The State Worker

Updated at 2:05 with reaction from both sides

A San Francisco appellate court let stand Thursday a judge's order blocking furloughs for more than 144,000 state workers.

The decision by the First District Court of Appeal means that workers will not be furloughed -- at least temporarily.

Gov. Arnold Schwarzenegger, through his Department of Administration, vowed to appeal to the California Supreme Court.

Aaron McLear, Schwarzenegger's spokesman, said that today's appellate ruling temporarily blocks one form of cost-cutting but does nothing to relieve the state's dire need to act quickly in meeting a $19 billion deficit.

"The furloughs are a direct result of the Legislature's failure to pass a budget, which is causing the state to run out of cash and face IOUs this month," McLear said.

"Whether through more furloughs, pay cuts, or layoffs we will realize the intended savings to state employee compensation and cut back just as every California family and business is doing," McLear said.

The issue before the appellate court was whether to lift a temporary restraining order issued Monday by Alameda Superior Court Steven A. Brick, who had barred the state from imposing furloughs until a Sept. 13 court hearing at which both sides will press their case.

Put simply, the effect of today's appellate ruling is to prevent the state from imposing four planned furlough days over the next month -- until the Sept. 13 hearing at which Brick will consider issuing a more permanent injunction.

If the California Supreme Court steps in quickly -- McLear said the governor's appeal will be filed Friday -- the possibility exists that furloughs could be imposed for the final two Fridays of August, and one next month, before the Sept. 13 showdown in Brick's Alameda County courtroom.

To compensate for the loss of payroll savings this week, employees would be asked to take an additional, self-directed furlough day in August if the High Court gives the green light, according to McLear. If furloughs are blocked throughout August, additional furlough days may be imposed in months to come.

J. Felix De La Torre, an attorney for Service Employees International Union Local 1000, said Thursday's appellate ruling, though not a final resolution, takes a big load off the minds of workers who were threatened with a new round of unpaid days off similar to a program imposed last year.

"Many of them were teetering on the edge of financial disaster, and this has allowed them to actually take a breath," De La Torre said of today's ruling.

Attorney Pat Whalen, representing state attorneys, hearing officers and administrative law judges, said today's appellate decision has triggered widespread relief. "Everybody is elated that their pay is not going to be cut," he said.

In issuing the temporary restraining order that sparked today's appellate ruling, Superior Court Judge Steven A. Brick concluded that there are "serious questions" about the legality of furloughs and that permitting them before the scheduled Sept. 13 court hearing could cause irreparable harm to workers struggling to pay mortgages and care for their families.

Brick also expressed doubt that the estimated "$80 million to $110 million" in general fund savings from from furloughs until Sept. 13 could make much of a dent in the state's $19 billion budget deficit.

Schwarzenegger, in his failed request to the First District Court of Appeal, said the lower court had overstepped its bounds by "questioning the wisdom, rather than the lawfulness" of gubernatorial policy decisions.

The Republican governor also argued that cost-cutting from furloughs was vital to retaining key health and safety programs during the budget crisis.

Even before today's appellate ruling, released about noon, the Schwarzenegger administration had instructed workers in an e-mail to report to work Friday because the legal fight over furloughs remained clouded as that date approached.

Click here to read the memo.