Budget Stalemate Continues Without Missing a Beat

For the fourth straight year, the fiscal year in California has begun with no budget in sight. As a matter of fact, the budget is late for the ninth time in the past 10 years -- a sorry record indeed.  What to do?

Gov. Arnold Schwarzenegger has come up with a plan to prod the legislature into action by reducing the salaries of 200,000 state employees to the minimum wage until the legislature does its job. 

The governor swears that he's not trying to punish state employees.  Rather, California needs to save money until the budget goes through, at which time the state will pay employees all the money that has been withheld.  

Does this make sense?  Let's do the math.

The average state worker earns $65,000 annually, while a year at minimum wage would be $15,000.  That means that over the course of an entire year, the state temporarily would save $3 billion, or $250 million per month. 

Given a deficit of $19 billion, even this momentary "savings" doesn't equate to much, although the discomfort for 200,000 employees will be enormous.  Just because the state promises their money sooner or later doesn't mean employees can pay their bills with the same understanding from their creditors.  

Moreover, it turns out that Schwarzenegger's objective of reduced salaries has much more bark than bite. 
The state's antiquated payroll system won't even allow checks to be written in the redesigned format proposed by the governor. 

Experts say that updating the system to permit an override in employee pay schedules will take six to nine months plus an appropriation of more than $100 million, which isn't even in the current proposed budget.

When all is said and done, the governor's effort to temporarily reduce state employee salaries seems more like a poorly executed ploy than any effort to save money.  The legislature knows it and state employees know it. 

The only concrete take-away will be a deterioration of the already bad relationship between the governor and California's civil servants who suffered a 14 percent pay cut over the past year because of the state's furlough program. 

Meanwhile, the budget stalemate goes on without missing a beat.   

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