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FROM THIS EPISODE

In the recall election against Gray Davis, Arnold Schwarzenegger promised to end the annual budget crisis once and for all. But once again this year there's no state budget, and the revenue shortfall is $15 billion. Schwarzenegger's public opinion rating has dropped to 40% and the legislature's is much lower than that. Now Schwarzenegger says he's cutting the salaries of state workers—down to the federal minimum wage.

Producers:
Frances Anderton
Christian Bordal
Katie Cooper
Sonya Geis
Dan Konecky
Gary Scott

Main Topic Schwarzenegger Threatens Minimum Wage for State Workers

It's more than three weeks into the new fiscal year, but the state legislature with Democrats in the majority has not passed a budget. Failure to meet the constitutional deadline is nothing new, but this year there's a revenue shortfall of $15 billion. Governor Schwarzenegger says it's too expensive to borrow the money to keep going, so he has a proposal to defer a billion dollars in spending a month: cut the pay of some 200,000 state workers down to the federal minimum wage. They'd have to get by on $6.55 an hour until the budget was passed.

Guests:
John Chiang, California State Controller
Mike Genest, former Director of Finance, State of California
Joe Mathews, Zocalo Public Square (@joemmathews)

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