State’s offer of unpaid leave faces uncertain popularity

Indiana is offering state government employees voluntary unpaid leave, but it’s unclear how many workers might give up part of their paycheck during a recession to help the state save money.

Gov. Mitch Daniels announced the unpaid leave plan last week as part of a series of budget-cutting measures. State tax collections fell $309 million below expectations during the first four months of this fiscal year, prompting the cuts.

State workers who want to take the state up on its offer can request up to a month of unpaid leave, during which they won’t get paid but will continue to get benefits. Employees can request the leave however they want it: a day of unpaid leave every week, for example, or two weeks off in a row. It’s up to department supervisors to approve or deny requests and make sure state services continue.

The Daniels administration isn’t sure exactly how much the state might save or how many of the state’s 30,000 workers might take unpaid leave.

"Once we’ve given this a little bit of time and people know this option is there, we’ll have a much better picture," said Daniels spokeswoman Jane Jankowski. "Some people will see this as a way to help out during a difficult economic time and others won’t want to use it, and that’s certainly understandable."

Daniels said last week that unpaid leave might be especially attractive to workers in agencies that deal with seasonal work, such as the Department of Natural Resources.

"I’ve had a number of employees say to me this is something they might value," Daniels said Friday.

Voluntary unpaid leave is certainly better than the mandatory furloughs or layoffs that workers in other states have faced during the economic downturn, said David Warrick, leader of the union that represented state workers before Daniels took office in 2005 and stopped collective bargaining rights for state employees.

"Obviously people who need the money aren’t going to take off, but I think there will be some takers around the holidays," said Warrick, executive director of the American Federation of State, County and Municipal Employees, Council 62.

More than 20 states have tried using mandatory furloughs to reduce their payrolls without resorting to layoffs, according to an August report by the Rockefeller Institute of Government at the State University of New York in Albany.

"States are trying to cut costs without hurting services or employees too much," said Bob Ward, who heads the institute’s state finance research.

Indiana workers can request unpaid leave through the end of June, when the state’s fiscal year ends.

Daniels noted that Indiana is better off financially than many states. California, for example, furloughed more than 200,000 state workers three days a month earlier this year during a budget crisis, reducing their pay by about 14 percent.

Daniels said this latest round of budget-cutting measures — including unpaid leave, cuts by state agencies and no pay raises for state workers — is likely enough to fill Indiana’s current budget gap. But if revenues continue to fall below the projections, he said, all bets are off.

"Up to this point, we have managed economy in state government with few, if any, involuntary terminations, except for poor performance," Daniels said. "I can’t say that will remain the case here. We’re going to try our very best."