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John Chiang: I’m doing my job, Sen. Strickland should do his

Guest Commentary

Posted: August 7, 2010 4:28 p.m.
Updated: August 8, 2010 4:30 a.m.

Contrary to state Sen. Tony Strickland’s commentary of Aug. 2 (“Controller Chiang defies governor”), I am fighting Gov. Arnold Schwarzenegger’s order to slash state employees’ pay to the federal minimum wage for one reason: to save taxpayer dollars.

Temporarily paying state employees minimum wage when the Legislature and governor fail to do their job and enact a timely budget does nothing to help the budget deficit.

But it could make our fiscal problems worse by exposing the state to massive penalties for violating labor and contract laws.

An independent study by the accounting firm Crowe Horwath concluded that attempting to pay minimum wage while complying with constitutional, federal and state laws would be an “unsolvable puzzle.” Sen. Strickland may not understand this, but every state payroll chief who has served for the last 40 years does.

In 2004, the Legislature passed and the governor signed a law declaring the urgent need to replace the state’s existing payroll system.

In 2006, the Schwarzenegger Administration and my predecessor approved contracts to launch the new payroll system, named the 21st Century Project.

When I took office in January 2007, I quickly determined the original vendor was not meeting its contractual obligations and put the company on a strict timeline.

In October 2007, I issued a breach-of-contract notice.

When the company still failed to meet performance expectations, I terminated the contract.

The state was able to keep all products developed, plus the $6.7 million that we refused to pay the company for failing to meet performance expectations.

We also collected $2.7 million from the surety bond — believed to be the first time California has ever recovered even a dollar from such a bond.

A new vendor was hired last February and the project continues with a six-member steering committee, which approved the new implementation schedule.

The 21st Century Project is on track to be fully implemented by the end of October 2012.

If Sen. Strickland has concerns about the schedule, he should confer with the governor, who appointed four of the six members on the steering committee. Better still, perhaps Sen. Strickland should show leadership and help his legislative colleagues enact an honest, solid budget. That’s his job, and I’m doing mine.

John Chiang is State Controller. His column reflects his own views and not necessarily those of The Signal.


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