Guv's Executive Order: Hurry Up and Wait

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BUDGET DAY PLUS 34 -- Today, a reminder of Reason Number 2,332,716 of how state government differs from the private sector: even urgent things happen slowly.

Today, the actual policy issues leading to the budget stalemate have taken a back seat to the headaches of implementing Governor Schwarzenegger's decree to save money on the state employee payroll.

And the news: officials say they still don't know to whom the order applies... and even if they did, others say it can't be implemented in time to actually save the state money.

As you may remember, the governor's executive order on Thursday fired a number of temporary state workers on the spot, and suspended all but federal minimum wage of the salary for permanent workers for the pay period that ends August 31.

But how many workers are we talking about? No one knows.

As of this afternoon, the governor's staff has no final numbers on either the total number of folks given pink slips last week or the total number of folks who could lose all but $6.55 of their salaries by month's end. The original estimate of about 10,000 layoffs has not been updated -- partly, it appears, because various state agencies were allowed to protect temp and intermittent workers who are involved in public safety or other critical services.

[UPDATE, 3:21 pm -- New info from the governor's office pegs the total number of pink slips issued last week at 10,133.]

The governor's order also allowed various agencies to exempt workers from the minimum wage requirement, provided that cabinet secetaries appointed by Schwarzenegger responded with a list of exempt employees by midday Friday.

But the list isn't complete. In fact, some state agencies had managers still feverishly working this past weekend trying to figure out who would get a full salary, and who wouldn't. The lack of specifics was a particular sticking point this morning during a Senate hearing called to assess the governor's money-saving action.

"It hasn't been finalized yet," said Fred Klass of the state Department of Finance when asked the number of employees exempt from the minimum wage order.

"Was there planning for this?" asked Sen. Dean Florez (D-Shafter), the chair of the committee. The answer to the question was yes, but even so it should be noted that while the executive order is officially only four days old, it was publicized in draft form 12 days ago.

Meantime, Schwarzenegger administration officials professed to themselves be perplexed by Controller John Chiang's declaration that the state's payroll system is too antiquated to deal with the temporary salary reductions of thousands of state employees. Chiang's staff told the committee that such reprogramming would take months, not weeks.

And again refuting the governor's rationale for the payroll cuts, Chaing told senators, "We will not run out of money."

Even with all the uncertainty that remains, there are at least two things we do know at this point. First, the governor's staff says that the workers laid off last week were the only ones who will be; the rest of those non-full timers appear to be safe.

And second, the window for a budget deal that avoids Wall Street borrowing is about to close. Both in information provided in an interview last week with Controller Chiang... and confirmed today by the governor's staff... the first step toward borrowing cash through an expensive "revenue anticipation warrant" will have to be taken next week. That's when bankers will want the state to agree to millions of dollars in so-called "credit enhancements" which are necessary to get the actual loan (estimated to be about $10 billion).

And even if the budget is enacted and the loan itself is never taken out, the state would still be on the hook for those early credit fees.

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About John Myers

John Myers is senior editor of KQED's new California Politics & Government Desk. He has covered California politics for most of the past two decades, serving previously as Sacramento bureau chief for KQED News and most recently as political editor for KXTV News10 (ABC) in Sacramento. In 2014, he was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.

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