STATE FURLOUGHING AT 24-HOUR FACILITIES DOESN'T SAVE

Study: Furloughing at 24-hour facilities doesn't save

Unpaid days likely will be more costly

Michael J. Sorba, Staff Writer

Posted: 10/20/2009 08:45:18 PM PDT

 

Furloughing employees at 24-hour care facilities could end up costing more in the long run than it saves in the short term, according to a study released this month by the state Senate Office of Oversight and Outcomes.

The situation could create additional, significant costs for taxpayers down the road because furloughs aren't eliminating but instead are pushing labor costs to the future, the report says.

"Some state jobs cannot stop for furloughs," the report says, "most prominently the care and supervision ofprison inmates and people with serious developmental disabilities and mental illnesses."

Under an executive order from Gov. Arnold Schwarzenegger, in July most state workers began taking three unpaid days off per month, the equivalent of a 14percent pay cut for the 2009-10 fiscal year.

Most state agencies responded by taking three unpaid Fridays off each month. But 24-hour facilities, such as prisons and mental facilities, don't close, so employees can't follow a set furlough schedule.

The situation has resulted in certain state employees, such as corrections officers and psychiatric technicians, working three 40-hour weeks each month in which they're paid for 32 and then bank the 24 hours of unpaid time for later use.

That banked time must be used before June 30, 2012, state officials have said. When it is used, workers will be paid for the time off because they've already absorbed the 14percent cut, the report says.

Since they'll eventually be paid for furlough hours, the plan is only delaying labor costs, not eliminating them like it does with other state employees, the study says.

About 33,000 state employees paid from the general fund work at 24-hour facilities, so this policy is passing on a significant cost, the report says.

"Correctional workers banked 1.5million furlough hours between February and August 2009," the report says. "Most are correctional officers. At a (top) pay rate of $34.91 an hour, those hours create a future liability of at least $52million."

The report cites a February-to-August period because Schwarzenegger started furloughs in February at two days per month, then upped it to three in July.

The state is requiring workers to use the banked furlough hours before any other time off, such as vacation orsick time, as one strategy to ensure it's used by the deadline, officials have said.

This is creating another future cost because more vacation or sick time is saved and likely won't be cashed out until retirement or upon leaving state employment, the report says.

When vacation time is cashed out the state will likely have to honor it at a higher rate of pay than if it were used at current rates, said Lance Corcoran, a spokesman for the California Correctional Peace Officers Association, which represents over 30,000 state correction officers and parole agents.

"That's what this administration is doing, bankrupting future administrations," Corcoran said. "(Schwarzenegger's) going to be long gone, making `Terminator 16,' when this bill is due."

Former Gov. Pete Wilson implemented a similar program in 1991 when state workers took one furlough each month, Corcoran said.

"We have people who are retiring today with 144 hours that they're cashing out, not at 1991 (pay) rates, but what the time is worth in 2009," he said.

Aaron McLear, a Schwarzenegger spokesman, said state agencies have always paid out unused vacation time and budgets won't be changed to cover more hours.

"We won't be increasing budgets," McLear said. `They'll have to pay that out with their existing budget."

Through the first quarter of the 2009-10 fiscal year, the furloughs are on pace to save $1.3 billion from the general fund and $2.1 billion overall, when including labor costs paid from other funds, McLear said.

Several state employee unions are against furloughs, McLear said. While they're protecting the interests of members, they're also failing to realize sacrifices are needed in a depressed economy, he said.

"At a time when 12 percent of Californians are unemployed and the state is slashing billions ... it is outrageous to argue that state employees should be shielded from the same economic reality everyone is facing," he said.

 

 

Ryan Sherman

Director, Research & Analysis

755 Riverpoint Drive

West Sacramento, CA 95605

916-372-6060 ext. 259

916-716-1400 (cell)