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California could begin issuing IOUs on July 2 unless the governor and lawmakers reach a budget deal, the latest challenge for the financially strapped state. On Wednesday, the state starts “a fiscal year with a massively unbalanced spending plan and cash shortfall not seen since the Great Depression,” State Controller John Chiang said in a news release. The state faces a $2.8 billion shortfall in July, increasing to $6.5 billion in September, with a “double-digit freefall” in the following months, he said. The state has an estimated $24 billion shortfall for the next fiscal year, after voters rejected propositions in...

Here are two words that state workers are going to hate to hear: minimum wage. Now government and labor officials around the Capitol are murmuring the phrase, since Gov. Arnold Schwarzenegger will probably order state employee wages cut to the federal minimum if lawmakers drag out budget talks. He's done it before. That prospect prompted the heads of 14 state employee unions to fire off a rare joint letter earlier this month to Senate President Pro Tem Darrell Steinberg and Assembly Speaker Karen Bass: "We believe … that if our members go to work, they should be paid in full...

SACRAMENTO — Gov. Arnold Schwarzenegger has been warning for months that California's budget is hurtling toward the proverbial cliff — the point at which the state, which boasts a $100 billion operating fund, runs short of money to pay its bills. That time is about to arrive. While the scenario is less like a suicidal jump than a long debilitating tumble — Californians won't wake up one day to find state government has gone belly up — the fallout could be severe and far-reaching. And the pain will only multiply the longer the legislative budget stalemate lasts. Starting in February,...

Sacramento -- The state budget crisis has been quiet for the past few months but will return to center stage this week as Gov. Arnold Schwarzenegger prepares to belt out some bad news. The governor is scheduled to release an updated budget plan Friday that will probably include even deeper cuts than those he proposed in January, when he called for reductions in health and human services, prisons, education and state worker pay, among other areas.Unexpected gains in state revenues that leaders hoped would significantly cut the deficit evaporated in the last few weeks. State Controller John Chiang reported Friday...

Hoping to head off an order to drastically reduce state worker pay if budget talks stall, Controller John Chiang's office sent a message to employee unions this week suggesting they reach out to a friend – U.S. Labor Secretary Hilda Solis. Although the three-page plain-paper memo acquired by The Bee is unsigned, the controller's office confirmed that Chiang Chief of Staff Collin Wong-Martinusen wrote the document circulated to labor leaders on Monday. "Seek Solis' immediate intervention on an unprecedented pay practice that, if allowed to proceed in California could become the new norm for all state and municipal governments that...

State Controller John Chiang filed suit today in an attempt to block Gov. Arnold Schwarzenegger's order to reduce pay for most state workers to the federal minimum wage during the current budget impasse. Chiang's suit, filed in Sacramento Superior Court, complains that he is being forced to choose between violating Schwarzenegger's order or violating various federal and state laws. The controller's lawsuit follows a 3rd District Court of Appeal ruling last week that confirmed Schwarzenegger's authority to reduce pay to the federal minimum, currently $7.25 per hour. Schwarzenegger has argued that under a 2003 California Supreme Court decision he is...

The Schwarzenegger administration filed a new legal action today asking the Sacramento Superior Court to force Controller John Chiang to pay state employees minimum wage for this month if no state budget is enacted. Chiang has said he will not comply with the governor's order to pay minimum wage for the July pay period. Filed by the Department of Personnel Administration and DPA Director Debbie Endsley, the action seeks to force Chiang to comply. It noted that the cut-off date to begin processing the July payroll is July 22. It says the order is "urgently needed" to stop Chiang from...

"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."

The 3rd District Court of Appeal has upheld a two-year-old ruling allowing Gov. Arnold Schwarzenegger to reduce state workers to minimum wage in the absence of a budget. The court, agreeing with a Sacramento Superior Court ruling, said State Controller John Chiang overstepped his authority by refusing to issue minimum-wage paychecks to state workers during the 2008 budget impasse. The decision, published just moments ago, comes the day after Gov. Arnold Schwarzenegger's Department of Personnel Administration gave Chiang the same pay reduction instructions the controller rejected two years ago. Chiang's office has not said whether it will appeal to the...

As though the state’s fiscal condition weren’t dire enough, Controller John Chiang sent a letter on May 29 to the governor and legislative leaders saying that on July 31 the state will be $1 billion short of meeting its payment obligations to schools, local governments and vendors. “Based on the May Revision revenue and expenditure estimates provided to us late last week by the Department of Finance and taking into account the actual cash receipts and expenditures my office tracks, it is clear the health of the State’s treasury has significantly deteriorated since the adoption of the (budget), a mere...

No, the check's not in the mail.Legislative approval of a 17-month budget today will not spark immediate payment of $3.3 billion owed to taxpayers, contractors and local governments by the state."Just because they passed it doesn't mean there's all-of-a-sudden cash in the treasury," said Hallye Jordan, spokeswoman for state Controller John Chiang. The state finance department is expected to provide cash-flow data within a week that will enable a payment schedule to be set through June 30, Chiang said in a written statement."Once this budget plan provides the needed cash in the treasury, my office will work around the clock...

Sacramento -- State Controller John Chiang, who oversees California's cash flow, warned state agencies Tuesday that unless Gov. Arnold Schwarzenegger and the Legislature agree on a budget, the state will have to begin issuing IOUs to some state employees and contractors as early as Feb. 1. "Without immediate cash solutions or the ability to borrow billions from the strained financial markets, the state controller's office has no choice but to pursue the deferral of potentially billions of dollars in payments and/or the issuance of ... IOUs," Chiang wrote in a letter to state agencies. Tuesday, Chiang was still in the...

Welcome to the live thread for the California Primary Election. Polls are open until 8pm tonight. If you are a registered voter, it is your duty to vote and defend your rights and civil liberties, protect your pocketbook, and vote the bums out where applicable. Feel free to discuss issues key to your local area that others may be interested in. Post your polling place experiences if you like. And post numbers as they come in later tonight.

Sacramento -- The race to become the next state controller pits a former Republican state lawmaker who has a reputation for being a fiscal conservative against a Democratic chairman of the Board of Equalization who is a tax and finance expert. Despite being veterans of public service, one of the biggest challenges for both Democrat John Chiang and Republican Tony Strickland has been overcoming their lack of statewide name recognition. An earlier Field Poll showed more than 80 percent of likely voters surveyed said they didn't have any opinion about either candidate. Nevertheless, the office that one of them will...

Controller Candidates To Debate Live On CBS5.com * Watch LIVE At 2 p.m. (today)* (CBS 5 / The Chronicle) SAN FRANCISCO The San Francisco Chronicle Editorial board will host a 60-minute debate between state Controller candidates John Chiang (Democrat) and Tony Strickland (Republican) today at 2 p.m. at the CBS 5 studios in San Francisco. The debate will be presented via Live streaming video here on CBS5.com and is the second of several Chronicle Editorial board candidate debates that will be offered via live and tape streams here on CBS5.com.

Welcome to the live thread for the California Primary Election. Polls are open until 8pm tonight. If you are a registered voter, it is your duty to vote and defend your rights and civil liberties, protect your pocketbook, and vote the bums out where applicable. Feel free to discuss issues key to your local area that others may be interested in. Post your polling place experiences if you like. And post numbers as they come in later tonight.

Democratic candidates spend time in church The Democratic candidates for governor went to church on Sunday and prayed for victory, as well they might in a race that is neck and neck heading into Tuesday's primary. Steve Westly, who made his fortune at eBay, and Phil Angelides, a wealthy former developer, have been battering each other with nasty television ads for several weeks. Analysts say voters may respond to the negativity campaign by not voting. Westly, the state controller, appeared with Rep. Diane Watson, D-Los Angeles, at the First African Methodist Episcopal Church in Los Angeles, which he joined three...

Field Poll link Lt. Governor (Democratic): In the contested Democratic primary for Lt. Governor, State Senator Jackie Speier has pulled ahead of State Insurance Commissioner John Garamendi and State Senator Liz Figueroa. The current poll finds Speier the choice of 30% of likely Democratic primary voters, with Garamendi at 25% and Figueroa far behind at 8%. More than one in three voters (37%) are undecided. The current findings are a reversal of voter preferences from April when Garamendi held the lead over Speier. • Attorney General (Democratic): Oakland Mayor Jerry Brown continues to hold a comfortable lead over Los Angeles...

Controller race draws a crowd They’re all competing for the key job described by one as ‘the CFO for the sixth-largest economy in the world’ By Bob Cuddy The four candidates running for state controller. What a controller does (PDF) Ask the average Californian what the state controller does, and you’ll likely hear, "What’s that?" says state Sen. Joe Dunn, who wants the job. But Dunn and his opponents know better. "You’re the CFO for the sixth-largest economy in the world," says John Chiang, also a candidate for state controller on the June 6 ballot. Chiang and Dunn are opposing...

Ex-Democratic Aide Admits Stealing Checks Tue Feb 15, 9:41 PM ET Elections - AP By SHARON THEIMER, Associated Press Writer WASHINGTON - A former staffer for the Democratic Senatorial Campaign Committee admitted Tuesday to stealing about $360,000 in donor checks while he was employed there. Roger Chiang pleaded guilty in U.S. District Court to one count of mail fraud. Sentencing is scheduled for June. Chiang, a staffer in charge of ethnic outreach and fund raising, was fired from the DSCC after about $360,000 in missing committee donor checks were traced to a bank account he had opened. The DSCC is...