Arnold’s Furloughs Have Flopped, Hurt Workers, Businesses, and All Californians

When the national recession battered California’s tax revenues and threw the state budget hugely out of balance, Governor Arnold Schwarzenegger tried to convince us that he could solve the problem with furloughs.

First he’d force state employees to take one, then two, then three unpaid days off a month, ultimately robbing those workers of 15 percent of their paychecks.

The plan has been a disaster. It hasn’t saved the state money. It has been a drag on the state and ultimately worsened the budget crisis. It’s disrupted state services, and, in turn, increasingly crippled the economy, slowed the recovery, and stopped job creation—especially in the construction field.

The immediate effect was obvious. Workers making less money paid less taxes, spent less on goods and services, and the businesses that made ends meet from that consumer spending started feeling the pinch. Around the state Capitol, you could see it clearly. Lunch crowds at formerly bustling restaurants dwindled dramatically. The recession had already hurt these small businesses. The furloughs slapped them in the face.

But the longer-term effect of reduced and slower state services has been even more insidious. These furloughs are directly worsening our economic problems because they are delaying much needed construction projects.

For example, $6 billion worth of hospital construction is being delayed right now, because furloughs at the Office of Statewide Health Planning and Development, the state office that permits and regulates hospital construction, have caused a bottleneck that has stopped projects from getting approved.

Our workers who could be at work on those hospital construction sites right now, earning money to support their families, and providing Californians with needed hospital facilities, are sitting idle because of Arnold’ s furloughs.

And furloughs at the Energy Commission are also causing great disruption. At the very time when the Commission has an unprecedented number of solar project applications, employees who are supposed to be evaluating these giant projects and recommending measures to reduce their environmental impacts are forced to work on their off days. This hurts both the quality and the speed of their work. Solar projects that could be good for the environment and creating thousands of construction jobs are being delayed, and damaging the long term success of this new industry.

All this at a time when 30 percent of construction workers, and 12 percent of all workers in the state, are already out of work, wondering how to feed their families and pay their bills.

The California Senate Office of Oversight and Outcomes has produced four detailed reports on the effects of the furloughs, and the findings are fascinating – each report concluded that the furloughs have worsened, not improved, the state’s financial outlook.

One study found that furloughs at the Franchise Tax Board are worsening the state’s fiscal shortfall by resulting in more than seven dollars of lost tax revenue for each one dollar saved! Another found that furloughs at “round the clock” facilities such as prisons resulted in more overtime expenses for other state employees. At facilities like the DMV, which use special funds rather than the general fund, the furloughs produced no savings at all but resulted in slower service to the public. And for assistance programs using federal funds but administered by the state, the furloughs again produced no savings but significantly slowed down needed assistance to unemployed and disabled Californians.

Furloughs are even putting your health care at risk. A spokesman for the California Medical Association told a newspaper that people are losing health care as a result of furloughs at the Medical Board of California, which licenses and regulates physicians. Hundreds of physicians who could be caring for people right now are still waiting because of that furlough-caused backlog.

Schwarzenegger now is appealing a court’s order to stop the furloughs. The judge ruled that when furloughs save nothing and increase costs, “such a policy is arbitrary, capricious and unlawful.”

Governor, let’s end this idiotic policy now. End the bottlenecks. Speed up the process. Begin construction. Put our people back to work, now!