Governor’s May Revise. The Governor’s revised budget was released last Thursday, which includes large cuts to his $222 Billion proposed budget from January. Governor Newsom’s revised budget proposal is about $203 Billion, with so-called “trigger cuts” tied to federal relief. The Governor’s proposals to enact a balanced budget include drawing down $16.2 Billion in the Budget Stabilization Account (the “Rainy Day Fund”) over three years and allocating the Safety Net Reserve to offset increased costs in health and human services programs over the next two years. The budget also proposes canceling $6.1 Billion in program expansions and spending increases, including reducing or canceling one-time expenditures included in the 2019 Budget Act, and redirecting $2.4 Billion in extraordinary payments to the California Public Employees’ Retirement System (CalPERS).
One of the Governor’s trigger cuts includes a 10% reduction to state worker compensation for all state bargaining units based on June 2020 numbers. Other trigger cuts the Governor is proposing include a 10% reduction for many programs; among those would be cuts to K-12 education, child care, universities, and various safety net programs, from Medi-Cal benefits to In-Home Supportive Services. Absent additional federal funds, the COVID-19 Recession requires reductions necessary to balance the state budget. These reductions will be triggered if the federal government fails to provide sufficient funding to restore them.
Notably absent from the budget are union-negotiated contracted pay increases (for CAPS, that’s the previously agreed-to 5% General Salary Increase, or GSI, that was to take effect July 1, 2020).
As a result, CalHR has requested that all state bargaining units negotiate to reduce compensation by approximately 10%. The state informed us that they will make every attempt to reach these savings through collective bargaining; however, the Administration will include a budget provision to impose furloughs on state employees if the state and bargaining units cannot reach timely agreements. CalHR and the Governor both stressed that they are open to so-called “creative options” for finding the 10% compensation cuts. Additionally, CalHR has reported in a phone call last week that the Administration will be “pulling back” July 1st raises, and that this would be an additional point of discussion.
News Briefs
‘A lot of sacrifices:’ California state workers brace for pay cut in Gavin Newsom’s budget – Gov. Gavin Newsom proposed cutting state worker pay by 10 percent Thursday, dramatically changing the economic outlook for a workforce that just a few months ago was looking forward to raises from a humming economy. Union leaders said Newsom’s approach is preferable to that taken by former Republican Gov. Arnold Schwarzenegger, who insisted on furloughs and showed little interest in negotiations. “It’s not the imposition of the furlough days but a conversation,” said Bianca Petzold, Staff Manager of the California Association of Professional Scientists. Nonetheless, Petzold said, “This is definitely something that’s going to hurt. It’s not something that’s taken lightly.”
California regulators prepare for the Champagne of cannabis – The first-of-its-kind Cannabis Appellation Program will allow for place-of-origin branding. At the final public hearing this week, growers emphasized the importance of “terroir” baseline standards.
Elk hoof disease found in California for first time – California’s first cases of elk hoof disease have been discovered in two animals in a herd of Roosevelt elk that live in Del Norte County, the state Department of Fish and Wildlife said. The painful and potentially crippling disease causes deformed and overgrown hooves that can cause elk to limp, become lame and even die, the department said Thursday. Elk with severe cases may be unable to graze, fight off other infections or escape predators. A main concern for researchers is whether the disease can be passed from wildlife to livestock.