The governor says he has to do something to save money and this is one option that would save the state $1 billion.
"I don't know what we would do. I'm frightened," said Terry Ree, a state worker.
Ree is trying not to get emotional as she takes a mental inventory of all of her family's bills. Now that /*Governor Schwarzenegger*/ is considering slashing her salary, as a workers comp claims adjustor, to $6.55 an hour.
"This is what I get for being loyal to the state of California, $6.55 an hour. It's not just frightening, it's humiliating and insulting," said Ree.
It's also seen as a money-saving move while the budget standoff continues. Once it's passed, state workers would be repaid, but many are still taking precautions.
"Immediately calling my wife and saying curtail all spending, turn off the air conditioner," said Curtis Stapp, a state worker.
"This is something the governor is looking at very strongly, we haven't decided what we're going to do, but it's something he has to look at, he is duty bound to make sure the state does not run out of cash," said Aaron McLear, the governor's press secretary.
The state is headed in that direction. Internal cash reserves will likely run dry in a matter of weeks without a new budget.
"It's a way to use state employees as a political football to try to put pressure on the Democrats to cave to a minority agenda," said Russell Kilday-Hicks, from the State University Employees Union.
State worker union reps feel their salaries are being used as collateral for the state, and instead of agreeing on a budget, lawmakers are putting them in the middle. /*State Senator Leland Yee (D) from San Mateo*/, says it's not that easy, considering party leaders have different priorities.
"The only way we can take care of this structural problem is to raise revenue, we can't cut, we've asked the Republicans where else we can cut from, they're not offering substantial solutions to that," said State Senator Yee.
Yee does hope the governor holds off on his decision considering the Senate is supposed to vote on the budget on Tuesday.