On January 10, 2022, Governor Gavin Newsom released his proposed 2022-2023 State Budget that will fund state government for the 12-month period starting July 1, 2022.
State spending next fiscal year would increase by 9.1 percent to just over $286.4 billion, with $213.1 billion in general fund spending. The Governor projects a $45.7 billion surplus, which includes $20.6 billion in the general fund available for discretionary purposes. This $20.6 billion projection is far more conservative than the Legislative Analyst’s Office projection of $31 billion. The proposed budget allocates 86 percent of the discretionary surplus to one-time investments.
Regarding state employee compensation, the Governor’s budget proposal summary states:
The Budget includes $770.5 million ($377.8 million General Fund) for increased employee compensation, health care costs for active state employees, and retiree health care prefunding contributions for active employees.
This employee compensation number is expected to increase as six of the state’s 21 bargaining units will be in bargaining for new labor contracts. As those rank-and-file groups engage in bargaining, ACSS will make proposals to CalHR for related excluded employees.
Other proposed budget items of interest include:
- In addition to the $8.4 billion state employer contribution to CalPERS for state pension costs, a supplemental $3.5 billion pay down of retirement liabilities at CalPERS
- An additional $365 million in one-time funding to prefund retiree healthcare
- $20.9 billion in the Rainy Day Fund and $3.1 billion in operating reserves
- Funding to modernize the state’s payroll system (expected to be implemented in a few years)
- With continued use of telework, over the next three years the Department of General Services is projecting a 20-percent overall reduction in the state’s leased office space
In his remarks, the Governor stated he is working with the Legislature on the issue of supplemental paid sick leave for employees. The prior availability of 80-hours of COVID-19 supplemental sick leave expired in September 2021.
As the proposed state budget progresses, ACSS will continue to meet with CalHR to advocate for supervisory and managerial employees.
The Governor’s complete budget summary can be found here: Budget Summary (ca.gov)