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Savings from state worker pay cut far from assured

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POSTED May 14, 2012 8:01 p.m.


 

SACRAMENTO  (AP) — Gov. Jerry Brown wants California's state government employees to take a 5 percent pay cut to help balance the budget.

Yet the savings he forecast in his revised budget proposal Monday are far from assured.

The Democratic governor must negotiate details of any cuts with dozens of labor unions that have been reluctant to accept wage rollbacks and hold enormous sway with the Democratic lawmakers who control the Legislature.

The governor's budget proposes shifting most state employees to a four-day, 38-hour week, which would save $839 million overall. But only about $402 million of that savings would come from the $91 billion general fund.

Still, Brown said he was optimistic about the cuts.

"We have contracts. We'll look at a variety of ways. State employees, particularly, have come forward with some very imaginative ideas," Brown said at a news conference. "They've been willing to step up to the plate even though they represent some people who are not paid all that much."

Brown also is seeking sweeping reductions to public employee pensions, but his proposal has not gained much traction in the Legislature.

His proposed pay cuts for state employees are part of some $8 billion in new cuts proposed by the governor to address a budget shortfall that has ballooned to $15.7 billion for the 2012-13 fiscal year.

As California's recession worsened and the state faced successive multibillion-dollar shortfalls, state employees were furloughed under former Gov. Arnold Schwarzenegger, which amounted to about a 14 percent cut in pay. Still, relatively few have lost their jobs to actual layoffs.

Yvonne Walker, president of SEIU 1000, which represents about 95,000 state employees, said she has told Brown the union is willing to consider talks that would lead to a 5 percent pay cut.

"State workers are as interested in government running well and the services we provide as their neighbors," Walker told The Associated Press.

When asked, workers have made "thousands upon thousands of suggestions" to cut costs, Walker said.

Brown's proposed budget would reduce the state workforce to about 216,000, down from 225,000 workers in 2007-08 and about 4,000 fewer than last year.

He said Monday the job cuts could total 30,000 since 2011-12, However, that figure includes state college and university employees who do not fall under direct control of the governor and Legislature. The state workforce has actually fallen by about 9,000 since 2007-08.

There are other limitations to a governor's authority to make cuts, as Schwarzenegger learned.

State employee unions sued — and mostly lost — over his furloughs and pay cuts, delaying implementation and cutting into savings. State courts have ruled that while the governor cannot unilaterally reduce employees' hours or working schedules, the state Legislature can. It did so when it approved Schwarzenegger's budget.

The state cannot cut back pay or hours for employees who work under a handful of programs that receive funding from outside the state budget.

Even if Brown persuades union leaders to accept his proposed reductions, legal restrictions mean the employees would continue to earn pension benefits for a 40-hour week, Director of Finance Ana Matosantos said.

Brown said his administration will work with state employee unions to achieve the 5 percent savings, either through a straight pay cut or reduced work hours. Matosantos said that could mean some state offices would be open earlier and later hours Monday through Thursday, and closed Friday.

Democrats in the Legislature signaled their willingness to go along with cuts — as long as the unions approve.

"It needs to be done in a collaborative way with the people affected," said Senate President Pro Tem Darrell Steinberg, D-Sacramento.

Professional Engineers in California Government, which represents about 13,000 engineers and other professionals, said Brown and the Legislature should focus on eliminating other inefficiencies before cutting state workers' pay.

"They should eliminate wasteful no-bid contracts which cost the taxpayers billions of dollars," union president John Roberts said in a statement.

In 2010, before the deepest state budget cuts had taken effect, California had the fifth lowest number of full-time equivalent state government employees relative to population among all states, according to U.S. Census figures.

The state had 110 state employees for every 10,000 residents, compared with the national average of 142 state employees per 10,000 residents.

 

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