The State Worker

Chronicling civil-service life for California state workers

July 6, 2012
Blog back: California compensation cut calculations, contractual constraints, 'cutbacks' caveat changed

Thumbnail image for Thumbnail image for 100831 calculator.JPGBlog backs review your thoughtful and provocative online comments, amplify points, answer questions, correct our mistakes and humbly accept your warranted criticism.

July 3 SEIU Local 1000 members vote to accept furloughs

Well for starters, I'm not sure if the state is saving $839 million or $401 million, since the article fails to explain the details of the $438 million difference.

Regardless, $401 million divided by 93,000 employees divided by 12 days is $359.32 per day; or hourly pay of $44.91. This equates to an annual salary of $93,423.

Now, we all know that the average state worker doesn't make $93,000, so I'm guessing Jerry is just blowing more smoke at us .... and this is without the unexplained $438 million.

The state budget is organized into various "funds." Think of them as pots of money organized to pay for government functions. The largest is the general fund, this year pegged at about $92 billion. It's also the center of the state's serial budget crises.

The general fund's revenue streams, especially the personal income tax, swing up and down based on the state economy. It must fund many services -- schools and prisons, for example -- even when anticipated expenses exceed anticipated revenues.

Furloughing state employees who work in those areas of government one day per month through June 2013 will save an estimated $401 million, lawmakers have estimated.

The other $438 million in furlough savings will come from trimming payroll in the other so-called "special funds" that receive dedicated revenues (motor vehicle license fees, for example) that pay for specific government functions (such as operating the DMV). These funds tend to run without deficits because their revenues and expenses are predictable. Many run surpluses that the state can use for short-term loans to patch up the general fund's deficit.

In reality, nearly all departments receive at least a few general fund dollars that get mingled with other money. With the exception of five agencies that are truly fiscally independent of the legislative appropriations process, no one has ever defined what distinguishes a "special fund department."

Dividing the payroll numbers by 93,000 Local 1000-covered state workers is flawed. The actual math is $839 million (total 2012-13 payroll savings, all funds) divided by 214,000 (total number of state employees who will lose one day's hours and pay per month during the 2012-13 budget year).

That works out to an average annual salary loss of about $3,921 per state worker, or $327 per month lost to furloughs.

The furlough negotiation saga resurrected a debate among blog users about the sanctity of state employee contracts: Since the Legislature has authority over state pay and working conditions, how genuine is an an invitation to bargain? Wasn't the outcome -- a 5 percent state worker pay reduction despite contracts to the contrary -- a foregone conclusion?

Here's one commenter's tongue-in-cheek analogy:

I called my auto loan company and I told them "I don't like the way things are, so instead of paying you my $345.00 per month payment, I'm only going to pay you $298.00. What? Waht (sic) is that you said? We have a SIGNED, AGREED-UPON "CONTRACT"? Oh, and I HAVE TO do as the contract states? OMG!!! What a concept!?" Hummmmm..., who would have thought....., "some" folks out there DO expect you to follow-through with a CONTRACT! Ammmmmmmaaaaaaazzzzzzzing!

Many commenters took SEIU Local 1000 President Yvonne Walker to task for telling members that furloughs were "off the table" and then supporting a furlough deal with Brown in exchange for outsourced contract reviews and axing retired annuitants and student assistants.

Still, one blog user took a moment on the Fourth of July to recognize Walker for something else:

Lots of harsh words for Ms. Walker on this blog - most of them well deserved, and some of them from me. But I'd like to take a moment on Independence Day to say thank you to Ms. Walker and all other veterans of military service. Please accept my sincere appreciation for your service to our country. We are the home of the free *because* of the brave.

July 5 From the notebook: More about the union furlough agreements

The Brown administration's agreement with SEIU Local 1000 to cut student assistants provoked debate among blog users. Two examples of the divergent points of view:

Axing students was a stupid move. This demographic is already suffering disproportionately, and they cost effectively fill important gaps for lots of organizations.

To top it off, it seems many organizations are moving to get rid of all students, regardless of whether or not they do work normally performed by SEIU members. Stupidity squared.

The students work until September when they are supposed to go back to school. What is wrong with letting students attend school? Isn't that what they are supposed to do?

July 5 Budget ends furlough protections for State Compensation Insurance Fund employees

Can someone please explain to me why the legislature went through the trouble of ensuring that SCIF employees are furloughed? If the General Fund can't touch their funding, and in fact can't even borrow it, what's the point?

Removing the statutory protections from "staff cutbacks" afforded State Compensation Insurance Fund employees means that all the employees covered by a union are dealt with based on representation. It reinforces the state's policy of dealing with workers by bargaining unit and not by where they work.

Ironically, when Jerry Brown was California's attorney general he refused to comply with Gov. Arnold Schwarzenegger's furlough order. Brown and other constitutional officers argued that they had the independence to deal with their employees as they saw fit. They lost that argument.

State Fund had solid legal ground for that same argument -- until last month.


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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at


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