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California: Furloughing Prison Employees Costing Taxpayers More

Faced with an unprecedented budget deficit, California Governor Arnold Schwarzenegger ordered state workers to stay home three Fridays each month, which amounts to a 14% pay cut. Known as the “Furlough Friday” program, the cost-cutting measure, implemented in February 2009, was supposed to save the state a projected $1.7 billion. A recent report commissioned by Senate President Pro Tem Darrel Steinberg, however, concludes that the savings will be far less than originally anticipated.

“Plain and simple,” Steinberg said, not mincing his words, “It’s a poorly thought-out program.”
The Senate report highlights the fact that a shortage of prison staff to cover 24-hour positions has resulted in employ-ees often having to report to work on their furlough days. Those employees are paid in IOUs that will eventually cost the state – and taxpayers – much more. Under the furlough program, furlough days are not supposed to be cashed in by workers; rather, each furlough day is to be exchanged for a day off taken no later than June 2012.

In reality, “what is happening,” said Steinberg, “is the state is not reducing hours, they’re deferring paychecks.”

In fact, it may be worse than that. In the case of the prison health care system, for example, where a furlough savings of $108 million was projected, rather than saving money the furloughs are actually costing the state tens of millions of dol-lars, according to the Senate report. That is because Clark Kelso, the federal receiver appointed to oversee the delivery of medical care to California state prisoners, has had to resort to overtime to cover what would otherwise be a personnel gap resulting from the furloughs.

“The long-term cost of this is greater than the savings,” observed David Lewis, deputy director for fiscal affairs for the California Department of Corrections and Rehabilitation (CDCR). “You sacrifice the future to deal with the current problem.”

In response, Schwarzenegger spokesperson Rachel Cameron said, “The state has never had to deal with a $60 bil-lion deficit – over half of the general fund – in one year.” The administration will review the Senate report’s findings, she added.

In March 2010, the Los Angeles Times reported that state employees had been paid more than $1 billion in overtime last year despite – or perhaps due to – the furloughs. Most of the overtime came from the CDCR and the Department of Mental Health. For example, prison nurse Nellie Larot lost $10,000 in salary in 2009 due to the furloughs but made $177,512 in overtime, which raised her total earnings to $270,000 – more than the CDCR’s director. Another prison em-ployee, Randall Rowland, received $133,000 in overtime pay.

The Senate report and excessive overtime paid to state employees aren’t Governor Schwarzenegger’s only head-aches related to the furlough program. On March 19, 2010, a California Court of Appeals ordered the state to stop fur-loughing 500 attorneys and other staff members at the State Compensation Insurance Fund. The appellate court found the furloughs were illegal under a state law that exempted those employees from “hiring freezes and staff cutbacks other-wise required by law.” The affected workers are not paid from the state’s general fund, unlike most other state employees. See: CASE v. Schwarzenegger, 106 Cal.Rptr.3d 702 (Cal.App. 1 Dist., 2010).

Governor Schwarzenegger requested review of the ruling, and also vetoed legislation that would have exempted up to 80,000 state workers from being furloughed. The California Highway Patrol and other public safety officers are already exempt from the furlough program, but not CDCR employees.

This has led some to question whether the California Correctional Peace Officers Association (CCPOA), which repre-sents state prison employees and has an adversarial relationship with the Schwarzenegger administration, is losing its political clout. The CCPOA had lobbied for California’s harsh three-strikes law, which contributed to the state’s prison overcrowding crisis; now the prison system is under court order to reduce its population by up to 40,000 prisoners and the governor is in favor of expanding the use of private prisons, which will likely cost some CDCR employees their jobs.

On May 20, 2010, the California Supreme Court agreed to review the appellate ruling in CASE v. Schwarzenegger. Chief Justice Ronald George met with the governor to discuss the budget for the judicial branch on May 11; Schwar-zenegger restored $100 million in funding for state courts 72 hours after the meeting, and six days later the Supreme Court agreed to review the adverse appellate ruling. The governor’s office denied there was any connection between the events.

Sources:, The Economist,,

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