California to lay off 20,000 if budget deal isn’t reached

Gov. Arnold Schwarzenegger warned lawmakers about potential job cuts last week.
Faced with a projected $42 billion deficit, California Gov. Arnold Schwarzenegger says his office will send out 20,000 layoff notices Tuesday if lawmakers fail to reach a budget deal before then, according to a spokesman.

The Republican governor, who declared a fiscal emergency in December, has butted heads for months with the Democratic majority over alleviating the state’s $11.2 billion revenue shortfall. He warned lawmakers about the cuts last week, urging them to approve the latest budget proposal. However, voting was stalled during a 30-hour weekend session as the legislature mulled over 26 pieces of legislation that make up the budget package. By Monday night, there was still no vote on the floor, and the State Assembly in Sacramento was not in session as night fell. A single Republican vote is holding the budget from passing with a two-thirds majority, Schwarzenegger spokesman Aaron McLear told CNN late Monday. Watch a report on the budget crisis » Some Republican lawmakers, including state Sen. Abel Maldonado, R-Santa Maria, say they don’t agree with the $14.4 billion in tax increases tied into the budget package.

Don’t Miss
State may have to cut prison population by 40 percent

“People don’t realize where California is at — people are losing homes, people are losing jobs,” Maldonado told CNN affiliate KOVR. “We are in a fiscal emergency, and we need to come together to (resolve) it.” The cuts, if they happen, wouldn’t begin until the start of the fiscal year on July 1, starting with employees of least seniority, McLear said. The cuts would save California $750 million for the year. McLear added that state workers are under contract, meaning layoffs would be a slow process. Schwarzenegger and lawmakers have tried discussing alternatives to avoid the scenario.

Running short of cash, California last month started delaying $3.5 billion in payments to taxpayers, contractors, counties and social service agencies so the state could continue funding schools and making debt payments. “The real-life impact will be the slowdown — the actual shutdown — of hundreds of state funded transportation projects, people not getting paid, taxpayers not getting refunds,” said Senate President Pro Tem Darrell Steinberg, D-Sacramento.