Are Furloughs Better than Layoffs for State Workers?
What happens if lawmakers do not approve a budget by the June 30 deadline? That’s a question no one at the statehouse seems to have a clear answer to just yet. Governor Tomblin and his staff, though, are taking steps to prepare for the worst-case scenario -- a government shutdown.
“Should we not have a budget then June 30, every state employee would lose their job,” Tomblin said.
Theoretically, Tomblin said that’s what the result of not having a budget could mean by the end of the fiscal year. That’s why the governor is asking lawmakers to approve Senate Bill 1006, a bill that would give him the authority to furlough state employees, or schedule them for mandatory days off without pay.
“What this would do is allow the governor in a case where there is no budget, no funding mechanism, or if there’s not enough money to make it through the year, to be able to furlough employees,” he said. “That may be a day, a month a day a week, whatever the need may be to balance it out.”
The bill is currently before the Senate Judiciary Committee where several members have concerns over its provisions, like Democratic Sen. Mike Romano of Harrison County.
Romano said he can’t support the bill in its current form because it prohibits furloughed employees from being eligible for income assistance programs like unemployment or low-wage benefits.
“We have to make sure that our employees can put food on the table,” Romano said.
“We are not here to save money off the backs of people that are making $30-40,000 a year and that’s what that bill does. What we need to make sure of, is that if we have to furlough employees that they are eligible for unemployment benefits so that their families can be fed and they don’t miss mortgage payments and their cars don’t get repossessed and their kids can go to school. That’s got to be our top priority.”
But Senate Judiciary Chair Charles Trump, a Republican from Morgan County, said amending the bill to allow employees to apply for those benefits might defeat its purpose, saving the state money.
Romano suggested laying employees off rather than furloughing them might be a better option, but Joe Thomas, assistant director of the West Virginia Division of Personnel, explained to the Senate Judiciary Committee layoffs can actually be more expensive for the state and lead to the loss of several benefits for employees.
State workers who are laid off are entitled to unemployment benefits, but they also receive a cash payout for back pay and built up vacation time, according to Thomas. Laid off employees who are not rehired within 30 days also risk losing their health insurance, seniority, and built up sick leave.
“I would be coming back as a brand new employee,” Thomas said of laid off state workers who return to their jobs.
“I believe the bill, if used effectively, could result in an employee missing one day per week, one day per month of work and not completely losing their job. If that was true, I believe that would be more effective from the employee’s perspective because they would get to continue their benefits, their insurance, they wouldn’t have a break in service,” he told the committee.
Because state workers are entitled to those benefits when they are fired, Chairman Trump said relying on layoffs will likely be more expensive for the state in the short term.
That notion played out following the 2015 legislative session when lawmakers approved a bill that would have transferred Cedar Lakes Conference Center in Jackson County to a non-profit entity.
Tomblin vetoed that bill saying in his veto message paying out employees of the conference center for their separation costs would have been too cumbersome for state taxpayers. It was better for the state to continue to pay to operate the conference center at a slight loss than to lay off its workers.
Trump said he and his staff are looking for potential fixes to the bill to make it more palatable for all members, but said the majority party does recognize that without a budget by June 30, there will be many more problems facing the state.
“I think that based on that language in the Constitution, if we enter a new fiscal year with no budget, there’s no authority for anybody in state government to write a check to anybody,” Trump said. “So, we have to have a budget.”
“Literally, I think unless we have a budget there is no authority for anybody to get a check from the state.”
Senate Bill 1006 also includes a provision that would allow the governor, in cases where there is no budget, to use revenues coming in to the state to make debt payments on bonds.
Some members of the committee worried the provision is unconstitutional, and Trump said they will continue to look at that provision as well.