SPECIAL REPORT

California plans more furloughs due to budget

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California Governor Arnold Schwarzenegger speaks to the media in Washington D.C. May 20, 2009. REUTERS/Peter Grigsby/Office of the Governor/Handout

California Governor Arnold Schwarzenegger speaks to the media in Washington D.C. May 20, 2009.

Credit: Reuters/Peter Grigsby/Office of the Governor/Handout

SAN FRANCISCO | Fri Jun 26, 2009 7:36pm EDT

SAN FRANCISCO (Reuters) - California will force state employees to take a third unpaid day off work per month starting in July if the legislature cannot close a mounting budget gap, Governor Arnold Schwarzenegger said on Friday.

State Controller John Chiang has said he will start paying state bills with IOUs on July 2, a day after the fiscal year starts, if the $24.3 billion budget gap is not closed with a new spending plan, since the state is running out of cash.

State employees who already are required to take two unpaid days off per month will get a third furlough day, Schwarzenegger said in a statement, repeating that he opposed any partial effort to fix the finances of the largest U.S. state.

(Reporting by Peter Henderson; Editing by Gary Hill)

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