Politics

SACRAMENTO (AP) ― Gov. Arnold Schwarzenegger and state Controller John Chiang are headed for a court fight over the governor's attempt to cut the pay of about 175,000 state employees until lawmakers approve a state budget.

A lawsuit against the controller will be filed late Monday afternoon in Sacramento County Superior Court, said Lynelle Jolley, a spokeswoman for Schwarzenegger's Department of Personnel Administration.

"We don't believe we are in a position to wait much longer for resolution of this question," she said.

The controller's office did not immediately respond to a call from The Associated Press seeking reaction.

The lawsuit would add another complication to the already strained negotiations over a state budget. Republican and Democratic lawmakers differ about how to close a $15.2 billion deficit and have been struggling to find common ground since the fiscal year began on July 1.

The Republican governor had hoped his executive order on July 31 would pressure lawmakers to compromise. In it, he directed that the pay of nearly 140,000 rank-and-file employees be cut to the federal minimum wage of $6.55 an hour.

About 30,000 management employees would be paid $455 a week under the order. Another 8,000 state workers without federal minimum wage protection, mostly doctors and attorneys, wouldn't be paid at all until a budget was adopted.

Schwarzenegger said the cuts were needed to prevent the state from running out of money as lawmakers debate how to erase a $15.2 billion budget deficit.

Chiang, a Democrat, has balked at making the pay cuts, saying the state has enough money to cover its needs into October.

The two sides met last week to discuss how Schwarzenegger's order could be implemented.

The administration suggested that the controller could suspend the employees' regular pay and implement the lower compensation as a "special pay differential."

Administration officials said that was the same process employed when pay for legislative employees and others is suspended during budget impasses.

A controller's official responded on Monday, saying the process wasn't that simple.

Don Scheppmann, head of the controller's personnel and payroll services division, said it could "subject the state to further litigation and unnecessary costs." In a letter, he asked to be given until the end of the week to provide a "thoughtful and thorough analysis" of the options proposed by the Schwarzenegger administration.

"Your concept would not only require stopping pay, but also issuing minimum wage payments and determining the appropriate treatment of multiple deductions for each employee," Scheppmann said. "Then, after the budget is passed, we would need to restore full pay and again determine the appropriate level of deductions offsetting the prior adjustments."

He said there were several other questions that needed to be answered, including whether the executive order would cover California State University employees and whether the state would freeze hiring and employee transfers to make the payroll switch easier.

"Implementing system changes of the magnitude needed to accurately pay each employee should not be taken lightly," Scheppmann said. "If they are not performed thoughtfully and accurately, the system changes could subject the state to further litigation and unnecessary costs."

The state already is being sued by the Service Employees International Union over the provision of Schwarzenegger's order that laid off more than 10,000 temporary, part-time and contract employees.

SEIU Local 1000, which represents 95,000 state workers, said it would side with Chiang in fighting the executive order.

"The governor wants to treat state workers like pawns," said Yvonne Walker, the local's president. "John Chiang treats us like people, with families."

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