Ghost Employees Fill State Job Lists

The widespread practice of keeping “phantom employees” on the books as a cushion against budget cutbacks is coming back to haunt some of the state’s biggest agencies.

A preliminary report released last week by the Department of Finance sheds light on a decade-old problem of high staff vacancy rates in California’s 200,000-employee state government.

The report confirmed concerns raised by legislators and others that state bureaucrats, beginning in the recession period of the early 1990s, have relied on vacancies to help balance budgets.

Funding resulting from “excessive vacancies” totaled an estimated $205 million in 1998-99, the report concluded.

Under state law, almost all positions that have remained open for more than nine months are supposed to be dropped from the books. But recently a budget subcommittee heard allegations that some agency managers routinely transfer employees in and out of vacant positions to keep the posts from being eliminated.

Critics of the practice have called on the Legislature to bring “truth in budgeting” back to Sacramento.

“The next step is to eliminate the vacancies,” said Sen. Jim Brulte, a Republican from Rancho Cucamonga and vice chairman of the Senate Budget Committee.

A final and more detailed report examining vacancy rates in 29 of the state’s biggest agencies is expected to be submitted to Gov. Gray Davis’ office this week and could lead to budget cuts for some departments in the May revision.

“It’s too soon to tell,” said finance spokesman Sandy Harrison. “We have to review each of these 29 departments individually and then we’ll make recommendations to the governor and the Legislature.”

A 5% vacancy rate is considered normal and is typically factored into an agency’s budget. Brulte and other critics contend that, with some exceptions, vacancy rates of more than 5% should be considered excessive.

The Finance Department reported that, over a 10-year period, statewide vacancies averaged nearly 10%, with a rate as high as 18% at the Water Resources Control Board. By comparison, the Department of Parks and Recreation had a 10-year average vacancy rate of 4.3%.

In recent weeks, the movement to eliminate superfluous jobs has taken on new momentum in the Capitol, with angry lawmakers grilling agency and administration officials during routine budget hearings.

A confrontation erupted last week when Sen. Richard Polanco (D-Los Angeles) quizzed Finance Department officials appearing before the Senate Budget and Fiscal Review Committee. Polanco, along with Brulte, wanted to know why $1.6 million was needed to pay for more than 40 new staff sergeants’ positions at Corcoran and Pelican Bay state prisons when the Department of Corrections currently has 255 vacant staff sergeants’ positions.

Dissatisfied with the answers they were hearing, Polanco and Brulte voted against a special funding bill that included money for the sergeants. The bill failed to clear the committee.

The Finance Department report found that in some cases agencies have maintained excessive vacancies to balance budgets that went woefully underfunded during the economic hard times in California during the last recession.

Consequently, many agencies use some of the money saved by leaving positions open by spending significantly more on filled staff positions than they are budgeted for by the Legislature. They also spend more for overtime pay. The report also found that some agencies have diverted unused salaries to cover other operational expenses without legislative approval--a practice that critics contend has clouded the state’s budgeting process.

Trade and Commerce Secretary Lon Hatamiya, for example, reportedly revealed during a recent budget hearing that his agency is planning to use $900,000 in unused salaries to help finance the more than $1.6 million he anticipates it will cost the agency to move into new headquarters.

Hatamiya, through his spokesman, refused to confirm or deny the report, saying it would be inappropriate for him to discuss the matter.

In other cases, positions have been held vacant in key support areas that are crucial to hiring new state employees. Administrative vacancies in the personnel office can hamper recruiting, testing and other jobs necessary for staff hiring in state departments, the report concluded.

Helping to fuel the problem is California’s sizzling economy, which has made competition for workers fierce for state agencies, the private sector and local governments.

Fran Vitulli, a spokeswoman for the Water Resources Control Board, said her agency is addressing the problem.

“We are very aggressively hiring,” Vitulli said. “We have brought our vacancy rate down dramatically and we project it will be down to about 8% by the end of the fiscal year.”

Vitulli attributed her agency’s high 10-year average to difficulties in hiring engineers in some parts of the state, such as Los Angeles, where the government faces considerable competition from the private sector. Hiring freezes and the fact that the agency receives funding from multiple sources have also hampered past hiring efforts, she said.

The water resources board is not alone in when it comes to grappling with vacancy problems.

A separate report dealing with job vacancies issued in January by Controller Kathleen Connell’s office showed half of the 85 positions assigned to Gov. Gray Davis’ office were vacant on Dec. 31, 1999.

Davis spokesman Michael Bustamante said that all the positions in the governor’s office have since been filled and added that Davis has directed the Finance Department to work with agencies on the broader issue of high vacancy rates.

“This governor believes if we can do better with less, then so be it,” Bustamante said. During the 1998-99 fiscal year, Connell’s office abolished 164 positions that had been vacant for nine months or more in the previous year.

Regardless of the cause, Legislative Analyst Elizabeth Hill noted in her annual budget analysis, a high vacancy rate may mean a department cannot carry out its responsibilities.

Moreover, Sen. Steve Peace (D-El Cajon), chairman of the budget subcommittee that has been specifically dealing with the vacancy issue, made it clear last week that agency budgets need to be adjusted to more accurately reflect current staffing and salary levels.

“We have to reconcile all these numbers to what they really are,” Peace said at a recent hearing.

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Job Openings Aplenty

The California Dept. Of Finance reported that over a 10-year period, statewide job vacancies averaged nearly 10%. Here are the state offices with the highest average vacancy rates:

Department: Water Resources Control Board

Average vacancy rate (1989-90 to 1998-99): 18%

Department: Dept of Industrial Relations

Average vacancy rate (1989-90 to 1998-99): 16%

Department: Dept. of Insurance

Average vacancy rate (1989-90 to 1998-99): 15%

Department: Dept. of Health Services

Average vacancy rate (1989-90 to 1998-99): 15%

Department: Dept. of Justice

Average vacancy rate (1989-90 to 1998-99): 14%

Department: Dept. of Toxic Substances Control

Average vacancy rate (1989-90 to 1998-99): 14%

Department: Dept. of Education

Average vacancy rate (1989-90 to 1998-99): 14%

Department: Employment Development Dept

Average vacancy rate (1989-90 to 1998-99): 12%

Department: State Controller

Average vacancy rate (1989-90 to 1998-99): 12%

Department: Dept. Of Mental Health

Average vacancy rate (1989-90 to 1998-99): 12%

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Source: California Dept. of Finance