8 months ago
SACRAMENTO, CA - With the state fiscal year set to end on Tuesday and with no budget in place, Gov. Schwarzenegger ordered all administration agencies to prepare to implement a third furlough day per month for all employees.
"I am directing all agencies to prepare to implement a third furlough day for all employees beginning July 1 in the event that no budget solution is in place by that date," Schwarzenegger said.
The state faces a $24.3 billion shortfall and lawmakers have been unable to agree on how close that gap.
"It's clear that if the legislature does not send a full budget solution to my desk by June 30, California will face an extreme cash-flow problem that will threaten our ability to pay for vital services," Schwarzenegger said. "I cannot force the legislature to act, so I must do what is in my power as Governor to conserve cash so that the state can continue to operate."
Schwarzenegger has proposed a cuts-only budget that would primarily impact education, social services and welfare programs.
Democrats have countered with mix of cuts and tax increases in an effort to save some of those programs.
However, Schwarzenegger said California must live within its means and he will veto any measure that includes tax hikes. He said voters made it clear during February's special election that they do not want to pay more for services.
Response to the plan was swift from unions representing thousands of state workers.
American Federal of State, County and Municipal Employees Local 2620 President Nancy Swindell said her union's 5,000 state health service employees have already endured a 9.2 percent pay cut with two furlough days a month.
An increase to 14.2 percent is an unreasonable demand, Swindell said.
"Governor Schwarzenegger says state workers need to take a haircut, but a 14 percent pay cut is more like a buzz cut," Swindell said. "It's time Governor Schwarzenegger stop searching for budget scapegoats and start looking for real budget solutions."
For state workers like Chris and Nikki Dove, the prospect of another furlough day each month is cause for more anxiety about supporting their home and four kids.
"We've already taken a 20 percent cut, now it's going to be even more," Chris Dove said. "I don't know how we're going to make our mortgage."
State lawmakers failed in a third attempt to solve the budget woes Friday, despite Senate President Darrell Steinberg's pleas for Republican votes.
"We need two of your votes in order to avoid the payment of IOUs and a resolution of our budget crisis," Steinberg said.
But the proposal did include taxes -- and withholding more from people's paychecks is something Republicans strongly oppose.
"The last thing we need for Californians is to raise their taxes," Sen. Tony Strickland, R-Moorpark, said. "Hardworking Californians didn't cause this problem."
The governor's announcement came just hours after state Controller John Chiang said thousands of Californians will be hurt and it will cost millions if the state hands out IOUs instead of payments next week.Chiang said Schwarzenegger and lawmakers need to come up with a complete solution to the deficit instead of making a political statement.
Democrats are proposing to cut and delay billions in spending to prevent the IOUs without solving the whole shortfall. Schwarzenegger said he would veto that plan.
Without a new budget, Chiang said Friday that he will have to start issuing IOUs. Students expecting college grants and low-income seniors would not get paid, along with vendors that provide services to the state.
Chiang said taxpayers will also owe interest on the IOUs.
News10/KXTV
