Governor Newsom released his May Revise of the state budget on May 13, 2022. The budget includes a projected record $97.5 billion surplus, including $49.2 billion in discretionary surplus. The Governor’s plan would spend 94 percent of this discretionary surplus on one-time projects. The historic $300.6 billion budget ($227.3 billion general fund) includes $37.1 billion in reserves, with $23.3 billion in the state’s rainy day fund.
The budget proposal contains a few highlights of importance to ACSS members:
- The May Revision adds another $217.6 million in new employee compensation to reflect updated estimates for salary increases, updated estimates for the state employer’s health and dental costs, telework stipends, and recruitment and retention differentials for the CDCR Division of Juvenile Justice
- This addition brings the new employee compensation number to nearly $1 billion to fund salary increases, health care costs for active state employees, and retiree health care prefunding for active employees
- The proposed budget includes a $3.4 billion additional one-time supplemental payment to CalPERS for state plans (to pay down liabilities and save state employer pension costs)
- The Rainy Day Fund is at the constitutional maximum of 10 percent of General Fund Revenues
The updated budget proposal kicks off legislative deliberation over the budget plan with a June 15 deadline for the legislature to send a budget to the Governor. Six of the state’s 21 rank-and-file bargaining units are negotiating for new labor contracts to be effective in July 2022. ACSS will continue discussions over the next few weeks with CalHR over excluded employee pay increases and will use the opportunity created by the historic budget surplus to urge CalHR to address long-standing pay and benefit issues for supervisory and managerial employees. We will keep you apprised as the excluded pay plan for the fiscal year beginning July 1, 2022 comes into focus.
The May Revision summary can be found here: Budget Summary (ca.gov)