That state is seriously $#%&@!. *This is the first story in America's Great State Payroll Giveaway, a six-part series. Coming tomorrow: how a court ruling and state bungling sent the price of psychiatric care soaring, and led to suicides in California's prison and mental health systems.* $822,000 Worker Shows California Leads U.S. Pay Giveaway By Mark Niquette, Michael B. Marois & Rodney Yap - Dec 11, 2012 12:54 AM ET $822,000 Worker Shows California Leads U.S. Pay Giveaway - Bloomberg * Across the U.S., such compensation policies have contributed to state budget shortfalls of $500 billion in the past four years * Payroll data compiled by Bloomberg on 1.4 million public employees in the 12 most populous states show that California has set a pattern of lax management, inefficient operations and out-of-control costs. From coast to coast, states are cutting funding for schools, public safety and the poor as they struggle with fallout left by politicians who made pay-and-pension promises that taxpayers couldnâ€™t afford. * Davis had taken office in 1999 with a $12 billion budget surplus. Four years later, he began his second term by reporting a $35 billion budget deficit -- about $1,000 for every man, woman and child in the state. Pay Increases Davis and the Legislature also agreed to labor contracts that gave 164,000 state workers pay increases of 4 percent in 1999 and again in 2000. Those contracts cost the state an extra $1.3 billion within a year, according to the stateâ€™s independent Legislative Analystâ€™s Office. There were more to come. After technology stocks plummeted in 2000, cutting tax revenue, Davis asked state workers to postpone additional raises. In lieu of immediate increases, Davis and the California Legislature agreed to link highway patrol pay to an average of the five biggest law enforcement agencies in the state. The result: escalating raises that came due after Davis left office. Officersâ€™ pay rose 2.7 percent in fiscal 2004, 12.1 percent in fiscal 2005 and 5.6 percent and 5.7 percent in the following years, according the Legislative Analystâ€™s Office.