Nebraska Governor Orders Furloughs to Save $3.5M

Nebraska Gov. Dave Heineman on Friday ordered more than 11,000 state employees covered by union contracts to take two furlough days by the end of year, a move he says is needed "to avert as many layoffs as possible."

Heineman pointed to state revenues that lagged official projections by $76 million in the fiscal year that just ended, and worries revenues may fall short again this year, when ordering the furloughs. He said the furloughs will save the state about $3.5 million.

"As a result of the downturn in revenue and in order to avert as many layoffs as possible, it is prudent for the state to take additional action now," Heineman said in an e-mail to state employees. "Wages represent the largest cost for most agencies, and it is necessary to implement employee furloughs as the next appropriate step."

The state is facing its worst budget crisis in recent memory, with lawmakers bracing for a slash-and-burn legislative session next year when they may have to close a two-year budget gap of roughly $680 million.

Julie Dake Abel, director of the union covering about 10,600 of the more than 11,000 employees who will have to take furlough days, said employees weren't happy with the decision.

"But if this does save some jobs, furloughs certainly are preferable" to layoffs, she said. The state hasn't said how many jobs might be spared by the move, nor how many total layoffs there might be, she said.

Heineman spokeswoman Jen Rae Hein said those figures can't be predicted.

In June, union employees rejected Heineman's request to freeze their pay. Heineman said at the time that that rejection could cause hundreds of layoffs, and furloughs. A pay freeze would have saved roughly $15 million to $20 million.

Approximately 3,000 managers not covered by union contracts will have their pay frozen this fiscal year, which began July 1, saving almost $6 million.

Dake Abel said furloughs will siphon money from the sluggish economy and that Heineman and lawmakers need to consider increasing revenues, such as by increasing taxes on the rich.

Heineman has said repeatedly taxes should not be increased and there is little appetite in the Legislature to do so.

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Online:

Gov. Dave Heineman: http://governor.nebraska.gov