State workers in California ordered to take furloughs

SACRAMENTO, Calif. -- 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 an executive order requiring state workers to take three unpaid days off per month starting in August, forcing a number of state government office 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 he might not sign a budget before he leaves office in 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. 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 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 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 of $7.25 per hour while the state operates without a budget.