Pennsylvania withholds July pay for 69,000 workers

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Pennsylvania withholds July pay

State freezes workers' pay for July as budget impasse continues. Two other states have yet to approve budgets, while California closes in on deal to close $26 billion deficit.

By Tami Luhby, CNNMoney.com senior writer


NEW YORK (CNNMoney.com) -- Pennsylvania state workers' paychecks are a little light these days.

Struggling to resolve a 17-day-old budget impasse, Pennsylvania is withholding pay for 69,000 state employees for time worked after July 1. Workers Friday received only 70% of their salary, covering days worked in June. Starting two weeks from now, they'll get nothing on payday until a state budget is approved.

Pennsylvania is one of three states that have yet to pass budgets for fiscal 2010, which began July 1. The other two -- Connecticut and North Carolina -- are operating under temporary spending measures. Still two others, Illinois and Ohio approved their 2010 budgets this week.
0:00 /3:00States' budget bummers

In California, which passed a budget in February, Gov. Arnold Schwarzenegger and lawmakers are moving closer to resolving a $26 billion budget shortfall that has forced the state to send out nearly 150,000 IOUs to residents, contractors and small businesses.

When Pennsylvania state workers open their paychecks, they'll see the words "Budget Impasse Leave without Pay" for the time worked in July. Even after a budget is signed, employees won't see the money for several days. And they won't get interest on the money owed, said a governor's spokeswoman.

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http://money.cnn.com/2009/07/17/news/economy/State_budget_woes/