Mercury News Sacramento Bureau

Pay cuts, layoffs ordered.

California DMV employee Cassandra Sausedo holds a sign Thursday in San Jose calling for lawmakers to pass a state budget. Earlier in the day, Gov. Arnold Schwarzenegger ordered pay for up to 200,000 state workers cut to minimum wage and laid off more than 10,000 others, blaming a looming cash crunch.

With hours cut, worker faces pinch. Although the governor portrayed the unprecedented move as a money-saving maneuver, it was seen in the Capitol primarily as a way to intensify pressure to pass a budget. The state enters the second month of the fiscal year today without a spending plan, and faces the prospect of taking out high-cost loans from Wall Street if one isn't in place soon.

"Our state faces a looming cash crisis. This situation leaves me with no easy choices," Schwarzenegger said at a news conference. "This is not an action that I take lightly. I understand that this will affect people at a time when they are already struggling and so I want to apologize to all the state employees for having to do that."

The pay cuts would not take effect until September at the earliest, and a pitched political and legal battle may ensue to block them.

As for the layoffs, the administration has not yet specified which employees will be exempt, so it's unclear exactly how state services will be affected. Generally, the order calls for exceptions for those in public safety and emergency medical care jobs; department heads have until today to decide which workers are spared.

But one place where the public may notice a difference is at the Department of Motor Vehicles, which employs many part-time and temporary staffers who were expected to be laid off. That could mean longer waits for people registering their vehicles or seeking new driver's licenses.


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Can you say "ouch!" What a terrible way to balance the budget. Oh, by the way Mr. Smith,I'd like to recognize all your hard work and what you do for our dept., but from now now on you'll only be making minimum wage. Now get back to work. Doh!