Senate Budget Sub5 — 2026-08-12

Richardson. Here.

Ciarto. Here.

Thank you. Can you hear me? You should have a handout before you that our office produced that I'll be using as kind of the guide for my presentation. It's red. Yeah, there must be an issue with the mic.

Is this better? Okay, all right. Okay, now I'll be perfect. Okay, so you have the handout that I'll be using as my kind of notes for my presentation. Overall, what we're going to be talking about is the collective bargaining process and the legislature's role in that process. And then we'll be talking about how the economic provisions of labor agreements that are ratified by the legislature are incorporated into the Annual Budget Act, so how they're actually funded. And then we'll be turning to talking about Unit 10 specifically and the 26-27 special salary adjustment that was excluded from the budget and talk about how it came to be that it was excluded. So turning to page one of the handout, first talking about the collective bargaining process. The collective bargaining process was established by the Ralph C. Dills Act in 1977, establishing collective bargaining rights for state civil service rank and file employees. and through the collective bargaining process, the parties of the negotiations are the governor and the employees organized into 21 bargaining units, and at the bargaining table, the governor is represented by the Department of Human Resources CalHR and the bargaining units are represented by their union And at the bargaining table they negotiate a tentative agreement that they then transmit to the legislature for its determination. And an important part of that is that a tentative agreement only goes into effect if it's ratified by both the legislature and the union members. If either the legislature or the union members reject an agreement, it does not become the binding labor agreement between the parties. And typically a labor agreement will have a term of between two and three years, although there are MOUs that have terms of less than two years and more than three years, but that's kind of the normal range, two to three years. And during that two to three year term, the parties can meet and amend an agreement, and that's typically done through a side letter, an addendum, or some other amendment to the agreement. And the last point on this page is, as part of the collective bargaining process, is that although the legislature ratifies the agreements, it does not, it reserves its right to not fund economic terms of an economic provision of agreement going forward. And so this is really to preserve the legislature's constitutional power of the purse and to not by in the hands of a future legislature to make budget decisions. So turning to page two, we'll be talking specifically about the legislature's role in the collective bargaining process. When the tentative agreement is submitted to the legislature, the legislature cannot amend it. The decision that is before the legislature is either to approve the agreement or to reject the agreement. And if it adopts it and the union adopts it as well, it becomes the memorandum understanding which is the controlling agreement. And the second bullet on this page is talking about what happens if the legislature chooses to exert its right to not fund an economic term of the agreement. Two things happen in that case the unfunded provision of the agreement does not go into effect and the second thing is that either party so the governor or the bargaining units may reopen any or all of the provisions of an MOU. So turning to page three we'll be talking about how the economic provisions of a ratified labor agreement are incorporated into the budget act each year. And so one thing is that the base funding levels for departments or for employee compensations, that'd be the funding that has been approved in the past, is already in departments budgets each year. And in most cases, employee compensation constitutes a significant share of a department's state operations expenditures. Any augmentations to employee compensation appears in the budget under a single item, which is item 9800. And item 9800 within the budget bill itself is just one line by fund showing a dollar amount. You can't actually tell by looking at that which economic provisions of a labor agreement are being approved or not being approved. And so to help with that, the administration provides the legislature each year the item 9800 log, and that is a technical budget document that they provide to the budget committees as well as to the LAO, and it itemizes what economic provisions are being funded under their assumed dollar amount for item 9800. And although it's routinely provided to the legislative offices, it's not something that's posted on the administration's electronic budget website but through our communications with the administration leading up to this hearing it's our understanding that it is a public document that anybody can request and receive going forward so we talked about already is about the augmentations to employee compensation The last bullet is talking about how reductions to employee compensation typically are done through the budget. And most typically the way it's done is through a control section where the legislature directs the administration to achieve some dollar of savings, some level of savings, either through collective bargaining or through administrative actions. And typically, the administration proposes that control section language. It is debated in public hearings and then either adopted or not into the Budget Act. An example of this would be all the furloughs between 2008-09 and 2012-13, as well as PLP 2020 and PLP 2025. Turning to page four, we're now going to be talking specifically about Bargaining Unit 10 and the labor relations between the state employer and Unit 10. The agenda gives a lot of information about Unit 10 itself. They represent the professional scientists and state employment. And one thing about the relations with the Unit 10 to understand is that there are a number of classifications within Unit 10 that are similar to classifications that are represented by Unit 9, which represents professional scientists. And one of the issues, the main issue that has been a kind of a longstanding disagreement between the union and administration is the pay parity between Unit 10 classifications and similar classifications represented by Unit 9. In addition to that, there's been disagreements about the Unit 10 rank and file workers' compensation compared with that of their own supervisors within Unit 10 as well. And so those two factors have been a longstanding disagreement, and it had led to a deterioration of the relationship. Ultimately, in 2023, the union approved and actually implemented a three-day strike in November of 2023. And this was the first time in state history since 1977 when the DILS Act established collective bargaining rights that a civil service bargaining unit did go on strike. So turning to page five, we'll be talking about the actual pay increases in question. So the policy to provide a special salary adjustment in 26-27 was established through the ratification of the 2024 MOU. So the parties after the union had done the strike in 2023, the parties met again and they came to an agreement and submitted an agreement to legislature that was ratified in 2024 is also ratified by the union members. And a big significant piece of that agreement is that it provided three SSAs or special salary adjustments in an effort to address the pay equity concerns. concerns. And the final of those three pay increases is the 26-27 pay increase, which, as the agenda indicates, would provide between a 4% and 5% pay increase to employees at the top step of their salary range, and would provide a 3% pay increase to the employees at other levels of their salary range. When the administration submitted the 2024 MOU to the legislature, it included its cost estimates of all the economic provisions of the agreement, including the costs in 2627 associated with the implementation of the agreement or of the SSA. And then in 2025, the legislature essentially affirmed the state policy to provide a SSA in 2627 with a subsequent agreement. So in 2025, the administration negotiated new bargaining agreements with all 21 of the bargaining units to achieve budgetary savings through PLP 2025 and some other economic provisions that are discussed in the agenda. In the case of Unit 10, The agreement affected a number of elements of compensation, but notably it did not affect the 26-27 SSAs. It made no change to that. And in the fiscal estimates that were provided by the administration to the legislature, there was no indication that those would not be provided funding in the subsequent budget. One thing that the agenda indicates is that the 2020 agreement includes a Reopener Clause, And it does include a re-opener clause where essentially if the legislature were to not appropriate fundings for any of the economic provisions in 2627's budget, that it would allow either the governor or the unions to re-open negotiations on any or all of the MOU provisions. In our mind, this is no change from existing law under the DILS Act and the legislature's constitutional power of the purse. It's really just kind of a reassertion of existing law. So then on the final page talking about how we got to where the units 10's SSA is not included in the budget. When the administration submitted to the legislature its 9800 log for the 2627 budget, it submitted a 9800 log in January and then again in May as part of the original January proposal and the May revision proposals. In both of those 9800 logs, the 2627 SSA was omitted from the log, and so through that omission it was not funded. The administration indicates that if it had been included, it would be $8.6 million general fund. One thing we would note is that the 9800 log included other pay increases, including pay differentials for specific duties, longevity and seniority pay differentials, the Unit five general salary increase for highway patrol officers that's established in statute as well as their MOU and notably it included longevity pay differentials for unit 10 that is included in the same labor agreement that established this SSA for 2627 and in the final bullet there was really no communication from the you repeat that last couple sentences sure so the 9800 log omitted the SSA but included other pay increases including a pay increase for unit 10 members that was included in the same agreement as the SSA and in the last poll we discussed that there was no communication from the administration to the legislature that it was proposing a change in the policy that was established in 2024 and affirmed in 2025 that the state provide Unit 10 members in SSA in 26-27. Further, the administration indicates that this decision was made based on the state's budget condition, but we would note that it was not included in any of the solutions lists that the administration provided us to identify savings that they were scoring in the budget. So that's that concludes my presentation. I'm happy to answer any questions that you have.

Good morning. Thank you very much.

Yeah, you two are sharing today. More than happy to do that. How's that? Is that a good sound check? Thank you. So again, thank you to the committee, subcommittee, and thank you for the opportunity for this informational hearing I want to start off with that I the Deputy Director of Labor Relations In that role I responsible for managing all of the labor relations for the state of california all of the various bargaining units we have an assigned negotiator and have had assigned negotiator for unit 10 for several years and that person is the principal negotiator for that contract i want to give that a little bit of context And I don't want to be argumentative, but I don't want to, for the record, accept everything Mr. Schroeder has said and has characterized as being the way that I would characterize it.

Right. And thank you. And so the purpose we're here for today, I understand, is to explain how did we get here? Why are we here? And for my role, what's the impact on collective bargaining? And so from our perspective, this is an ongoing issue in terms of the budget problem. And I'm going to let the Department of Finance speak to the budget problem. But with respect to labor relations, we have a cycle of labor relations where typically the governor's budget is brought out in January. We will then do what's called sunshine, where we'll provide public notice to the public about what the proposals are going to be. And then after that period of time, we enter into negotiations. The thing that is critical for me to help you to understand this is that this isn't a snapshot of what happened in January of 26 or January of 25. The whole history of this is that in bargaining, the parties were looking at a budget crisis. And I put out a notice to all the unions that there was going to be, there was an issue with the budget. And we were aware of that. And there was, Mitch Schroeder had mentioned there are control sections. and the control section basically put out that the state was directed to negotiate the issue of this potential loss of funding with all the unions. We had some unions that had open contracts, and that followed the normal bargaining process. With Bargaining Unit 10, they had a closed contract, and typically you don't open closed contracts, But this was the type of emergency, and given the control language, we made the announcement to all the units, Unit 10, that we wanted to reopen negotiations. And we did that, and we have been in negotiations with Unit 10. As you know from the record, there was an agreement reached. Then there was a subsequent agreement reached with what's called the side letter. And I think the side letter gives the perspective to this particular problem in front of us today because the parties knew there was a budget issue and they are bargaining, which is a process which is wholly separate from the budgeting process. I am just given instructions to get contracts with the information that we have. And that information is fluid and it's expected to be fluid. The way the Deals Act is constructed, it contemplates that the legislature is going to be going through a budget process. At the exact same time the state is negotiating and it has been every year negotiating salaries and benefits for various unions as those union contracts come open So in my mind I look at this as like two tracks There my track the bargaining track and then there the budgetary track And until the legislature has done the bargaining piece, until that point in time, we really don't know what the budget is going to be. All kinds of things can happen. And this is not abnormal. This is expected. It's built into the DILS Act. And so when you look at the side letter, that side letter, which is a public document and online, it's comprehensive. The parties went back to the drawing board. They negotiated in good faith. They looked at all the things that were on the table, came up with resolutions, and then had that side letter to memorialize to become the agreement. Critical, in my mind, that side letter is that the parties put the language in there, a mechanism, a process, so in the event the legislature doesn't fund any item, under the DILS Act, a party can reopen any or all of the contract. And, in fact, that process had happened just the year before. And so this is, again, I want to really emphasize this is not a snapshot. Look at this date or look at this date. This is a bargaining process. And that bargaining process is ongoing right now. When we knew what the budget was, per the agreement, we gave notice to the union. And we are now in the process of getting dates to meet with respect to that side letter. So, in my mind, this process is, is it unusual? Does this happen every year? No. But is it contemplated? Absolutely. And so, again, looking at the process, the parties have been meeting. The parties have had every opportunity to, you know, look at all the pieces and come to an agreement. They did that. It's in the side letter. We're honoring that. And we just move forward through that process. Absolutely, unless you have any other questions.

No, thank you. Thanks, Senator. My main point is that this is a bargaining process that I'm involved in, that we are on our track. We do what we we we work with the information that we have. And and and it's it's a process that. And I hate to say this because it sounds terrible, but it's adversarial. It's adversarial in nature. It comes out of the National Labor Relations Act. The Ville's Act was fashioned on on on the National Labor Relations Act. And at its heart, it's adversarial, which means both sides are advocating for for their interest. Right. It is not intended to be a different kind of bargaining process that you have in other jurisdictions where there is sharing of information and things like that. The DILS Act has a process for that, but at its heart, it's adversarial. So I say that because working in good faith with our partners, there are mechanisms in place to get information, and we do that, and we have disputes about that, which we work through. And again, the DILS Act, through the Public Employment Relations Board, affords us these processes. So we in that process So with that I conclude Thank you Thank you Next we have Rosanna Nguyen Good morning Madam Chair and members of the committee

And Hanzo Ming.

Okay, thank you. Do we have, let's see, is there an opportunity for Unit 10 to speak? Sure, if you'd like to have one. Okay. Do we have a representative from Unit 10 who's here? Thank you. I always believe in hearing all sides. You don't have to. He'll make his presentation.

I'm going to start with a few questions and then we'll open it up to the public and then I may have some subsequent questions based upon public's brief comments. Let me start off with a couple things. First of all, were other raises appropriated in this year's budget? Hi, Domingo, Department of Finance. There's no new employee compensation related to the funding in the budget this year. So, are you saying, to make sure I'm clear, I'm hearing you, no state employees, regardless of their contracts, received raises this year? There's no new employee compensation-related funding? No, that's not my question. My question is, are there any existing contracts that employees have that include raises, such as the case of Unit 10? Are there any contracts in the state of California where employees have an existing contract, which they did at this time, and they receive their schedule raises? Not new raises, but their scheduled raises based upon their contracts. So if the adjustment was included and approved in the previous budget, for example, the BO 10 longevity pay differential case those were continue being funded in the 2026 budget if there any new employee compensation related items such as the SSA item they were not included in the budget Okay, let me say this in a different way. I'm not just limiting this to Union, Unit 10. Are there any state of California contracts inclusive with employees that had an agreement in the agreement included step increases that were withheld, not new in their current agreements, of any employees in the state of California. Yes, there were a few pay deferentials, including the $9,800. But as I mentioned, those are the previously approved and included in the budget in the previous years. So the 2026 is not representing a new employee compensatory item. Those items are funded. Okay. Let's talk a little bit about the budget. It's my understanding that in June, excuse me, in January, the governor, when he presented his budget, he presented the budget that we had a deficit, although he expected that we would have potential additional revenues that would be able to assist in that. Isn't that correct? In January. Yes, that's correct. Okay. And isn't it also correct that in May, when the governor did his May revise, he also noted the potential additional revenue that was going to be anticipated that was going to be able to help with the budget. And in fact, those numbers were utilized as we were determining and working on the budget. Yes, that's true. Okay. So given the fact that that's true, when the program manager says that there was a budget emergency, being one of the subcommittee chairs, that certainly we were aware that we had a budget deficit. In fact, we still do. we were able to pay down, I think it's 50% of that, and we still have a little more to do. But, and certainly there was an effort to make sure that we were watching our spending wherever we could, make cuts wherever we could. I mean, all of that was true. But was there any communication to all departments that said, okay, you can expect potentially additional cuts that are going to occur.

So what's been testified here is that a part of opening this is determining if, in fact, there is a budget emergency. And my question is, was only Unit 10 the bearer of what was determined to be a budget emergency, and employees would not receive a raise that they were anticipated, or was this considered to be across the board with all employees?

Okay. Were there other contracts that were approved in 2025 that went into effect in 2026 that included raises for employees?

Okay, but I thought in Unit 10 there were other employees that received raises.

So maybe you could clarify for me better how was Unit 10's contract deemed new versus being existing if it had just been signed and approved?

Okay. Were there any other contracts that were similar to that? Because it seems to me that it's a little odd because if someone had just negotiated a contract due to their no fault of their own, if someone had negotiated a contract two years ago, then theirs isn't considered new. but someone who happened to certify theirs the year before, well, theirs is new, so they don't get theirs. It's not their fault when their contract comes up for renewal.

Yeah, what I'm trying to understand is this contract happened to have been negotiated the year before, which is why you're saying that their increases were considered new, right? That's what you're saying?

And what I'm saying is due to no fault of their own, their contract came up, you know, I mean they don't control whether their contract comes up two years ago, one year ago, or two years from now. They don't control that. Their contract happened to come up. So what I saying is people other units that their contracts maybe came up two years prior that included their increases they got theirs Isn that correct Because they were approved in that previous year budget

Okay. Mr. Starkey, were there any other unions or bargaining units that received side letters that were not, that kind of alerted them to, hey, you know, you may not be getting your increases? Could you use the mic please for the record?

Were there any units that received the side letter that did not receive the scheduled increase?

Okay. So can you restate that for the record because that's really important?

So since you knew that Unit 10 had a problem, didn't you think that it might be appropriate to maybe do a little more attention, calls, follow up, something certainly before the day before to let them know that this was going to impact them if it wasn't impacting all the others?

that notice. Mr. Starkey, I'm trying to be very fair but I think it's important and I'm going to choose my words carefully. How long have you been with

say that the budgets are open every year until, you know, we get to the last day? I mean, that's nothing new. You don't know for sure we submit things, we hope, whatever, but until we actually vote, you don't know for any year, for the last six years that you've been in this position, you didn't know that it was done until it was done. That's absolutely true. Right. And that, I believe, since that's true, my question is, don't you feel that maybe within your office, I'm not saying it's necessarily you, I don't know what role you have with direct negotiations. But given the fact that this was probably, you know, you see the train wreck is coming, you know, that there's only one union that potentially could be impacted. My question to you is, don't you think we could have probably maybe erred a little better to have had some conversations either with Unit 10, more with the administration, certainly with the legislature? Can't you agree that we probably should have started having this conversation? I can tell you, I think I had no less than

Don't you think that since this was the only union potentially impacted, certainly at least advising that this is the position that the administration has taken in their Form 98 twice leading up, that there should have been a little more communication?

Okay, that's enough. Mr. Starkey, unfortunately your comments is what conveys why we need unions. because you know if if employees have to request and track and you know go through all that you know unions have to exist to hold departments agencies companies accountable And that's why they have to exist. And if we didn't view things adversarial and just did the right thing, we probably wouldn't have an adversarial action that would take place. So I would actually say maybe you or your department's activities causes the adversary. But that being said, let me ask you a few other questions. As a part of the three-year contract with BU-10 that was ratified by the legislature and signed by the governor, the administration negotiated three different SSAs scheduled for 2024, 2025, and 2026. Since the MOU is a legislatively approved statute, what gives the administration the authority to omit the appropriation necessary to fund the SSA that was scheduled for January 1, 2026? And if I'm hearing you correctly, Ms. Ming, your testimony is the reason why you had the authority was because in 2024, there wasn't the actual increase.

But I think I know the answer, but go ahead.

So to be clear again, and sorry we're pulling hairs here, but my job as this informational hearing is to get a clear understanding of what happened and why. In the Unit 10's contract, the new increases were only taking effect in what year?

There are salary increases that they were anticipating. They weren't in effect in 2024 and 2025, correct?

But was it an increase?

Okay. So if they had, what was different from their salary increase in 2024 and 2025 and the one that's in dispute, which is 2026? What's the difference? And thank you for your patience, but you know, this is you know, I'm

No, I heard you with that. My question is, I thought you testified that the reason why it wasn't included in 2026 was because it was a new allocation, right? That's what you both testified to. Okay, so my question was, then I asked, did 2024 and 2025 include an increase? And I thought you said yes. Is that not correct?

Okay, so then how is 2026, and I thought I heard you say that the ones that you did approve were already ones that were approved in 2025. So it was kind of continuing the year's budget, right?

Okay, so then my question is, if they had a raise that was approved and appropriated in 2024 and 2025, why was that not considered to be ongoing in 2026 like the others? It's because they had a higher increase, or what was the reason of the difference of what happened from 2025 and 2026 and how that relates to all the other contracts?

And so why wasn't it included in the baseline for 2026?

Okay. Why did the administration wait until June 30th after the budget was enacted to notify the unions, the union and the legislature, other than the adversarial relationship that you assume that you don't give information unless asked? Why did the administration wait until June 30th after the budget was enacted to notify the legislature and the union that the salary adjustments were considered new and were not going to be included? Other than the adversarial part.

But with respect to why didn we notice them until we had been providing various contacts with with bu10 and and this was in the context of before the side letter Let me get my chronology so I have this right. Yeah, so as I mentioned, in the summer of 25, or even before then, in May and June, we were talking about the need to come back and bargain. Then in July 2nd of 2025, we requested to CAPS to reopen, and they responded. They would reopen the agreement for bargaining. On July 22nd of 2025, we commenced that bargaining. And then during the course of the bargaining, and again, this is not abnormal, CAHPS UAW filed an unfair labor practice which among other things alleged bad faith and alleged that we were basically over noticing them about the budget process and that matter got resolved so the UPC is part of the public record the settlement agreement is not but My point is, is that we have been talking to CAPTUAW the entire time. And the side letter, in my mind, represents an understanding of both parties that this might not work out. And so this was the agreement. Again, this is the process. Bargaining is the process. And I'm quite proud of the process. and the policy which is set forth in the DILS Act. So when we negotiated in good faith and got this side letter, it's clear on its face that we had hoped that all of these SSAs would be funded. The parties recognize that might not happen or that's an eventuality, and they then put into this side letter, if that happens, we go back to the table.

That process is followed up by once we know what the budget is, then we go into the bargaining process.

As I said, I really don't know. I don't know. I'd have to go back and check.

If we did notify the legislature in the manner that you're discussing, we normally do that. by sending a letter to basically through the Department of Finance. When a contract is reached, for example, there's a legislative, there's a summary that we provide to them in terms of the budget bill.

Well, as we were building the budget for 2026, we did not include the funding, and so upon release of the governor's budget, and again during the May revision, we send information to both the legislature and the legislative analyst's office in the form of the 9800 log, and the 9800 log would detail all of the employee compensation items that were included in the budget.

Yes. Correct.

Well, generally in the log, it's what we include. We don't necessarily detail what is excluded because there are other items that, you know, might not have been included. So it's, you know, the log is really sharing the information that these are the items that we're including in the budget.

So the process and they followed this process is that it's submitted to the legislature and us with their January budget proposal and their May revision proposals as part of the budget backup.

So looking at the 9800 log, you could see that there were pay differentials and other pay increases, including the general salary increase for Unit 5. And you could see that for Unit 10, there was also the pay differential for the longevity pay differential, those being phased in under the agreement, which we would argue is by definition, by including those costs into the 9800 log, those are by definition new funding for provisions because it's not included in the base. And so by looking at that you can see that there was a line in the log for Unit 10 longevity pay differentials but there was no line for their SSAs And so it's just the lack of a line in the Excel sheet was the only indication of this proposal.

There is no line.

We just started the process.

That would have been an impossibility because we didn't know what the budget held.

Again, we initiated the process, which is part of the meet and confer.

We have not conferred.

Mr. Ciardo, would you like to join me in this conversation? Yes. Thank you for your indulgence here, and I hope I don't repeat anything that you may have said before I got in here. But I just – you've covered a lot of ground, and I want to make sure that I understand this right. So one of the things that I got out of this is if you ignore a negotiated contract and don put it in your budget and you just don fund it that the way you open up negotiations again In other words you know okay I saw that I said it confusing why It seems like ignoring a negotiated contract is as easy as choosing not to fund what you negotiated and agreed to in an MOU. So what good is the process if that's all it takes, is us not putting a line in and hoping nobody notices it?

It obviously is not. We are here today dealing with a problem that shouldn't be here. We shouldn't be in this process right now. We shouldn't have this meeting. These people should have got their MOU done. they should have fulfilled the obligations of the MOU. So I respectfully disagree with you on that. So go ahead.

Okay, so let's talk about the eventuality. Usually organizations, and I was in city government, and I was in county employment before, so I understand both sides of this process. Usually, when we're going to freeze or reduce salaries, it's because we had a budget shortfall. We had less revenue than we thought we were going to have. I have never seen a situation where we have $25 billion of increase in revenue that we had not anticipated. And then we leave one bargaining unit out of their thing. Usually what you do is you take care of your obligations first, and then you figure out where to spend the rest of the money. In this case, it appears that the administration had their priorities, like you guys said, and one of those priorities was not fulfilling the obligations of a contract that they already had. So why did they not consider that a priority? Because that's the first thing you hear is, well, you know, it's not just $25 billion because we have to go $7 billion goes to the Prop 98 fund. We have all these obligations, but this was extra money. This is money we didn't anticipate. How could this not be a priority in the administration's deliberations over the budget?

Right. Even though we already knew that we had a substantial increase. At the time, it was only $20. It was only $20 billion. But by the time we got to the May revise, then it was $25 billion. dollars. I would have thought that at some point we would recognize that hey we have this obligation already we're going to make sure that obligation gets taken care of even if we thought we were going to not honor it by leaving the line out and hoping nobody notices I just don understand this type of governance And it's the kind of governance that really, really frustrates people. Because if you were counting on a 3% raise, and all of a sudden you don't get it, and you're seeing a state that's bragging about a $25 billion increase in revenue, and a state that's saying we have the fourth highest GDP, it doesn't seem like there's a financial or fiscal emergency that would justify not honoring something you already should be obligated to honor. What I will say is that a lot of the funding that became available, the revenues, were one-time funding.

So I'm going to work with my staff and our finance folks to come up with a list of things that are not one-time funding that was funded with this $25 billion. dollars because that that is an indicator that the people that you're that are working that are doing the job for the state of California and the citizens are not a priority because I can guarantee you I can find lots and lots of money that is not one-time funding that is in our 350 billion dollar budget this year take out schools it's 250 billion dollars it's 20 billion dollars more than it was last year I think somewhere around there there is no good reason to omit this one bargaining units agreed upon thing that you know agreed upon salary increase. Somewhere between now and when we get done, I'm hoping that that will be rectified because if that's the way the state's going to do business, we're not going to have a lot. We'll have even less confidence in what we're doing than we already have, and I'm tired of it. Tired of people looking at me like I'm part of the state process, and the state process can't be trusted. And when our answer is, hey, they didn't catch it, that's ridiculous. We had an agreement. We should have honored that immediately. We should have honored it before the excess revenues came in. And certainly when the excess revenues came in, that was the first thing you should have jumped on and said, hey, you know what? This is one bargaining unit we left out. We're going to put them back in. We're good to go. And then we wouldn't be here. so that's my only comment I don't I don't have any more questions that you

Good morning, Chair Richardson, Senator. My name is Jacqueline Tack. I am the proud president of CAPS UAW Local 1115. We are the state workers in Bargaining Unit 10 doing the critical work every day to protect public health, the environment, our food, our water supply, and the natural resources Californians depend on. State scientists went four years without a contract, from 2020 to 2024. In 2024, we reached an agreement with CalHR and ratified a three-year contract. CAPS UAW members overwhelmingly ratified it. The legislature also ratified it, and the governor signed it into law. Last year, we were forced to go back to the bargaining table because of the 2025 budget deficit. This year, we were shocked to hear that our raises were not funded in the 2026 Budget Act. In the past few weeks, we have met with a lot of our representatives in the Senate and the Assembly, and every time we heard the same, we were not aware. We also found out after July 1. We've heard today that the administration had no plan to fund our 2026 raises, even though our 2025 side letter did not pertain to 2026. You have been told the union and CalHR are engaged in the bargaining process and dialogue since last year about our 2026 raises. In fact, we never had an agreement or knowledge that our 2026 raises were not forthcoming. Nonetheless, the state took the savings. The contractual 2026 raises that are in our three-year MOU have been in place since that MOU was ratified by our members and by the legislature in 2024. for. We negotiate in good faith, and we believe that a deal is a deal. We need to be able to count on the language in the MOU that is negotiated and ratified. Thank you so much for your time today.

of your organization, so I wanted to respect that. Yes, go ahead. Good morning, committee members. My name is Marisol Pasquier. I am a staff research scientist and injury epidemiologist at the Department of Public Health, and I am a proud CAPS UAW member and an elected head steward. I have worked for CDPH since 2019, and my fellow epidemiologists and I work on preventing injuries, including traumatic brain injuries, older adult falls, e-bike injuries, and suicide, among many others. Like Jacqueline said, in 2024, when we reached a tentative agreement for a three-year MOU, The agreement was overwhelmingly ratified by our members with huge participation. The contract provided much needed salary adjustments, and they were in a step in the right direction of fixing our longstanding pay gaps. As has been discussed, this year's salary increase is about $28 million. We've already saved the state close to $9 million through last year's side letter in a very difficult budget year. I want to emphasize that a vast majority of state scientists like myself are funded through special funds not Not the general fund it only costs eight million dollars from the general fund And I close really quickly to say that like Jacqueline said a deal is a deal and just to respect the deal thank you hello everyone my name is Elijah

Kim Lewis, representing California Coalition for Youth, and not to take away from this hearing, but I just wanted to make one last appeal for the Homeless Youth Emergency Services Housing Program and the Homeless Youth Pilot Program. Notices just went out last week that these programs are going to have to close on December 31st. We're going to have a bunch of homeless young people who are going to be spending their holidays not knowing where they're going to go and sleep at night. We're going to have a bunch of more young people with no safe beds losing hundreds of beds.

I know, and they need $10 million to continue that program for one more year. Thank you.

Good morning. My name is Christian Moore and I'm directed, you know, formerly incarcerated from Barry J to LRP to LP. and I'm speaking on behalf of Ramp LA and they showed me nothing but love and they showed me work work uh things to work I wrote it down my bad and then Ramp has helped me get into mt3 program to get go to trade school and then through that trade school I graduated and now I'm iron worker and now they're also helping me get custody of my daughter back into my life and this Friday I'm going to get an apartment and I'm just saying with more LRPs like RAMP I really honestly think that with the funding there more youth can have help yeah thank you and good luck thank you yes again your name the organization and what you're supporting hi chair I'm my name is Jesus Alvarado and I'm here

California has led in criminal justice reform, and I'm standing here as a result of that. I had a live sentence, and because of all these changes, I stand before you today. But one thing, survivors have not been given equity. They have not been given the resources. We have a survivor program that has not been funded by the county or the state, yet we've just been given an award by the Office of Victim Services in Los Angeles. So I'm here to advocate for $2 million to support our survivor program. Thank you. Thank you, and good luck.

Thank you. And if there's any specific organizations that you're looking to be funded, could you write them down and give it to the sergeants over here to your left? Thank you. Yes, go ahead.

Please summarize, because I am familiar with the program and we have advocated.

Thank you.

Thank you.

Thank you. And please provide the information to your left over here to the sergeants. Yes.

Thank you. And good luck. Thank you. Yes. Yes, ma'am. Good morning.

Thank you. Seeing no other members of the public to speak, for those of you who spoke about additional programs, we have officially, for all intents and purposes, closed the budget process. There are a few items we're dealing with that were fixing some issues that we had, but it's not like we're considering new items. However, we're going to be back here in just a few more months, back at this again, and I appreciate your feedback, and we'll certainly be considering for those going forward that being said mr. C. Ardo did you have anything else you wanted to add I know it just seems like

Thank you. With that, all the individuals who've participated in the public testimony today, we thank you for being here present. If you were not able to testify, please submit your comments or suggestions in writing to the Budget and Fiscal Review Committee or visit our website. So for you individuals that testify, thank you. I know it's always uncomfortable when we have to go back and fix things, but it's better that we learn about things versus ignoring and don't have a path forward. I cannot, for the members of Unit 10 who are present, I'm not in the position to make a decision, but I am in the position to write a letter and make a recommendation, and I will be doing that. But I thank you all for being present, for bringing this to our attention, because it is our responsibility, as Senator Sayardo said, to fulfill our agreements, and we certainly should be fulfilling them with our own employees. So this meeting is not adjourned, however, because I do have a few questions for CalHR regarding the judges. but for those of you who testified thank you for being here we may have a few follow-up questions that we would ask for your expeditious response as we you know we only have a few days here that we're dealing with this issue so we'll certainly be in touch but thank you for being here thank you for your honest testimony and you know look forward to lessons learned from this experience Thank you. For the representative of CalHR, before we close, could you please come forward so I can ask a couple questions? Okay, could you state your name and position for the record?

Thank you for being here. I just have four questions, but I'll open it up of why I'm asking the question. We receive communication from some of our judges with the state that apparently their salary is tied to some formula that's tied to other positions. So I'm not really familiar with that, so trying to understand that. And so that the first issue is if you could help us understand how their salary is determined how increases are determined and then apparently in some cases some positions that are tied to their same formula have received increases that the judges haven't. So that's what our questions are essentially surrounding. Now I realize you may not handle that, but if at least you can tell us what you do know and who we should seek to get further answers to the questions. So my first question is, what role does CalHR play in determining salary increases for judges?

Okay. And let's say over the last five to ten years, I don't know if you have that information. what increases have the state employees received on average and what has that been consistent with the judges to your knowledge?

Okay, and this whole determining that the judges are tied to this formula, this is a statutory requirement?

Okay, and it would require an act by the legislature to change or make any amendments to that, I'm assuming?

Okay and because judges oftentimes work with prosecutors defense attorneys all different sorts of people who may not be state employees is there at any point that there was a consideration that maybe their salary should include some additional things to consider besides what every state employee might have happened to have received? Because they're not doing the same work, obviously.

Okay, and how old is that statute approximately?

Okay, well that helps us understand. You've answered the next question, how are salary increases determined for judges? We get that. What would the legislature have to do to change the formula that sets the salary increases?

Okay, and then in addition to the salary increases of employees, one of the things that happens is that there are other things, benefits, that people receive besides their salary that can contribute. Maybe it's not a direct salary increase, but if you got more in retirement or whatever it is. last year it's my understanding that we suspended other post-employment benefits OPEB for contributions for the state and state employees did that include the judges

And have you all had any discussions to maybe say, this doesn't quite seem right? Have you approach the legislature or the governor because it seems like I mean I get that you're not a negotiating body with them but it seems that if their salary is tied to the state employees certainly the benefits would be as well and other points it's just that that's what the statute says and that's what you do and that's it or has anyone kind of gone this doesn't smell right yeah I can't

Okay. And then last question for me, who has the discretion or authority to suspend the judge's contributions to OPEB?

Okay. Given that we're in the last couple weeks of this situation, could you assist us in finding out whether it's judicial counsel, whether it's Department of Finance with the governor, who is it that would actually have the authority or the legislature, other than a statutory change, who would have the ability to say that judges similar to other state employees could suspend their post-employment benefit contribution?

In the next 24 hours?

Time is of the essence.

And last, I'm sorry I said last question, but do you know how many years the state employees have postponed their benefits so we would know specifically what to ask for?

Okay. And if you could include for us not only OPEB, but any other benefit adjustments that you might have done for other bargaining units. Because there might be something that I don't even know that applies to them.

And did you say your name was Crawford?

Yes. Thank you for coming on such a short notice to deal with an issue that is important. Thank you for waiting through the entire presentation that we had. And we do appreciate your participation.

Thank you.