Schwarzenegger cuts Calif. workers' pay to $6.55 an hour

Gov. Arnold Schwarzenegger signed an executive order today eliminating jobs for as many as 22,000 temporary state employees and reducing pay for about 200,000 state workers to the federal minimum wage of $6.55 per hour, portraying it as a stopgap measure to ensure the state can pay its bills without a state budget.

The Republican governor intends to reverse those moves once lawmakers reach a budget compromise, meaning the state would rehire temporary workers and give employees their entire back pay. The governor's order also imposes a strict hiring freeze and eliminates overtime but exempts workers in health and safety fields.

Schwarzenegger said the state's financial situation and the fact that no budget has been signed "leaves me with no easy choices."

"I have a responsibility to ensure that our state has enough money to pay its bills. This is not an action that I take lightly," he said.

Schwarzenegger said he understands that the action will affect families that are already struggling financially. "I want to apologize to all the state employees for having to do this," he said.

California's budget is now 31 days late as Democrats and Republicans remain divided over how to bridge a $15.2 billion shortfall in a $101 billion general fund budget. Democrats have proposed $8.2 billion in tax increases, while Republicans are calling for cuts in education and social programs in addition to long-term changes to reduce future state spending.

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