’s advisory letters on the ballot measure, included in envelopes with pay and benefit checks sent out last week by his office, were the first such notices the controller has sent regarding a ballot measure, an aide said. He sent one version of the letter to the state’s 200,000 employees and a different version to the state’s 300,000 retirees.

“I urge you to learn about Proposition 61 and consider its effect on your employment with the state of California,” Cory said in the memo to employees.

John Chen, a spokesman for Cory, said the controller occasionally sends advisory letters on issues affecting employees’ pay and benefits, including one last year on legislation that permitted electronic deposit of paychecks.

Although Cory personally opposes Proposition 61, Chen insisted, “He is not taking any position in the letter whatsoever.” (Under state law, it is illegal to use state resources to expressly advocate approval or defeat of a political candidate or measure.)

But Gann charged that the letter was politically motivated, saying that “at the very least it smells bad. It seems to me he is using his position in a rather odd way.”

He said he wants Cory to also send out his side of the argument in payroll and benefit checks before the election. Chen said Cory is considering the request and may approve such a mailing if it is not a political message and would provide additional information about the initiative.

One political consultant estimated it would cost Gann’s campaign about $125,000 to independently send out a political mailing to 500,000 people.

Gann and Ted Costa, his assistant, said Cory’s letter to employees was inaccurate when it declared that the measure’s salary limit would “require the immediate reduction of the salaries of about 18,000 state employees.”

Costa said only about 2,500 state employees are paid more than $64,000 and would suffer a pay cut if the measure passes.

Costa contended that Cory’s letter also was misleading because it suggested that all employees could lose vacation or sick leave by not using it in the same year. Costa claimed that only 7,000 to 9,000 employees would be affected by that provision.

In his letter to the retirees, Cory warned that the passage of Proposition 61 would probably affect the size of retirement allowances by reducing the salaries of the managers of the state retirement system.

“The persons affected by these reductions are the very persons who are responsible for the prudent investment of your funds,” Cory said.