California controller says he won't carry out paycut order

State Controller John Chiang said Monday an antiquated state computer system makes it impossible to adjust the state payroll quickly to issue minimum-wage checks to state workers. He said it would take at least six months to make the change.

The Democratic controller has vowed to defy Gov. Arnold Schwarzenegger's executive order directing the state to pay workers the federal minimum wage of $6.55 per hour until a budget agreement is reached. He has previously asserted that the Republican governor's order is based on an untested 2003 state Supreme Court legal opinion and that he will continue issuing full paychecks to state employees.

In a meeting with The Bee Capitol Bureau on Monday, Chiang said that even if Schwarzenegger's legal reasoning were sound, the state could not logistically retool its outdated payroll system in a matter of weeks, as the governor has asked. If the change were eventually made, Chiang also said it would take an additional nine to 10 months to issue checks to employees for their full back pay.

Schwarzenegger said last week his executive order is necessary to preserve cash, ensure the state can pay its bills in September and avoid heavy borrowing costs. Chiang again challenged that view, asserting that the state will have enough cash to pay its bills and that the order will do nothing to prevent the state from incurring any more heavy borrowing costs than it would otherwise.

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