From: Funderburk, Dale C. Jr.

Sent: Friday, March 20, 2009 9:12 AM

Subject: FW: Clarification of budget and furlough information

From: DePaolo, Rosemary
Sent: Monday, February 09, 2009 4:37 PM
To: FAC&STAFF
Subject: Clarification of budget and furlough information

Given recent media coverage this past week, it’s not surprising for me to hear there is continued concern and considerable speculation about the budget, most particularly, about the possibility of furloughs.  The key word here is “speculation,” but that said, here are a few points that I would like to try and clarify:

Budget Reductions

We do not expect to have to make any further reductions to this fiscal year’s budget, which ends June 30, 2009.  Recent media reports about possible 3%, 5% or 7% budget reductions are in reference to the Governor’s request that each agency and university develop budget reduction scenarios for the biennial budget that begins July 1, 2009 and ends June 30, 2011.  We have developed preliminary plans and continue to refine them with the help of the deans and vice chancellors.  Open budget forums are scheduled at the Lumina Theatre on Wednesday, February 25, 2009, at 10:00 a.m. and Thursday, February 26, 2009, at 2:30 p.m. where we will discuss this in more detail.

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      Furloughs

A furlough is a period of time during which a person is relieved of all job duties and is not required to come to work nor is allowed to work from home.  Sometimes furloughs are used as a means for avoiding a permanent reduction in staffing.  The salary that would normally have been paid to an employee is deducted from an individual’s total pay.  Such a deduction is often spread across several pay periods in order to minimize the financial impact on an individual’s regular take-home pay.  Contrary to popular belief, paid leave (vacation, sick, etc.) cannot be used as a substitute for a furlough, because the purpose of a furlough is to reduce the state’s payroll expenditure.

If the furlough practices at other states are any indication, individuals with the appropriate approval would be able to choose which day or days they wanted to schedule as furlough.  Some states also have developed a graduated scale for the number of days state employees have to take, based on salary levels.  For example, individuals making higher salaries might be required to take the highest number of days of furlough, while employees making below a certain salary might not be required to take any days at all.   There is considerable variation among the plans being implemented by states throughout the country.

Most importantly, while furloughs may be considered by the General Assembly as one method for addressing a shortfall in the state’s revenue, at the present time, there is no authorization under North Carolina law that allows furloughs of state employees. Therefore, until the General Assembly initiates some furlough legislation, debates the issue and makes a decision, it’s impossible to know whether furloughs will become a tool the state can use to alleviate budget shortfalls or what specific rules might be legislated. 

If the General Assembly were to authorize furloughs, I am confident there would be ample notice to state employees before any implementation would take place. I am also confident strict parameters would be established to ensure fairness to employees, as well as consistency among the various state agencies. 

Please raise any additional questions you may have about the budgets or furloughs at one of the budget forums. If you are unable to attend one of the forums, however, please feel free to discuss any concerns you might have with your supervisor. As always you may ask any questions about our budget reduction plan by writing to VCBA@UNCW.edu Meanwhile, if new  information is forthcoming, I will update you.  Thank you for your patience and understanding in the months ahead as our legislators wrestle with the best solutions for addressing the economic challenges facing North Carolina. 

Sincerely,

Rosemary DePaolo