Tuesday, June 30, 2009

Furloughs cut into state services

By Pauline Vu, Stateline.org Staff Writer

  STATES TURN TO EMPLOYEE FURLOUGHS

More than 728,500 employees in at least 21 states have taken or will soon be forced to take furloughs, or unpaid days off. Some states have implemented furloughs statewide, while others allow agencies to implement them as needed.

STATES WITH FURLOUGHS

Arizona

 

Individual departments have responded to budget cuts with furloughs. The state Department of Transportation, for example, has furloughed 4,500 employees while the Department of Economic Security and Revenue has furloughed more than 8,200.

California
238,000 employees
$1.3 billion savings
34 days over 18 months

 California has furloughed 238,000 employees twice a month since February. The furloughs, which will last until July 2010, are expected to save $1.3 billion. The governor has warned that if lawmakers don’t agree on a budget that closes a $24 billion budget gap, state workers could be furloughed three days a month.
Colorado
$16 million savings
4 days over a year		 Colorado’s plan for four furlough days set around the holidays will save $16 million.
Connecticut
50,000 employees
$70 million savings
7 days over two years		 The state’s 50,000 public employees agreed to take seven furlough days over the next two years in exchange for no layoffs during that time. The days will be scheduled around holidays and are expected to save Connecticut about $700 million.
Georgia
At least 25,000 employees		 Georgia’s agencies can furlough employees to meet their budgets; so far at least 25,000 employees have been furloughed. The 500 employees of the state’s prosecutors offices, for example, have been furloughed once a month since September and twice a month since March, saving those offices about $2.8 million.
Hawaii
15,000 employees
$688 million savings
72 days over two years		 Starting July 1, Gov. Linda Lingle (R) proposes to save $688 million by furloughing 15,000 employees three times a month for the next two years. Unions have filed a lawsuit challenging the governor’s right to furlough, but if she’s successful, these would be the country’s most severe furloughs.  

Idaho
More than 5,000 employees
$11.6 million savings
4 to 10 days over a year

 At least two of the state’s largest departments are using furloughs. The 3,100 employees of the Health and Welfare Department will be furloughed four days in the next fiscal year. Combining the furloughs with layoffs and not filling vacant positions will save $9.5 million. The Department of Corrections will save $2 million next year by furloughing its 1,650 employees from four days, for prison security workers, to 10 days for everyone else. Both departments used furloughs in the 2009 fiscal year.
Iowa
1,600 employees
5 days over a year		 This year Iowa courts furloughed 1,600 employees for five days. Originally, eight furlough days were planned before the state sent more money to the courts in a supplemental budget. No furloughs are scheduled for the next fiscal year.
Maryland
67,000 employees
$34 million savings
2 to 5 days over a year		 Gov. Martin O’Malley (D) of Maryland issued an order in December requiring 67,000 employees to take two to five days off to help save $34 million and close a gap in the 2009 fiscal year. They were the first furloughs imposed by the executive office since 1992. No furloughs are scheduled for the next fiscal year.

Massachusetts
5,000 employees
$4.5 million savings
3 to 5 days over a year

 Gov. Deval Patrick (D) imposed furloughs of up to five days on 5,000 executive staff employees in the 2009 fiscal year, saving about $4.5 million.
Maine
7,000 employees
$10 million savings
20 days over two years		 About 7,000 state employees will have 20 unpaid “shutdown days” over the next two years, which will save about $10 million. The plan also freezes merit and longevity pay.
Michigan
37,400 employees
$22 million savings
6 days over a year		 Michigan will save $22 million this fiscal year by furloughing 37,400 employees for six days by Oct. 1.
Nevada
$333 million savings
12 days over a  year		 Starting July 1, Nevada’s state employees will take off one unpaid day each month. Originally, Gov. Jim Gibbons (R) wanted a 6 percent pay cut for employees, but lawmakers instead instituted the furloughs, which cut salaries by 4.6 percent. Savings of $333 million are expected.
New Jersey
60,000 employees
$300 million savings
12 days over  two years		 Gov. Jon Corzine (D) furloughed 60,000 state workers for two days in the current fiscal year, and reached an agreement with the state's largest union to furlough employees for nine to 10 days in the next fiscal year in exchange for no layoffs during 2010. If other unions agree, the furloughs will save the state more than $300 million.

North Carolina
$65 million savings
10 hours over a year

 Gov. Beverly Perdue (D) signed an executive order in April stating that all state employees and teachers will get a .5 percent pay cut in exchange for 10 hours of flexible time to be taken before June 30, which is expected to save $65 million. The 55,000-member State Employees Association of North Carolina fears the furloughs – the first in state history – are only the beginning. Lawmakers have proposed bills to have more furlough days in the next fiscal year.

Ohio
At least 51,000 employees
$173.2 million savings
20 days over two years

 Ohio’s two largest state employees’ unions, which together represent almost 40,000 workers, agreed to a wage freeze and 10 “cost-savings days” during each of the next two fiscal years, which will save $173.2 million. It was the first time in state history that the governor asked for furloughs. The furloughs will also be imposed on 11,000 nonunion employees who work for the executive office. Some other departments, such as the Attorney General’s and Treasurer’s offices, will also require employees to take days off.
Oklahoma
470 employees
$1.2 million savings
12 days over a year		 The 470 employees at the Oklahoma Corporation Commission will be furloughed for 12 days in the 2010 fiscal year, saving about $1.2 million.
Oregon
2,000 employees
6 days over a year		 Oregon courts furloughed 2,000 workers for six days to cover a shortfall in the current budget; employees were originally supposed to take 16 days off. The state is considering a budget that would lay off up to 1,700 state workers and require as many as 24 furlough days over the next two years.
South Carolina
24,000 employees
$30 million savings
up to 10 days over a year		 South Carolina’s agencies are allowed to furlough employees up to 10 days each fiscal year if their budgets require it. So far, more than 24,000 employees have taken furloughs this fiscal year, and agencies have saved more than $30 million.
Utah
3,000 employees
5 days over a year		 Utah State University furloughed almost 3,000 employees over spring break. Public school districts and state agencies are expected to furlough some employees during the next fiscal year.
Wisconsin
69,000 employees
$121 million savings
16 days over  two years		 About 69,000 Wisconsin state employees will take eight unpaid days off over each of the next two years. The furloughs should save about $121 million.
POSSIBLE FURLOUGHS
Illinois Illinois Gov. Pat Quinn (D) has proposed that state employees be furloughed for four days next fiscal year, but that would require negotiations with the state employees’ unions.
Minnesota Gov. Tim Pawlenty (R) dropped a proposal to furlough state workers twice a month and instead, reached a tentative two-year contract with the state’s two largest public unions to freeze wages. The governor maintains he has the right to impose furloughs in the future.
New Hampshire Lawmakers have passed a budget that requires Gov. John Lynch (D) to make $25 million in personnel cuts, either through layoffs or furloughs. Any furloughs would have to come out of negotiations between Lynch and the State Employees’ Association, which represents the state’s 11,500 workers.
Washington After revenue projections fell by almost $500 million in June, Gov. Christine Gregoire (D) ordered agencies to cut payrolls another 2 percent. Her letter to agency directors said the cut “may necessitate furloughs, reductions in force, or reductions in overtime.”
Sources: National Conference of State Legislatures and Stateline.org reporting
With states facing a $121 billion shortfall in the next fiscal year, a growing number of them have turned to squeezing their workforce for savings, and effects are being felt, both great and small.

In Hawaii, some criminal trials will likely have to be rescheduled because public defenders are being furloughed — or forced to take unpaid days off — three Fridays a month. In New Jersey, about 5,000 parolees went unmonitored for a day in May and June as their parole officers were forced to stay home.

In Georgia, state prosecutors have been furloughed at least one day a month since September, with each day off causing a backlog of about 500 criminal cases. Meanwhile, petty, nonviolent criminal charges are in danger of being dismissed.

“We’re getting critically close to not being able to look at every case,” said Rick Malone, the executive director of the Prosecuting Attorneys Council of Georgia. “There’s only so much time in the day … Certainly we will have to screen (cases) more carefully, more finely.”

Although state jobs are usually among the most stable, more than 728,500 state employees in at least 21 states have already or will be furloughed, and several other states are also considering furloughs for their workers.

By comparison, at least 54,000 state workers have been laid off so far, according to tallies by the National Conference of State Legislatures and the Association of Federal, State, County and Municipal Employees union (AFSCME).

“People were saying, ‘well if things are so bad, why aren’t people getting laid off?’ The answer to that is that in a lot of places, they’re choosing furloughs,” said AFSCME’s Kerri Korpi.  

The furloughs translate to pay cuts for workers, ranging from 0.5 percent in North Carolina to 13.8 percent in Hawaii. Employees whose jobs are deemed essential to public health and safety, such as police officers and veterans’ homes employees, aren’t furloughed.

The move will affect state services at a time when a bad economy means more people are relying on such services. Disability checks are delayed, for example, and in Hawaii, the state will take even longer to process unemployment claims.

Even patients at the country’s last remaining leper colony will feel the effects. The 15 people suffering from Hansen’s disease, better known as leprosy, who rely on Hawaii’s Kalaupapa Settlement to take care of them could end up eating pre-delivered boxed meals instead of freshly cooked meals three days a month if food service workers are furloughed. But acting director Tim Richmond hopes his workers, who are employees of the state Department of Health, can be exempted.

“We can’t just say, ‘Sorry, Governor (Linda) Lingle says you don’t eat today.’ So we will make it happen,” Richmond said. “If it means a boxed meal, nutritionally, it’ll be up to standard and that will be the best we can do.”

The most furious fight over targeting state jobs is in Hawaii, where Gov. Lingle (R) has proposed to help balance an additional $729 million budget shortfall on the backs of state workers. The governor plans to save $688 million by furloughing every employee for three days a month for the next two years — the country’s most severe furlough measure.

The plan “allows all employees to be a part of our shared sacrifice to close this budget gap,” Lingle said June 18. “This is not something I want to do, it’s something I have to do.” Lingle said if she cannot furlough employees, as many as 10,000 workers could be laid off.

The state’s largest public employees’ unions have sued to block the furloughs, saying the governor should have negotiated with them first. The court hearing will begin July 2. 

In some cases, the furloughs will lead to states’ losing money. Commissioner of Social Security Michael Astrue has complained that several states — including California, Connecticut, Hawaii, Maryland, Massachusetts, New Jersey and Oregon — are furloughing state employees who work in Social Security offices, even though their pay and benefits are federally funded. The money that isn’t spent on their salaries will be returned to the federal government. Some governors, including Lingle and California Gov. Arnold Schwarzenegger (R), say it’s only fair that all workers share the pain.

The furloughs raise other questions about their benefit. Bruce Blanning, executive director of the Professional Engineers in California Government union, said the days off are forcing engineering departments to outsource work. According to Blanning, a state engineer costs California $103,000 a year, while a full-time outsourced position costs $232,000.

“It’s a waste of money. The employees get shortchanged … and it costs the state a lot more,” he said.

Figuring out how to implement Nevada’s furloughs, which begin July 1, has been a headache for Teresa Thienhaus, the state’s personnel director. For example, the furlough law says no workers can get overtime or standby pay in the same week they have a furlough day. But now agencies are asking what to do if maintenance employees who have already taken a furlough need to be on-call that same week for an emergency.

“We’re still working on trying to get guidelines out that are going to be applicable to enough people to make a difference. And as soon as we do that, somebody will call and have another question and we’re back to the drawing board on some other aspect,” Thienhaus said. “We’ve not seen any light at the end of the tunnel.”

Sometimes, state employees simply don’t take off their furlough days. In California, where furlough days are “use them or lose them” by June 2010, about 238,000 state workers are supposed to work with supervisors to arrange two days off a month. But many employees are finding they have too much work to take furlough days. During the swine flu scare, for example, state scientists worked 16-hour days to conduct tests and keep the disease in check, said Chris Voight, the staff director of the California Association of Professional Scientists.

“The services were delivered, but that’s because we represent a lot of very dedicated state scientists who are willing to do what it takes,” Voight said. 

See Related Stories: 
States shave workforce to save money (3/5/2009)
Court cuts trigger blunt warnings (2/18/2009)
State workers face bleak budget picture (10/3/2008)

Contact Pauline Vu at pvu@stateline.org.


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Issues: Economy and Business    Recession   
Topics: state court    state economy    unions    state employees   

COMMENTS (1)
Most Recent Comments
States’ Failure to Manage Revenues is only visible in a Deep Recession
By Lawrence Rosier on Jul 1, 2009 7:14:58 AM

From: Lawrence Rosier Management Consultant 573 364 8789
The following is my latest article on my Government Reform website.
Article 130. States’ Failure to Manage Revenues is only visible in a Deep Recession

The current deep recession has states scrabbling for ways to meet their budgets resulting from falling revenues. It is only in times like this that the failure of states to manage its resources becomes visible. Unlike private industry state funds are allocated without knowing what the actual cost of a service should be. State governments assume that all services are managed equally well. No private industry would make this incredibly false assumption. Witness the across the board furloughing of state personnel, yes it does help the public to know what days certain state offices are closed. The assumption is that the pain should be shared equally when the reality is that some services may be significantly over staffed while others are struggling to maintain a decent level of service to the public. Only when essential services are maintained such police and fire protection is there some sanity in across the board furloughs.

The bottom line is that states do not do Work Measurement as performed in responsible private businesses. In my experience as a Management Consultant most functions both private and government are overstaffed by as much as 10% if they do not use Work Measurement as a part of their management policy.

Some states are laying-off employees cutting bureaucratic personnel will help fix the current budget shortfall but it will not be a permanent change because bureaucracies will simply replace the personnel when there is a budget surplus. A second problem becomes apparent when staff is cut. The tendency is to cut the most recently hired first, the people actually doing the function’s work and not supervisory personnel. This threatens the capability to meet current workloads.

The key to the successful reduction of state government is in establishing standards something rarely done in government. In industry the establishment of a standard through Work Measurement is a necessary part of operations and of staff reductions. The standard establishes a staffing floor insuring that the essential service being provided by the function will not be impaired or reduced. The standard also provides a base for measuring the effectiveness and the efficiency of the organization in accomplishing its tasks. Without this reporting mechanism the remaining staff employees may simply cease doing their jobs jeopardizing the service provided.

I recommend that reforms begin with the implementation of Total Quality Management (TQM). This reform brings a positive cultural change to the organization. Employees become members of Work Improvement Teams (WIT) and are motivated by empowering them to improve their jobs through innovation. By bringing innovation and continuous improvement to the government’s processes the state will save $ millions through increased efficiency in the future. The reform amounts to a win win situation for government union employees as well as the tax payers of the state by employee empowerment and by ending bureaucratic waste. I have further recommended that after implementing Total Quality Management (TQM) and Work Improvement Teams (WIT) that standards be set using Process Flow Charts. This is followed by replacing the current organization with a two tier form of government based on Steering Management and Functional management.

See the following articles on my website: http://managementconsultant.blogsome.com
Article 103. Reforming Bureaucratic Government the Subtle way by Bringing Innovation to Government.
Article 104. Down Sizing State Government the Easy and Safe Way
Article 106. Where do the Government Reform Savings Come From?
Article 112. Using Surplus Government Employees to Take Back Privatized Contracts
Article 113. Private Versus Public Budgeting Practices
Article 116. Private Industry Example of Total Quality Management
Article 117. Overcoming Bureaucratic Resistance to Government Reform
Article 128. Using Private Industry techniques to Privatize (Reform) State Government



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