California State Budget Crunch Brings Back Furlough Fridays

The California Supreme Court agreed to allow furloughs to resume on Friday, until they have enough time to thoroughly review the case. The judges must decide whether or not Governor Arnold Schwarzenegger has the right to order unpaid days off for state workers.

News10.net reports:

150,000 state workers will take an unpaid day off Friday in an effort to curb the state's budget crisis. Furloughing state employees three days a month will save $150 million a month.

The California Supreme Court cleared the way for furloughs to resume Wednesday, saying furloughs can resume while it reviews whether the governor has the authority to mandate unpaid days off for state employees.

Gov. Arnold Schwarzenegger recently ordered workers to be furloughed three days a month, following a previous round that ended in June.

It's a move that has an impact on the private sector as well as state employees.

Read more here

Cities Threaten to Cut 500,000 Jobs

Local government agencies around the country are having ongoing budget and deficit problems, and officials are now saying that unless Congress steps in they will be forced to cut thousands of jobs. As CNN Money.com explains, many of these jobs include government workers and safety personnel.

Cash-strapped cities and counties have been cutting jobs to cope with massive budget shortfalls -- and that tally could edge up to nearly 500,000 if Congress doesn't step up to help.

Local governments are looking to eliminate 8.6% of their total full-time equivalent positions by 2012, according to a new survey released Tuesday by the National League of Cities, the National Association of Counties and United States Conference of Mayors.

"Local governments across the country are now facing the combined impact of decreased tax revenues, a falloff in state and federal aid and increased demand for social services," the report said. "In this current climate of fiscal distress, local governments are forced to eliminate both jobs and services."

The depth of the recession has pushed cities to make reductions in departments that are typically shielded from cuts because they provide core services to residents, including public safety, public works, public health, social services and parks and recreation.

Continue reading at CNN Money.com…

Governor Puts 200,000 State Workers on Minimum Wage

The Governor of my home state, Arnold Schwarzenegger, issued an order on Thursday that reduces about 200,000 California state workers’ wages to minimum wage. The pay reductions are going into effect this month. Many experts are predicting that this move is a tactic to put pressure on unions that have not agreed to pay and pension concessions.

According to a letter delivered to Controller John Chiang in late afternoon, July pay for most hourly state employees will be withheld to the minimum allowed by federal law – $7.25 an hour – and then restored once there's a budget.

Chiang, whose office cuts state paychecks, said Thursday that he won't follow the order unless a court tells him to.

The letter from the governor's Department of Personnel Administration instructs Chiang to withhold employees' pay because the state started the 2010-11 fiscal year without a budget appropriating money for payroll. Hours earlier, Gov. Arnold Schwarzenegger officially ended 17 months of furloughs for state workers.

The minimum-wage order exempts roughly 37,000 state workers in the six bargaining units that have tentatively agreed to labor deals.

Continue reading at SacBee.com…

Government Jobs Not So Cushy

When you hear the words “government job,” you probably think of big paychecks, or extreme job security. However, new studies have revealed that some state and local government workers actually earn less than their private sector counterparts.

As this article from CNN Money.com explains, government workers earn between 11% and 12% less than workers in private companies, according to a joint study from the Center for State and Local Government Excellence and National Institute on Retirement Security.

The report, which analyzed 20 years of data from the Bureau of Labor Statistics, also found that the pay gap has generally widened over the last two decades, as private compensation moved higher while earnings for state and local workers fell.

"The big divergence began to occur in the late 1990s," said John S. Heywood, a professor in the economics department at University of Wisconsin-Milwaukee and co-author of the report. "It's an issue."

Researchers say the make-up of public workers could be a primary driver for the gap. According to the study, because state and local employees tend to be older, they're less likely to leave their positions, which could keep salaries stagnant.

Bill Seeks to End Some Furloughs for California Workers

From MercuryNews.com:

California would end three-day-a-month furloughs for tens of thousands of state employees under a jobs bill that is scheduled for its first committee hearing this week.

The targeted employees would be those who work for agencies that collect taxes or receive their revenue from sources other than the state's general fund, such as the Department of Motor Vehicles.

Republicans have been critical of the Democratic proposal, saying it does not go far enough to create private-sector jobs.

The bill's sponsor, Senate President Pro Tem Darrell Steinberg, D-Sacramento, said allowing certain workers to return to their jobs full-time will actually generate more revenue for the state and improve customer service.

He said furloughing workers at the Franchise Tax Board is costing the state more than $300 million a year in uncollected taxes. His bill would exempt the tax board and the Board of Equalization, which is fighting the furloughs in court.

The state loses $7 in tax board collections for every $1 it saves by furloughing workers there, the Senate Office of Oversight and Outcomes calculated in a report released Friday.

"All it's doing is keeping our economy down," Steinberg spokesman Nathan Barankin said.

Steinberg's bill also would exempt other agencies that receive at least 95 percent of their budgets from federal money or fees, which are not tied to the general fund.

Our View: State Hires Workers as Taxes Rise

California has been having budget problems for a long time, and now some are beginning to criticize the state about the number of new government workers that are being hired. Check out the following article on the controversy courtesy of the Colusa Sun Herald.

Do you ever get the feeling that the public works for the government, rather than the other way around? That’s the sense we get, especially during tough economic times. The private sector is slashing jobs, and taxes are going up, thanks to the recently enacted state budget plan. Freedom Communications Inc., parent company to this newspaper, announced a furlough program Friday that mirrors similar cutbacks being made by the newspaper industry nationwide.

But the government isn’t tightening its belt. In fact, a Sacramento Bee analysis of the state government found that its “full-time workforce continues to grow despite Gov. Arnold Schwarzenegger’s order to freeze hiring amid a historic budget shortfall.”

Over an eight-month period, most state agencies expanded their workforce or kept the same number of employees. A fewer-than-promised number of part-time employees were laid off.

“The overall number of full-time state employees increased by roughly 2,000, or 1 percent, excluding the Department of Forestry and Fire Protection, or Cal Fire, which always shrinks sharply outside of fire season, the figures show,” according to the Bee. “While the increase is modest compared with other years, it clashes with the belief that the state workforce must shrink to meet the current economic downturn and resulting drop in state revenue.”

So once again we see Schwarzenegger’s promises are not to be believed. That should surprise no one given this supposedly anti-tax governor championed a huge tax increase. The same governor who promised to blow up the boxes of government is doing his best to make those boxes bigger. And now his promises to cut the part-time workforce are empty. The permanent bureaucracy seems to rule things in Sacramento, so even as the rest of the state contracts, its ranks expand.

The California Highway Patrol has expanded its workforce by an astounding 3 percent. At the local level, cities are still pushing for expanded pay and benefits for their workers. USA Today reported last year that, “State and local government workers are enjoying major gains in compensation, pushing the value of their average wages and benefits far ahead of private workers.” It’s a nationwide trend, although no other state has the fiscal mess faced in California.