Furloughs For Everyone

As the State is grappling with balancing the FY 2010 budget  local governments are also trying to find ways to shore up their fiscal houses.  City and county governments have already had to contend with their 2009 budget cycles and continue to bleed red ink as the recession strains revenue collections.

Staffing costs are the largest component of local government budgets.  A county such as Cuyahoga for example spends as much as sixty percent of its operating dollars to pay employees and provide them with fringe benefits.  Thus any meaningful action that can be undertaken to plug a budget deficit has to involve reducing those people related costs.

The method of last resort is laying off of employees.  Hamilton County , deep in financial distress has already laid off hundreds of people and plans canning more staff this year.  Other counties such as Summit and Cuyahoga  have implemented early retirement programs, the good natured cousin of the lay off.

The relative newcomer to the staffing cut arsenal is the furlough or unpaid leave. Previously, furloughs were a creature of the manufacturing sector.  A plant shuts down for a few weeks and the workers get a paid or unpaid vacation.  The furlough concept is gaining ground as a budget reduction mechanism in the white collar world.  A recent WSJ article highlighted the benefits of using furloughs to cut costs:

Amid the steep job losses, some managers and advisers are touting alternatives to layoffs, including furloughs, pay cuts and reduced workweeks. Some economists say these alternatives slow the recession's downward spiral by preserving jobs, albeit at lower wages.

Some counties in Ohio  are moving to employ furlough programs to check budget deficits that continue to grow unabated.  The only catch has been that O.R.C. does not permit County employees not covered by a bargaining agreement to be furloughed.  Yet another example of the outdated and inflexible means in which county government is organized in the Buckeye State.

In response to the need of counties to have the option of unpaid leave a provision is being tailored for insertion into the Senate version of the budget bill.  The County Commissioner Association of Ohio  has been working on the furlough amendment and plans to have something ready for the Senate bill this month.  Inclusion of the amendment would permit county governments to furlough employees as a cost cutting measure. Of course the deeper the fiscal mess faced by any individual county the more likely lay offs will be necessary. 

Uh, Yeah ...you're going to have to come in on Saturday to make up that furlough time.