• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

Furloughs cost Calif. more than they save?

February 16, 2010 12:00:00 AM PST
California could end furloughs for tens of thousands of state employees if a new jobs bill wins approval from the legislature. The furlough bill has already passed one test.A new state Senate audit found that California is losing out on hundreds of millions of dollars by furloughing state workers from revenue-generating departments.

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

"The administration used a sledgehammer when they should have used a scalpel," said state Senate President Sen. Darrell Steinberg (D-Sacramento). "And in many instances, this furlough policy is Exhibit A of 'penny-wise and pound foolish.'"

Over at the California Department of Motor Vehicles, 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.

It's often frustrating for them to see the millions tax evaders owe, while they endure a 15 percent pay cut during furloughs.

"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," said Renee Lee, tax technician, California Franchise Tax Board.

The governor 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," said Gov. Schwarzenegger.

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