San Francisco Mayor Gavin Newsom reached an accord with public employee unions this week to cut labor costs by $200 million over two years.
The deal with the San Francisco Labor Council gives workers 12 unpaid furlough days off for each of the next two years, the equivalent of a 4.6% wage reduction. It would also close non-essential city departments between Christmas and New Year’s Day.
California’s fourth-largest city also committed to cut $30 million a year in contracts and agreed to limit layoffs to 500 workers between now and June 30, the end of its fiscal year.
“This comprehensive agreement will help us balance the budget while protecting vital city services and jobs,” Newsom said in a release. “Once again, our public employee unions are stepping up to be part of the solution towards closing next year’s budget deficit.”
The agreement will save the city’s general fund about $50 million a year in labor costs, helping to close a $483 million projected deficit for fiscal 2010-11.
The agreement comes after Newsom — a candidate for lieutenant governor of California — backed off from an unpopular plan to reduce city workers’ hours to 37.5 hours a week from 40, which would have reduced pay by 6.25%.
The city and public employee unions estimated that the agreement would save 1,000 jobs, but the benefit would only last for two years.
