updated 10/4/2010 1:12:56 PM ET 2010-10-04T17:12:56

The California Supreme Court on Monday upheld Gov. Arnold Schwarzenegger's order to furlough state workers, dealing a major victory to part of the governor's budgeting plans.

In its unanimous ruling, the court concluded that the state Legislature's 2009 budget legislation "validated the governor's furlough program."

State employee unions have been challenging Schwarzenegger's order since he implemented two-day-a-month furloughs for more than 200,000 state workers in February 2009. He later expanded it to three days a month, which has translated to a pay cut of roughly 14 percent for government employees.

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Schwarzenegger said the move was intended to save money as California faced a severe budget crisis, but his order prompted the filings of more than two dozen lawsuits.

During a hearing in San Francisco last month, the governor's legal team said the administration was acting within its rights to deal with a budget crisis. Labor attorneys claim the order violates collective-bargaining law.

While the court deliberated, state workers continue to be furloughed.

An Alameda County Superior Court judge had issued a temporary restraining order preventing the governor from implementing furloughs, but the state Supreme Court allowed furloughs to resume while it deliberated.

After an initial round of furloughs ended in June, the governor brought back three-day-a-month furloughs in late July while the state deals with a $19 billion deficit.

The new order exempts departments that collect revenue, such as the Franchise Tax Board, and provide public safety protection, including the California Highway Patrol.

It also exempts about 37,000 workers in six unions that recently reached tentative labor agreements with the Schwarzenegger administration. Those unions agreed for their members to contribute more of their salaries toward their pension benefits and to take one day of unpaid personal leave a month, the equivalent of a nearly 5 percent pay cut.

The state's high court consolidated the appeals of several unions, including the Service Employees International Union Local 1000, the California Attorneys, Administrative Law Judges and Hearing Officers in State Employment, as well as the Professional Engineers in California Government.

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