Could state furloughs prevent layoffs?

The unpaid furloughs that Gov. Tim Pawlenty seeks for state employees aren't part of his plan to close the state budget deficit, but they could be used to help avoid layoffs, a state official said Friday.

The proposal to give state workers up to 24 unpaid days off in each of the next two years "is not something that was figured into the governor's budget planning," said Curt Yoakum, spokesman for the state management agency. "It's just a possible tool that's not available right now, that might be used to avoid layoffs."

But many state workers aren't convinced that forced unpaid leave would foreclose the possibility of job cuts.

"No one is saying that if they furlough workers, they're not going to lay workers off," said John Sokatch, an enrollment representative with MinnesotaCare, the state health insurance program.

State negotiators introduced the idea of mandating unpaid leave for public workers last weekend during contract talks with AFSCME Council 5 and the Minnesota Association of Professional Employees (MAPE), the state's two largest public employee unions.

It's a lousy option but probably one of the better ones available right now, said John Budd, a human resources professor with the University of Minnesota's Carlson School of Management.

Losing two days a month, he said, is a better deal than 30 or 31 -- in other words, losing your job altogether.

On its website, AFSCME called furloughs "a bomb" among a number of "harmful take backs," including loss of a floating holiday and limited unpaid medical leave.

Union officials haven't said much more than that, citing an agreement with the state not to publicly discuss negotiations.

The furlough proposal is "something that's been floating around, and it truly is the fix of the day," said Jim Monroe, MAPE's executive director. "How was the concept received by the members? Not well."

Other states' plans

But state workers in Minnesota at least are getting a chance to negotiate furloughs in contract talks, Budd said. In cash-starved California, furloughs were unilaterally imposed by Gov. Arnold Schwarzenegger, a Republican, last month.

According to 2007 U.S. Census statistics, Minnesota ranks 10th among the 50 states in full-time state employees per 10,000 residents. Maryland ranks 33rd.

Under Maryland's plan, O'Malley will take a five-day furlough himself. It wasn't clear whether Pawlenty has factored himself or department heads into his proposal, but Budd said the symbolism of shared sacrifice is important even if furlough savings for a handful of top state officials don't add significantly to the bottom line.

Records on furloughs are somewhat sketchy, because people with unpaid leave remain on the payroll, said Steve Hine, research director for the state's Department of Employment and Economic Development.

"We're hearing fairly frequent reports of it being used to cut costs," Hine said. "But at the same time, we're hearing much more frequently of firms resorting to layoffs, too."

Different furlough structures

Pawlenty's proposal doesn't set a required number of furlough days, spokesman Brian McClung said. The plan would establish furloughs for up to two days per month for fiscal years 2010 and 2011, he said.

Many companies have turned to furloughs as "a creative approach" to saving labor costs without having to resort to layoffs, said Cliff Waldman, an economist with Manufacturers Alliance/MAPI in Arlington, Va.

"Employers are realizing that there's a cost to laying off workers -- unemployment insurance costs and morale and that sort of thing," Waldman said. "When growth returns, as it will, there is a kind of sense that it's really rough to get good people back again ... and labor realizes it's better than losing your job."

That's little comfort to Sokatch, who belongs to AFSCME, or Cathleen Cotter, a MAPE member and business analyst who collects child care for the Department of Human Services.

An annual furlough of 24 days, Sokatch said, is almost a 10 percent pay cut. His wife also works for the state. "We're not paycheck to paycheck, but we're pretty darn close," he said.

"Given the current budget climate, there's more and more demand for our services. Ultimately, our clients are children and families in Minnesota."