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CA in jeopardy of losing millions from furloughs

February 16, 2010 6:03:54 PM PST
State lawmakers are now questioning whether a move designed to save money is actually causing California to lose money. It has to do with those furlough Fridays and the employees who collect taxes and fees.

Even though Senate President Darrell Steinberg voted for the furloughs in 2009, he now says it's time to take tens of thousands of state workers off furloughs.

A new Senate audit found that California is losing out on hundreds of millions of dollars by furloughing state workers from revenue-generating departments.

The Franchise Tax Board, for instance, is supposed to collect taxes, but the report says every dollar saved in worker pay, costs the state $7 in uncollected taxes.

"The administration used a sledge hammer when they should have used a scalpel. And in many instances, this furlough policy is Exhibit A of penny-wise and pound foolish," Sen. Steinberg said.

Over at DMV, which collects license and vehicle registration fees, workers are furloughed three days a month too, forcing average wait times to balloon from 27 minutes to 45 minutes and costing the state even more in uncollected money.

The Senate Public Employees and Retirement Committee unanimously passed a bill that would end furloughs for state workers whose job helps California bring in money. It comes at a time when the state needs every penny to avoid more devastating budget cuts.

Franchise Tax Board employees think that's a good move.

"They need to untie my department's hands, so we can go after the money. We know where the money's at. We just need to go get it," Renee Lee from the California Franchise Tax Board said.

Governor Arnold Schwarzenegger signed an executive order mandating the furloughs a year ago. He's not sure whether he'll approve the bill to bring back revenue-generating employees. He says furloughs are saving the state $1.3 billion during these tough times.

"The furloughs were not something we would have done in this budget crunch. But there are certain things we have to do in order to live within our means," he said.

Schwarzenegger also has to weigh whether it's even worth signing the bill. Furloughs end June 30, but Sen. Steinberg says a lot of money can come in four months.


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