State employment offers few certainties these days.
Consider:

* Nearly 9,000 state workers have received or within days will receive notice that they may be pink-slipped.
* Tens of thousands of other state employees could see their take-home pay fall 5 percent starting Tuesday.

* And if the state budget dispute rages on through the summer, most workers would be paid only federal minimum wage beginning in late August.

With the Legislature deadlocked over whether to raise taxes to help bridge a $38 billion deficit, the prospect of a work force earning $5.15 an hour is real. That reality has some state workers throwing up their arms in disgust.

"I have never seen the Legislature this spectacularly stupid ... petty (and) mean," said Richard Barton, who has spent the last 23 years in state service and currently works for the Department of Transportation. "The Legislature and the governor are just not doing their jobs.

"You can't live on minimum wage," Barton said. "It gives me a heck of an incentive to look for a job elsewhere. It gives me an incentive to retire."

State Controller Steve Westly said Wednesday he is required to comply with a recent California Supreme Court ruling that dictates use of the federal minimum wage if no budget is enacted. He said the bare-bones paychecks would start when state payroll systems can be reprogrammed, most likely in late August or September.

But for most state workers, the budgeting uncertainty will start Tuesday.

As the fiscal year begins, they are scheduled to receive two negotiated changes in their paychecks: a 5 percent raise and a corresponding increase in their retirement contributions.

After years of being told there was no money for pay raises, most unions in 2001 agreed to complex deals that increased their take-home pay by reducing their retirement contributions. The deal called for workers to receive a 5 percent increase on July 1 this year as their retirement costs returned to their prior rate.

But state officials don't agree on whether workers are immediately entitled to the raise if the state, as expected, operates without a spending plan beginning Tuesday.

If the raises aren't paid, most workers will see their take-home pay dip by nearly 5 percent as their retirement contributions rise.

Union officials are adamant on the point: "We should get that five percent increase in pay," said Perry Kenny, president of the California State Employees Association.

Westly, whose office actually cuts the checks, said he agrees.

But Marty Morgenstern, director of the state Department of Personnel Administration, said he doesn't think workers could be paid more without a budget in place. The administration has already told administrators and managers, who are not represented by unions, that they won't be receiving a raise.

"I don't know if we can put increases in until they have been budgeted," Morgenstern said, saying his lawyers would be meeting with the controller's lawyers.

"I'm sure that we will all be talking and work out something," he said.

California Highway Patrol officers may be the only group to emerge with substantially more money if raises are paid. They negotiated 5 percent to 7 percent increases and aren't affected by the same retirement contribution increases.

Whether state workers receive their negotiated raises next week is one question. Whether they ultimately keep them is another.

In the absence of a state spending plan, the Department of Personnel Administration has operated under the assumption it needs to find $470 million in payroll savings through salary rollbacks or 7,000 layoffs. The state is issuing 9,000 surplus notices, warning employees they may lose their jobs, to get to the figure because some of those who receive notices may ultimately find other jobs in state service.

A Senate budget draft under discussion calls for the state to save $855 million over two years through payroll reductions or 13,000 layoffs -- meaning thousands more letters will need to be sent out.

Keith Wimer, a prison educator, is among the state workers who could find themselves without a job. Some 300 prison educators have been told they won't be needed. Given that many public schools are laying off teachers, finding employment would be hard, he said.

"I'm 54 years old, so my options are limited," Wimer said. "It's going to be a great burden."

State officials have been trying to get the unions to stomach salary reductions but have had little luck.

Scott Burns, president of the union representing state attorneys and administrative law judges, said negotiations are going slowly. He said the state has not been able to guarantee that layoffs would be avoided even if they agree to salary decreases.

"If the layoffs are going to come anyway, then you protect what you have," Burns said.

Bruce Blanning, executive director of the unit representing state engineers, said there has been "very little progress."

Kenny repeated calls for early retirement incentives to help thin the state work force.

"Let those people go that can afford to go," he said.

Legislation authorizing an early retirement incentive is moving through the Legislature, but the administration has insisted that such an offer should be discussed at the negotiating table.

Morgenstern said the state and unions are in an unusual position.

"Normally, people talk about how much they are going to get, and now (we) are talking about how much we need them to give back," Morgenstern said.

Some elected officials, including Gov. Gray Davis and a handful of legislators, are taking voluntary pay reductions, but the result has been largely symbolic because of the size of the deficit. Davis also has asked his top advisers to take a 5 percent pay cut.

Westly has said he won't pay Davis, other statewide constitutional officers, appointed staff or legislators until a budget is signed.

Fred Sater, 51, wasn't willing to wait to see what happens.

His 22 years with the state and the Division of Tourism ended Monday. While he could have taken another, unrelated state job, he chose to leave state service to start his own public relations firm.

"There is so much uncertainty in the air right now, I'm thinking I made the right move," Sater said.

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About the Writer
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The Bee's Ed Fletcher can be reached at (916) 326-5548 or efletcher@sacbee.com.

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State employees brace for layoffs
Layoffs and pay cuts are among the uncertainties state workers face as the budget debate unfolds.

Layoffs
The lowdown
7,000-13,000 workers are at risk.

Hitting home

Nearly 9,000 workers will soon have been told they may lose their jobs.

Price tag

Officials hope to save $470 million to $855 million through layoffs or pay cuts.

July wages
The lowdown
State Controller Steve Westly wants to give workers their negotiated pay raises July 1. But only CHP officers would take home more money, because pension contributions for most workers will also rise. Administration lawyers say they can't process raises without an approved budget. If they're right, most workers would take home less money because their pension contributions would increase anyway.

Hitting home

For 130,000 state workers, a previously negotiated 5 percent raise beginning Tuesday is supposed to offset a scheduled increase in retirement contributions. If workers don't receive the raise, most would see a 5 percent dip in their pay before taxes and other deductions.

Price tag

A worker now earning $50,000 a year would make $52,500 after the raise, but would take home $50,184 as the higher retirement contribution kicks in. The same worker making $50,000 a year without a raise would see his yearly takehome pay drop to $47,684.

Minimum Wages
The lowdown
A recent court ruling says most state workers must be paid the federal minimum wage -- $5.15 per hour -- when the state has no budget. The state must repay workers' lost wages once a budget is signed.

Hitting home

Most state workers would be paid minimum wage as soon as changes to the payroll system can be made. Westly says employees likely will receive their full checks until the end of August or early September.

Price tag

Several credit unions are offering state workers no-interest loans if the budget standoff persists.

Source: Department of Personnel Administration, State Controller