Cash-starved California orders unpaid leave for workers

AFP
July 29, 2010

California Governor Arnold Schwarzenegger declared a fiscal state of emergency Wednesday, requiring most state employees to take three days of unpaid leave per month until a new budget is enacted.

Schwarzenegger said the state, which faces a budget deficit of 19 billion dollars, is on the verge of a “fiscal meltdown” and could be forced to issue IOUs starting in August to avert a new cash crisis.

“Our cash situation leaves me no choice but to once again furlough state workers until the legislature produces a budget I can sign,” he said in a statement.

He said the state has already taken “extraordinary measures to conserve cash,” such as deferring payments to schools and other local governments but that the crisis is deepening with no state budget for the 2010-2011 fiscal year expected soon.

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