Governor Orders Government Worker Furloughs in California

Gov. Schwarzenegger Orders Government Worker Furloughs

Even though California received almost $42 billion in federal aid from the stimulus package, the state faces a $19 billion budget hole

July 29, 2010

Associated Press - Gov. Arnold Schwarzenegger on Wednesday brought back furloughs for thousands of state workers until California passes a budget that addresses a $19 billion deficit.

Schwarzenegger released a new executive order requiring state workers to take three unpaid days off per month starting in August, forcing a number of state government offices closures. State workers were furloughed a total of 46 days when Schwarzenegger issued a similar order in February 2009, which translated to a pay cut of about 14 percent.

Those furloughs just ended in June.

It's unclear how long the latest round of furloughs could last, as Schwarzenegger and lawmakers enter the fifth week of the new fiscal year without a balanced budget. Earlier this week, the governor hinted that he might not sign a budget before he leaves office next January unless it includes pension, tax and spending reforms.

"Without a budget in place that addresses our $19 billion budget deficit, every day of delay brings California closer to a fiscal meltdown," Schwarzenegger said in a statement. "Our cash situation leaves me no choice but to once again furlough state workers until the Legislature produces a budget I can sign."

State Controller John Chiang has warned he will start issuing IOUs in August or September if the budget stalemate drags on in the Legislature. Chiang said the cash-saving measure is necessary because the state is projected to run out of cash in October.

As before, the public will be inconvenienced by the furloughs. Many state offices, including the Department of Motor Vehicles, will close on the second, third and fourth Fridays of the month. The first furlough is scheduled for Friday, Aug. 13.

The new order, however, exempts departments that collect revenue, such as the Franchise Tax Board, and provide public safety protection, including the California Highway Patrol. Those agencies will remain open along with the Employment Development Department, which processes unemployment claims.

It also exempts about 37,000 workers in six unions that recently reached tentative labor agreements with the administration. Those unions agreed for their members to contribute more of their salaries toward their pension benefits and to take one day of unpaid personal leave a month, the equivalent of a nearly 5 percent pay cut.

The latest furlough will affect about 156,000 of the state's 237,000 workers. The Schwarzenegger administration estimated it will achieve $80 million in general fund savings and nearly $150 million in overall savings per month.

The furlough puts pressure on remaining unions that have not agreed to the governor's demands for pension changes.

Schwarzenegger's last furlough order triggered more than two dozen lawsuits, but the administration said the furloughs achieved about $1 billion in general fund savings and $2.2 billion in overall savings during the state's last budget crisis.

Unions also have been fighting the governor's efforts to impose the federal minimum wage $7.25 per hour while the state operates without a budget.

"To once again force state employees to take unpaid furloughs is just another punitive measure by Gov. Schwarzenegger because he couldn't impose minimum wage," said Patty Velez, president of the California Association of Professional Scientists, which represents 3,000 state employees.

The state Assembly's Republican leader, Martin Garrick, said Democrats who control the Legislature were to blame because they have refused to make cuts that Republicans, including Schwarzenegger, have demanded.

"I believe they've brought it on themselves and their constituents -- and mine -- that have been furloughed, because they haven't made the reductions," Garrick said in a telephone interview. "The longer we go, the deeper the cuts have to be."

Democrats have vowed to protect education and social service programs, such as CalWORKS, the state's welfare-to-work program. They have proposed delaying corporate tax breaks and a new oil tax.

"It's shocking that every single one of the governor's budget moves deliberately hurt people," said Shannon Murphy, spokeswoman for Assembly Speaker John Perez.

Carolyn Schneider, an executive assistant for the California Air Resources Board, said the furloughs have already caused financial stress. She and her husband cut back on vacations and haven't been saving as much as they would like for college for their two children, ages 4 and 13.

But given the choice between a furlough and a permanent pay cut under the governor's plan, Schneider said,

"I'd rather have furloughs than the pay cut and still have to work."

55% Say Better for California to Go Bankrupt Than Be Bailed Out

January 4, 2010

Rasmussen Reports - California Governor Arnold Schwarzenegger reportedly intends to ask this week for a federal bailout to keep his state from going bankrupt. But most voters have never been fans of any kind of federal bailout, and most continue to oppose a bailout for California, even when told what specific budget cuts may be necessary.

A new Rasmussen Reports national telephone survey shows just 27% of voters nationwide believe the federal government should provide bailout funding for California. Fifty-five percent (55%) think the federal government should let the state go bankrupt instead. Seventeen percent (17%) are not sure.

No matter how you frame the choice for voters, bailing out California is unpopular.

Schwarzenegger himself has said that California may seek $8 billion in federal funding assistance. When we ask about that request without mentioning the trade-off of filing bankruptcy, only 16% of voters nationally favor the bailout. Sixty-eight percent (68%) oppose an $8-billion bailout for California, with another 16% undecided.

Without the federal bailout, Schwarzenegger has said California will have to cut back the state’s main welfare program and reduce health care services for the disabled and elderly. He also says a 14% cut in pay for state workers may be necessary.

Just 33% of voters nationwide favor a bailout to avoid these cuts on the state level. However, 53% say the state should cut back on welfare programs, health services and the state payroll. Fourteen percent (14%) aren’t sure.

When asked about what should be done if their own state ends up in a bind like California, 49% opt for cutting back on services, 28% say the state should raise taxes, and 9% say bankruptcy is the best course of action.

As is often the case, the divide is a huge divide between Mainstream America and the Political Class on these topics. Fifty-seven percent (57%) of the Political Class favor a federal bailout for California, while 68% of Mainstream voters say the state should go bankrupt instead.

Sixty-seven percent (67%) of male voters say it’s better to let California go bankrupt, a view shared by 45% of women.

Nearly two-thirds of both Republicans (66%) and voters not affiliated with either party (64%) say bankruptcy is the better option. Democrats are evenly divided on the question.

Voters have taken a dim view from the start of the bailouts proposed for General Motors and Chrysler and for the financial industry.

A plurality (38%) of voters nationwide say the $787-billion economic stimulus plan has hurt the economy.

The president has indicated that he hopes to use money still unspent from the stimulus plan to fight the nation’s 10% unemployment rate, and one of the ideas on the table is to channel money to states to keep them from laying off public employees. But a majority of voters oppose using the stimulus money for that purpose and also are against a second economic stimulus plan.

Fifty-one percent (51%) of voters say more jobs would be created if the remaining spending planned in the first stimulus plan was cancelled right away.

Just last month, 58% of all voters opposed giving federal bailout money to states like California with serious budget problems. Twenty-two percent (22%) thought it was a good idea. These findings remain largely consistent from a survey in May when California’s budget programs began grabbing headlines.

Michigan Senate GOP: Cut Public Workers’ Pay, Benefits

Even though Michigan received close to $13 billion in federal aid from the stimulus package, the state faces an almost $2 billion budget hole

January 20, 2010

The Associated Press - Senate Majority Leader Mike Bishop said Tuesday the pay of teachers, professors and state and local government workers should be cut by 5 percent and held at that level for the next three years to save money.

The Rochester Republican told reporters he is proposing a constitutional amendment to go to the voters in August that would suspend collective bargaining rights and allow the pay cut to take effect.

Another constitutional amendment would be needed to require that all public employees pay 20 percent of their health care premiums unless they participate in a health savings account or wellness program. If they did, they would have to cover 15 percent of their premiums.

It’s all part of a plan Bishop said would save up to $2 billion, enough to eliminate the estimated $1.6 billion deficit in next year’s budget. Both the pay cut and the higher premiums cost would affect lawmakers.

Democratic legislative leaders did not immediately respond Tuesday to requests for comment.

Other groups denounced the idea. Progress Michigan said in a statement that a study by Michigan State University economics professor Charles Ballard shows state workers already have saved the state $3.7 billion in reduced compensation and through other sacrifices, including furlough days.

It’s unclear if either measure could get the two-thirds vote needed in both the House and Senate by early June to get the measures on the Aug. 3 ballot. If lawmakers balked, the issues could go to voters through a ballot drive, but that would take time and money.

Bishop said he’s not trying to be mean-spirited, but wants to solve the money woes of public institutions, including state government, by decreasing costs rather than raising taxes.

“We cannot afford the government that we have today,” he said. “We’re asking that our public servants ... step up to the plate to be a part of the solution.”

Bishop also said he wants to cut Medicaid spending by $160 million to $500 million by either cutting services or reducing the number of people eligible for state-provided health care coverage.

He offered no specifics on where he wants to cut, but some of the optional Medicaid coverage Michigan provides pays the costs of seniors in nursing homes and for prescription drugs.

Bishop also wants to trim costs to school districts by requiring them to competitively bid out transportation, food and custodial services, which he said could save schools up to a half-billion dollars. He wants districts to keep administrative spending to 28 percent or less, which would force 211 districts to trim costs.

House and Senate Democrats announced earlier Tuesday that they would try again to end free, taxpayer-funded lifetime health care for state lawmakers starting at age 55 who serve at least six years and substitute a health care benefit more in line with what other workers receive.

“It is simply ridiculous that politicians in Lansing still get free health care for life after working only six years. This plan will put an end to that special treatment and require elected officials to share in the sacrifices that Michigan families are making during these tough times,” said state Rep. Dian Slavens of Wayne County’s Canton Township, one of the sponsors of the bills.

Maine $2 Billion in the Hole

MAINE’S FINANCIAL STATE OF THE STATE
WHAT DO WE OWE…
AND WHERE DO WE STAND?
As of June 30, 2009

	What We Own
	Capital Assets	$4,434,966,000
	Other Assets	$2,311,773,000
	OUR ASSETS	$6,746,739,000
	What We Owe
	Debt Related to Capital Assets	$570,404,000
	Pension Benefits Due	$3,994,115,000
	Retirees’ Health Care Benefits Due	$2,330,463,000
	State Bonds	$529,990,000
	Other Liabilities	$1,391,959,000
	OUR BILLS	$8,816,931,000
	Where We Stand
	Net Assets (Financial Position)	($2,070,192,000)