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California Supreme Court Upholds Schwarzenegger’s Worker Furloughs

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Furloughed California Workers

State workers protests California furloughs (Robyn Beck/Getty Images)

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SACRAMENTO (AP) – The California Supreme Court’s ruling Monday upholding Gov. Arnold Schwarzenegger’s order to furlough state workers ends an 18-month budget distraction and puts more pressure on public employee unions to negotiate benefit rollbacks with the administration.

The high court handed the governor a unanimous decision, saying he could force employees to take unpaid leave because the state Legislature gave him that authority when it approved the 2009 budget bill.

Legislative leaders are now pushing the unions to accept concessions on pension and other benefits as part of a 2010 budget agreement scheduled for a vote by lawmakers as soon as Thursday.

Schwarzenegger has demanded the concessions as a condition of signing the budget aimed at closing a $19 billion deficit.

Schwarzenegger implemented the two-day-a-month furloughs for more than 200,000 state workers in February 2009. He later expanded it to three days a month, which has translated to a pay cut of roughly 14 percent for government employees.

Schwarzenegger said the move was intended to save money as California faced a severe budget crisis. His order prompted the filing of more than two dozen lawsuits.

“As governor, I have had to make very difficult decisions in response to the worldwide economic collapse, including furloughs for state workers and line-item vetoes to balance our budget,” Schwarzenegger, a Republican, said in a statement after the court rulings. “These decisions were absolutely necessary to keep our state functioning.”

In another ruling Monday, the state Supreme Court also said Schwarzenegger had the authority to use his line-item veto power to cut $489 million from last year’s state budget.

The administration estimates furloughs saved the state’s general fund $1.5 billion during the previous two fiscal years and an additional $80 million a month in the fiscal year that began July 1, said H.D. Palmer, spokesman for the governor’s Department of Finance.

Bruce Blanning, executive director of the Professional Engineers in California Government, one of the plaintiffs, said he was disappointed by the state Supreme Court ruling.

“Obviously, we had hoped for a better outcome,” he said. “But that’s the way the court ruled, and we take it and move on.”

The budget legislation passed in 2009 authorized the furloughs through either collective bargaining or “existing administration authority.” The state Supreme Court said those three words gave the governor his authority.

“By enacting this provision, the Legislature, through the exercise of its own legislative prerogative, authorized the substantial reduction in the appropriations for employee compensation, mandated in the revised budget legislation, to be achieved through the two-day-a-month furlough plan,” the court said.

State workers dispute that the state has saved money through the furloughs, which have meant most state offices are closed on three Fridays a months. Both nominees for governor, Republican Meg Whitman and Democrat Jerry Brown, have said they would avoid furloughs if elected.

Schwarzenegger and the Democratic and Republican leaders of the Assembly and Senate said last week they had reached a tentative agreement to address California’s budget deficit. The spending plan is more than three months late.

The latest furlough order exempts departments that collect revenue, such as the Franchise Tax Board, and provide public safety protection, including the California Highway Patrol.

It also exempts about 37,000 workers in six unions that recently reached tentative labor agreements with the Schwarzenegger administration. Those unions agreed for their members to contribute more of their salaries toward their pension benefits and to take one day of unpaid personal leave a month, the equivalent of a nearly 5 percent pay cut.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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