California Supreme Court Hears Arguments on Furloughs, Vetoes

On Wednesday, the California Supreme Court heard arguments about the legality of furloughs that Gov. Arnold Schwarzenegger (R) has imposed on more than 200,000 state workers, the Los Angeles Times reports.

Background

In 2009, Schwarzenegger ordered the furlough program to run through June 2010 because the state was running out of funds. Last month, the governor issued a new furlough order to conserve funds during the current budget stalemate (Dolan, Los Angeles Times, 9/9).

The latest furlough order affected workers represented by Service Employees International Union Local 1000, but exempted certain unions that previously reached labor deals with Schwarzenegger. Among the exempted unions is the Union of American Physicians and Dentists, which represents 1,800 state employees (California Healthline, 8/16).

The forced unpaid days off angered labor unions and led state employees to file more than 30 lawsuits questioning the legality of the program (Los Angeles Times, 9/9).

In total, the furlough program has reduced payroll spending by about $3 billion. Each furlough day is equivalent to about 5% of a state employee's monthly salary (Ortiz, Sacramento Bee, 9/9).

Lower courts have been divided over the legality of the furlough order (Los Angeles Times, 9/9).

Issues at the Hearing

Wednesday's 90-minute hearing allowed all seven members of the state Supreme Court to probe those on both sides of the issue. The justices honed in on two major points:

Whether the furloughs are an extension of the governor's authority to lay off state workers; and

Whether legislators implied that they recognized -- and therefore legalized -- the furlough program in 2009 by accounting for the reduced spending in the state budget (Ortiz, Sacramento Bee, 9/8).

Arguments on Legality of Furloughs

An attorney for Schwarzenegger said the governor has the legal authority to impose the unpaid days off because he acts as the state's CEO (Los Angeles Times, 9/9).

However, Patrick Whalen -- an attorney for California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment -- said that instead of issuing the furloughs, the governor could have:

• Negotiated with labor unions;
• Laid off workers; or
• Frozen state spending on hiring, travel or overtime.

Whalen said such actions would have complied with state law (Richman, San Jose Mercury News, 9/8).

Chief Justice Ronald George said that California law permits the governor to lay off state employees during financial crises, noting that the same law might implicitly authorize furloughs as a "less drastic measure" (Egelko, San Francisco Chronicle, 9/9).

Questions About Legislative Approval

During the hearing, George also asked Whalen whether it was "purely coincidental" that in February 2009 legislators passed a budget that included a reduction in state spending on employee costs. The reduction equaled the amount that Schwarzenegger said the state would save by initiating the furloughs.

Whalen said the amounts mentioned were the same, but legislators did not intend to repeal layoffs and labor bargaining.

Senate President Pro Tempore Darrell Steinberg (D) has said that lawmakers did not approve the state employee cost cuts to allow the governor to impose furloughs (Sacramento Bee, 9/9).

Line-Item Veto Issues

On Wednesday, the high court also heard arguments about a separate case involving the governor's line-item veto power.

In 2009, Schwarzenegger used line-item vetoes to cut almost $500 million in legislative appropriations from the budget package (San Francisco Chronicle, 9/9).

Schwarzenegger's vetoes reduced funding for health and social service programs such as Medi-Cal, In-Home Supportive Services, Healthy Families and HIV/AIDS services. Medi-Cal is California's Medicaid program and Healthy Families is the state's Children's Health Insurance Program (San Jose Mercury News, 9/8). 

George said that reducing legislative spending is a "tool given to the governor" because the state Constitution requires a balanced budget.

Next Steps

Decisions on both the furlough and line-item veto cases are expected within 90 days (Los Angeles Times, 9/9).

However, legal experts expect the court to issue a ruling much sooner (Sacramento Bee, 9/8).

Broadcast Coverage

Headlines and links for broadcast coverage of the furlough case are provided below.

• "Calif. Supreme Court to Decide Legality of Schwarzenegger's Furloughs " (Small, "KPCC News," KPCC, 9/8).
• "Furlough Case Heard by State Supreme Court" (Russ, "KXJZ News," Capital Public Radio, 9/8).