Guest Editorial by Dan Bacher, Editor of the Fish Sniffer
How can Schwarzenegger campaign for $9.3 billion water bond while slashing salaries?
August 1, 2008. -- Governor Arnold Schwarzenegger must live in a parallel universe devoid of logic, rationality, critical thinking and accountability, based on his latest contradictory actions at the State Capitol.
The same Governor who is working relentlessly to pass a budget-busting $9.3 billion water bond, with absolutely no sense of irony, yesterday issued an executive order slashing the salaries of 200,000 state workers to the federal minimum wage of $6.55 per hour and immediately laying off 20,000 temporary workers until California passes a budget.
"Today I am exercising my executive authority to avoid a full-blown crisis and keep our state moving forward," Governor Schwarzenegger said. "This is not an action I take lightly, but we do not have a budget, and as Governor, I have a responsibility to make sure our state has enough money to pay its bills."
Schwarzenegger, the worst ever Governor for fish and wildlife in California history, is apparently one of the most ruthless in the way he treats the state's workers, including DFG staff. A police officer's son who became a body builder and then a Hollywood "action hero," Schwarzenegger apparently wants to run California like a totalitarian state. Agency staff are routinely bullied and those who disagree with his disastrous environmental policies are pressured into resigning.
On Schwarzenegger's watch, Central Valley king salmon have collapsed to the lowest recorded population level, due to the Governor's zeal in increasing water exports to his buddies in corporate agribusiness. The same increase in water exports is also the key factor in the collapse of three pelagic species - the delta smelt, longfin smelt, juvenile striped bass, and threadfin shad - as documented by a team of federal and state scientists.
The same Governor who is slashing state worker salaries last week spoke at a Capitol rally touting the "benefits" of a $9.3 billion "compromise" water bond sponsored by him and Senator Dianne Feinstein. The proposal, opposed by a coalition of fishing groups, Indian Tribes, conservationorganizations and Delta residents, includes two new dams and a peripheral canal. The bond would build the infrastructure to export more even more water out of the Delta, further imperiling collapsing salmon and other fish populations.
I ask Schwarzenegger how he can cut salaries and jobs, due to a budget shortfall of $15.2 billion, while he is campaigning for a proposal that would indebt the state for another $9.3 billion? Is Schwarzenegger out of his mind?
The corporate media, who haven't yet got tired of the novelty of having an "action hero" actor as the Governor, portray Schwarzenegger as the "green governor," since they are deceived by his detestable grandstanding about "global warming" and "ocean protection." Meanwhile, he presides over the destruction of the largest estuary on the West Coast and California and Oregon salmon fisheries.
Schwarzenegger's bizarre vision of "ocean protection" means allowing corporate water polluters and agribusiness to routinely violate environmental laws while his administration removes sustainable recreational and commercial fishermen from the water by creating massive "no fishing" zones.
Apparently, Scharzenegger has the same compassion and consideration for state workers that he has for commercial fishermen, charter boat captains, fishing guides and people employed in the fishing industry who are being devastated economically by the salmon fishing closures.
"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," said Schwarzenegger. "When I sign this order thousands of pink slips will start going out across the state. And I'm also cancelling all overtime, except for public safety and 24-hour medical care and I'm ordering also a hiring freeze. And, effective for the August payroll, tens of thousands of state employees will be paid the federal minimum wage until a budget is passed and then, of course, they will get reimbursed their salaries."
If there ever was a governor that really needed to be recalled, it's Arnold Schwarzenegger. His legacy to date includes the Prospect Island Fish kill, the closure of ocean and Central Valley river salmon fisheries, the collapse of the California Delta food chain, the gutting of the California Department of Fish and Game and repeated breaking of federal and state environmental laws. What will it take to get the people to rise up and get him removed from office like was done to Governor Gray Davis?
Here's the transcript of Schwarzenegger issuing the executive order, followed by the order itself.
For Immediate Release: Contact: Aaron McLear, Thursday, July 31, 2008 Brittany Chord, 916-445-4571
Transcript of Gov. Schwarzenegger Issuing Executive Order to Address State's Looming Cash Crisis
First, I want to say thank you to Mike Genest, who is my Finance Director, for being here with me and Dave Gilb from the Department of Personnel Administration.
Today is a month and a half past the constitutional deadline and the legislature still has not sent me the budget. Because of this, our state faces a looming cash crisis. This situation leaves me with no easy choices, only choices with consequences, consequences that will have a direct impact on California families. And so I have a responsibility to make sure that our state has enough money to pay its bills. The executive order that I will sign here today will free up money to help cover the state's costs.
But 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. When I sign this order thousands of pink slips will start going out across the state. And I'm also cancelling all overtime, except for public safety and 24-hour medical care and I'm ordering also a hiring freeze. And, effective for the August payroll, tens of thousands of state employees will be paid the federal minimum wage until a budget is passed and then, of course, they will get reimbursed their salaries.
Now, some financial institutions have offered in the past assistance to employees when they had a budget delay, so I encourage state workers to contact your banks and credit unions, talk to your personnel offices and check for updates on the Department of Personnel Administration website, dpa.ca.gov.
But the problem here is really that none of this had to happen. I've been saying this ever since the January budget, that the legislators should start negotiating immediately, that we have a lot of problems, not just the budget problem but also a problem with our dysfunctional budget system and also the declining economy but still, we have no budget today. But I will continue to work with the legislative leaders and negotiate the budget and I am an optimistic person and I remain optimistic that we can get a budget in the next few days.
But today I am exercising my executive authority to avoid a full-blown cash crisis, so this is why I am going to now sign this executive order.
(EXECUTIVE ORDER SIGNED)
GOVERNOR: So if you have any questions -- we will have Mike Genest come up afterwards and also Dave Gilb, to answer some of the detailed questions -- but if you have any questions in the meantime, please feel free.
QUESTION: Governor, John Chiang has said that he will continue to pay the salaries through September. Is there a kind of conflict there? Is there some legal disagreement about how you interpret the law?
GOVERNOR: I don't think there is, because I think that the court has made that decision already and this a law that they have to follow through. But I think that I'm looking forward to working with him on this and to move things forward, because I think the most important thing for everyone here is to avoid a cash crisis, that we can't make our payments.
So I think this is what this is all about. And it is a terrible situation to be in. I don?t think any governor wants to be in this situation, because, of course, state employees are working very hard. They are the ones that are making our state run and they're doing a great job. But this is really the only way out at this point, because we are coming to the end when it comes to cash and so this is why this is a very important step to take.
QUESTION: Do you think that your action today will force the legislature, the added pressure, to come up with a budget solution faster?
GOVERNOR: This is not meant to do that. This is -- it's very important that the legislators are working very hard. And, like I said, I will do everything in my power. We have continuous meetings, we have meetings every day with the legislative leaders and with other legislators, as far as that goes, in order to get the job done.
It's very important for all of you to understand that the reason why I have been stressing throughout the whole spring, the whole year, actually, that they should start talking about this, is because our whole schedule is somehow off. Because why is it that for the last 20 years we have only had four budgets on time? It's not that for 20 years people are not really functioning well here, or they are not capable, or that they're bad people or anything like this. It's just that when you propose your budget in January, on January 10th, no one does anything except go out and complain about it and do all that, because you never can make everyone happy.
But then they wait until April, until the receipts come in, when the people pay their taxes. And then they wait until the May Revise. Then the May Revise comes in, I put out my May Revise and that's May 14th. Then, of course, they have to analyze that May Revise and they have to digest it. So they have endless amount of conversations about this and meetings and hearings and all of those things. But now they have to have that time, which takes usually a month. But by that time it's the constitutional deadline and we haven't yet negotiated.
And now, when you have a very complicated year like this, like I said, where you have a budget problem and a dysfunctional budget system and on top of that a declining economy and you're talking about reforming the budget system, where you talk about the rainy day fund and where you talk about mid-year cuts and all of those kind of things -- I said always there are a lot of moving parts and this is very complicated and it takes a long time to negotiate those things.
You can't do that just in a week, so you have a choice. Do you want to do a get-out-of-town budget or do you want to really solve the problems? Well, I insist that this time we solve the problems and that's why I said I will not sign a budget that does not have serious budget reform in there as part of it.
QUESTION: You talk about the state's cash crunch but what about the cash crunch that hundreds and thousands of state workers will be experiencing, their families?
GOVERNOR: We feel, of course, bad that they have to go through hardship and this is why it is very important for them to know -- and I think Dave Gilb will talk a little bit about that afterwards -- it's very important for them to know that we will do everything in our power so that they can get loans, because as soon as we have a budget they will be reimbursed their salaries. This has been done in the past, as you know, that every time we are late with the budget the legislators and the legislative staff, there are 1,000 people here that don't get paid. Every year that's the case and they go and get loans. But it is difficult. It is difficult but we want to make sure that they have money and that no one is out on the streets.
QUESTION: Governor, can I follow up on the cash crunch issue? Because you've said you need to do this because we could run out of cash but the Controller's Office has said that the amount of money we could be short is $10 billion. The most you could get out of this is $1 billion. In other words, he's insinuating that this is more a political, symbolic move, than really solving the problem.
GOVERNOR: I think that, again, Mike Genest can get into that. But I can tell you that it is a very important step. It is my responsibility to make sure that the state keeps running and that we keep paying our bills. And you know, there are different opinions about all of that. I totally understand that and I respect those opinions but the fact is that we are running out of cash and this is an action that we have to take.
QUESTION: (Inaudible) insinuate. The Controller says it's logistically impossible to retool the state's payroll system and that he will not do that. Would you go to court to force him to do that?
GOVERNOR: If that's what it takes. Look, I'm here to make sure that our state functions and whatever it takes I will do. And I think that the court has made a decision on that four years ago, that they have to follow through on what our Finance Director is working out with them. I'm not ordering him to do anything; it's the Finance Director, Mike. He can talk about that, that he is working with him to make sure that we have enough cash.
QUESTION: Governor, what impact will the thousands of layoffs have on state services? And what would California residents see in terms of the impact that these layoffs will have?
GOVERNOR: I think that whenever you have layoffs and you do that it will have an impact. I mean, inevitably, when you see, for instance, local government -- left and right they have been laying off people because they are short on cash. All over the United States that's the case. In the private sector we read every day stories where companies have to lay off. That means there is less productivity there. So we have to tighten our belt, everyone has to tighten their belt. We recognize that. But this is, like I said, the only solution in order to get out of this problem.
And I hope that we never have to use any of this in the first place. My intention is to get a budget within the next few days and if that is the case then we will never have to use any of those kind of things and everyone will get paid and some of the people will be hired back and all that.
Okay, last question. Please.
QUESTION: What will be the impact on the California economy if you have 22,000 people laid off, people who perhaps can't make their household payments? Are you concerned that there might be a risk for the greater California economy because of this?
GOVERNOR: Like I said, we will do everything we can so that people can go and get loans and they don't get into a crisis situation.
And when it comes to stimulating the economy, we hopefully have, as part of our budget, a stimulus package that will stimulate the economy. Because there are a lot of things that this state is already doing; pushing out billions of dollars in infrastructure bond money so that we can rebuild California and put people to work and also to help people that have problems making their payments with their houses, we're working on that. There's great legislation that we have already signed and with the federal government there are great things that are happening. So we are all working on that.
But it's very important. I think you touched on a very important point, which is economic stimulation. That's what we have to work for. And, of course, also getting the confidence of the financial community that we can get our act together and that we can be fiscally responsible in this state. And I think this is why it is important that we get a budget in the next few days.
Thank you very much. Thank you.
GAAS:587:08. For Immediate Release: Contact: Aaron McLear, Thursday, July 31, 2008 Lisa Page 916-445-4571
Gov. Schwarzenegger Issues Executive Order to Address State's Looming Cash Crisis
With California facing a looming cash crisis and without a 2008-09 state budget, Governor Arnold Schwarzenegger today issued an executive order to make money available to cover the state's costs.
"Today I am exercising my executive authority to avoid a full-blown crisis and keep our state moving forward,? Governor Schwarzenegger said. ?This is not an action I take lightly, but we do not have a budget, and as Governor, I have a responsibility to make sure our state has enough money to pay its bills."
Text of executive order:
EXECUTIVE ORDER S-09-08?
WHEREAS the constitutional deadline for enacting a state budget for Fiscal Year 2008-09 has passed without the enactment of a budget; and
WHEREAS in the absence of a budget, State government is constitutionally prohibited from making payments that are not compelled by either the State Constitution or federal law; and
WHEREAS until there is a state budget, the State has no authority to pay the following payments: (1) Vendors and Contractors for goods and services chargeable to Fiscal Year 2008-09; (2) Payroll for legislative staff, appointees, and exempt employees; (3) Payroll for other state employees beyond that required by federal labor law; (4) Highway User Taxes that are apportioned to the state, cities and counties for highway and road improvement projects; (5) Cal Grants to students in higher education; (6) Transfers to the Trial Courts; (7) Transfers to University of California, California State University, and Community Colleges; (8) Transportation Revolving Fund disbursements; (9) Non-revenue limit school payments; and (10) Payments for non-federally mandated social services programs such as Community Care Licensing, Adult Protective Services, State Only Foster Care; State Only Adoptions Assistance, and Cash Assistance Program for Immigrants; and (11) tax relief payments to low income seniors and disabled persons; and
WHEREAS on May 1, 2003, the California Supreme Court, in White v. Davis, issued a decision that, in conjunction with other pre-existing court orders, clarified that during a period that there is no state budget in place, federal labor laws require the State to pay its nonexempt FLSA employees either federal minimum wage or, for those employees that work overtime, their full salaries plus overtime; and
WHEREAS it is not known when a budget will be adopted for Fiscal Year 2008-09; and
WHEREAS as a result of the late budget, there is a real and substantial risk that the State will have insufficient cash to pay for state expenditures; and
WHEREAS since June 2008, the unprecedented number and size of fires in California has created states of emergency that have required additional and substantial expenditures of cash to ensure that there are sufficient resources to effectively fight these fires and save lives and homes; and
WHEREAS it is critical that the State be able to meet any unforeseen emergency such as fire, flood or public health emergency and to continue to make timely payments on constitutionally and federally-mandated obligations and existing obligations to pay holders of state bonds; and
WHEREAS due to the impending cash crisis and budget delay, the State may be forced to consider a Revenue Anticipation Warrant (RAW) at an exorbitant cost to the State, including hundreds of millions of dollars in credit enhancements, in order to make sure there is sufficient cash to pay for state expenditures; and
WHEREAS after the late adoption of a budget, there will be additional cash demands because all of the deferred payments that were not permitted to be made during the budget impasse will become due and payable; and
WHEREAS the late budget has resulted in loss of savings to the State in the amount of $164 million for July, and failure to enact a budget in August will result in additional loss of savings in the amount of $323 million; and
WHEREAS as a result of the late budget, additional mitigation measures must be implemented to offset the loss of savings and to ensure that there is sufficient cash to make the State?s payments; and
WHEREAS the State employs nearly 22,000 retired annuitants, permanent intermittent employees, and seasonal employees and the State hires new employees at the rate of approximately 1,700 per month; and
WHEREAS except for services and functions of state government deemed critical by this Order, additional mitigation measures need to be taken to immediately reduce expenditures and preserve cash, including the following: (1) halting all hiring, transfers and promotions of employees, and contracting for individuals to perform services; (2) prohibition of overtime; (3) termination of the services of retired annuitants, permanent intermittent employees, seasonal employees, temporary help workers and, student assistants; and (4) suspension of personal services contracts.
NOW, THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the State of California, in accordance with the authority vested in me by the Constitution and the statutes of the State of California, do hereby issue the following orders to become effective immediately:
IT IS ORDERED that the services and functions of state government directly related to the preservation and protection of human life and safety, including but not limited to emergency and disaster response activities and the provision of 24-hour medical care, shall be deemed critical and exempt from this Order.
IT IS FURTHER ORDERED that except for services and functions of state government deemed critical and exempt by this Order, all State agencies and departments under my direct executive authority take immediate action effective July 31, 2008 to cease and desist hiring of employees (except in instances in which there is a bona fide offer and acceptance prior to the effective date of this Order), transferring employees between State agencies and departments, promoting employees, and contracting for individuals to perform services.
IT IS FURTHER ORDERED that except for services and functions of state government deemed critical and exempt by this Order and emergent situations to preserve and protect human life and safety, all State agencies and departments under my direct executive authority take immediate action to cease and desist authorization of all overtime for employees effective July 31, 2008.
IT IS FURTHER ORDERED that except for services and functions of state government deemed critical and exempt by this Order, all State agencies and departments under my direct executive authority take immediate action to terminate the services of the following five categories of employees and individuals effective July 31, 2008: (1) Retired Annuitants; (2) Permanent Intermittent Employees; (3) Seasonal Employees; (4) Temporary Help Workers; and (5) Student Assistants.
IT IS FURTHER ORDERED that except for services and functions of state government deemed critical and exempt by this Order and except for services provided pursuant to multi-year contracts for Information Technology systems and services, all State agencies and departments under my direct executive authority take immediate action to suspend all personal services contracts effective July 31, 2008.
IT IS FURTHER ORDERED that all Agency Secretaries and Department Directors shall take immediate action to implement this Order, and any other action that will reduce state expenditures.
IT IS FURTHER ORDERED that the Director of the Department of Finance shall establish an exemption process that Agency Secretaries shall utilize to determine if an exemption is justified based on critical services and functions, which may include either cost-reducing or revenue-producing services and functions that will help ensure that there is sufficient cash for the State to make its payments.
IT IS FURTHER ORDERED that Agency Secretaries and Cabinet-level Directors shall report their exemptions to the Cabinet Secretary and the Director of the Department of Finance within 24 hours of approving an exemption.
IT IS FURTHER ORDERED that the Director of the Department of Finance and Director of the Department of Personnel Administration shall work with the State Controller to develop and implement the necessary mechanisms, including but not limited to pay letters and computer programs, to comply with the California Supreme Court?s White v. Davis opinion to pay federal minimum wage to those nonexempt FLSA employees who did not work any overtime.
IT IS FURTHER ORDERED that the necessary mechanisms to ensure compliance with the White v. Davis opinion must be in place to be effective for the August 2008 payroll.
IT IS HEREBY REQUESTED that during this budget impasse, the State Treasurer shall take all actions necessary to maintain the State?s ability to pay its bond obligations, including payment of principal and interest with funds in the State Treasury, and shall take all actions that are necessary to protect the State?s funds and investments.
IT IS FURTHER REQUESTED that other entities of State government not under my direct executive authority, including the California Public Utilities Commission, the University of California, the California State University, California Community Colleges, constitutional officers, the legislative branch (including the Legislative Counsel Bureau), and judicial branch, assist in the implementation of this Order and implement similar mitigation measures that will help to preserve the State?s cash supply during this budget impasse.
IT IS FURTHER ORDERED that this Order shall remain in effect until such time as both a Fiscal Year 2008-09 Budget is adopted and the Director of the Department of Finance confirms an adequate cash balance exists to meet the State?s fiscal obligations.
I FURTHER DIRECT that as soon as hereafter possible, this Order be filed in the Office of the Secretary of State and that widespread publicity and notice be given to this Order.
IN WITNESS WHEREOF I have hereunto? set my hand and caused the Great Seal of? the State of California to be affixed this 31st? day of July 2008.
________________________________ ARNOLD SCHWARZENEGGER, Governor of California
________________________________ DEBRA BOWEN, Secretary of State