Government Law

Bad Budget News in Calif. & N.Y.; Schwarzenegger Cuts State Workers' Pay

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After recent bad news about the state of New York state and New York City’s finances, officials there are probably watching with interest the current budget crisis in California.

Today Gov. Arnold Schwarzenegger temporarily reduced the pay of most California state employees to the federal minimum wage of $6.55 an hour, to help keep the state afloat while he and lawmakers argue about the budget, reports the Los Angeles Times. However, the California controller says in a letter that he doesn’t intend to follow the governor’s executive order, because it isn’t in accord with the law.

California has also laid off more than 10,000 part-time workers to ease its cash crunch. The state’s budget was supposed to be in place by July 1.

Additional coverage:

The Economist: “In a state of shock”

New York Times (editorial): “Gov. Paterson’s Budget Emergency”

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