BILL ANALYSIS
AB 2008
Page 1
ASSEMBLY THIRD READING
AB 2008 (Arambula)
As Amended May 28, 2010
Majority vote
PUBLIC EMPLOYEES 5-1 APPROPRIATIONS 12-5
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|Ayes:|Torrico, Furutani, |Ayes:|Fuentes, Ammiano, |
| |Hernandez, Ma, Nestande | |Bradford, |
| | | |Charles Calderon, Coto, |
| | | |Davis, Monning, Ruskin, |
| | | |Skinner, Solorio, |
| | | |Torlakson, Torrico |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey |Nays:|Conway, Harkey, Miller, |
| | | |Nielsen, Norby |
| | | | |
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SUMMARY : Prohibits state civil service employees of certain
specified agencies and boards from being furloughed by the
Governor through Executive Order or by any other action of a
state agency, board or commission. Specifically, this bill :
1)Prohibits, except as specifically authorized by the
Legislature, employees of the Franchise Tax Board (FTB), and
the Board of Equalization (BOE) from being furloughed.
2)Defines "employee" as a civil service employee of the State of
California.
EXISTING LAW :
1)Sets forth the general policy that the workweek of a state
employee shall be 40 hours and authorizes workweeks of
different hours to be established in order to meet varying
needs of different state agencies.
2)Authorizes the Governor to require that the 40-hour workweek
be worked in four days in any state agency or part thereof
when the Governor determines that the best interests of the
state would be served thereby.
AB 2008
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3)Vests the Department of Personnel Administration (DPA) with
the duties and responsibilities exercised by the State
Personnel Board with respect to the administration of
salaries, hours, and other personnel-related matters.
4)Executive Orders S-16-08 and S-13-09 imposed mandatory
furloughs on state civil service employees, regardless of
funding source and with limited exemptions. The current
furlough program is scheduled to end on June 30, 2010.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, about 9,000 employees would be potentially affected
by affected by 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 be:
1)Increased state compensation costs of about $35 million for
FTB employees and about $28 million for BOE employees (General
Fund), though the BOE board is currently exempting its staff
from furloughs.
2)Offsetting increases in revenues, potentially exceeding $250
million, to the extent that both agencies are revenue
producing.
COMMENTS : 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
three-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
AB 2008
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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.
According to the author, "This measure is intended to stop
future Governors from furloughing state employees in cases that
are counter-productive to the state's overall administration or
just defy commonsense.
"It is contrary to the effective administration of state
government to limit the revenue collecting agencies, such as FTB
and BOE. Every day employees of the FTB and BOE are not working
equals less effective tax revenue collection, including ensuring
that taxpayers paying their full amount."
Supporters state, "Our state employees have dealt with a
reduction of their wages by 14%, and as various studies point
out, the furlough program is actually costing the state millions
more than it is saving. In an economic time where more than
half of Californian's are worried about paying their rent or
mortgage, the furlough program currently in existence is not
sound fiscal or public policy."
This bill is similar to SBX8 29 (Steinberg) which was vetoed by
the Governor on March 24, 2010. SBX8 29 would have exempted
state civil service employees from being furloughed if employed
in positions funded at least 95% by sources other than the
General Fund, prohibited state agencies, boards, and commissions
from implementing, or assisting with implementation of,
furloughs for such employees, and specifically exempted all
employees of the Franchise Tax Board (FTB) and Board of
Equalization (BOE) from being furloughed.
In his veto message of SBX8 29, the Governor stated, in part,
"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. Further,
this bill as written would be difficult, if not impossible to
implement. Many positions are funded through multiple funding
AB 2008
Page 4
sources and as such it is not always possible to determine if
they are funded at least 95 percent by sources other than the
General Fund."
This bill is also similar to AB 1765 (Solorio) which was passed
by this Committee on April 7, 2010. AB 1765 prohibits a state
employee from being furloughed, during a time in which
California's unemployment rate reaches or exceeds 8.5%, if the
employee is in a position funded at least 95% by the federal
government, performs services that combat the state's recession,
and works for the California Unemployment Insurance Appeals
Board or EDD.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0004719