In a fiddling while Rome burns scenario, California officials argue, file lawsuits and call names with no balanced budget in sight. Eastern Sierra business owners and state workers watch Sacramento nervously, awaiting the economic impacts.

Governor Arnold Schwarzenegger wants to cut the pay of 200,000 state employees down to the federal minimum wage of $7.25 an hour until the Legislature passes a budget. State Controller John Chiang refused to cut the checks. Schwarzenegger sued Chiang to get him to pay minimum wage. The courts agreed with the Governor, but Chiang had, at last word, still not obeyed.

Instead, Chiang filed a cross claim saying the State’s computer systems couldn’t handle the changed pay scale. The Governor’s people say that’s absurd.

Meanwhile, California media have begun to focus on the State Pension system. A watchdog group, California Pension Reform, reports that more than 9,000 retired state and local government employees are collecting pensions of at least $100,000 per year. That’s up by 3,000 people over last year. There is some talk of reduction of pensions or an increase in retirement age to save money.

California still faces a nearly $20 billion deficit and no sign of compromise among factions. If the Governor prevails, locally some Caltrans workers and Department of Fish and Game employees could experience the $7.25 per hour wage until state leaders find a way to a balanced budget. Local business owners say these statewide developments could put still another pinch in the local economy.