Newsom administration to state officials: Find savings from permanent telework
Telework moved closer to becoming a permanent part of California state employment this week after Gov. Gavin Newsom’s administration told officials to reconsider building leases and find other permanent savings.
Finance Department Director Keely Bosler sent a letter to agency secretaries and department leaders Tuesday instructing them to submit plans for permanent spending reductions of 5% by Feb. 1.
The letter makes repeated reference to telework, saying departments may find savings by reducing lease space, trimming travel spending and using telework to cut costs such as printing, postage, utilities and transit subsidies.
The across-the-board reductions for fiscal year 2021-2022 were included in this year’s budget, which was drafted to close a projected $54 billion deficit. Newsom stated his intent in budget proposals to incorporate telework into state service — a long-discussed but hitherto elusive goal for past leaders. The letter provides firm direction to departments to start making changes.
The letter also says departments should consider reducing discretionary programs, consolidating programs and finding other ways to reduce operational expenses and spending on equipment. Spending on contracts is one example.
The letter doesn’t say anything about layoffs, nor does it institute a hiring freeze. It restates prior directions saying departments should limit new spending and hiring to “core functions, emergency response activities and the ability to maintain operations in a telework environment.”
A few departments have started reimbursing remote workers for their phone and internet usage, but no government-wide reimbursement program has been announced.
The 5% reductions must be made in addition to the pay cuts the administration and the Legislature have imposed on state workers, the letter says. The pay cuts, made through a personal leave program that gives workers days off in exchange for the reductions, saves the state $2.4 billion per year.
The Finance Department plans to approve spending-reduction plans by March 1 and to implement them by July 1, according to the letter. The reduction order applies to the entire executive branch, including constitutional officers, the letter says.
The letter acknowledges departments might not be able to get out of leases by July 1 and offers short-term flexibility in finding short-term savings for departments that can change leases to achieve longer-term savings.
Exemptions will be available to address emergencies, provide medical care and to avoid revenue losses or achieve bigger savings, the letter says.
This story was originally published November 5, 2020 at 5:00 AM.