Schwarzenegger Addresses Budget Crisis through Payroll

Gov. Arnold Schwarzenegger today issued an executive order directing the Department of Personnel Administration to implement a furlough of state employees for two days monthly and to initiate layoffs to save up to 10 percent in the state’s general fund, should the State of California go bankrupt in February, as is anticipated. California has saved $9.7 billion for the 2008-2009 budget. As a result of the national economic downturn, however, the state’s deficit for the fiscal year has grown to $15 billion and could grow as high as $42 billion without intervention. Gov. Schwarzenegger sent a letter to all state employees explaining the state’s worsening budget situation and the need for the executive order.