State Workers To Face Pay Cuts

70,000 Would Lose 3 Days' To 2 Weeks' Pay Under Furlough Proposal To Save $75 Million

August 25, 2009|By Laura Smitherman | Laura Smitherman,laura.smitherman@baltsun.com

About 70,000 state employees would see their salaries reduced under a furlough proposal from Gov. Martin O'Malley to save $75 million in the middle of the latest budget crisis.

The plan includes a shutdown of routine state government operations for five days around holidays, including the Friday before the coming Labor Day weekend.

The highest paid employees - those earning more than $100,000 a year - would lose two weeks' pay. Lowest-paid workers would be docked for three days. Salaries would return to current levels next year.

The American Federation of State, County and Municipal Employees, the largest state worker union, decried the proposal, saying O'Malley shouldn't balance the budget "on the backs" of workers. Still, union director Patrick Moran said the furlough plan is preferable to layoffs, which would have been "unthinkable."

The $75 million in savings from furloughs equates to roughly 1,500 in layoffs. Moran, who has been involved in negotiations with the governor's office, said an initial proposal had called for 2,500 layoffs.

O'Malley, a Democrat, plans to outline today a package of $470 million in budget cuts, which includes the furloughs, and to seek approval from the Board of Public Works on Wednesday. Documents detailing the furlough plan were obtained by The Baltimore Sun.

Budget Secretary T. Eloise Foster, in a letter to labor officials, said the state would "give appropriate consideration in future negotiations to the sacrifices made by state employees." She said the state would be willing to consider additional cost-of-living increases, paid leave days or other concessions.

"We anticipate that at some as yet undetermined future date, the national and state economies will recover," she wrote. She called the furloughs "painful but necessary" budget reductions.

Because elected officials can't be forced to take midterm salary reductions under the state constitution, the governor and Lt. Gov. Anthony G. Brown plan to pay out of pocket for the equivalent of 10 days' pay, according to an aide.

The governor has been in budget-cutting mode for much of his term that began in 2007, as the economy slid and tax collections stalled. The latest round comes just one month into the new budget year.

Republicans have complained that the governor should have acted more decisively to bring spending in line with revenues earlier.

House Republican Leader Anthony J. O'Donnell, from Southern Maryland, said it's "fairly easy" for the governor to give up two weeks' salary. "But for those who are struggling to pay bills and put food on the table, two weeks' pay reduction is a big hit," he said.

Under the two-part furlough plan, state government offices would be shuttered for five days, including the days before Thanksgiving and Christmas, New Year's Eve, and the Friday before Memorial Day weekend.

Employees making more than $40,000 a year would not be paid for all of those days; workers making less wouldn't be paid for three days and would have to take vacation or comp time for the other two. Those pay cuts would be spread throughout the remaining 10 months of the fiscal year.

Through the second part of the plan, up to five additional furlough days would be required according to a sliding-income scale. Those making less than $40,000 a year would be exempt. Those earning between $40,000 and $50,000 would take another three unpaid days. Earners who make between $50,000 and $100,000 would take four days, and those with salaries above that would be docked five days. The unpaid days would be reflected in the pay period they are taken.

Unlike last year's furlough plan, which contained as many as five unpaid days depending on salary level, emergency personnel would be required to take some unpaid days. And this time, employees will be allowed to take additional voluntary furlough days or seek a 35-hour work week for less pay.

Moran also said labor officials were able to protect employee health benefits and pensions, and that the union worked to secure financial incentives for state employees using generic prescription medications.

Sen. David R. Brinkley, a Frederick County Republican on the Budget and Taxation Committee, said that while "there is pain to be felt across the board," the temporary furloughs don't address a systemic imbalance in the state's budget.

Baltimore Sun reporter Julie Bykowicz contributed to this article.

O'Malley proposal

State employee furlough and pay reduction plan, by income:

Less than $40,000: three days

$40,000 to $50,000: eight days

$50,000 to $100,000: nine days

More than $100,000: 10 days

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