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Reducing California state payroll a daunting task

Schwarzenegger may succeed where Pete Wilson and Gray Davis failed. Legal precedents, political alliances and policy protections built up over the years by unions are formidable obstacles.

January 31, 2009|Evan Halper

SACRAMENTO — The notion that the only safe job in a recession is a state Civil Service job was punctured this week when a Sacramento court gave the governor the authority to take an ax to the government payroll.

Thursday's Superior Court ruling, which greenlighted Gov. Arnold Schwarzenegger's plan to shut down much of state government on two Fridays each month -- forcing 238,000 mostly unionized workers to stay home without pay -- follows decades in which the state workforce remained relatively impervious to financial crises.

Governors have long tried -- and mostly failed -- to reverse the growth of the state payroll when deficits have soared. Even as private companies lay off tens of thousands of workers, the state employment rolls tend to remain impenetrable.

Past plans for reductions have been tangled in a thicket of policy protections, political alliances and legal precedents that organized labor has built up over the years. Delays in scheduled pay raises or trims in generous worker benefit packages are typically the extent of what governors wrangle from the unions.

Cutting the state workforce "is just very difficult to do," said Jason Dickerson, a public employment expert at the nonpartisan Legislative Analyst's Office. "It can be a very long and cumbersome process."

Personnel records show that there have been no mass layoffs in state government since 1975, when 2,500 California Department of Transportation employees lost their jobs during a budget crunch.

Schwarzenegger sidestepped the layoff process by opting for furloughs. Whether his plan to save $1.3 billion that way will survive the court appeal process remains to be seen.

Gov. Pete Wilson attempted a similar move in 1991. He used his emergency powers to cut the salaries of most of the state workforce by 5%. A state court judge ultimately ruled that the governor could not do so without the consent of the Legislature, and the money was eventually returned to employees in cash or vacation time.

Wilson also threatened to lay off 10,000 state workers that same year, when California was facing a $14.1-billion deficit. It never happened. Wilson abandoned the idea after years of battle with public employee unions.

Gov. Gray Davis in 2003 put plans in motion to lay off some 12,000 workers, sending them notices that the state had begun the lengthy process of eliminating their jobs. That process can involve six to eight months of appeal hearings, paperwork processing and negotiations between the state and unions. Those layoffs never happened either.

Instead, Davis struck a deal with the unions that put off a promised 5% pay raise for a year. In return, the affected workers got an extra day off with pay each month.

Schwarzenegger has been stymied in previous efforts to reduce the workforce.

His 2004 California Performance Review, a top-to-bottom examination of state government, proposed various ways the state could consolidate operations to function more effectively. The Legislature rejected every one of them. The governor put the proposals on the back burner, and the state payroll continued to grow.

The governor's plan to temporarily cut state worker pay to the federal minimum wage during last summer's cash crunch also failed. The state controller refused to make the salary reductions, which would have been repaid to the workers once a budget was signed. The courts declined to intervene before a budget deal was reached.

Labor leaders say that when the economy goes south, Californians need government services more than ever and that it is simply not a practical time to throw public employees onto the street.

"There are certain things that the state needs to do more of during bad times," said Jim Zamora, spokesman for Service Employees International Union, Local 1000, which represents tens of thousands of state workers. "You can't cut the workforce without making decisions about what it is that you are not going to do anymore."

Unemployment claims that need to be processed rise in tough times, as do requests for welfare assistance, for example.

Government healthcare programs are stressed by Californians who have lost their private insurance. And some things, such as prisons, continue to operate around the clock.

Indeed, despite the furloughs and the governor's urging departments to make only the most essential new hires, all indications are that the state has not completely curbed its appetite for new employees.

The State Personnel Board's website lists 2,975 current vacancies. Of those, 1,172 were posted in the last two weeks. One local entrepreneur, Ken Mandler, continues to hold popular workshops on how to get a state job. He said he was too busy in meetings with clients to be interviewed.

Labor leaders argue that California already has one of the most efficient workforces, with a lower ratio of state employees to the population than most other states. But there are other factors in play.

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