The State Worker

CASEY WIAN, CNN CORRESPONDENT (voice-over): Cindie Fonseca (ph) is six weeks away from the unemployment line. The Riverside, California, single mother has worked for 16 years in the state prison system teaching inmates graphic arts and printing.

(on camera): What are you going to miss about it most, do you think?

CINDIE FONSECA, CALIFORNIA STATE EMPLOYEE: I'm going to miss the fact that I -- I can make -- help people make a difference and make a change in their life, you know. And really get a second chance.

WIAN (voice-over): Now Fonseca (ph) is one of thousands of state employees who've received layoff notices because of California's persistent budget crisis. They have already endured 15 percent pay cuts for most of this year.

CINDIE FONSECA: We knew that there was going to be cuts, right? And we -- I think you have to live in some kind of cave not to see what's happening in our state and in our country right now, but we didn't think it was going to be this significant.

WIAN: State job cuts are the result of lawmakers' efforts this year to close a record $60 billion two-year budget deficit and another $21 billion shortfall over the next two years. The private sector is faring no better. Overall California has lost more than a million jobs since the summer of 2007. Its unemployment rate is above 12 percent. Underemployment, including people who have given up looking for work or settled for part-time jobs is now above 20 percent.

ROSS DEVOL, MILKEN INSTITUTE: This really was the perfect storm for the California economy. We got hit by it all. You go from the subprime mortgage crisis to the foreclosures that led to the decimation of the housing market, trade collapse, 30 to 35 percent. California got hurt domestically from the rest of the country cutting back as well as the rest of the word.

WIAN: Jobs aren't California's only problem. The state has a water shortage. Some cities are resorting to rationing while lawmakers want voters to approve $11 billion in new borrowing for water infrastructure. Federal judges have ordered California to release more than 40,000 prison inmates to relieve overcrowding. Its people are increasingly undereducated. California ranks next to last in the nation in adults with a high school diploma.

UNIDENTIFIED FEMALE: (INAUDIBLE)

WIAN: Presiding over it all, Governor Arnold Schwarzenegger and the state legislature. Only 27 percent of Californians approve of the governor's job performance. The legislature fares even worse with an approval rating of 13 percent.

(on camera): Thirteen percent approval rating, what was the reaction up here in Sacramento to that poll?

ABEL MALDONADO (R), CALIF. STATE SENATE: What's my reaction? I'm embarrassed that 1.3 out of every 10 people like us. That's a sad state of affairs. That must change.

WIAN (voice-over): State Senator Abel Maldonado is in the eye of California's perfect storm. He is a Republican who is ostracized by his own party after siding with Democrats on a deal to break a budget stalemate the governor compared to financial Armageddon.

ABEL MALDONADO: My father and my mother didn't raise me to not pay my bills. And California wasn't paying its bills. We were sending IOUs to taxpayers and number two they didn't raise a son to bankrupt a company and we were on the verge of bankruptcy, so we did the best that we could do under the circumstances that we had.

WIAN: Those circumstances include a state legislature bitterly divided along party lines and a governor elected on the promise of solving California's budget mess only to see it spiral further out of control. One of the workers most affected has this message for the governor.

CINDIE FONSECA: Come walk a day in our shoes and see what we do for the citizens of California. Come walk a day in our shoes and see how these furloughs and layoffs are impacting us.

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