Challenges to Governor's Layoff Order Continue

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Governor Schwarzenegger's executive order to cut state workers' pay and lay off more than 10,000 employees led to a California Senate committee hearing Monday. Senators wanted to know whether the move was necessary, as the governor claimed, to make sure California has enough cash to pay its bills. KPCC's Julie Small says public employees begged to differ.

Julie Small: Until last week, Celeste Knox worked at the state Department for Consumer Affairs. There she helped Iraq War veterans enroll at universities. For five solid years, the single mother of three was a "permanent intermittent" state employee, called up to work, or not, at the will of her supervisor. Knox told a state senate hearing that she used the income to buy her first house just last week.

Celeste Knox: On Wednesday July 30th, 8:45, I signed the final paperwork on the purchase of a home for me and my children. And at 10:00, I was told not to report to work any longer. That my services were no longer needed. I have not received my paycheck. I can't pay my bills right now. I did not have a notice of layoff and I'm not guaranteed that I'll have a job when this budget is finally signed.

Small: Governor Schwarzenegger's said his decision to lay off some employees and cut others' wages was the "only way out" of a month-and-a-half budget impasse that's draining state cash reserves.

Governor Arnold Schwarzenegger: Our state faces a looming cash crisis. The situation leaves me with no easy choices. Only choices with consequences – consequences that will have a direct impact on California families.

Small: The governor didn't have to take it that far, State Controller John Chiang testified at the senate hearing.

John Chiang: This executive order was issued unnecessarily.

Small: State Controller John Chiang has been saying that ever since Schwarzenegger first threatened to sign it. Chiang manages the state's cash flow – and he told state senators that California has plenty of cash to manage for another month or so.

Chiang: The governor's off. He really ought to focus on getting the budget signed. We have sufficient cash reserves, as I pointed out, to make all state obligations through most of September. We have the cash borrowing in place. We might have sufficient cash funds to go into October.

Small: Controller Chiang's securing cash loans for California until lawmakers pass a budget. Because he signs the checks, he's refused to cut workers' pay. But Chiang can't help laid off workers like Celeste Knox.

Knox: My refrigerator is empty and school is around the corner. I don't really know how we're going to get through this.

Small: Knox's supervisors told her she might find a job in a different state department once the budget passes. But Knox says she can't wait for that. She's already looking for a new job.