State workers still taking pay cuts as California rakes in tax revenue

The $26 billion that California’s state government will receive from the lastest round of federal coronavirus assistance doesn’t change the timeline for discussions about restoring state workers’ pay, according to the state Finance Department.

Gov. Gavin Newsom raised the prospect in January that the pay cuts state workers took last summer could be restored as early as July, a year ahead of schedule.

Finance Department Director Keely Bosler said at that time that the administration would begin discussions in earnest with state unions around May, when the administration will provide a budget update.

When asked whether the federal infusion might speed up that timeline, Finance Department spokesman H.D. Palmer offered the following response in an email Friday:

“Our assessment on this issue, like many others, will be part of the decision-making process for the May revision.”

That means the Newsom administration is sticking to the

timeline it raised in January.

The state faced a projected budget deficit of $54 billion in the early weeks of the coronavirus pandemic when lawmakers asked California state workers last summer to accept two years’ worth of pay cuts.

The union-negotiated agreements that cut state workers’ pay starting last July identified two ways the cuts could be undone early: The state could collect enough revenue to cover its obligations plus employees’ full pay, or it could receive a big boost from the federal government.

As of last week both conditions seemed like they had been met.

Thanks to better-thanexpected tax revenues, the state entered 2021 with a surplus, and by the end of January, it had a $10.5 billion budget windfall.

And, the new stimulus agreement is projected to send California $26 billion in federal aid,

But the union agreements give Bosler the final word, specifying she has “sole discretion” to determine whether the state has taken in enough revenue to restore workers’ pay.

Bosler can’t unilaterally restore pay — that would require new union agreements or legislation, said Nick Schroeder, with the Legislative Analyst’s Office.

For the unions, it’s not as simple as just agreeing to undo the pay cuts.

Last year’s agreements included base pay cuts of 9.23% for most state employees, the equivalent of two days’ pay. In exchange, employees get two days off per month that they may bank indefinitely.

The agreements softened the blow to workers’ paychecks by suspending the contributions they normally make to their retirement health care. State employees normally contribute between 1.4% and 4.6% of their pay toward the retirement health care fund, depending on their job and union.

In addition, the agreements delay the raises many employees were scheduled to receive last year and this year. Bundled together, the changes are referred to as a personal leave program.

Union negotiators have said they will seek not only to restore pay, but to get workers the suspended raises. They also could ask for the pay restoration to be retroactive. And they could ask for the state not to resume the health care contributions just yet.

“There’s some bargaining that needs to happen before the (personal leave programs) go away,” said Coby Pizzotti, a California Association of Psychiatric Technicians spokesman. The union represents employees who work in state hospitals.