State Worker columnist Jon Ortiz gives the specter of 7,000 state layoffs a new perspective in this morning's column. In the past, he says, announced layoffs resulted in few jobs actually being lost. Six years ago, 9,100 jobs were eliminated but -- through transfers, demotions, retirements and the like -- only 291 employees lost their jobs. The same thing is happening again, a Legislative Analyst Office spokesman said.

A Democratic senator has questioned whether the governor's furlough is cost-effective after the Franchise Tax Board and Board of Equalization acknowledged the furlough will cost the state $350 million in revenue, The Sacramento Bee reports. The report prompted one state worker, facing foreclosure, to comment, "The third furlough day is killing people." In a separate development, Sen. Dianne Feinstein asked the governor to stop the furloughs for state employees who review Social Security disability applications.

ACSS Secretary-Treasurer Terry Sutherland is quoted in State Worker columnist Jon Ortiz's article Sunday revealing that state retirements rose 13 percent in the first half of this year compared with the same period last year. Sutherland, a CPA with the Franchise Tax Board in the Bay Area, says that with the reduction in pay from the furloughs he will make more money as a retiree. "I just can't afford to subsidize my job any more," he says. He will retire in November.

A Sacramento Bee editorial this morning supports greater scrutiny of the state's contracts with private vendors. Although the newspaper does not support doing away with outside contracting, it does support requiring contractors to report their reasons for issuing contracts (as proposed in AB 756, which SEIU supports). You can look up any state contract over $5,000.

CalPERS has sued Gov. Schwarzenegger and other state officials saying the furloughs are jeopardizing CalPERS' ability to service California's retirees. The suit claims furloughing CalPERS workers does not save the state money because employees are paid from internal sources. CalSTRS did not sue but did ask state Controller John Chiang for relief from the furloughs.

WhenState Worker columnist Jon Ortiz asked for specifics on the governor's layoff plans, he got more than he'd expected: A spreadsheet showed not 7,000 layoffs but as many as 12,000. Ortiz lists the reasons the governor would probably choose more layoffs over a fourth furlough day to cut more costs.

In a letter to California's congressional members, CalPERS is urging Congress to quickly overhaul the nation's health care system, The Sacramento Bee reports. Without reform, the letter, signed by CalPERS President Rob Feckner and CEO Anna Stausboll, said, "we will not be able to sustain our health care system." CalPERS is the nation's second-largest buyer of health care services. The CalPERS press release is here.

A Sacramento Bee editorial reports that a top CalPERS official is calling the state's pension plan costs "unsustainable."

Legislators will vote Thursday on a plan back by Gov. Schwarzenegger to reduce the state's inmate population by 27,300. Included in the package are proposals to reduce some property crimes to misdemeanors, placing low-level parolees on GPS monitoring and sending inform prisoners to medical facilities or house arrest. The move would save the state $1.2 billions, the Sacramento Bee article reports.

Gov. Schwarzenegger has revived his proposal to create a two-tier system for state retirement that would give lower benefits to new hires (current employees' retirement benefits would not change). With CalPERS and CalSTRS struggling financially, the governor may now gain a foothold for this idea, which has been consistently defeated in the past. At least 10 states have cut benefits for new hires, the Sacramento Bee article reports.

Associated Press reports this morning that, despite the budget crisis, at least 87 Assembly staff members and nine Senate staffers have received raises this year totaling well over half a million dollars. Some of the increases were more than 20 percent. In some cases, the increases were given to compensate for extra hours of work, spokespersons said.

State Controller John Chiang announced yesterday that California will not only stop using IOUs for payments beginning Sept. 4 but will also redeem IOUs with interest that day. The move will end a "shameful chapter in our state's history," he said.

State Controller John Chiang has announced he will stop issuing IOUs Sept. 4, a month earlier than previously projected. Ending the IOUs, Chiang said in a press release today, "does not bring an end to our fiscal challenges." The press release includes a link to a graph of California's cash outlook.

Senate President Pro Tem Darrell Steinberg will discuss his lawsuit against Gov. Schwarzenegger today at 2 p.m. at the Mission Neighborhood Health Center in San Francisco. Sen. Loni Hancock will also attend the talk.

Gov. Schwarzenegger's administration has spent $228,000 on furlough litigation so far, Jon Ortiz reports in his State Worker column this morning.