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ACSS Daily Blog

To view blog postings by category, click the Blog Topic of your choice at left. For questions about this Web site, contact Linda Holderness at (916) 326-4302.

Author: ACSS Communications Created: 11/13/2008 5:13 PM
Keeping members current with the latest news about ACSS and State Employees.

History professor Joseph A. Palermo writes in the Huffington Post one of the most enlightening accounts of the state's budget process we've seen. The story ran July 1, so a couple of references are out of date (and CalPERS is spelled wrong), but the facts and the opinions are strong. Don't miss the Robert Kennedy quote at the end.

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The Sacramento Bee's Capitol Alert blog reports this morning that Senate President Pro Tem Darrell Steinberg is predicting a budget deal could be reached in a few days. Democrats have given up asking for tax increases, however. (As blog items are added, you may have to scroll to read.)

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The first question you may want to ask has been answered here already, but it's worth repeating: State workers will not be paid in IOUs. You'll still get your paychecks, immediately cashable. For other answers, check out The Sacramento Bee's QandA this morning -- starting with "Why can't a state with the eighth-largest economy on Earth pay its bills?" (Unfortunately, many of the questions that appear in today's paper don't show up online. Here are a few very brief answers you can use: You don't have to cash the IOU right away; you can hold it to earn interest. Banks that have agreed to take them, some for a limited time, include Bank of America, Wells Fargo, Tri-Counties, Chase, Golden One Credit Union and several other credit unions.)

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The DPA has issued a memorandum (PML 2009-029) explaining the details of the governor's furlough order. State workers will furlough the first, second and third Fridays of every month; for this month, however, the three furlough days will be July 10, 17 and 24 (the correct dates this time!). Charts clearly show furlough hours for part-time and intermittent workers.

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State Treasurer Bill Lockyer, a Democrat, offers this unusual suggestion for resolving the budget impasse -- only partly tongue-in-cheek, we suspect. From the Los Angeles Times.

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Sacramento Bee political columnist Dan Walters decries the unrelated extras -- such as pension reform -- that have become part of deals to pass a budget.

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State Worker column: As most state workers struggle with a 14 percent pay cut, about 10 percent of the work force is not affected by the furloughs.

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From State Worker columnist Jon Ortiz we get this gem: Gubernatorial candidate Meg Whitman told a reporter at The Bakersfield Californian that, if elected, she would cut "at least 17,000 mid-level bureaucrats" from state service. Ortiz responded that his "bet is that state service would be badly damaged by reductions of that magnitude." What do you think? He wants to know, through his blog. If you email him, copy us, too, at acss@calcsea.org. Ortiz will be a speaker on July 11 at our Delegate Assembly in Sacramento.

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After the failure to pass a budget solution, Gov. Schwarzenegger this morning declared a state of fiscal emergency and ordered a third furlough day for state workers through June 2010. He also reinstituted "furlough Fridays": Beginning July 10, state offices will be closed -- and state employees required to take unpaid furlough days -- on the first, second and third Fridays of every month. Some 24-hour facilities will maintain normal operating hours, but the public services available on furlough Fridays will be limited. Controller John Chiang has said he will begin issuing IOUs tomorrow.(Photo: Elnora Fretwell, Frank Ruffino and President Olin King represent ACSS at state workers rally July 1 at the Capitol to protest third furlough day.)

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You can help make a difference in your career and the careers of all state excluded employees by attending ACSS' Delegate Assembly July 11 and 12 at the Holiday Inn Capitol Plaza. Every three years at Delegate Assembly we elect the board and officers, update our bylaws, set up committees. You can make your voice heard, meet your colleagues in state service and volunteer to become active.The weekend begins at 9 a.m. Saturday. All members are welcome. For more information, see our June newsletter (also in our Newsroom) or call ACSS at 800-624-2137 or 916-326-4257.

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It looks as if state workers will be getting a third furlough day after Gov. Schwarzenegger and the Legislature failed to pass a budget by the deadline last night. Schwarzenegger had threatened the furlough day if the budget didn't pass. He now plans to declare a new state of fiscal emergency today. Also, State Controller John Chiang is expected to begin issuing IOUs. The first go to taxpayers awaiting refunds. State workers will not be paid in IOUs.

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The Sacramento Bee's "Capitol Alert" blog published this brief item tonight: "State Treasurer Bill Lockyer laid out some disheartening numbers about downgraded bonds today. If the state is forced to issue IOUS and has its credit rating downgraded to a BBB level, it could incur an additional $8 billion in costs. Lockyer was quick to point out this is both 52.5 times the amount spent on state parks in a year, and more than it would take to give taxpayers a 15 percent cut in personal income taxes (bold theirs).

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The California Citizens Compensation Commission, the body that regulates salaries for state officers, voted today to cut state legislators' monthly car allowance, fringe benefits and per diem by 18 percent. In May, the commission voted to reduce lawmakers' pay by the same percentage. That cut, however, won't take effect until December 2010; today's cuts will begin Dec. 1. Some legislators have taken voluntary pay cuts ranging from 5 percent to 18 percent. The latter group includes Sen. Maldonado and Assemblymen Eng and Lowenthal.

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Get valuable information to help you plan for your state retirement at a CalPERS retirement planning fair. The seminars are held throughout the state. The dates and places for July and August are: July 8, Hilton Concord Hotel, Concord; July 24 and 25, Sacramento Convention Center; July 30, Four Points by Sheraton in San Rafael; Aug. 13, Konocti Harbor Resort, Kelseyville. Workshop descriptions are here.

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Among the governor's budget-cutting proposals submitted to the Legislature is a proposal to institute a pared-down pension plan for state workers who start their jobs after July 1. Current employees would not be affected. Further down this blog is a pdf of the proposal. Today, The Sacramento Bee expands the information. The article includes a graphic breakdown.

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As California braces for IOUs -- registered warrants -- to replace payments beginning tomorrow, the unknown is whether the banks will cash them. If they don't, some businesses and municipalities could be hurting. The IOUs will come due Oct. 1, meaning anyone holding them will be paid their value plus interest. State workers will continue to receive paychecks, not IOUs. As the clock continues to tick, a budget by tomorrow appears less and less likely.

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Little attention seems to have been paid to a critical element of Gov. Schwarzenegger's budget proposal: state workers' pensions. The governor is seeking to establish a far less lucrative pension plan than state workers enjoy now, including raising the retirement age in some categories and opening health care coverage to competitive bidders. Any changes would apply only to new employees.

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The Supreme Court ruled this month that the entire burden of proving an age-discrimination charge must rest with the plaintiff. In other discrimation claims, and previously in age-discrimination claims, once the plaintiff proves discrimination occurred the employer must prove it had a legitimate reason for the decision. The FindLaw Web site discusses this new law and provides links to the case and related resources.

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Gov. Schwarzenegger this afternoon issued a statement threatening a third furlough day for state workers if the Legislature does not produce a budget solution before July 1. The third day would bring the total wage cut for state employees to about 14 percent. The furlough would begin with the July pay period. In a late-afternoon telephone conference with state agencies, the DPA's Julie Chapman said it was possible that if the budget issues are resolved by Wednesday, the furlough would not take effect. It is not clear whether the July furlough days will be self-directed -- in other words, taken at the employee's discretion -- or scheduled statewide; the state agencies are looking into which would be better, Chapman said. If it is enacted, the furlough day would run through June 30, 2010.

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In what The Sacramento Bee called "another wasted day," Republican senators united today to defeat the Assembly bills that would have freed up some cash to put off the need for IOUs. In meetings during the morning, the governor had told Republican senators he would veto the bills. Every Republican senator except Abel Maldonado voted against the bills; Maldonado withheld his vote either way. State controller John Chiang says if the budget isn't passed, he will begin issuing IOUs next Wednesday. State workers cannot, by law, be paid in IOUs.

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The Assembly passed two bills today -- and is expected to pass a third -- that will free up cash by deferring some state payments to delay the need for IOUs, but the governor vows to veto them. The Senate is expected to pass the bills later today.

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This may be no surprise to state workers, but the California Budget Project has published a report, based on Franchise Tax Board data from 2007, that shows the income gap between the wealthiest 1 percent of Californians and the middle-income taxpayers has widened. The adjusted gross income of the wealthy has nearly doubled since the early 1990s, more than eight times the increase of the middle income earners. No surprise again: Average corporate profits more than doubled during the same period and almost none of it trickled down.

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If a budget is not adopted by June 30, the state will be forced to issue IOUs to pay its bills for such items as  social services, income tax refunds and vendor and private contractor payments. State workers cannot be paid with IOUs. "Next Wednesday, we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression," Chiang says in a press release. Among the most affected by the IOUs -- officially, registered warrants -- are taxpayers, small businesses and local governments. In addition, resorting to IOUs sends a signal that California has exhausted all other options to manage its cash flow, the press release says. For Sacramento Bee story, click here.

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All but three senators, out of 40, have voluntarily cut their pay at least 5 percent, Sacramento Bee Alert reports. Three, Maldonado, Eng and Lowenthal, have take 18 percent pay cuts. The Assembly total wasn't available, but two weeks ago we reported in this blog that 20 percent of the Legislature had voluntarily reduced their pay. Two senators have gone even further. Sens. Wiggins of Santa Rosa and Denham of Merced gave up their state cars. Wiggins bought her Honda hybrid back.

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One state worker, in the face of pay cuts and insults, wryly defends the general public's misimpression of state service in a Sacramento Bee opinion piece.

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In an opinion piece published Monday in The Sacramento Bee, the California Budget Project's Jean Ross urges legislators to start closing the budget gap by repealing recent tax cuts quietly given to some of the big and powerful corporations. Giving corporate tax breaks while closing parks and severely cutting education represents "misguided priorities," Ross writes. The CBC posted a short response on its Web site.

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The California Budget Project has published a side-by-side comparison of the governor's and Legislature's budget conference committee's budget proposals. A Sacramento Bee story discusses the two proposals and and a budget Q&A explains, as much as possible, how we got into this fix.

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A Sacramento Bee editorial is calling for a freeze not only on pay raises for state workers but also on the step increases.

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Democratic leaders are promising a "share the pain" budget plan next week that will "close the state's deficit without completely shredding California's social service safety net," The Sacramento Bee reports. The budget conference committee has adopted a plan that balances the budget with some new taxes; Gov. Schwarzenegger said yesterday he will not sign a budget that included any tax or fee increases. Read the full plan here.

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Members of ACSS Chapter 512 joined other constituents of Sen. Abel Maldonado (at left in photo, with ACSS labor rep Tom Considine) for a June 12 luncheon that began at Hearst Castle and included seal watching in Cambria and a tour of the Piedras Blancas lighthouse. Maldonado, a Republican, broke with his party to cast the deciding vote for the 2009-2011 budget. “It was the hardest vote in my life,” he said. “At the last minute, I said to myself, ‘California first, Abel Maldonado second,’ and I think other people should have done the same.”  There will be cuts to come, he said, but he also predicts tax increases on such items as cigarettes and alcohol. He has a 17-inch stack of mail decrying the closing of parks -- which hold a "special place" for him -- and has met with disabled people who will suffer from the proposed cuts. “The state needs to move forward in a way that makes us solvent,” Maldonado said. “We can get some good reforms in the next couple of weeks and get this state on our way.”

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Two of California's top pollsters say the May 19 special election was not a referendum against more taxes, as has been interpreted, but an order to fix the budget mess, according to a Sacramento Bee article. California voters strongly favor raising taxes on pornography, cigarettes, alcohol and people who make more than $1 million a year, the pollsters say. The real message: The governor and the Legislature need to avoid delays and pass the budget.

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The CalPERS Health Benefits Committee has recommended an overall 2.9 percent increase in health care premiums for 2010 -- the lowest increase in 14 years. The full board will vote on the increase today. A CalPERS release says the lower rates are partly the result of reduced use of health care services and greater use of generic drugs as well as tough negotiations by CalPERS staff.

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A legislative budget committee has rejected the governor's proposal to cut state workers' pay by another 5 percent. In place of the cut, the committee voted to put off paying state workers from June 30 to July 1, a move that would transfer nearly $1 billion of payroll expense into the next fiscal year. The committee did vote to increase cigarette taxes and impose a new tax on oil.

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Senate President Pro Tem Darrell Steinberg Tuesday asked his fellow senators to agree to cut their pay 5 percent beginning July 1.

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Gov. Schwarzenegger's office has set up a Web site asking for your suggestions to save the state money: www.wastewatchers.ca.gov. You can sign your name or submit your ideas anonymously. The Sacramento Bee published a few suggestions it has received on Sunday.

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This quarter's UCLA Anderson Forecast says 60,000 public sector jobs could be lost in the next year in state and local government and education through attrition and layoffs. The loss, the report says, will keep California's unemployment rate in the double digits until 2011.

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State Worker columnist Jon Ortiz examines some of the numbers he ran in his last two columns debating whether state workers are underpaid. He doesn't draw conclusions but puts out some food for thought.

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Assembly Speaker Karen Bass says her caucus is considering "revenue options" -- she didn't call them "taxes" -- to help close the $24.3 billion budget shortfall. Potential revenue increases include restoring the motor vehicle licensing fees to their 2003 level, increasing corporate income tax rates, higher fees on cigarettes, alcohol and card rooms. Ideally, she said, the approach should be balanced equally between cuts and revenues. Senate President Pro Tem Darrell Steinberg Tuesday called for taking $4.5 billion from the state's reserves to preserve some programs.

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State Controller John Chiang has completed an audit that revealed the state loses millions of dollars every year because state agencies do not collect the fines and penalties they levy. The most common problem is "management's disregard" for the agencies' collection functions. Chiang is recommending legislation to require agencies with collection responsibilities to assess their risk assessment functions every four years, among other requirements.

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State workers who have received layoff or SROA notices are reminded they can take administrative time off to attend DPA's job fair at Cal Expo in Sacramento from 9 a.m. to 3 p.m. tomorrow. You must bring your notice to be admitted. State agencies with vacancies in the Sacramento area will be interviewing and even hiring. The event also includes a seminar on "job tools." The DPA Web site has full information on the job fair and job hunting with the state in general as well as directions to the fair.

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ACSS is examining the recent lawsuit filed by CASE (California Attorneys, Administrative Law Judges and Hearing Officers in State Employment) in Alameda Superior Court to see how it might relate to the rights of ACSS members. The lawsuit addresses the furlough issue. We will keep our members updated on our progress. To read a summary of the lawsuit, enter the Alameda Superior Court Web site, click on Case Summary, and enter the following case number: RG09453982 (case sensitive). To read the documents, click “Register of Actions” on the left.

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According to The State Worker blog, Gov. Schwarzenegger has canceled unfilled vendor contracts, retroactive to March 1, and tells departments to plan on cutting outside contracts by 15 percent. The blog cites a recent study that found the state has 13,600 active contracts at a cost of $34.7 billion. Read the order here.

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In a Webcast interview with The Sacramento Bee editorial board Friday, Gov. Schwarzenegger said he does not think state workers' benefits are sustainable. More excerpts from the interview are here. The Bee is posting videos of the interview.

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If you've received a layoff notice or have been placed on the State Restriction of Appointments list -- and have received an invitation-letter from the Department of Personnel Administration -- you are eligible to participate in a DPA job fair on Thursday, June 11, at Cal Expo. Representatives from about 60 departments with vacancies will be accepting applications and interviewing qualified candidates. The event runs from 9 a.m. to 3 p.m. You are allowed administrative release time to attend. The fair targets only the Sacramento area. DPA has issued a letter that explains what you need to bring with you and has posted complete information on its Web site, www.dpa.ca.gov/.

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Senate President Pro Tem Darrell Steinberg will begin holding committee hearings on proposals to consolidate or eliminate state boards, departments and commissions to help pare down California's $24.3 billion budget deficit, The Sacramento Bee's Capitol Alert reports.

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Although state workers' salaries have been cut by 9.2 percent, with another 5 percent proposed, only 20 percent of the state's lawmakers have taken voluntary paycuts. Legislators' pay is set by an independent commission. Three legislators voluntarily cut their pay by 18 percent, the highest cuts.

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The Employment Development Department is offering state employees free seminars on ways to increase your paycheck through the state's various benefits programs. The seminars are offered at a range of locations and dates between now and September. More information on pdf flier.

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CalPERS reports its investment portfolo has increased in value by more than $20 billion in the last three months. The fund's assets are now approximately $180 billion, up from a low of $160 billion in early March. You can track the value of CalPERS investments on the CalPERS Web site home page, www.calpers.ca.gov.

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CalPERS has added a new section to its Web site -- "CalPERS Responds" -- to answer misinformation about topics related to the current economic downturn. The first entry tackles state workers' pensions, explaining that, despite public perception, the average CalPERS pension is only $23,808 a year. Access the section at the link above or go to the CalPERS home page, www.calpers.ca.gov, and follow the links to Press Room and then News Center.

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State workers have been hit hard with furloughs, lost holidays and another possible pay cut. Why isn't the public sympathetic? The State Worker columnist Jon Ortiz tells you in today's column. (Last week's column discussed the misconceptions the public has about state employment.)

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The State Worker blog asked the question: Would people who retire after July 1 cash out at the reduced rate? Answer: Yes.

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A legislative budget committee voted unanimously Wednesday to eliminate state agencies -- the layer of bureaucracy that oversees state departments -- and the Office of the Secretary of Education. Gov. Schwarzenegger began laying off 5,000 rank-and-file workers. The committee asked the Legislative Analyst's Office to report on how much the Legislature could cut.

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The election results for chapter officers and delegates to Delegate Assembly and General Council are here by chapter (in pdf format): Chapter 502; Chapter 503; Chapter 504; Chapter 505; Chapter 507; Chapter 508; Chapter 509; Chapter 511; Chapter 512; Chapter 513; Chapter 514.

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Gov. Schwarzenegger spoke to a joint session of the Legislature Tuesday to defend his harsh budget cuts. Along with a 5 percent pay cut for state workers, he wants to eliminate Cal Grants and welfare-to-work, close 220 parks and cut the school year by seven days. Sacramento Bee story here.

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According to an article Sunday by State Worker columnist Jon Ortiz, Gov. Schwarzenegger is "virtually certain" to cut state workers' paychecks -- again. Will it be with Legislature approval or will the governor order another emergency furlough day? In related articles, on Saturday The Sacramento Bee probed the question: Is the dramatic cutting a "giant bluff"?

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State Controller John Chiang has sent a letter to the governor and legislative leaders warning them that California will not have the cash it needs to meet its payments beginning July 29. On July 31, the cash deficit will reach $1.3 billion. Chiang urges lawmakers to address the shortage immediately. Not to do so, he writes, would "do immeasurable harm to our economy" and "create an even greater fiscal hardship for Californians." The state has not had a positive cash balance since July 12, 2007.

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The Sacramento Bee reports the governor plans to propose yet another 5 percent paycut -- this time without giving a day off -- on state workers today. The move would save $500 million in next year's budget, the governor's office said.

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To ACSS members: If you attended Lobby Day and have not turned in your expense claims, please do so immediately. We must report all Lobby Day expenses to our political action committee administrator. If you do not have a Lobby Day expense form, designated for this event, you can get one at headquarters by calling 800-624-2137. We have already extended our reporting deadline and it is crucial to get these forms in as quickly as possible. Mail them to: ACSS Headquarters, 1108 O St., Sacramento CA 95814.

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State Worker columnist Jon Ortiz punctures holes in the common perception that state workers are pampered and overpaid. For example: Think all state workers retire into luxury? Think again. Their average pension is $27,000 a year.

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In addition to slashing funds for schools and laying off 5,000 more state workers to help close the projected $24.3 budget gap, Gov. Schwarzenegger has proposed shutting the state's main welfare program, releasing nonviolent prisoners a year early and closing up to 80 percent of state parks.

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The California State Teachers' Retirement System, in the face of a $22.5 billion funding gap, may ask the Legislature for higher pension contributions from the state, school districts and teachers. Unlike CalPERS, CalSTRS needs legislative approval to impose rate hikes. At least one legislator has suggested raising the retirement age as a way of lowering expenses.

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The Sacramento Bee Capitol Alert reports Gov. Schwarzenegger today announced $5.6 billion in additional cuts, including cutting the CalWORKS program. Dropping the state's welfare-to-work program would save the state $1.3 billion.

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Despite the results of Tuesday's election, SEIU Local 1000 continues to press for passage of AB 964, its proposed employment contract, and to promote cost-saving solutions for California. The MOU failed on its first vote in the Assembly.

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The Legislative Analyst's Office released two sobering reports in the past two days. The "Overview of the 2009-10 May Revision" includes among its money-saving suggestions a third furlough day for state workers, extended through 2011, and the defeat of the proposed SEIU contract. The document also warns the administration's projected $21 billion shortfall may be too low by about $3 billion. "California's Cash Flow Crisis" gives the picture of the state's cash problems in graphic detail.

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The DPA's Layoff Manual, with detailed and technical information on state civil service layoffs, is posted online. The manual is subdivided into separate pdf sections. This manual adds depth to ACSS' "Facing Layoff?" booklet, which gives you information in an easy-to-understand format. A DPA overview of the layoff process is here.

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The State Worker columnist tries his hand at finding positions laid-off employees might transfer into. The result seems to be: not easy, not many. To keep up to date on layoff commentary and information, check columnist Jon Ortiz's blog.

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Associated Press reports that Gov. Schwarzenegger will now look to close California's budget gap with cuts alone. He plans to meet today with state lawmakers to discuss options, which include cuts in education and health care and transferring prisoners to local and federal prisons.

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From The Sacramento Bee: An independent commission voted 5-1 today to impose an 18 percent pay cut for statewide elected officials and all members of the Legislature. The commissioners said they were influenced by Gov. Schwarzenegger's announcement of 5,000 state job cuts and the results of yesterdays election.

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California's voters shouted their feelings yesterday on the handling of the budget crisis by defeating each of five propositions with nearly a two-thirds margin and approving the sixth -- a measure that would freeze legislators' salaries in bad budget years -- by 74 percent.

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Republican gubernatorial candidate Meg Whitman -- former president of eBay -- will cut 10 percent of the state's workforce if she's elected, she told CNN yesterday. The State Worker blog reports the story and links to the interview.

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If you've received a layoff notice or expect you might be laid off, ACSS’ booklet, "Facing Layoff?" is full of information that could help you understand the process and your rights. We’ve just uploaded a 2009 PDF version. If you’d like a copy of our older printed version, email lholderness@calcsea.org. If you are an ACSS member and need advice or representation, call 800-624-2137. You also may be eligible for financial assistance from ACSS. The information on this program is on this site under Financial Assistance on the Labor Relations page.

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Notices of layoffs went out to about 5,000 workers Friday, reports State Worker columnist/blogger Jon Ortiz. Corrections, with 3,600 notices, and Health and Human Services, with 1,000, took the biggest hits. Further down, the State Worker links to the Next 10 interactive budget game -- you decide how to balance the state budget.

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State Worker columnist Jon Ortiz captures the outrage of state workers faced with layoffs -- after paycuts and reduced holidays. "Why does everybody want to take it out on me?" one state worker asks.

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In breaking news, Gov. Schwarzenegger has announced he will lay off 5,000 state workers. We will update this item after the governor's budget presentation this afternoon. 5 p.m. update: Other cuts include shortening the school year, releasing thousands of undocumented immigrants into federal custody, eliminating funding for drug and alcohol treatment programs. May 15 update: A more detailed story with quotes.

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Gov. Schwarzenegger is expected to propose today selling seven state properties to raise money to help solve the budget crisis. The seven: The Los Angeles Coliseum, San Quentin Prison, Cal Expo State Fairgrounds in Sacramento, the Cow Palace, the Del Mar Fairground, Orange County Fairgrounds and Ventura Fair. The sales could bring in more than $21 billion.

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