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From: Rob Follett (robfollett)

Sent: Friday, July 25, 2008 10:56 AM

http://www.pe.com/localnews/inland/stories/PE_News_Local_...

I thought some people (I had a certain fire apparatus engineer in mind) might like to see some inside info on this- I just received the text of the executive order in my e-mail:

EXECUTIVE ORDER S--08
(DRAFT)
WHEREAS the constitutional deadline for enacting a state budget for Fiscal Year 2008-09
has passed without the enactment of a budget; and
WHEREAS in the absence of a budget, State government is constitutionally prohibited from
making payments that are not compelled by either the State Constitution or federal law; and
WHEREAS until there is a state budget, the State has no authority to pay the following
payments: (1) Vendors and Contractors for goods and services chargeable to Fiscal Year 2008-09;
(2) Payroll for legislative staff, appointees, and exempt employees; (3) Payroll for other state
employees beyond that required by federal labor law; (4) Highway User Taxes that are apportioned
to the state, cities and counties for highway and road improvement projects; (5) Cal Grants to
students in higher education; (6) Transfers to the Trial Courts; (7) Transfers to University of
California, California State University, and Community Colleges; (8) Transportation Revolving Fund
disbursements; (9) Non-revenue limit school payments; and (10) Payments for non-federally
mandated social services programs such as Community Care Licensing, Adult Protective Services,
State Only Foster Care; State Only Adoptions Assistance, and Cash Assistance Program for
Immigrants; and (11) tax relief payments to low income seniors and disabled persons; and
WHEREAS on May 1, 2003, the California Supreme Court, in White v. Davis, issued a
decision that, in conjunction with other pre-existing court orders, clarified that during a period that
there is no state budget in place, federal labor laws require the State to pay its nonexempt FLSA
employees either federal minimum wage or, for those employees that work overtime, their full
salaries; and
WHEREAS it is not known when a budget will be adopted for Fiscal Year 2008-09; and
WHEREAS as a result of the late budget, there is a real and substantial risk that the State
will have insufficient cash to pay for state expenditures; and
WHEREAS since June 2008, the unprecedented number and size of fires in California has
created states of emergency that have required additional and substantial expenditures of cash to
ensure that there are sufficient resources to effectively fight these fires and save lives and homes;
and
WHEREAS it is critical that the State be able to meet any unforeseen emergency such as
fire, flood or public health emergency and to continue to make timely payments on constitutionally
and federally-mandated obligations and existing obligations to pay holders of state bonds.
WHEREAS due to the impending cash crisis and budget delay, the State may be forced to
consider a Revenue Anticipation Warrant (RAW) at an exorbitant cost to the State, including
hundreds of millions of dollars in credit enhancements, in order to make sure there is sufficient cash
to pay for state expenditures; and
WHEREAS after the late adoption of a budget, there will be additional cash demands
because all of the deferred payments that were not permitted to be made during the budget impasse
will become due and payable; and
WHEREAS the late budget has resulted in loss of savings to the State in the amount of $164
million for July, and failure to enact a budget in August will result in additional loss of savings in the
amount of $323 million.
WHEREAS as a result of the late budget, additional mitigation measures must be
implemented to offset the loss of savings and to ensure that there is sufficient cash to make the
State’s payments; and
WHEREAS the State employs nearly 22,000 retired annuitants, permanent intermittent
employees, and seasonal employees and the State hires new employees at the rate of
approximately 1,700 per month; and
WHEREAS except for services and functions of state government deemed critical by this
Order, additional mitigation measures need to be taken to immediately reduce expenditures and
preserve cash, including the following: (1) halting all hiring, transfers and promotions of employees;
(2) prohibition of overtime; (3) termination of the services of retired annuitants, permanent
intermittent employees, seasonal employees, temporary help workers, student assistants and certain
individuals working under contract; and (4) cessation of contracting for individuals to perform
services.
NOW, THEREFORE, I, Arnold Schwarzenegger, Governor of the State of California, in
accordance with the authority vested in me by the Constitution and the statutes of the State of
California, do hereby issue the following orders to become effective immediately:
IT IS ORDERED that the services and functions of state government directly related to the
preservation and protection of human life and safety, including but not limited to emergency and
disaster response activities and the provision of 24-hour medical care, shall be deemed critical and
exempt from this Order.
IT IS FURTHER ORDERED that except for services and functions of state government
deemed critical and exempt by this Order, all State agencies and departments under my direct
executive authority take immediate action to cease and desist hiring of employees (except in
instances in which there is a bona fide offer and acceptance prior to the effective date of this Order),
transferring employees between State agencies and departments, promoting employees, and
contracting for individuals to perform services.
IT IS FURTHER ORDERED that except for services and functions of state government
deemed critical and exempt by this Order and emergent situations to preserve and protect human
life and safety, all State agencies and departments under my direct executive authority take
immediate action to cease and desist authorization of all overtime for employees.
IT IS FURTHER ORDERED that except for services and functions of state government
deemed critical and exempt by this Order, all State agencies and departments under my direct
executive authority take immediate action to terminate the services of the following four categories of
employees and individuals: (1) Retired Annuitants; (2) Permanent Intermittent Employees; (3)
Seasonal Employees; (4) Temporary Help Workers; (5) Student Assistants; and (6) individuals
providing services under contract, except for services provided pursuant to multi-year contracts for
development of Information Technology projects.
IT IS FURTHER ORDERED that all Agency Secretaries and Department Directors shall take
immediate action to implement this Order, and any other action that will reduce state expenditures.
IT IS FURTHER ORDERED that the Director of the Department of Finance shall establish an
exemption process that Agency Secretaries shall utilize to determine if an exemption is justified
based on critical services and functions, which may include either cost-reducing or revenueproducing
services and functions that will help ensure that there is sufficient cash for the State to
make its payments.
IT IS FURTHER ORDERED that Agency Secretaries and Cabinet-level Directors shall report
their exemptions to the Cabinet Secretary and the Director of the Department of Finance within 24
hours of approving an exemption.
IT IS FURTHER ORDERED that the Director of the Department of Finance and Director of
the Department of Personnel Administration shall work with the State Controller to develop and
implement the necessary mechanisms, including but not limited to pay letters and computer
programs, to comply with the California Supreme Court’s White v. Davis opinion to pay federal
minimum wage to those nonexempt FLSA employees who did not work any overtime.
IT IS FURTHER ORDERED that the necessary mechanisms to ensure compliance with the
White v. Davis opinion must be in place to be effective for the August 2008 payroll.
IT IS HEREBY REQUESTED that during this budget impasse, the State Treasurer shall take
all actions necessary to maintain the State’s ability to pay its bond obligations, including payment of
principal and interest with funds in the State Treasury, and shall take all actions that are necessary
to protect the State’s funds and investments.
IT IS FURTHER REQUESTED that other entities of State government not under my direct
executive authority, including the California Public Utilities Commission, the University of California,
the California State University, California Community Colleges, constitutional officers, and legislative
and judicial branches, assist in the implementation of this Order and implement similar mitigation
measures that will help to preserve the State’s cash supply during this budget impasse.
IT IS FURTHER ORDERED that this Order shall remain in effect until such time as both a
Fiscal Year 2008-09 Budget is adopted and the Director of the Department of Finance confirms an
adequate cash balance exists to meet the State’s fiscal obligations.
I FURTHER DIRECT that as soon as hereafter possible, this Order be filed in the Office of
the Secretary of State and that widespread publicity and notice be given to this Order.
IN WITNESS WHEREOF I have hereunto
set my hand and caused the Great Seal of
the State of California to be affixed this XXth
day of July 2008.

ARNOLD SCHWARZENEGGER
Governor of California
ATTEST:
__
DEBRA BOWEN
Secretary of State

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From: AoRobert

Sent: Friday, July 25, 2008 08:27 PM

Our state senators ought to be ashamed. We need to cut off their salaries, lock them in the capital with food and water for one day and not let them out until they pass a budget.

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