Politics & Government

Schwarzenegger's worker furloughs upset California tax agencies

California's two largest tax agencies won't collect an estimated $350 million in revenue over the next year because furloughs and budget cuts have harmed their ability to audit returns and collect money owed by taxpayers, top state officials said Tuesday.

That admission, made by Franchise Tax Board and Board of Equalization executives at a Senate hearing, left a Democratic senator angrily questioning whether the Schwarzenegger administration's plan to furlough state workers a third day each month is cost-effective.

"I don't believe the third furlough day is creating the savings (the Department of) Finance has said. Their projections are not credible," said Sen. Denise Ducheny, D-San Diego, who chaired the morning hearing.

Finance Department official Chris Hill defended his department's numbers, touting an estimated $1.3 billion in savings from the three-day-a-month furlough program.

Sen. Bob Dutton, R-Rancho Cucamonga, said he's sympathetic to state workers, but added that the state should have just cut all employee pay without imposing furloughs to avoid revenue losses like those described by BOE and FTB officials.

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