May 15, 2019

May 15, 2019

Last week, Governor Gavin Newsom released his updated state budget plan – known as the May Budget Revise – for the 2019-20 fiscal year that begins this July 1. The Governor’s updated plan puts the total budget at $213 billion, up $4 billion from what was projected in January. The General Fund budget includes $147 billion in spending, up from the $144.2 billion predicted only 5 months ago. Surplus revenue is now predicted to be $21.5 billion with the rainy day and other budget reserves slotted to grow to more than $18 billion.

State Employee Items of Note. The state employee compensation and benefit line items remain largely unchanged from January.  The budget still includes $1.2 billion in new funding for increased employee compensation, state health care costs for active employees, and the state’s contribution to prefund retiree health care costs for active employees. This $1.2 billion also includes CAPS’ 5% pay raise on July 1, 2019.

The state will also make its statutorily required $6.8 billion payment to CalPERS to meet its funding obligations for state employee pensions. The budget plan also continues to call for a $3 billion supplemental payment to bolster the funded status of CalPERS’ state employee fund.

Foreshadowing. Though the May Revise projects that revenues next year will be $3.2 billion more than was estimated in the Governor’s January budget proposal, the new budget proposal also predicts slower economic growth in the years to come. It also warns that a moderate recession could result in revenue declines of nearly $70 billion and a budget deficit of $40 billion over the next three years.

Most of the new $3.2 billion in revenue is constitutionally obligated to schools, the rainy-day fund, and debt repayment. Additionally, the May Revise makes a number of new investments – in homeless, early childhood education, emergency response and preparedness, and healthcare programs.

Click here to view the full 2019-20 May Revision.

More Appointments for the Newsom Administration. In addition to the May Revise last week, Governor Newsom made another appointment, important to CAPS members and all state employees. On May 2, Newsom named Paul Starkey the Deputy Director of Labor Relations at the California Department of Human Resources (CalHR).  This position’s primary responsibility is to manage negotiations during collective bargaining. It may serve as the state’s chief negotiator at the table with the bargaining units.

Prior to his appointment, Starkey had been assistant chief counsel in CalHR’s Legal Division.  During his career, he has served in multiple other attorney positions at CalHR.  He has also served as an attorney at the Agricultural Labor Relations Board, the Commission on State Mandates, and in the private sector.

More details about Starkey can be found in the Governor’s press release about his appointment here.  On behalf of all CAPS members, President Patty Velez sent a letter to Starkey requesting a meeting to introduce CAPS and congratulating him on his appointment.

CAPS May 18 Board of Directors’ Meeting. The next Board of Directors’ meeting is scheduled for Saturday, May 18, 2019 at the Courtyard Marriott Airport Natomas Hotel (2101 River Plaza Dr, Sacramento, CA 95833), commencing at 9 a.m. All members are welcome to attend.

News Brief

Virulent Newcastle disease quarantine continues, informed public vital — Valley News
The Virulent Newcastle disease quarantine continues to be enforced, but misinformation abounds within the poultry community.

In Review. Check out what you may have missed from past CAPS Updates here:

May 8, 2019. Vacation/Annual Leave Cash Out. CalHR has authorized Departments to analyze whether they have the funding to participate in the Vacation/Annual Leave Cash Out Program for the 2018-2019 Fiscal Year.