|
For Immediate
Release:
Wednesday,
July 28, 2010 |
Contact:
Aaron
McLear
Rachel
Arrezola
916-445-4571
|
Gov. Schwarzenegger Declares State of Emergency, Issues
Executive Order to Impose Furloughs Due to Cash Crisis Caused By
Budget Impasse
Governor
Schwarzenegger issued an order today directing state agencies to
reinstitute furlough Fridays until a new budget is in place. The
order for state workers to take three furlough days per month will
take effect starting August 1 and continue until a new budget is
enacted and the Department of Finance certifies that the state has
enough cash to meet its obligations through the end of the Fiscal
Year.
“Without
a budget in place that addresses our $19 billion budget deficit,
every day of delay brings California closer to a fiscal meltdown,”
said Governor Schwarzenegger. “The State Controller has indicated he
could be forced to issue IOUs starting in August in order to avert a
cash crisis. Our cash situation leaves me no choice but to once
again furlough state workers until the legislature produces a budget
I can sign.”
The
Governor’s furlough order continues to exempt CAL FIRE and
California Highway Patrol from furloughs. In addition, the
Governor’s new order is more narrowly drafted to exempt revenue
generating agencies and quasi-public entities with non-general fund
resources.
You
can read the Governor’s state of emergency proclamation by clicking
here.
The
full EO is below:
EXECUTIVE ORDER
S-12-10
BY THE GOVERNOR OF THE STATE
OF CALIFORNIA
WHEREAS, due to continuing weak performance in the California
economy and other factors, there is an approximately
$19 billion General Fund deficit for the 2010-11 fiscal year;
and
WHEREAS the State has already taken extraordinary measures to
conserve cash, such as implementing payment deferrals to schools and
other local governments; and
WHEREAS there is no state budget for the 2010-11 fiscal year and
a lengthy budget delay is likely; and
WHEREAS the longer it takes to adopt state budget measures to
implement needed savings, the more the value of those savings erode,
meaning that additional savings will be needed to make up for that
lost time and money; and
WHEREAS without a budget in place, the latest cash projections
show that California’s cash will go into the negative no later than
October 2010; and
WHEREAS to ensure that the State meets its payment obligations
protected by the California Constitution and federal law, the State
Controller has stated that he could be forced to begin issuing
registered warrants (IOUs) as early as August 2010; and
WHEREAS the State must start preserving cash beginning in August
2010 to improve the State’s ability to meet its obligations to pay
for debt services and critical and essential services to protect
public health and safety and to make payments protected by the
California Constitution and federal law; and
WHEREAS furloughs are necessary to immediately begin saving cash
until a budget is in place that includes solutions that will ensure
there is sufficient cash for the State to meet its obligations to
pay for debt service and critical and essential services to protect
public health and safety and make payments protected by the
California Constitution and federal law; and
WHEREAS as part of the solutions to close the $19 billion
General Fund deficit, the Governor’s May Revise budget proposal
included a 15 percent reduction in employee compensation costs for
fiscal year 2010-11; and
WHEREAS in order to preserve sufficient cash in the 2010-11
fiscal year without a budget in place, three furlough days per month
are necessary to achieve savings in employee compensation for the
2010-11 fiscal year; and
WHEREAS immediate action to reduce current spending
must be taken to ensure, to the maximum extent possible, that the
essential services of the State are not jeopardized and the public
health and safety is preserved; and
WHEREAS a furlough will reduce current spending and immediately
improve the State’s ability to meet its obligations to pay for
essential services and make payments protected by the California
Constitution and federal law in the 2010-11 fiscal
year.
NOW, THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the
State of California, by virtue of the power and authority vested in
me by the Constitution and statutes of the State of California, do
hereby determine that an emergency pursuant to Government Code
section 3516.5 exists and issue this Order to become effective
immediately:
IT IS ORDERED that effective August 1, 2010, the Department
of Personnel Administration (DPA) shall adopt a plan to implement a
furlough of represented state employees and supervisors for three
days per month consistent with the terms of this Order.
IT IS FURTHER ORDERED that effective August 1, 2010, the DPA
shall adopt a plan to implement an equivalent furlough or salary
reduction for all non-represented state employees, including
supervisors, managers, and exempt state employees, consistent with
the terms of this Order.
IT
IS ORDERED that the following state agencies and departments are
exempt from this furlough executive order:
California
Highway Patrol
California
Department of Fire and Forestry Protection (CalFIRE)
Franchise
Tax Board
Board
of Equalization
Employment
Development Department
State
Compensation Insurance Fund
California
Housing Finance Authority
California
Earthquake Authority
IT IS FURTHER ORDERED that the represented employees in
Bargaining Units 12, 16, 18 and 19 are exempt from this furlough
executive order based on the expectation that the tentative
Memoranda of Understanding reached with these Bargaining Units will
be ratified by the Bargaining Unit membership and the State
Legislature by early August 2010, whereby the employee compensation
savings in these agreements will result in immediate cash savings
beginning in the August 2010 pay period.
IT IS FURTHER ORDERED that DPA shall adopt a furlough plan that
will result in the closing of general government operations on the
second, third and fourth Fridays of each month, beginning in August
2010.
IT IS FURTHER ORDERED that effective August 1, 2010, and for the
duration of the furlough period, all state agencies and departments
subject to furloughs shall take all necessary action to require
their employees to take three furlough days within the month.
IT IS FURTHER ORDERED that the furlough period shall end when
a 2010-11 fiscal year budget is in place and the Director of the
Department of Finance determines that there is sufficient cash to
allow the State to meet its obligations to pay for critical and
essential services to protect public health and safety and to meet
its payment obligations protected by the California Constitution and
federal law.
IT IS REQUESTED that other entities of State government,
including the California Public Utilities Commission, the University
of California, Hastings College of Law, the California State
University, California Community Colleges, the Bureau of State
Audits, the legislative branch (including the Legislative Counsel
Bureau), and judicial branch, implement similar or other mitigation
measures to achieve budget and cash savings for the 2010-11 fiscal
year.
This Order is not intended to create, and does not create, any
rights or benefits, whether substantive or procedural, or
enforceable at law or in equity, against the State of California or
its agencies, departments, entities, officers, employees, or any
other person.
I
FURTHER ORDER that, as soon as hereafter possible, this Order
shall be filed in the Office of the Secretary of State and that
widespread publicity and notice be given to this Order.
IN
WITNESS WHEREOF I have hereunto set my hand and caused the Great
Seal of the State of California to be affixed this 28th
day of July, 2010.
____________________________
ARNOLD SCHWARZENEGGER
Governor of California
ATTEST:
_____________________________
DEBRA BOWEN
Secretary of State
