California minimum wage hike is vetoed

SACRAMENTO, Calif. — Gov. Arnold Schwarzenegger vetoed bills Saturday that would have raised the minimum wage to $7.75 an hour, made Wal-Mart-like megastores more difficult to build and limited schools’ ability to give students random drug tests.

The Republican governor contended the minimum wage and megastore legislation would have hurt the state’s economy and said drug testing policies should be left up to school officials.

The minimum wage bill would have raised California’s minimum wage from $6.75 to $7.25 Jan. 1 and to $7.75 on Jan. 1, 2006. The federal minimum wage is $5.15 an hour.

Bill supporters said the minimum wage hasn’t kept up with inflation, but Schwarzenegger said the legislation would have discouraged economic growth.

“Now is not the time to create barriers to our economic recovery or reverse the momentum we have generated,” he said in a veto message. “I want to create more jobs and make every California job more secure.”

The megastore bill would have required cities and counties to complete economic impact reports before ruling on proposals to build retail stores with more than 130,000 square feet and that devote more than 10 percent of their space to selling food. The reports would have included assessments of the stores’ impact on other businesses, wages, public services and traffic.

Supporters, including the California Independent Grocers Association and several labor unions, said such stores can drive out other businesses and result in lower wages, more part-time jobs and traffic congestion. Opponents included the state Chamber of Commerce, Costco, Wal-Mart and the League of California Cities.

Schwarzenegger said the bill would have imposed “unnecessary, burdensome restrictions on businesses attempting to expand in California.”