BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1215|
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THIRD READING
Bill No: AB 1215
Author: De La Torre (D)
Amended: 8/17/10
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE APPROPRIATIONS COMMITTEE : 7-4, 8/12/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Ashburn, Emmerson, Walters, Wyland
SUBJECT : Public employees: furloughs
SOURCE : Author
DIGEST : This bill provides that state employees in
positions funded at least 95 percent by sources other than
the General Fund, employees of the Franchise Tax Board, and
employees of the State Board of Equalization, shall be
exempt from furloughs implemented by any state agency,
board, or commission.
ANALYSIS : On December 12, 2008, the Governor implemented
a furlough of state employees for two days per month from
February 1, 2009 through June 30, 2010. On July 1, 2009,
the Governor added another furlough day through June 30,
2010.
The three unpaid furlough days represent a reduction in
take home pay of 13.86 percent for most state employees.
CONTINUED
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The Governor indicated at the time that affected employees'
retirement benefits would not be affected by the furlough.
Existing law 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. Existing
law vests the Department of Personnel Administration with
the duties and responsibilities exercised by the State
Personnel Board with respect to the administration of
salaries, hours, and other personnel-related matters.
This bill exempts employees in positions funded at least 95
percent by sources other than the General Fund, employees
of the Franchise Tax Board, and employees of the State
Board of Equalization from furloughs implemented by any
state agency, board, and commission. This bill also
prohibits a state agency, board, or commission from
directly or indirectly implementing or assisting in
implementing a furlough of those employees. This bill
defines "employee" as a civil service employee of the State
of California and defines the "State of California" to
include state agencies, board, and commissions as may be
designated by law that employ civil service employees.
This bill also specifies that nothing in those provisions
shall be construed as legal authorization for the
imposition of furloughs on employees through Executive
order. This bill also makes related findings and
declarations.
This bill makes the following findings and declarations:
1. Executive Orders S-16-08 and S-13-09 imposed three
unpaid furlough days on state employees. These
furloughs, instituted outside the collective bargaining
process, constitute an annual pay cut of 14 percent. The
imposition of involuntary furlough time on state
employees has resulted in tremendous hardship to
employees and their families.
2. Although the Executive orders declare an emergency
pursuant to Section 3516.5 based upon the General Fund
deficit, the furloughs apply to virtually all state
employees, without regard to whether they are paid
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through the General Fund or whether the furlough results
in any state savings.
3. Several dozen state agencies are user-funded or
federally funded. Furloughing the employees of these
agencies creates no General Fund savings and simply
makes these agencies less efficient.
4. Not only do delays harm California's most vulnerable
residents but they also deprive the state of various
sources of federal funding, at a time when we must
maximize all revenue sources to improve our economy. A
report by the Social Security Administration's inspector
general concluded that just two furlough days would
decrease California's capacity to process disability
claims by 10 percent, delaying 2,375 disability cases
per month. Currently the Department of Social Services,
which administers the program, is losing $10 million per
month in federal funds.
5. With the unemployment rate at a record high, furloughing
workers at the Employment Development Department and the
California Unemployment Insurance Appeals Board will
only make it harder for the unemployed to access
benefits. It is estimated that the wait time for an
appeal to be heard will increase from seven weeks to
three months. These departments are federally funded so
the hardship inflicted will not result in any state
savings.
6. In addition to departments whose employees are not paid
from the General Fund, the furloughs extend even to
those departments that generate new revenue. The
Franchise Tax Board (FTB) says the state will lose $500
million over the next three years because collections
and audits will decline due to employee furloughs. The
FTB has already seen a $372 million reduction in income
tax revenue for the fiscal year that ended June 30.
These furloughs are actually exacerbating the General
Fund deficit they were intended to help reduce.
7. California's budget deficit is a product of the national
and global economic downturn. Solutions to the budget
crisis should focus on improving the economy, rather
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than cutting the pay of and decreasing consumer spending
by California workers. The Sacramento region is already
losing $500 million to $600 million a month in worker
wages, forcing many local businesses to lay off workers
or close their doors.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/17/10)
American Federation of State, County and Municipal
Employees, AFL-CIO
California Association of Professional Scientists
California Board of Accountancy
California Labor Federation
California Statewide Law Enforcement Association
Professional Engineers in California Government
OPPOSITION : (Verified 8/17/10)
Department of Finance
ARGUMENTS IN SUPPORT : In support, the American
Federation of State, County and Municipal Employees,
AFL-CIO, states "?if there is no General Fund savings, then
employees should not be burdened by state furlough days.
Any program that only receives 5 percent or less of its
funding from the General Fund must have an outside source,
which are generally user fees or registration charges?..The
backlog of work that has resulted from these furloughs has
lead to further delays and increased costs to the state,
thus denying the public vital services."
The Professional Engineers in California Government state
"Ninety-five percent of state engineers are paid through
Special Funds (fuel taxes, user fees, federal funds, etc.)
For that reason, furloughing state engineers does not help
to solve our General Fund budget deficits."
The California Statewide Law Enforcement Association states
"Generally, fees are collected from various industries and
the public to pay for governmental regulation in the public
interest. Furloughing employees that regulate these
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industries jeopardizes public safety as many of our member,
including peace officers, investigators and inspectors are
forced to stay at home 36 additional days a year instead of
providing a level playing field for all businesses."
ARGUMENTS IN OPPOSITION : The Department of Finance is
opposed to this bill for the following reasons:
1.More positions in state civil service are funded from a
combination of fund sources than funded exclusively with
General Fund or with other funds; determining which
positions to furlough would require lengthy and
costly/tedious calculations.
2.Funding based exemptions could result in an employee
exodus from General Fund positions to special fund
positions, causing workload disruptions and backlogs in
General Fund programs, agencies and departments.
3.Limits the ability of future Governors to implement
furloughs during a fiscal emergency.
4.Potentially limits the state's ability to borrow from
other funds for cash flow purposes.
CPM:cm 8/16/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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