The State Worker

Chronicling civil-service life for California state workers

February 25, 2010
The state's '$540 million paycheck cut' that isn't

The State Worker has received some frantic e-mails triggered by media reports this week that lawmakers approved "... a $540 million reduction in state workers' paychecks."

One e-mailer summed it up: "If true this is huge and it isn't getting any attention. The employees in our office are very concerned about this."

Stand down, state workers. Nobody slipped one by you.

Click the following link to read about what cut the Legislature approved.

Here's the deal: The stories are referring to ABX8 2, which contains the 5 percent operating cost reduction that Schwarzenegger ordered earlier this year as part of his 5/5/5 plan. A big chunk of that is payroll costs, but the administration has said the savings will come through attrition and eliminating vacancies.

It's not a "reduction in state workers' paychecks." The governor wants that, too, as part of the 5/5/5 plan. If the Legislature agrees to it, we'll be all over it. Promise.

The actual figure, by the way, is $580 million when you count operating and equipment cutbacks. Here's the breakdown from the pertinent passage from the Assembly analysis of ABX8 2:

Governor's Executive Order S-01-10:

A net total savings of $580 million GF will be achieved through this Executive Order, which ordered a 5% salary savings through a workforce cap and attrition by July 1, 2010.

The savings are scored as $450 million GF from the implementation of the 5% reduction to departmental personnel costs and $130 million GF savings in operating expenses and equipment.

The Bee and this blog have written about this several times. This post linked to the Legislative Analyst's report on the 5/5/5 plan. Page 3 of the analysis discusses the "unallocated reductions in personnel costs" that lawmakers approved with ABX8 2.

You can read the Assembly analysis of the measure by clicking here. Read the bill by clicking this link.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at


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