Schwarzenegger orders cuts amid fiscal crisis

August 19, 2008 6:27:20 PM PDT
There is no state budget agreement yet, so Governor Schwarzenegger Thursday signed an executive order laying off 10,000 part-time state workers and temporarily withholding most of the wages of thousands more state employees.

No amount of hugs could comfort a stunned Celeste Knox, one of thousands of state workers who received a pink slip. The single mother closed on her first house less than 24 hours ago, a house she thought she could afford.

"Now I can't because of some little game or some little ploy," Knox said. "It's not fair to me; I showed up to work, I do the job I was asked to do."

With the state budget a month late and cash reserves dwindling very quickly, Schwarzenegger apologized for signing the order that laid off thousands of part-time and temporary workers and slashed the wages of 200,000 employees to the federal minimum wage of $6.55 per hour.

"I think it's a terrible situation to be in," Schwarzenegger said. "I don't think any governor wants to be in this situation. But this is the only way out."

Unions have been very vocal about their opposition to the cuts, but their protests neither convinced the governor to abandon his plan, nor did they push lawmakers to agree to a state budget. But Thursday's executive order puts pressure on state leaders.

"I think it adds pressure, I do. I believe that none of us wants to see something like this," Assemblyman Mike Villines said. "Nobody wants to see people that are being affected that, frankly, don't have a part in the decision process."

10,000 state workers lost their jobs following Schwarzenegger's executive order, but more layoffs maybe to follow. It was previously estimated that up to 22,000 people could be laid off, but in a press conference Thursday, state controller John Chiang said the number could be as many as 33,000.

State workers will get their jobs and full pay back once a budget is in place.


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