Writing from Destin, Florida:
According to the story from the AP, California is been suffering from a budget fight since July, when the new fiscal year was supposed to begin. The reason: you guessed it. Politics. (Read the article for details, but it boils down to raise taxes vs. cut spending.) As a solution to extend the state’s cash reserves, Gov. Arnold Schwarzenegger is threatening to sign an executive order that would drop wages for state employees to the Federal minimum wage of $6.55/hour, over a dollar lower than California’s own minimum wage. (Their pay would be reimbursed retroactively once the new budget has been passed.) Schwarzenegger wants any budget passed to include reform plans, including establishing a rainy-day fund for helping the state through emergencies — such as this.
This is a new one to me in terms of solving budget deadlocks or other problems. I recall from my youth in Michigan that, when the state threatened to overspend, the legislature simply ordered an extension of the fiscal year by a month or two. I don’t recall if that shortened the next fiscal year, or if they simply altered the new starting date to accommodate. I’m told that, in the early days of the republic, when Congress came up against budget arguments, someone would go to the big gilded eagle clock over the door of the Old Senate Chamber and stop it at 11:55 pm. They would declare time “officially” stopped until the new budget was hammered out; then the clock would be restarted after the budget was passed and presented to the President. Other governments have simply stopped paying salaries and bills until a new budget is made — remember President Clinton and the shutdown of the government during budget arguments in the 1990s. And, of course, there’s always the ever-popular “emergency funding bills” that allow continued spending until the budget is passed, as well as raise the debt ceiling.
Gov. Schwarzenegger’s threat would not affect as many people and services as the Federal shutdown way back when. But it will have a sting for a time on some thousands of California state employees who have built their personal budgets or paying schemes around the pay rate they’re getting now. Yes, they’ll receive their back pay once the new budget goes into effect; but it could be some time before that happens if one side or the other remains intractable. For their sake, I hope this gets fixed soon.
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Peace be to you.
