However, this fight is far from over. On Friday, Controller John Chiang argued that while he lost the appeal he still has legal room to maneuver.
“Like the Supreme Court in White, the appellate court declined to resolve the feasibility issue,” he continued.
“This is not a simple software problem. Reducing pay and then restoring it in a timely manner once a budget is enacted cannot be done without gross violations of law unless and until the State completes its overhaul of the state payroll system and payroll laws are changed,” the statement read.
The statement concluded, “I will move quickly to ask the courts to definitively resolve the issue of whether our current payroll system is capable of complying with the minimum wage order in a way that protects taxpayers from billions of dollars in fines and penalties.”
The Sacramento Bee is reporting that state employee unions are also signaling their willingness to file their own lawsuits.
Senate President pro Tem Darrell Steinberg issued his own toughly worded statement on Friday as well. “The court ruling is wrong, and the Governor’s decision to impose minimum wage is as fiscally reckless as it is heartless,” said the Senate leader. “The negative economic consequences of the Governor’s action will be harsh and long-lasting. The Governor should not be toying with the lives of working families in order to gain a tactical advantage in budget negotiations. You don’t get to a fair and decent budget result by bullying people.”
“This underscores the fact that everyone loses when we have a budget impasse,” said Governor Schwarzenegger’s spokesman Aaron McLear.
“Let’s be clear: the Governor’s minimum wage order is nothing more than a political stunt that will not save the state a single penny,” Speaker John Perez said on Friday. “I find it shocking that the Governor is deliberately causing real suffering in an attempt to force the Legislature to pass his job-killing budget. The Governor shouldn’t be playing political games to distract from the fact that his budget will devastate California’s recovery and wipe out 430,000 jobs.”
Clearly this is a move designed more for leverage than anything else. The Bee article quotes Bruce Blanning from the Professional Engineers, he made the point, “If (Schwarzenegger) tries to cut everybody’s pay to minimum wage, there probably would be a number of legal challenges,” said Mr. Blanning. “Our view is that when people do their job, they should get paid.”
What seems more likely is that he will try to push to get the various groups to the bargaining table to hammer out a new agreement.
However, from the standpoint of Davis, this is a situation worth watching as the large number of people effected by this in Davis would be huge. One member of the business community told the Vanguard Friday that if this went into effect this could endanger a number of businesses. The current downturn has already put a lot of businesses into the margins and if a large percentage of Davis residents had their discretionary income cut, it could be the death blow for a number of restaurants, bars, and other establishments that rely on people’s discretionary income.
The good news is that given the myriad of legal challenges and the lack of a court order, we do not see this as much more than a political ploy to get people’s attention at this point. Even with yesterday’s court ruling, it is not going to go into effect.
Nevertheless, the economic news right now is bad both nationally and statewide and I think we are in for several more years of hardship at both the state and local level.
—David M. Greenwald reporting