Budget Sub5 — 2026-08-12 (partial)

All right, everyone. The Senate Budget Subcommittee No. 5 on Corrections, Public Safety, Judiciary, Labor, and Transportation will now come to order. Good morning, everyone. As I said, we are holding our committee hearing in 1021 O Street. I ask that all members, which actually all that are going to be present are here now, in room 2100 so we can establish a quorum and begin our hearing. Today's hearing is an informational item only. We will be discussing budget item 9800 and the lack of funding for bargaining unit 10's special salary adjustments. We'll take public comment at the end of the hearing, and now we'll begin to establish a quorum. Consultant, would you please call the roll?

Durazo. Ciarto. Here. Sayarto here. You have a quorum.

Did you have anything to add, Senator? No, thank you very much. I just wanted to warn everybody that I have another cleanup project at about 10 o'clock sharp. So I'm going to step out, but I will come back, and it's not disinterest. It's just dueling meetings going on this morning. And so I'm anxious to get on with this hearing so we can get some of this done while I'm here. Thank you.

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. Can we share this one? Sure. 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 buying 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 of 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 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 our understanding that it is a public document that anybody can request and receive going forward So what 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 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 the legislature that was ratified in 2024. It was 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. 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 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 5 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...

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 concludes my presentation. I'm happy to answer any questions that you have.

Good morning. Thank you very much.

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's 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 deals 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 a good faith they looked at all the things that were you know on the table came up with resolutions and then had that side letter to memorialize to become the 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.

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 work with the information that we have. And 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 DILS Act was fashioned on the National Liberation Act. And at its heart, it's adversarial, which means both sides are advocating 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 DELS Act through the Public Employment Relations Board affords us these processes.

I'm Rosanna Nguyen from the Department of Finance. We don't have a formal presentation prepared,

Good morning Chair. Hanzo Ming from the Department of Finance. As Rosanna said, we don't have a presentation and have nothing to add to what's already been presented.

Is there an opportunity for Unit 10 to speak?

Good morning, Madam Chair, members of the committee. Alberto Tirico on behalf of UAW Caps. you know in the legislature oftentimes most times we'd like to argue on policy grounds what's good policy sometimes people like to argue process and that's when that's an immediate red flag and what i've heard this morning is all about the process about the previous conflicts over the last 10 years over a confrontational system. Well, the conflicts were resolved, and the members of UAW reached a collective bargaining agreement with the administration. That collective bargaining agreement had three critical provisions in my estimation. One were savings generated by concessions by the employees. Those concessions have been fully implemented to the tune of over $8 million. conveniently. Number two, there's provisions for raises, which apparently there's a budget crisis now. We're talking about less than $9 million of general fund. $9 million. And the third provision, I think, is the reopener and the reliance on the Charles Dill Act. I just want to know for the record that every single collective bargaining agreement has the language that they're relying on the Ralph Dills Act, that the money is subject to appropriation by the legislature. but in my experience which is 15 years as a lobbyist six years as a member and 10 years as a labor lawyer i can't recall an instance where there was a collective bargaining agreement where the money wasn't funded unless there was an emergency and and it was and the parties were informed of said emergency so this contract has reopener language and it's very important to note what it says. It says that the parties shall meet and confer in good faith on or before July 1st, 2026. Remember that date, because it's very critical for this conversation. The administration did not put the raises in the budget. They took the savings. They didn't do it in January. They didn't do it in May. They still took all the savings. The contract was ratified by the legislature, by the two-thirds vote. They didn't put it in the final budget. Now, was there a meet and confer request in January? No. Was there a meet and confer request at the May revise? No. When did they make the request? request to reopen the negotiations. June 30th, one day before the deadline. The language is clear. Meet and confirm good faith on or before July 1st. So it's very convenient that they asked to reopen on June 30th when the budget negotiations were over. So I'm sorry. it doesn't pass the smell test if you're going to make a deal with your workers and your workers are going to give up things and their retirement and other aspects of their compensation and you've promised a raise then I object to the use of the process I object to the use of claiming there's a look, we all understand the state is under fiscal I get it, but this was not done in good faith Madam Chair. I'm sorry. It was not. And now this needs to be resolved. What are we saying to the other unions for the state? That you're going to negotiate in good faith, take concessions, accept a raise, and then we're just going to send a letter on June 30th and say, sorry, we didn't fund it? This is not an acceptable result. I was hoping to hear that it was an oversight. I really was. I was hoping to hear that there was a mistake. So we can go on our merry ways and fix it in the budget trailer bills. I was hoping that the Department of Finance would come up here and give us some explanation of fiscal pressure. I didn't hear any of that. I heard that it was that the DILS Act allows it, therefore we're going to do it. Well, I would like to hear when it's been done before. When the parties were notified of a fiscal emergency, when everybody was taken a haircut. I haven't heard that. So I don't accept the premise that this is processed. I don't accept the premise that this is allowed. It's irrelevant whether it's allowed or not. It's wrong. Thank you very much.

There's no new employee compensation-related funding?

the BO10 longevity pay differential case those were continue being funded in the 2026 budget But if there any new employee compensation related items such as the SSA item they were not included in the budget

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.

Yes, that's correct.

Rosanna Wynn, Department of Finance. So can you repeat the last part of your question about the departments?

So I think we need to step back a little bit and think about the 2025 Budget Act. You know we were dealing with a projected shortfall and that when we removed all of the salary increases for all employees and went back to the bargaining table as Paula had mentioned and renegotiated concessions such as the PLP program and other adjustments to OPEB So at that point in time, we did not include any salary increases for both the 2025 budget as well as the 2026 budget. Moving forward, what I will say is as we're developing the 2026 budget, the administration decided that we were not going to fund any new employee compensation increases in the governor's budget. So at that time, the items that were included in the 9800 log that was referenced did not include these salary adjustments.

No, there's no salary increases in 2026 for the other bargaining contracts.

Those are the existing adjustment items that was included and approved in the previous budget. So the 2026 is just a carry-on of the existing item, and it's not a new item.

So, for example, the longevity item, that was a 2024 agreement item, and that was implemented in three years.

Can you repeat your question? You want to know whether there's other contracts?

But in 2025, as Rosanna just explained, we went into a budget situation that we have to implement a solution where we removed all the salary increases that existed in the budget and we went back to the table and renegotiated. So that's when the new side letters with all the bargaining units become effect. And those side letters do not include any salary adjustments for 2025 and 2026 budget years.

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

doing this? I've been the chief negotiator since May of 2019. Okay, so six plus years. Wouldn't you

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

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 maybe six budget hearings, it's not like we weren't available. 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 Because you know 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?

Their 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?

you know, this is you know, I'm delving into this issue as we speak Yes so I think that according to the DLS Act any items that require funding would be included in the approved annual budget

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?

Yes. 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.

Yes, for those items. 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 and I want to if I may

Let me get my chronology so I have this right.

Okay. My question was, and I'll restate it, why did the administration wait until June 30th after the budget was enacted to notify the union and the legislature? So what did you do to notify the legislature that the salary adjustments would not be given to BU 10 members? Because the obligation was also to the legislature.

No, but you were supposed to notify the legislature. My question is, did you notify the legislature at any time and to who that these salary adjustments would not be given to the members? Did you? Yes or no?

Okay. All right.

Okay. So the Department of Finance, did you receive notification that the salary adjustments would not be given to BU-10 members?

So, excuse me, so just a second. So are you saying, so you were aware by the fact that you didn't include it in the budget, that you would not be doing the salary adjustments for BU-10?

Okay. All right. And it's your testimony that because you, in the 9800 form letter that you sent to the LAO and the legislature, it was up to us to understand that this was the only unit that you left out and didn't provide salary adjustments for.

Okay. So, Mr. Schroeder, can you tell us a little bit in your testimony? You did mention the Form 9800. Could you just share with us a little bit when you get the Form 9800? Was it something that you guys identified and said, oh, my goodness, Budget Unit 10 isn't getting their salaries? Or how were you and I supposed to have seen that?

And the only communication to the legislature that we're aware of, certainly to our office, the only communication that they were intending to deviate from the policy that was ratified by the legislature was the omission of the funding in the 9800 log. There was no communication that that was omitted, so really there was no proposal presented to the legislature on which to base a decision of whether or not to fund this particular provision. We were supposed to just notice the omission. Could you tell from the Form 9800 that this unit was omitted, that they were the only unit in the entire state of California that was omitted?

And so it's just the lack of a line in the Excel sheet was the only indication of this proposal. And does the line say SSAs zero, or it just doesn't say SSAs at all?

Okay, so that's probably one of the issues that needs to be considered is we may have to be more prudent in what we identify in the Form 9800, which will cause more work for you. But if that's the only way in this adversarial relationship that we're going to know whether something's funded or not, then we may have to require more specific information. Okay, let me go to my next question that I want to defer to the Senator to see if he has any other questions. The administration has cited a provision in the BU-10 cited letter that says, if funds are not appropriated for any provision of the contract, the two parties can reopen negotiations. and Mr. Starkey, you've testified that you guys are now having those conversations and you've said to them, you know, you guys are open and you need to reopen this. That provision also says that the parties shall meet and confer in good faith on or before July 1, 2026. Can you tell us how your department or Department of Finance met and conferred in good faith on or before July 1, 2026?

So then it's your testimony that you did not meet or confer in good faith on or before July 1, 2026.

I need for you a yes or no answer. Did you or did you not meet and confer in good faith on or before July 1, 2026?

No, the question is, did you meet? Did you meet? Did you meet? We'll do one section at a time. Did you meet in good faith on or before July 1, 2026 regarding this?

You did not. Did you confer? And confer normally means conversation, discussion. Hey, this is coming down the pipe. Did you confer in good faith on or before July 1, 2026? You sent a letter on June 30th. But did you confer in good faith on or before July 1, 2026?

Okay. Thank you. Thank you for just answering it honestly. Okay. Mr. Sciardo, would you like to join me in this conversation?

Senator, I'm going to say the process is very good, and the process resulted.

So go ahead. No, I'm just going to say the parties have a negotiated side letter, which was the process to deal with this eventuality.

Well, what I will say is that these are also discussions that are a point in time. So as we were developing the 2026 budget, that was a policy decision that the administration made. And then once the governor's budget was released, we did not make any adjustments in the May revision accordingly.

What I will say is that a lot of the funding that became available, the revenues, were one-time funding. And so I think to the extent the administration just was not looking at funding any new employee compensation increases across the board. So I think the items that are in the agreements, you know, obviously are subject to appropriation. And again, those were some decisions that were made in governor's budget and was not revisited in the May revision. 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.

Thank you, Senator Ciardo. With that, thank you for your recap. I think that covered some very key points. We're now going to go to the public. That will have a minute afterwards. I really should do 30 seconds, but in light of, I think, the severity of this issue, we want to give you that additional time. So we're going to have the public come over here to the mic to your left for one minute each, and then we will wrap this up. I appreciate the representative who's here with CalHR to answer the questions regarding the judges, but we shouldn't be too much longer, and then we'll go to that as we close out. Okay, come forward. Please state your name and your point within one minute, please, each.

I really appreciate it. Thank you. Please try and stay within the one minute, but she's the president of your organization, so I wanted to respect that. Yes, go ahead. Good morning, committee members.

Portugal and I'm a senior environmental scientist with the California Department of Fish and Wildlife I've been with the department for eight years and I'm also you know a single father of two school aged children and I just want to speak just kind of from the heart here for a moment I mean we're talking about nine million dollars and it's just totally ridiculous that we're squabbling over here in this adversarial way when people are really suffering like I work with people in my office I have a another environmental scientist with a master's degree who has to sleep in his car because he can't afford to pay you know child support and rent in this state we have people having to commute from like you know really far away now that we're being forced back into the office so that's effectively a pay cut too and it's just ridiculous I mean the governor speaks out of one side of his mouth praising the work that we do. I'm managing a project that's like a $65 million project in the tidal wetlands. We're doing incredible work for this state and for the people of the state, and yet we can't even get enough to make our basic ends meet. I'm looking at having to sell my house to get my kids child care, and it's just ridiculous. Thank you. Thank you.

Please summarize because that's not on the agenda.

Thank you. If you're here not speaking on the agenda, just state your name and what the issue is.

And good luck. Thank you. Yes. Again, your name, the organization, and what you're supporting.

And good luck.

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.

hello hello Ana y Matias with Mesa Verde group here on behalf of Gabilan Joint Community College District to uplift the college district joint request for the San Benito County Local Transportation Authority for million to fund student transportation fees and business route connecting from Hollister and Gilroy campuses Being in the college district that serves rural California, transportation is a significant challenge for our communities to access educational programs, which can transform the trajectory of students and their families. All they need is a simple right. Thank you.

Good day. My name is Darius Ali. I am a graduate of Free World. and what I can say is free world has been a answer from God I pray to pray to God you know please help me find a situation when I come home I did 15 years and I still have reservation for crime I didn't know how I was going to you know sustain a living situation and then take care of my wife and you know children and whatnot and Jeremiah 29 11 you know God said my plans for use for a future and a hope and um i came home i was i was hopeless i worked at uh del taco and it was it was rough catching the bus here and there uh free world came out and i i had no idea about free world and that's why i say it came from god it had to be a blessing because i i never signed up it's just i got the call hey you're on parole you want to you want a chance at getting your cdl I took it um they took care of me while I was going to class they gave us stipends and it just helped a lot it helped a lot for me and my wife and I grabbed my my my CDL and I've been working as an operator in the operator engineers union I just received my crane certificate and I'm going to be a crane operator Laura Willing within the next few weeks and it changed my life I don't even know who I am anymore you know it's a complete 180 who I used to be is that's that man is dead and i have have god to thank first and free world close second so thank you and good luck thank you yes yes ma'am good morning um sanjita nahar here on behalf of

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. Sciardo, did you have anything else you wanted to add?

I would like us to try to ensure that if there is a means to address this issue this year, that would be most beneficial for everybody. 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 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 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 a 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 that 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 has that been consistent with the judges to your knowledge?

Okay, but it's your understanding, if I'm understanding your answer, that whatever formula was determined for the state employees that was in turn then applied to the judges because it's my understanding they haven't received increases in some time.

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

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?

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.

All right. Thank you, everyone, for your participation. We have now concluded the agenda for today's hearing. I left out one sentence here any comments or suggestions that people have for us they're very important to us please include them in a written form to the committee and with that the Senate Budget Subcommittee number 5 on corrections public safety, judiciary, labor and transportation is hereby adjourned Thank you.