Local Politics

Bill would allow furloughs of state workers

Posted March 20, 2009 1:06 p.m. EDT
Updated March 20, 2009 7:30 p.m. EDT

— Some lawmakers are backing a bill to allow furloughs of state employees in an effort to avoid the prospect of layoffs as the budget deficit grows.

House Bill 708 would enable the governor, the Supreme Court chief justice and legislative officials to place people on temporary, unpaid leave to save money when "significant" deficits are projected. The furloughs would be a "last resort," according to the bill.

Gov. Beverly Perdue has recommended eliminating more than 1,000 government jobs to help erase a projected $3.4 billion deficit for fiscal 2009-10, which starts in July.

Lawmakers say they find the idea of furloughs more palatable than layoffs, but Perdue said furloughs suggest a poor state economy and would hurt the state's efforts to recruit business.

"She would prefer not to go down that path because she thinks it doesn't send the right signal. She doesn't want to send a signal that portions of state government aren't operating at any given time," Perdue spokesman David Kochman said.

Rep. Rick Glazier, D-Cumberland, a primary sponsor of the bill, said furloughs could save the state $130 million to $140 million a year. The unpaid days could be rotated through departments so that services aren't affected, he said.

At least nine states have proposed furloughs to help ease tight budgets. Forty-six states face budget shortfalls this year.

University of North Carolina President Erskine Bowles and chancellors of the system's 16 campuses have already requested legislative approval for furloughs to avoid cutting faculty and staff and, in turn, damaging academic programs.

The UNC system would receive $168 million less than expected in the next fiscal year under Perdue's budget recommendations.

Bowles said furloughs could save jobs – he couldn't provide an estimate – and would put North Carolina in better shape when the recession ends.

"I think our people would a lot more prefer to give up a couple of days' pay, as opposed to seeing us lose some of the people they work beside who we are going to need when we come out of this recession," he said. "There's a lot of cost in letting somebody go, and there is more cost in recruiting them to come back."

The UNC Board of Governors voted Friday to eliminate 76 degree programs across the university system. Most were cut because of low enrollment, but Bowles said budget considerations did factor into the decision on some of the programs.

"You will see more of that in the year to come because we simply can't afford to be all things to all people,” he said.

Under the House bill, employees could take up to 20 unpaid days per year. "Essential employees" would be exempt from furloughs, as would anyone earning less than $30,000 a year.

More than 95,000 employees are subject to the State Personnel Act, including 23,600 at universities.

A furloughed employee would still be covered by the State Health Plan and wouldn't lose any accrued benefits in the state retirement system, according to the bill.