BILL ANALYSIS
AB 2008
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Date of Hearing: May 5, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2008 (Arambula) - As Introduced: February 17, 2010
Policy Committee: P.E.R. &
S.S.Vote: 5-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill exempts civil service employees in the Department of
Corrections and
Rehabilitation (CDCR), the Employment Development Department
(EDD), the Franchise Tax Board (FTB), and the Board of
Equalization (BOE) from future furloughs.
FISCAL EFFECT
About 81,000 employees would be affected by this exemption;
6,000 from FTB, 65,000 from CDCR, and 10,000 from EDD (the BOE
has about 4,000 employees, but its board has exempted them from
the furloughs). The impact of the exemption would depend on the
amount and duration of furlough days ordered by a future
governor. As an illustration, if a future governor ordered three
days per month furloughs for a full fiscal year, the exemptions
in this bill would:
a) Raise total state compensation costs by up to $620
million, $530 million in GF and $90 million would be
federal funds. The increases would be partly offset to the
extent that the elimination of furloughs reduced overtime
costs in CDCR.
b) Accelerate and/or increase in GF revenues of about $230
million annually due to improved collections activity at
FTB.
COMMENTS
1)Rationale . According to the author, the bill is intended to
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stop future governors from furloughing state employees where
it is counter productive. He asserts: furloughs in BOE and FTB
will result in reduced collections activity; furloughs in EDD
will hamper employment services at the very time demand for
these services are at a peak; and furloughs at CDCR present a
fiscal dilemma, since the department must be operational at
all times.
2)Background . In response to last year's budget and cash crisis,
the governor issued an executive order requiring mandatory
furloughs of two days per month beginning in February 2009,
and a second order upping the furloughs to three days per
month beginning in July 2009. Since the July implementation,
many state departments, boards, and commissions have been
ordered closed three days per month, while others are
permitted to put employees on a self-directed furlough
program. The self-directed program allows employees to accrue
furlough days and use them like vacation days, upon management
approval. Accrued furlough days have no cash value and must
be used within 24 months of the end of the furlough program.
The current 3-day furlough requirement amounts to a
reduction of 13.85% of employees' compensation.
Furloughs are scheduled to conclude on June 30, 2010 and
the governor has proposed alternative employee compensation
related savings in 2010-11 (5% pay reduction, 5% increase
in employee contributions to retirement, and 5%
departmental reductions). Certain departments have received
exemptions from the furlough program. These include
uniformed California Highway Patrol Officers, 911
dispatchers, employees of Department of Forestry and Fire
Protection (during fire season) and the Public Utilities
Commission.
3)Related legislation . SBX8 29 (Steinberg) which was vetoed on
March 24, 2010, would have exempted from future furloughs
employees funded from predominantly non-general fund sources,
as well as employees of FTB and BOE. In his veto message the
governor stated it is necessary to apply furloughs across the
board, with limited exemptions as needed to protect public
health and safety, to effectively manage the workforce and to
avoid inequities and morale problems for state employees.
AB 2008 is also similar to AB 1765 (Solorio), which is
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currently on this committee's Suspense File. That measure
prohibits employees from being furloughed when the California
unemployment rate is at or above 8.5%, and the employee is in
a position predominantly funded from federal funds and works
for EDD or the California Unemployment Insurance Appeals
Board.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081