In the midst of a budget crisis last year, Governor Arnold Schwarzenegger mandated furloughs for state workers. Employees who held positions that were deemed critical, such as state prison guards, were given permission to bank furlough days. This means that workers could cash in on the days they were forced not to work. In essence, furloughs were treated as unused vacation days for corrections workers. New research is indicating that this move only exacerbated an unresolved budgeting issue.

Prison guards have been instructed to cash out their furlough days before tapping into leave time. The result has been a rapid accrual of banked vacation days by prison guard union members since furloughs kicked into high gear. As a Legislative Analyst's Office report suggests, Gov. Jerry Brown has now increased the obligation problem by lifting the cap on the amount of unused vacation days a state prison employee can save. Generally, state workers are permitted to collect 80 days worth of unused vacation, but if one examines the California Correctional Peace Officers Association labor contract recently signed by Gov. Brown, they will find a provision which lets workers cash in on an unlimited amount of saved vacation days.

In 2009, a state Senate investigation found that corrections workers were banking vacation days at five times the rate of the pre-furlough era. How big is this often overlooked cash liability for the state? Chase Davis of California Watch writes:

     “Our investigation last year showed that over a three-year period from 2006 to 2009, retiring state workers cashed out nearly a half billion dollars in unused vacation. At least $100 million of that, and probably much more, was for vacation in excess of the state's 80-day cap...The corrections liability is even higher. As the [Los Angeles] Times pointed out, the average corrections worker has accumulated about 19 weeks of unused leave, creating a cash liability of more than $600 million that is virtually guaranteed to grow.”

Keep in mind that retiring state workers who cash out their leave time are reimbursed at their most current pay rate. It follows that vacation days banked early on in a state worker's career become more valuable over time.

The LA Times ran a story which focused on the fiscal impact of corrections officers who routinely exceeded the cap on banked vacation days. Owing to this practice, some corrections workers were rewarded with six-figure payouts upon retirement. Here are some interesting facts from that article:

     More than 3,500 corrections officer union members had more than 80 days of unused vacation and annual leave at the end of 2010, said Jacob Roper, a spokesman for the state controller's office.

     Even with the cap in place, it was not enforced, said Oscar Hidalgo, spokesman for the California Department of Corrections and Rehabilitation. Last year, corrections led all state departments in end-of-career payments for unused vacation and sick time, totaling $111 million, according to state payroll data.

     In all, 80 corrections union members got payouts exceeding $100,000 when they left state service in 2010. In most cases, those payments were well beyond the employee's annual salary.

     The average payout for corrections employees taking lump sums was $24,994. But one $97,000-a-year parole agent received a $268,990 payment for unused time off, the controller's records show. A $119,000-a-year prison administrator took away $243,308. A $70,000-a-year parole agent got $176,493.