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March 18, 2013
Editorial: California needs to set sensible leave policies. Costly cash-outs must be stopped

(March 18 -- By the Editorial Board)

The average state worker today has accumulated more than 53 days of unused vacation time - time that can be cashed out when they leave public service. That's almost 2.5 times as much as in the 1990s.

The skyrocketing levels of unused leave have saddled California government with $3.9 billion in liability, a burden that continues to grow at an alarming clip.

A recent report by the Legislative Analyst's Office blames the problem on mandatory furloughs instituted over the last five years to save money during difficult budget times.

Furloughs boosted the amount of annual leave state workers accumulated from 32 to 48 days, more than nine weeks. Given a choice, most state workers burned their furlough days, which can't be cashed out at the end of their careers, and held on to their vacation days, which can be cashed out.

There is a simple fix - cap the number of vacation days that can be accumulated. That's been state policy for years, but most agencies ignore it. Some 23,700 state workers, more than 11 percent of the state workforce, have accumulated leave balances greater than the state's generous cap of 640 hours or 80 days. In the agency where the vacation balances are highest, California Department of Corrections and Rehabilitation, the cap has been removed entirely.

The state's generous leave policies - on top of one, two and three-day-a-month furloughs in recent years - are taking a toll on productivity. All that time off meant departments had trouble completing their work, so managers often discouraged workers from taking vacation time.

To limit taxpayers from further exposure, several things need to happen. The state needs to enforce its caps more stringently by instituting "use it or lose it" policies. It also needs to tighten the caps. The federal government limits vacation accruals to 30 days; New York state, 40 days; the city of San Francisco, 50 days.

California's 80 days is too much.

To reduce future liability, the analyst has suggested that the state offer vacation buy-back programs. Redeeming vacation cash-outs at today's pay levels - rather than in the future when pay rates are higher - saves the state money over the long term.

But to really fix the problem, the Legislature must give the state greater flexibility to manage its workforce. When fiscal emergencies arise, seniority rules, bumping rights and notice requirements, among other things, make it virtually impossible for the state to cut expenses quickly. The trouble is, according to the legislative analyst, any potential fix - such as reducing and/or enforcing vacation caps, cutting the number of paid holidays, even cutting pay rates or benefit levels - would have to be collectively bargained. That would likely require the state to give something of equal value in return.

If it had the will, Gov. Jerry Brown and the Legislature could change that. State employees should be able to accumulate leave, but only at levels comparable to their counterparts in the federal government and other states. That understanding should be written into state law and into any future labor contracts.

Given the stranglehold public employee unions have over majority Democrats in the Legislature, that won't happen easily, but it will if the public applies enough pressure.

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