19852.2.
The Legislature finds and declares all of the following:(a) Executive Orders S-16-08 and S-13-09 imposed three unpaid furlough days on state employees. These furloughs, instituted outside the collective bargaining process, constitute an annual pay cut of 14 percent. The imposition of involuntary furlough time on state employees has resulted in tremendous hardship to employees and their families.
(b) Although the Executive orders declare an emergency pursuant to Section 3516.5 based upon the General Fund deficit, the furloughs apply to virtually all state employees, without regard to whether they are paid through the General Fund or whether the furlough
results in any state savings.
(c) Several dozen state agencies are user-funded or federally funded. Furloughing the employees of these agencies creates no General Fund savings and simply makes these agencies less efficient.
(d) Not only do delays harm California’s most vulnerable residents but they also deprive the state of various sources of federal funding, at a time when we must maximize all revenue sources to improve our economy. A report by the Social Security Administration’s inspector general concluded that just two furlough days would decrease California’s capacity to process disability claims by 10 percent, delaying 2,375 disability cases per month. Currently the Department of Social Services, which administers the program, is losing ten million dollars ($10,000,000) per month in federal funds.
(e) With the
unemployment rate at a record high, furloughing workers at the Employment Development Department and the California Unemployment Insurance Appeals Board will only make it harder for the unemployed to access benefits. It is estimated that the wait time for an appeal to be heard will increase from seven weeks to three months. These departments are federally funded so the hardship inflicted will not result in any state savings.
(f) In addition to departments whose employees are not paid from the General Fund, the furloughs extend even to those departments that generate new revenue. The Franchise Tax Board says the state will lose five hundred million dollars ($500,000,000) over the next three years because collections and audits will decline due to employee furloughs. The Franchise Tax Board has already seen a three hundred seventy-two million dollar ($372,000,000) reduction in income tax revenue for the fiscal year that ended June 30. These
furloughs are actually exacerbating the General Fund deficit they were intended to help reduce.
(g) California’s budget deficit is a product of the national and global economic downturn. Solutions to the budget crisis should focus on improving the economy, rather than cutting the pay of and decreasing consumer spending by California workers. The Sacramento region is already losing five hundred million dollars ($500,000,000) to six hundred million dollars ($600,000,000) a month in worker wages, forcing many local businesses to lay off workers or close their doors.