Outdated IT Blocks California Payroll OrderOutdated IT Blocks California Payroll Order

Outdated technology has blocked an effort by California Gov. Arnold Schwarzenegger to impose a minimum wage on state workers.

An appeals court in California ruled in favor of the governor's plan to reduce most state workers' salaries to the federal minimum wage of $7.25 an hour because lawmakers failed to meet a deadline to come up with a remedy for California's $19 billion budget deficit.

However, state controller John Chiang said he can't comply with the ruling because the computerized payment system, which was designed in the 1960s, can't support the change without a major overhaul that won't be ready until October 2012. California last updated its payroll system in 1970.

"This is not a simple software problem," he said in a statement on California's Web site. "Reducing pay and then restoring it in a timely manner once a 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."

It's the second time in two years Schwarznegger aimed to lower wages because of budget woes. His plan calls for workers to be reimbursed for lost wages once lawmakers sign a new budget.

An outdated payroll system is just one of the problems with California's IT operations, which Schwarzenegger has been attempting to fix. In February he issued an executive order to reduce the state's data center space by 50% by July 2011 and to cut energy usage from IT operations 30% by July 2012.

The executive order also aims to standardize IT governance and increase spending transparency to better manage California's more than $3 billion IT budget.

While the state has made some progress to consolidate data centers and clean up other IT operations, it faces another problem: management turnover.

Chief information security officer Mark Weatherford will leave this month to join North American Electric Reliability Corporation, an electric power industry group.

He's the second top manager in California's IT department to go in the last two months. In May, CTO P.K. Agarwal left to become CEO of nonprofit TiE Global.

Meanwhile Teri Takai, California's CIO, is waiting for confirmation as new CIO and assistant secretary for networks and information integration at the U.S. Department of Defense.