MAY 8, 2009: A $6.8 BILLION Dollar String
ByCalifornia, in its current financial meltdown, is about to run out of money as soon as July. As you have read on this blog before, going bankrupt isn’t as bleak as some would have you believe. Receivership offers California a clean slate and an opportunity to get out from underneath the thumb of labor unions and their crushing contracts.
Remember all that stimulus cash Governor Schwarzenegger was licking his chops over? The current Administration in Washington has attached a new string to some of those billions. According to federal health officials, the wage reduction for unionized home health care workers approved as part of the budget passed in February is in violation of the American Recovery and Reinvestment Act. If the wage cuts are not cancelled before they go into effect on July 1st, California stands to loose $6.8 BILLION dollars is stimulus funds.
The wage cuts would potentially save California $74 MILLION dollars. With the wage cuts, the state would contribute a maximum of $10.10 to the home health care workers’ pay instead of the current maximum $12.10 contribution. Workers effected by these cuts are part of the Service Employees International Union (SEIU)and the United Domestic Workers Union.
This is an example of why taking money from the federal government isn’t always a good idea. There are always strings attached and it usually ends up giving the federal government a say in how we run our states.









