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California faces higher costs because of past furloughs, report says

March 14, 2013|By Chris Megerian

SACRAMENTO -- The decision to furlough state employees over the last five years may have saved money in the short term but will leave bigger bills for California down the road, according to a new report.

State employees took fewer and fewer vacation days because furloughs were already forcing them to take time off from work. Now California will have to pay them $3 billion for unused time off when they retire, an increase of more than $1 billion since the furloughs began. 

When payouts for other types of compensation are included, the total bill rises to $3.9 billion, the report said. About one-third of the money is owed to corrections officers.

The report was released Thursday by the legislative analyst's office, which provides nonpartisan budget advice to lawmakers. 

Payments and liabilities have reached historic levels, the report said. California departments paid out $270 million to retiring employees in the 2011-12 fiscal year, two-thirds more than when furloughs began.

Although California limits the number of vacation days that can be saved by state workers, the cap "seemed totally ineffective" in recent years, the report said. The number of workers exceeding the cap more than doubled to 24,000 from 2005 to the beginning of this year.

Furloughs and similar programs have been used frequently to help the state close difficult budget gaps. Savings are estimated at $5 billion from February 2009 to July 2013.

Gov. Jerry Brown does not plan to include furloughs in the next state budget.

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