State Controller Calls Layoff Unnecessary

Sacramento, CA, USA Testifying before a Senate Committee, John Chiang challenged the governor's claim that the state is quickly running out of cash. The controller said California will have $4.2-billion in cash reserves at the end of September. That's much more than the $2.5-billion Governor Schwarzenegger requested.

Because of the large amount, Chiang calls the pay cut order unnecessary.

One of the governor's finance advisors responded, insisting the pay cuts are needed to follow state law. Governor Schwarzenegger has proposed a temporary one-cent increase in the state sales tax for the next three years in exchange for long-term fixes he believes that would solve the state's continuous budget woes.

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