Just when state workers were breathing a sigh of relief that the three-days-a-month furloughs are over -- at least for now -- an appeals court upheld Schwarzenegger's authority to reduce pay to the federal minimum wage in the absence of a state budget. State workers are shocked.
"I am. We were just talking earlier that it's not going to happen. All of sudden you gave us the bad news. What is next? No job?" said state worker Eden DeLaCruz.
The ruling is a second victory for Schwarzenegger on the minimum wage issue.
"It underscores the fact that we need to get a budget as quickly as possible. We don't want to pay minimum wage to state workers," said the governor's press secretary Aaron McLear.
A budget agreement won't be that quick, considering most lawmakers have left Sacramento. They're not calling it "summer recess" because they could be called back anytime.
But State Controller John Chiang is not convinced he has to follow the order. He is exploring legal options, including an appeal to the Supreme Court. He thinks the ruling left some room to exempt antiquated payroll systems like California's.
"The payroll system was designed to do the right thing, to pay people the proper wage for the hours earned. Not for political failure when the governor and Legislature don't get a budget enacted on a timely basis," said Chiang.
"He can't figure out his computers? That's absurd. He's been in office for four years. I think that's long enough to figure out how to do your job. Incompetence is not a defense," said McLear.
While the governor and the controller posture, state workers like health physicist Valerie Brown are caught in the middle.
After enduring 46 days of unpaid furloughs and spending most of her savings, she's out of options if she's paid $7.25 an hour.
"Selling the house, we've been engaged in that. We're working, trying to secure assets from the family. They're strapped too. I don't know what we're going to do, to be honest with you," said Brown.
If he wanted to, Schwarzenegger could ask a judge to find Chiang in contempt of court if he continues to defy the order. And the controller could be fined for every day he does. Of course state workers will get back pay once a state budget has passed.
