Governor set to sign state salary cuts

Gov. Arnold Schwarzenegger will sign an executive order Thursday intended to cut the salaries of about 200,000 state workers to the federal minimum wage until a budget is approved, according to administration officials.

A draft of the plan obtained by reporters last week showed it would reduce the pay of most state workers to $6.55 an hour and lay off nearly 22,000 part-time and seasonal employees. The first reduced payments would be made at the end of August.

Aaron McLear, a spokesman for Schwarzenegger, said the governor’s impending order, news of which has spawned numerous protests by workers and their advocates, would ensure that the state had enough cash in its accounts until a budget was passed, at which time workers would receive their full back pay. The state’s fiscal year began July 1.

State Controller John Chiang said in an interview Monday that he would not implement such an order because it would hurt workers while exposing the state to legal liability and monetary damages. He also said banks would lend the state the money it needs to pay bills in September. “We would not have the cash crisis he is referring to,” Chiang said.

-- Michael Rothfeld