More grim news Wednesday for state workers: California's general fund faces a $21 billion deficit through the middle of 2011. The red ink could flow for years to come, according to a forecast by the nonpartisan Legislative Analyst's Office.
The state's 200,000 or so workers, already taking a 15 percent pay hit from three furlough days per month, knew this was coming. What does the state's rotten financial picture mean to them?
• Real job cuts. Gov. Arnold Schwarzenegger already has ordered 7,000 jobs eliminated from the deficit-ridden general fund. And as this column reported a few months ago, the administration has run scenarios cutting another 5,000.
Schwarzenegger spokeswoman Rachel Arrezola said Wednesday that it's "likely" that the governor will look at employee compensation expenses as part of a wide range of cuts for the 2010-11 budget.
• Fewer transfer options. In the past, a state worker facing layoff could figure on sliding into an open position safe from budget whacking. But the state's finances have been so bad for so long that many departments swept out their vacant slots and have tightened hiring.
Teacher Cindie Fonseca has worked 16 years for the California Department of Corrections and Rehabilitation. It's laying off about 700 prison educators in January. That's about half of the state employees in that job class.
"We've never had this many people facing layoffs," said Fonseca, so competition is fierce for what few openings exist.
Some workers will "bump" others with less seniority, but many will resign, retire or take the layoff. Fonseca is a union labor rep – and one of the people getting axed early next year.
• No raises. The LAO forecast "assumes virtually no growth in employee costs through 2014-15." That's not a recommendation or a prediction of what lawmakers will do, but it's a distinct possibility.
• Deteriorating workplace morale and trouble recruiting and retaining good help. State workers haven't received a cost of living adjustment in years. A freeze for another five "could affect departmental operations negatively in various ways," Taylor's report said.
• A furlough extension? LAO state work force analyst Diego Martin said the forecast assumes furloughs will expire in June based on "everything we've understood from the Governor's Office."
But Arrezola didn't take a furlough extension off the table.
"We don't know yet what shape (the cuts) will take," she said.
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