Notable Points From The Governor's State Budget Report 2016-2017

Posted: 1/8/2016

On Thursday 1/8/16, Governor Brown released his proposed 2016-2017 State Budget. Brown claims that the budget still remains “precariously balanced” for the long term. Brown stated, “While timing is uncertain, the next recession is getting closer, and the state must begin to plan for it.”

Here are the proposals that affect ACSS and ACSS members:

State Employee Compensation

The Budget includes $220 million ($27 million General Fund) in 2016-17 for employee compensation and health care costs for active state employees. Included in these costs are collectively bargained salary increases for many of the state’s rank and file employees represented by bargaining unit 9 (engineers), which the Administration is extending to state managers and supervisors related to these employees. A 5% general raise in July of 2016 is the only currently programmed pay raise for state employees in the next fiscal year.

In addition, the Budget sets aside an additional $350 million ($300 General Fund) to fund potential employee compensation increases subject to collective bargaining. This is a new tack for the Administration. Previous budgets have not included a pot of money available for raises in the next budget.

Prefunding Retiree Healthcare

The budget continues the Administration’s “sky is falling” approach when referencing retiree healthcare. Last year, they emphasized a $72 billion unfunded liability. This year, the budget summary claims that if nothing is done the liability will grow to $300 billion by 2048.

Here are select excerpts from the budget summary on retiree healthcare:

“The state’s pay - as - you - go system for retiree health benefits is not working. The costs remain one of the fastest growing areas of the state budget.

The state and its employees must share equally in the prefunding of retiree health benefits, similar to the new pension‑funding standard.

The Administration will be negotiating with its other bargaining units this year to implement this critical, cost ‑ sharing agreement as part of labor contracts. Over the next 50 years, this approach will save $240 billion statewide.”

The budget does include $350 million for potential state employee compensation increases next year. It does not contain any funds to cover the state’s potential cost of prefunding retiree healthcare.

In the 2015-16 budget, ACSS and other state employee stakeholders were successful in eliminating the Administration’s proposed budget language that mandated equal prefunding of retiree health care by the state and state employees. Language requiring the development of a high deductible health care plan was also eliminated. In a good sign, the 2016-17 budget does not resurrect these proposals.

Civil Service Reforms

There is again a lengthy discussion on improving the civil service system.

“The Administration continues to implement reforms which were approved in 2015. These measures included simplifying the state’s hiring processes, broadening the pool of potential candidates eligible for a civil service appointment, increasing transparency, and eliminating outdated and overly bureaucratic statutes governing departmental position authority.

The Administration plans to eliminate antiquated and duplicative classifications to allow state departments to hire from a broader applicant pool.

With more than 40 percent of the state workforce entering retirement age by 2018, more work is needed to develop and support the next generation of employees.”

State Building Improvements

The Administration actually included money to begin renovating Sacramento’s aging state office buildings. This comes on the heels of a report last year that documented serious deficiencies with state office buildings that will require their replacement or renovation. The Budget proposes a $1.5 billion General Fund down payment to begin the work, but does not identify specific structures other than the State Capitol Annex.

Increasing Job Positions

The budget proposes the creation of an additional 2,217 state positions in 2016-17. Here is a rundown on some of the new positions outlined in the budget summary:

Department of Social Services

  • 5 positions – CalFresh Assistance and Training

Department of Developmental Services – Regional Service Centers

  • 14 positions – Audit functions, create a new fiscal and research unit

Department of Toxic Substances Control

  • 8 positions – Hazardous Waste Control

CalFire

  • 95 positions – increase staffing in Emergency Command Centers
  • 14 positions – to install and support Automated Vehicle Location and Mobile Data Computer devices in emergency response equipment
  • 14 positions – Professional Standards Program, adverse actions and personnel investigations

Department of Parks and Recreation

  • 3 positions – Los Angeles and Bay Area implementation of a community liaison project

Department of Conservation (DOGGR)

  • 2 positions – Oil and Gas Training Program

Department of Technology

  • 11 positions – Information Security
  • 12 positions – Project Oversight

PERB

  • 5 positions – Reducing Backlogs

Department of Fair Employment and Housing

  • 21 positions – Enforcement Resources

Department of Industrial Relations

  • 9 positions – Private Attorney General Act Resources
  • 19.5 positions – Retaliation Compliant Investigation Caseload
  • 9 positions – Wage Claim Adjudication Hearings

Medical Marijuana Regulation Positions

Department of Consumer Affairs

  • 25 positions – create the Beaureau of Medical Marijuana Regulation

Department of Public Health

  • 14 positions – Licensing and Regulation of product

Department of Pesticide Regulation

  • 3 positions – develop guidelines for the use of pesticides in cultivation

Department of Fish and Wildlife

  • 31 positions – address environmental impacts of medical marijuana cultivation

State Water Control Board

  • 35 positions – develop and implement a regulatory program to address environmental impacts of cultivation

 

The Governor’s complete budget summary can be found here: http://www.ebudget.ca.gov.

We will continue to work through the budget documents and let you know if there are any other proposals that impact ACSS and its members. Please let us know if you have any questions.

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UPDATE 1/12/16:
Here is a follow-up email sent to subscribers of the ACSS e-News in regards to State Employee Compensation:
http://us1.campaign-archive1.com/?u=3041f4d784a1954884f131805&id=858b875eb9&e=[UNIQID]