Canada freezes C$2.3 billion in Gaddafi assets (Reuters)

OTTAWA (Reuters) – Canada has frozen C$2.3 billion ($2.4 billion) worth of assets belonging to Libyan leader Muammar Gaddafi, a government official told Reuters on Tuesday.

The official did not give details.

Ottawa announced a clampdown on doing business with Libyan institutions on Sunday and later said it had blocked unspecified financial dealings the Libyan government had planned to carry out in Canada.

The United States, Austria and Britain have also frozen Gaddafi assets over the last few days.

($1=$0.97 Canadian)

(Reporting by David Ljunggren; editing by Rob Wilson)

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Calif gov. freezes hiring, drops minimum wage suit (AP)

SACRAMENTO, Calif. – Gov. Jerry Brown on Tuesday ordered a state government hiring freeze amid California's $26.6 billion fiscal crisis, hours after he dropped a lawsuit filed by former Gov. Arnold Schwarzenegger over whether the governor has the authority to pay state workers minimum wage.

Brown announced what he said was a comprehensive hiring freeze that applies to vacant, seasonal, full-time and part-time positions. The administration estimates the freeze, along with other cost-cutting efforts like reducing the number of state-issued cell phones, will save $363 million in the fiscal year that begins July 1, about $200 million of which will be in general fund savings.

"We must do everything possible to save money and make government leaner and more efficient," the Democratic governor said in a statement.

Brown is allowing for certain exemptions that are critical to public safety, revenue collection and other core functions. An example includes positions that respond to disasters or life-threatening situations. He also will continue to make senior-level appointments to form his new administration.

According to the state controller's office, California had about 234,000 employees as of Jan. 31.

Hiring freezes aren't new in California. Schwarzenegger ordered a state hiring freeze and payroll cuts to conserve cash as California struggled with a $42 billion budget deficit back in 2008. He also imposed days off without pay, which became known as "furlough Fridays."

As part of his budget, Brown has proposed a 10 percent pay cut for union-represented state employees that have yet to reach a contract with the state. Other bargaining units have already agreed to pay cuts.

Also Tuesday, Brown's administration announced it filed a dismissal in Sacramento County Superior Court. The filing ends Schwarzenegger's battle to impose the federal minimum wage on state workers during budget impasses. The three-page filing filed by the state Department of Personnel Administration indicated the Brown administration plans to work with the controller's office on future state employee pay issues.

"I am pleased and thankful that Governor Brown saw this litigation as a frivolous waste of hard-earned tax dollars that should be dedicated to fixing our schools, protecting our communities and rebuilding our infrastructure," state Controller John Chiang said in a statement.

Back in 2008, Schwarzenegger, a Republican, imposed the federal minimum wage on state workers while the state operated without a balanced budget. Chiang, who cuts state paychecks, refused to comply. That prompted the administration to sue and Chiang to counter sue.

According to Brown's dismissal, the state's aging payroll system was incapable of making the changes without "modifications at a potentially significant cost."

Labor groups applauded the move.

"Gov. Jerry Brown has done the right thing by dropping the minimum wage lawsuit," said Patty Velez, president of the California Association of Professional Scientists. "It isn't fair or reasonable to expect state scientists to work for minimum wage because the governor and state lawmakers can't agree on a budget."

The lawsuit isn't the first time Brown has departed from the previous administration. Last week, Brown dropped Schwarzenegger's plan to sell 24 state buildings to private investors to raise $1.2 billion for the general fund. Brown said the plan to lease back the office space at market rates didn't make sense because it amounted to "a gigantic loan with interest payments."

Brown has made a point of trimming back as the state faces its latest multibillion budget gap. In his first few weeks in office, Brown issued an executive order to halt new vehicle purchases by the state and directed vehicles that are not essential for state business to be turned in. Schwarzenegger also made similar efforts to reduce the state vehicle fleet.

Brown has also ordered half of the 96,000 phones issued to state bureaucrats to be turned in over an 18-month period.

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California governor Brown freezes state hiring (Reuters)

SAN FRANCISCO (Reuters) – California Governor Jerry Brown ordered a hiring freeze on Tuesday across the state's government to help cut costs in the face of a budget gap of at least $25 billion.

The budget deficit of the nation's most populous state is closely tracked in financial markets. California is the biggest issuer of U.S. municipal debt, and is of concern in Washington as some in Congress have discussed crafting legislation to allow states to declare bankruptcy to ease their fiscal woes.

The U.S. economy may be recovering but state and local governments still face weak revenue due to the recession, housing and financial market slumps, hesitant consumer spending and high unemployment.

Brown's order applies to vacant, seasonal, full-time and part-time positions and will save $363 million in operational costs in the next fiscal year beginning in July, Brown's office said.

"The hiring freeze will be in effect until agencies and departments prove that they can achieve these savings," Brown, sworn in last month, said in the statement.

It was the latest move by the 72-year-old Democrat to trim state spending on his own as he seeks approval from lawmakers for his budget plan.

It includes proposals for $12.5 billion in spending cuts and calls on the legislature to put a ballot measure to voters in June to extend tax increases scheduled to expire this year.

Democrats, who control the legislature, are expected to support Brown's cuts to help win Republican votes needed to advance a measure to the ballot.

The tax extensions, spending cuts and other moves would close a budget gap Brown estimated last month in his budget plan at $25.4 billion through mid-2012.

That deficit may swell to more than $27 billion after Brown canceled a plan to sell state buildings and if his proposal for creating a nearly $1 billion reserve survives budget talks with lawmakers.

In addition to the hiring freeze, Brown has ordered sharp reductions in mobile phones for state employees and in the state's vehicle fleet.

To further underscore frugality, Brown recently took a commercial passenger flight -- coach and without entourage -- to Southern California to urge business groups to support a referendum on tax extensions.

(Reporting by Jim Christie; Editing by Xavier Briand)

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