Governor Eyes Wage Cuts

California Gov. Arnold Schwarzenegger has prepared an order to cut pay for about 200,000 state workers to the federal minimum wage of $6.55 an hour until a budget is signed, the Los Angeles Times reported.

The Times said it obtained a draft of the order and reported that the governor was expected to sign it early next week as part of an effort to avert a cash crisis for the state, which was supposed to have passed a budget by July 1.

A spokesperson for state Controller John Chiang said California has enough money on hand to pay the salaries and that Chiang would not implement the order.

Such an order would almost certainly be challenged in court by public employee unions.

The order also calls for the state to immediately lay off part-time workers, stop overtime payments for almost all employees, and cease all hiring until a budget is enacted.

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