Furloughs cost state $1 billion

SACRAMENTO — State worker furloughs saved California $5 billion over five years but left taxpayers on the hook for $1 billion in unused vacation because employees banked many of their paid days off while they were forced to stay home, according to a report released Thursday.

The accumulated leave time greatly increased the state's cash liabilities because employees must be paid for the unused time off when they quit or retire from their government jobs, the nonpartisan Legislative Analyst's Office found.

Payments to employees for accrued leave time are now at historic levels, reaching nearly $270 million in the last fiscal year.

The furloughs began in February 2009 as a way to help close ongoing state budget deficits. But the report says many workers simply used furloughs for time off instead of their normal vacation days.

California's long-term liability to pay employee leave balances now is $3.9 billion annually, of which $2.1 billion comes from the state's general fund. The $3.9 billion amounted to 27 percent of all state salary costs, a greater percentage than for most other public and private employers.

Each day of unpaid leave amounted to a pay cut of about 5 percent. That cost the average state worker about $21,000 over the last five years, but also increased their overall time off by about 50 percent.

The furloughs started under Gov. Arnold Schwarzenegger and continued under Democratic Gov. Jerry Brown but are scheduled to end this July.

Spokesmen for Brown and the state Department of Finance referred inquiries about the analyst's report to the California Department of Human Resources.

"The governor is developing policies to cut leave balances at the same time that he's stabilizing the state budget," said Human Resources spokeswoman Pat McConahay.

But she couldn't give specifics or say when those policies might be revealed.

"Basically the problem, just like the deficit, is a carry-over from a prior era," she said. "Employees were furloughed for a short-term savings, and it has left us with a long-term debt."

The average employee had 79 furlough days during the five years the unpaid time off was imposed.