August 19, 2004 at 9:12 p.m.
SACRAMENTO (AP) -- The state Senate voted Thursday to hike the state's minimum wage to $7.75 an hour during the next two years -- to the nation's highest -- but Gov. Arnold Schwarzenegger is expected to veto the bill.

Business groups friendly to the governor say they widely believe Schwarzenegger will block it.

"It's our hope and expectation that he will veto it," said Michael Shaw, assistant state director of the National Federation of Independent Businesses, which represents the state's small businesses. "Certainly, we don't have any reason to doubt that."

With no discussion, the Senate voted 22-14 to hike the current $6.75 minimum wage by 50 cents next July 1, and another 50 cents on July 1, 2006. The Senate's vote returns the bill to the Assembly, which has already approved the concept, and sets up a showdown over the state's wages with Schwarzenegger.

KRON4