BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1765 (Solorio)
Hearing Date: 08/12/2010 Amended: 03/11/2010
Consultant: Maureen Ortiz Policy Vote: PE&R 4-2
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BILL SUMMARY: AB 1765 exempts employees of the California
Unemployment Insurance Appeals Board and the Employment
Development Department (EDD) from being furloughed when the
unemployment rate in California during the previous month
reached or exceeded 8.5%.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Furlough exemption
Loss of payroll savings: -------potentially up to $27
million annually
for each
furlough day imposed------- Federal
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STAFF COMMENTS: SUSPENSE FILE. The exact fiscal impact of this
measure will depend on the number of furlough days imposed on
state employees, the corresponding payroll, and the unemployment
rate in the state at that time.
There are approximately 10,000 employees at EDD and about 800
employees at the Unemployment Insurance Appeals Board, the
majority of which are funded from federal funds. The monthly
payroll for EDD is approximately $50 million. One furlough day
would result in savings of about $2.3 million per month, of
which approximately $60,000 would be General Fund savings.
AB 1765 also provides that the exemption from any furloughs
applies to employees who work in a position that is at least 95%
funded by the federal government, and that the employee performs
services that combat the state's recession.
On December 29, 2008, the Governor issued Executive Order
S-16-08 which proclaimed a furlough of two unpaid days per month
from February 2009 through June 2010 for represented state
employees and supervisors. The Governor's Executive Order
S-13-09 then subjected all state employees to a third day per
month furlough effective July 1, 2009 through June 30, 2010
which resulted in a total salary reduction of approximately
13.86%.
Since July of 2009 many state departments have been closed three
days per month. Others have been exempted from closures and
instead those employees were on a self-directed furlough
program. The self-directed program allows employees to accrue
furlough days and use them like vacation days. Accrued furlough
days have no cash value, but must be used before an employee
uses vacation, annual leave, personal holidays, holiday credit,
personal leave time credit, and compensatory time off. Some
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AB 1765 (Solorio)
departments have been entirely exempted from the furlough
program (CHP, 911 Dispatchers, Dept of Forestry and Fire
Protection, PUC, Legislative Counsel Bureau, and the Bureau of
State Audits).
According to the findings and declarations in AB 1765:
1) More than 2.2 million people were unemployed in California
in January 2010 which comprised 12.4% of the state's labor
force.
2) Reviews by the U.S. Department of Labor have found that the
California Employment Development Department (EDD) and the
California Unemployment Insurance Appeals Board (CUIAB) are
failing to achieve federal performance standards in processing
and paying unemployment insurance benefits.
3) In 2008 and 2009, furloughs were imposed on state employees
who worked in positions funded by the federal government without
regard to whether the employees worked in positions which combat
the state's economic recession. This has resulted in reduced
services to the public, contributed to the late payment of vital
unemployment benefits to the unemployed, and delayed the state's
economic recovery.