More Furloughs and IOUs in California

The Sacramento Bee reports that California’s furlough program, a measure aimed at helping to shrink a state budget shortfall now estimated at $19 billion, survived its latest court challenge and, for the next few weeks or so, government offices will be quiet on Fridays.

State workers endured the latest tortuous turn in an off-again-on-again furlough saga that has left roughly 144,000 of them uncertain from week to week of their work schedules.

But the California Supreme Court’s decision Wednesday to side with Gov. Arnold Schwarzenegger and allow furloughs to start again Friday should be the last twist – at least until next month.
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“The result of the California Supreme Court ruling today means that the furloughs will continue until the court says otherwise,” Schwarzenegger spokesman Aaron McLear said, adding that furloughs also will stop if the state budget is approved.

Otherwise, he said, “furloughs will continue as planned Friday the 20th, the 27th, and one additional floating furlough between now and the end of the month.”

Schwarzenegger ended a similar policy in June, but with state lawmakers at an impasse over how to close a $19 billion budget deficit, the Republican governor issued an executive order July 28 restarting the policy as a way to save $136.7 million per month in payroll costs, about $75.5 million for the general fund.

In related news, State Controller John Chiang said that the government will begin issuing IOUs in two to four weeks unless the legislature approves a budget. The state previously issued IOUs in 1983, 1992, and 2009, the back-to-back issuance this year further evidence that the state is nearly impossible to govern during recessions.

Read the original story at The Mess That Greenspan Made