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California State Controller John Chiang

California State Controller John Chiang became a hero to 200,000 state workers in 2008 when he defied Governor Schwarzenegger’s order to cut their paychecks to the federal minimum wage due to a budget impasse with the legislature had ended.

Chiang called Schwarzenegger’s order “a poorly devised strategy to put pressure on the Legislature to enact a budget”, and claimed that he had “both constitutional and statutory authority” to continue payments. In response to a formal order from Schwarzenegger, Chiang sent a formal letter reiterating his position. Chiang called state workers at a Los Angeles rally the “innocent victims of a political struggle”.

Both the trial and appellate courts ruled that Chiang had violated the law in defying the Governor’s orders, but those rulings came down long after the budget impasse was over. On July 1, 2010 the state legislature again failed to pass a budget on time and Schwarzenegger again ordered Chiang to cut wages to the federal minimum. Chiang said he couldn’t carry out the order due to an antiquated payroll system.

“This is not a simple software problem,” he said. “Reducing pay and then restoring it in a timely manner once the budget is enacted cannot be done without gross violations of law unless and until the state completes its overhaul of the state payroll system and payroll laws are changed.”

On July 7, 2010 Schwarzenegger filed a second lawsuit against Chiang. The legal brinksmanship with the Governor’s office ended on February 16, 2011 when new governor Jerry Brown dropped the suit Schwarzenegger had filed, agreeing that due to the limited capabilities of the state’s payroll computer system, Chiang would have had to violate the federal tax laws in order to comply with Schwarzenegger’s order.

Most observers agreed that Schwarzenegger’s order had been little more than a hardball tactic to put pressure on the legislature to make concessions in order to pass a budget. Legal analysts agree that Schwarzenegger had been acting in accordance with the law in issuing the order, but Chiang ultimately won more praise than blame for standing up to the former governor’s tactics.

John Chiang, a Democrat, was elected California State Controller in November of 2006 and took office on January 8, 2007. Within four months he earned praise for reporting that the state of California would have to pay an additional $2.2 billion annually for 30 years for the health benefits for all currently retired state employees and current state employees who will be retiring. In November 2010 Chiang was reelected to a second term as Controller.

Chiang was born to immigrants from Taiwan in New York City on July 31, 1962. He grew up in Chicago. At Carl Sandburg High School he served as student body vice-president. His close friend was student body president Dave Jones who ran with Chiang in the 2010 election and won the post of California Insurance Commissioner. Chiang graduated with honors from the University of South Florida with a degree in Finance. He then received a law degree from Washington D.C.‘s Georgetown University Law School.

Chiang became active in the Democratic Party after moving to Los Angeles in 1987 where he began his career as an IRS tax law specialist. He then worked as an attorney for Gray Davis, then California State Controller, and also worked on the staff of Senator Barbara Boxer. In 1998 Chiang was elected to a seat on the state Board of Equalization representing the Fourth District which includes southern Los Angeles County. He won a second four-year term in 2002 and served as the Board’s Chair until being elected Controller.

Chiang lives with his wife Terry in Torrance, California. He has two brothers, Roger and Bob. His sister Joyce was murdered in 1999.

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