SACRAMENTO, Calif. (AP) — In the latest departure from his predecessor's plans for trimming a multibillion-dollar budget gap, Gov. Jerry Brown has dropped a lawsuit over whether his office has the authority to pay minimum wage to state workers.

Just a week ago, Brown dropped former Gov. Arnold Schwarzenegger's plan to sell state buildings to raise $1.2 billion and then lease them back, calling the proposal "a gigantic loan with interest payment." The state is facing a $26.6 billion fiscal crisis.

The Democratic governor said Tuesday that his administration also filed a dismissal for the wage lawsuit, ending Schwarzenegger's battle to impose the federal minimum wage on state workers during budget impasses.

Back in 2008, Schwarzenegger, a Republican, imposed minimum wage while the state operated without a balanced budget. The state's controller, John Chiang, refused to comply, which prompted the administration to sue and Chiang to countersue.

According to Brown's dismissal, the state's aging payroll system was incapable of making the changes without "modifications at a potentially significant cost." The filing indicated the administration planned to work with Chiang on future state employee pay issues.

Chiang applauded the move, calling the lawsuit "a frivolous waste of hard-earned tax dollars that should be dedicated to fixing our schools, protecting our communities and rebuilding our infrastructure."

But Brown on Tuesday also took a page from Schwarzenegger's playbook by announcing a hiring freeze that, along with a cutback of state-issued cell phones, would save an estimated $363 million in the fiscal year that begins July 1. About $200 million of that would be in general fund savings, he said.

In 2008, Schwarzenegger had ordered a state hiring freeze and payroll cuts to conserve cash as California struggled with a $42 billion budget deficit. He imposed days off without pay, known as "furlough Fridays."

Brown's hiring freeze applies to vacant, seasonal, full-time and part-time positions. The exemptions are for positions critical to public safety, revenue collection and other core functions, such as those who respond to disasters or life-threatening situations.

He will continue to make senior-level appointments to form his new administration.

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

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

Brown has made a point of trimming back as the state faces its latest multibillion budget gap. He issued an executive order to halt new vehicle purchases by the state and directed vehicles not essential for state business to be turned in.

Schwarzenegger made similar efforts to reduce the state vehicle fleet.

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

Copyright 2011 The Associated Press.