In a decision that brought New Year's cheer to tens of thousands of California state workers, an Alameda County Superior Court judge ruled Dec. 31 that Republican Governor Arnold Schwarzenegger exceeded his authority last year when he ordered them to take three unpaid furlough days each month to help cover a soaring deficit in the state's general fund.
After the order was issued last February, the Service Employees International Union Local 1000 filed a lawsuit , together with the California Attorneys, Administrative Law Judges and Hearing Officers in State Employment (CASE) and the Union of American Physicians and Dentists.
In three separate rulings, Judge Frank Roesch said the governor's use of the state's Emergency Services Act was illegal because while the state had no budget when the orders were issued, the furloughs extended far beyond the date the budget came into effect. He also said that furloughing state workers whose agencies are supported by special funds rather than the general fund interferes with the functioning of specialized agencies like the Department of Motor Vehicles, and questioned the rationale of cutting their wages to help cover a general fund deficit.
SEIU 1000 said the furloughs resulted in a nearly 15 percent pay cut for its members, causing some to lose their homes or suffer damaged credit ratings. The union had already negotiated a contract with the state that included a 5 percent wage cut.
Workers affected by the ruling are employed by state agencies funded through special funds, like the Department of Motor Vehicles, rather than through the state's general fund. SEIU Local 1000 spokesperson Jim Zamora said slightly more than half of Local 1000's nearly 100,000 workers are affected by the decision.
Schwarzenegger's spokesperson said the governor will appeal the judge's decision, and predicted the issue will ultimately be decided by the California Supreme Court. An appeal would bring an automatic stay of the proceedings, but Zamora said the union plans to request the stay be lifted, opening the way to restoring the workers' full pay. He said the union feels it may be possible to challenge the furloughs of all the state workers it represents.
Later this week, Schwarzenegger will deliver his final "State of the State" address and issue his budget proposals for 2010-11. On top of the $60 billion in budget shortfalls in 2009, the nonpartisan Legislative Analyst's Office foresees a general fund gap of nearly $21 billion over the next 18 months. The governor is widely expected to call for more draconian cuts in human services and mass transit programs, and to renew his drive for oil drilling off the Santa Barbara coast.
Though California has by far the biggest general fund deficit, most states are expected to face sharpening budget crises in 2010. "The worst recession since the 1930s has caused the steepest decline in state tax receipts on record," the Center on Budget and Policy Priorities said late last year. Besides new gaps that have opened up in current fiscal year budgets, CBPP foresees state budget shortfalls in the new fiscal year, "as big as or bigger than they faced this year," and states will "continue to struggle to find the revenue needed to support critical public services for a number of years."
At least 43 states have already cut services to residents, CBPP said. Pointing out that federal aid including American Recovery and Reinvestment Act funds have alleviated part of this year's shortfalls, the Center said federal funds already allocated will likely be used up before the crisis ends, resulting in 2011 budget gaps even bigger than the current ones. It urged extension of federal support to states for Medicaid and education, to cover the period when states' fiscal circumstances are expected to remain problematic.