BUDGET TALKS CONTINUE, SCHWARZENEGGER THREATENS LAYOFF WARNI

[Daanyeer]

Wednesday, February 11, 2009, 4:00pm

Budget talks continue, Schwarzenegger threatens layoff warnings
Los Angeles Business from bizjournals - from the Sacramento Business Journal


Arnold Schwarzenegger on Tuesday said he would send layoff warnings to 20,000 state workers if a budget is not agreed upon by Friday.

A budget deal to cover the state’s expected $40 billion shortfall through June 2010 is being negotiated in the Legislature. The governor and legislative leaders were approaching a deal Wednesday, but as of noon no vote had been scheduled.

Any approved budget would have to save $750 million in some way other than job reductions to avoid the action. Schwarzenegger’s office said laying off 10,000 workers through job cuts, attrition or transfer to positions funded by other revenue would save $750 million. Of the 20,000 notices, 10,000 positions would be eliminated.

Schwarzenegger spokesman Aaron McLear said it is unlikely 10,000 people would lose their jobs.

"Gov. Davis did this in 2003," he said, "and 9,000 positions were eliminated but only 1,200 jobs were lost."

The notices would be sent Friday to the least-senior 20 percent of workers in each department. McClear said actions had to begin now to eliminate positions by July 1, the start of the fiscal year.

The cuts were first proposed in Schwarzenegger’s January budget, and he warned state workers of the possibility in a December letter.

The Legislature is 98 days into a special session to resolve the state’s budget gap. A combination of increased taxes, spending cuts, job cuts and regulation rollbacks are being discussed.