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California wage cut in limbo

State controller says old technology won’t let him comply

SACRAMENTO, Calif. – As the Terminator, Arnold Schwarzenegger was the technology of the future, feared by humans. As governor, he’s being foiled by the technology of the past.

For the second time in two years, Schwarzenegger has ordered most state workers’ pay cut to the federal minimum wage because lawmakers missed their deadline to fix the state’s $19 billion budget deficit. The Legislature’s failure to act has left the state without a spending plan as the new fiscal year begins.

A state appellate court ruled in Schwarzenegger’s favor Friday, but the state controller, who issues state paychecks, says he can’t comply. One reason given by Controller John Chiang, a Democrat elected in 2006: The state’s computer system can’t handle the technological challenge of restating paychecks to the federal minimum of $7.25 an hour.

Chiang cited Friday’s ruling by the 3rd District Court of Appeals, which said “unfeasibility” would excuse him from complying with Schwarzenegger’s order. He said a fix to the state’s computerized payroll system won’t be ready until October 2012.

Meanwhile, more than 200,000 state workers remain in limbo about the size of their July paychecks while Chiang asks the court for guidance on how to proceed. If wages are indeed cut to $7.25 an hour, employees will be reimbursed once a budget is signed.

John Harrigan, who served as a division chief for the state’s payroll services from 1980 to 2006, said upgrading the system would be complicated, time-consuming and expensive.

The state’s payroll system was designed more than 60 years ago and was last revamped in 1970, Hallye Jordan, state controller’s office spokeswoman, said in an e-mail.

The state has had fewer and fewer experts on hand who thoroughly understand the programming languages used to design the system.

“There’s been a knowledge loss with people retiring,” Harrigan said.

Asked if the administration agreed that the payroll system could not handle the change, Schwarzenegger spokesman Aaron McLear cited the 2009 lower court ruling in the governor’s favor. In part, it said the controller’s office “has not made a sufficient factual showing of impossibility … .”



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