Governor Newsom released his May Revise of the state budget on May 9, 2019. While forecasting a budget surplus of $21.5 billion for the budget year beginning July 1, the May Revise predicts slower economic growth in the years to come and warns of the possibly detrimental economic impact of even a mild recession.
The Governor’s proposed budget would increase the state’s rainy day fund to $16.5 billion to build resiliency in the event of an unpredicted recession. It also provides for some one-time funding to assist with cost-of living assistance for the middle class, the housing crisis, K-12 schools, and homelessness. The proposal kicks off legislative deliberation over the budget plan with a June 15 deadline for the legislature to send a budget to the governor.
A few highlights of importance to ACSS members:
State Employee Compensation
The January budget proposal included $1.2 billion for increased employee compensation (including proposed salary increases for most supervisors and managers), higher health care costs for active employees, and the state’s contribution to prefund retiree health care costs for active employees. This amount is updated slightly to reflect health benefit enrollments and costs. ACSS will continue to meet with CalHR, advocating for increases in excluded employee salaries for 2019 – 2020.
The budget includes $6.8 billion for the state employer’s contribution to CalPERS and a supplemental payment of $3 billion to CalPERS. The supplemental payment is expected to save $7.2 billion in state employer pension costs over 30 years.
Paid Family Leave
The Governor plans to bolster California’s Paid Family Leave program over the next few years and makes budgetary adjustments to plan for the expansion of the program. ACSS’ legislative advocates are busy supporting legislation which would for the first time make Paid Family Leave available to excluded employees, a long-standing goal of ACSS.
The proposed budget reflects the Administration’s intent to reorganize elements of state government, notably the Division of Juvenile Justice. With a proposed effective date of July 1, 2020, ACSS will work to protect the interests of members moved from CDCR to a new department under the California Health and Human Services Agency.
The Governor’s complete budget summary and draft can be found here: