Two employee unions had challenged Schwarzenegger's executive order, saying he did not have authority to order furloughs on his own.
Judge Patrick Marlette disagreed. In a preliminary ruling, he said the governor has "express authority to make the challenged order."
He also said certain union agreements allow the administration to reduce employee hours if the state runs short of money. Schwarzenegger has declared a fiscal emergency as California faces a $42 billion budget deficit through June 2010.
He and lawmakers are debating billions of dollars in spending cuts, tax increases and borrowing to close the shortfall.
"The current circumstances constitute an emergency," Marlette said. "The challenged order is reasonable and necessary."
He is scheduled to issue a final ruling later.
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