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Schwarzenegger Orders Furloughs Amid California Budget Impasse

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July 28 (Bloomberg) -- California Governor Arnold Schwarzenegger ordered more than 150,000 state workers to take three days of mandatory unpaid time off to conserve cash.

The executive order, effective Aug. 1, stipulates that the furloughs will end when a budget for the fiscal year that began July 1 is enacted, the governor’s press secretary, Aaron McLear, said in an e-mail. It comes after government workers endured furloughs over almost 12 months that ended June 30.

California began its fiscal year without a spending plan after Schwarzenegger and Democrats remained deadlocked over how to fill a $19.1 billion deficit. Controller John Chiang has warned he may again need to issue IOUs to pay bills if the impasse continues into September.

“Every day of delay brings California closer to a fiscal meltdown,” Schwarzenegger said in a statement today. “Our cash situation leaves me no choice but to once again furlough state workers until the Legislature produces a budget I can sign.”

About 37,000 state workers, including highway patrol officers, forest firefighters and psychiatric technicians, are exempt from the furloughs because their unions struck labor contracts with Schwarzenegger that included cuts in pensions he sought.

To contact the reporters on this story: Michael B. Marois in Sacramento, California, at Or mmarois@bloomberg.net;

To contact the editor responsible for this story: Pete Young at pyoung13@bloomberg.net.

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