State Worker Salaries: 11 Days of Savings
BUDGET DAY PLUS 43 -- The administration of Governor Schwarzenegger has some new estimates on how much money could be saved by implementing the executive order on state worker salaries. And those numbers seem to indicate that the order, if fully implemented, would pay for about 11 days of state government operations.
That estimate is an attempt to provide some context to the most contentious battle being waged as part of the budget impasse. And it was arrived at by using the new savings estimates, as well as data from the office of Controller John Chiang, and some old fashioned math.
So here's what we know:
After the layoffs of 10,133 part time and temporary workers, the state work force impacted by the governor's executive order stood at about 235,000.
Some of those folks would be paid only $6.55 for every hour worked this month. Managers would receive more, but not their full salary. And about 7800 professional employees (attorneys, some physicians, and others) would receive zip because they're reportedly not subject to federal labor protections.
Add up all of those savings... and then add up the cost of exempting about 59,000 employees from the salary reduction (more on that in a moment)... and administration officials now say you're left with a state savings of $764 million a month.
Next, add in the savings from the layoffs (reported here earlier) of $19.7 million a month, and then throw in the ban on overtime for an estimated additional $21.9 million in savings.
Got a calculator handy? That works out to $805.6 million in savings to the state. Now, the context.
Data from the controller's office shows that state expenses vary from month to month. So in the interest of fairness, let's take the total cost reported of 2007-08 state operations and divide it by 12 to get an average monthly figure.
The result: approximately $2,236,185,000 spent to keep state government running for a month. Now divide that by 31 days in August, and we can reasonably assume state expenses run about $72.14 million per day.
That means the savings from the layoffs, minimum wage, and overtime ban would appear to pay for about 11 days worth of state operations.
Now, some caveats. First, these are only averages. Second, the administration also is scoring a savings from the executive order's hard freeze on new employee hires of $6.7 million a month; add that in, and you might save enough money for an hour or so of a 12th day of state ops.
But remember, too, that the 59,000 state workers exempt from the salary reduction is almost certainly going to increase.
Why? Because almost two weeks after the governor signed the order, we still don't know how many of the 66,000 employees of the Department of Corrections and Rehabilitation will be allowed to keep getting their full paycheck. It could mean significantly less savings; remember that the current estimate of $805.6 million in savings was originally projected to be $1.2 billion.
And that would mean less than 11 days of savings -- that is, should a judge ultimately force Controller Chiang to implement the governor's executive order... and, if the budget impasse continues long enough for all of this to actually have to become reality.
