Schwarzenegger to sign pay cut order on Thursday

California Gov. Arnold Schwarzenegger now plans to sign an executive order Thursday to reduce pay for about 200,000 state workers to the federal minimum wage and lay off 22,000 temporary workers and retired annuitants until the state has a budget, according to his office.

"The first day of savings will be Thursday so the governor will invoke his executive authority Thursday to ensure the state has enough cash to cover its costs," spokesman Aaron McLear said today.

Schwarzenegger officials have said the move is necessary to ensure the state has enough cash to last through September. The executive order would save about $1 billion per month starting with the August pay period. That period starts Thursday, the last day of July, according to McLear.

Democratic state Controller John Chiang has vowed to defy the executive order and pay full salaries to 200,000 workers.

The governor had planned to sign the executive order as early as today but opted instead to wait until Thursday, the first day it takes effect.

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