Gov’s pay cut plan ‘Illegal’

Committee hears testimony on flaws

Updated Feb. 2, 2010
The governor’s plan to unilaterally reduce state employee wages is illegal, counterproductive and bad public policy, SEIU Local 1000 President Yvonne Walker told a Senate committee.

“The governor’s new budget proposals on pay cuts and pension contributions are illegal,” Walker said at the Budget and Fiscal Review Committee hearing. “He is attempting to operate outside the law, as he has on furloughs, even though his actions have been stricken down by the courts. This is another example of failed leadership. His actions are unacceptable and will not be tolerated.”

Walker said that the proposed 10 percent pay cuts and 5 percent pension contribution increase would make permanent the losses incurred by three furlough days a month.

“While the oil companies and the wealthy get tax breaks and loopholes to sneak through, state employees have lost 15 percent of our income to furloughs,” Walker said. “In a sense we’re paying a ‘tax’ equivalent to losing a month and half of wages in the past year.”

Walker, accompanied by Local 1000 Chief Counsel Paul Harris, pointed out that a report on employee compensation, released last week by the Legislative Analyst’s Office (LAO), misinterprets federal and state law as it applies to workers who are under union contract.

“Any action by the governor or Legislature which unilaterally reduces wages would be illegal if applied to union-represented workers,” Harris said. “Such action, even if accomplished through amendment to the Dills Act, would amount to an unconstitutional impairment of contract and violate the U.S. Constitution.”

However, the LAO report did recommend that the Legislature reject any increase in employee pension contributions, as well as any move to reduce overall payroll costs in the California Department of Corrections and Rehabilitation or any department that is funded by federal money or special funds.