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State workers have a lot to lose in budget battle

As California’s seemingly interminable budget crisis grinds on, one of the groups most nervously watching the flow of red ink is the state government workforce, which faces furloughs and layoffs that are likely to exceed the levels of 2003, where by one estimate 25,000 workers received pink slips during the last half of that year.

Thus far, the precise number of potential layoffs in the 240,000-member state workforce is unknown, although the administration’s 2009-10 budget is less than a month from unveiling and the immediate deficit is at least $15 billion and the two-year hole is $41 billion, perhaps more. Compounding the problem: Perhaps 35 percent of California state employees are paid through fees generated by special funds or even with some mix of federal money – Caltrans and the Highway Patrol, for example – that are not affected by cuts in the General Fund, which is what the Legislature currently is pondering.

Even after the numbers are disclosed the real impact of the layoffs will be unclear, because workers leaving one position may land at another within the government. In the fall, Gov. Arnold Schwarzenegger issued an executive order requiring 10,000 layoffs, but many of those were hired back department-by-department. The result: Nobody, including the administration itself, knows how many jobs ultimately were vacated.

But the administration, hoping to cushion the impact of layoffs, is likely to send notices, called surplus notices, in advance to workers that could be affected by staff reductions. Those notices are likely to be sent out in January, perhaps sooner. Ultimately, the fate of those workers will depend upon the budget package approved by the Legislature and the decision of the governor.

“We’ve been trying to get a handle on what the Legislature is going to do,” said Lynelle Jolley, a spokeswoman for the state Department of Personnel Administration. The DPA represents the administration in collective bargaining with the state’s unionized workforce, which is divided into 21 collective bargaining units. “The past practice is that more employees will receive surplus notices than actually will be laid off,” she noted.

Just how many employees may get surplus notices is unclear, but if 2003 is any guide, the layoff landscape will be grim indeed this time around. But unlike the private sector, where a layoff means a layoff, in government employment the action is not so clear-cut. Employees who have been “surplused” may find other jobs within the government workforce, and the state itself has set up offices to help them do that.

In a note to state employees, the DPA said that, “When you’re facing layoffs, you go on a surplus/SROA list. You have 120 days to find a new job. If, at the end of that time, you’re actually laid off, you go on a reemployment list for your class. A department must hire employees on the reemployment list, if one exists for a class. If not, the department must hire any eligible surplus/SROA employees.” SROA refers to “State Restriction of Appointments.”

But whatever the ultimate impact, the specter of widespread layoffs remains, even though they may occur only after a long list of other options is exhausted. One option that was tried earlier was the accumulated leave program, in which employees worked a full month but were paid less than a full month, but accumulated days off instead. Some workers chose the option, even after the fiscal crisis eased. Other options include furloughs.

Last week, Gov. Schwarzenegger exercised that option. In an executive order, he told state employees to take two days of unpaid leave per month through mid-2010. The furloughs amount to the equivalent of a 9 percent pay cut, and will save the state about $1.2 billion, according to the administration.

“We’ve found generally that management, under the current and previous administrations, anyway, have not wanted to kick people out the door. Nobody wants to create more unemployment, and we don’t think this administration would like to,” said Bruce Blanning, executive director of the 13,000-member Professional Engineers in California Government. The group includes engineers, land surveyors, engineer geologists and others. About two-thirds of PECG’s membership work at Caltrans.

The budget problem this year is worse than in 2003, where estimates of the two-year shortage ranged up to $38 billion in a $77 billion General Fund, daunting numbers indeed. But during that year, particularly in the final months before former Gov. Gray Davis was removed from office, there were suspicions that the numbers had been cooked in order to justify a series of unpopular measures, including a tripling of vehicle license fees. During that period, the state’s cash flow was considerably better than it is now. State Controller John Chiang believes the state will run out of cash in less than 60 days unless action is taken, and the State Treasurer has halted some infrastructure projects in order to save the state $3.8 billion.

“We tell our people that when the governor or any other major political leaders starts talking about layoffs, it should be taken seriously. That’s the trigger for the discussion of where the layoffs will be and who’s going to get laid off,” Blanning said.

But the high-profile discussion of layoffs, which captures significant media attention, can be misleading “because the impact isn’t all that great on some (special fund) employees. Frequently, it’s a matter of perception that government is cutting back, but whether it is really significant or not is something else,” Blanning said.

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