Dear Bargaining Unit 2 Member:
As you probably heard, the Governor released his budget proposal for FY 2021-22 on Friday, January 8, 2021. Of interest to CASE members was his announcement that the PLP days, and the associated pay cuts, might be rescinded in light of the unanticipated budget surplus.
During his speech on Friday, Governor Newsom made clear that it was a tentative proposal and will be dependent on the May Revise, which is the fiscal analysis and revised budget proposal that occurs after the April 15 tax receipts are known and calculated. The exact language from the budget summary released on Friday reads as follows:
“CalHR anticipates inviting bargaining units through collective bargaining to modify the side letter agreements that extended the PLP 2020 through the 2021-22 fiscal year immediately following the May Revision.”
At this time, it does not appear that there will be any formal negotiations regarding the rescission of PLP until Spring. CASE plans to engage the Administration as early as possible to maximize the benefit to CASE members in light of the somewhat surprising budget surplus. Governor Newsom and his staff were careful to temper expectations. They noted that while their early models at the beginning of the pandemic overestimated the revenue loss to the state, there are still projected structural deficits in 2022 and 2023 in the low tens of billions of dollars.
As you may recall, when COVID hit, the State asked all unions to enter into a side letter to deal with the fiscal impact of the pandemic. For BU2 members, the Personal Leave Program resulted in a pay reduction of 9.23%, in exchange for two PLP days per pay period. The pay cut was offset by a reduction in employee OPEB payments (2% for everyone) as well as a $260 per month health care subsidy. Per the language in the side letter, the $260 subsidy “will cease to be paid, once the Personal Leave Program 2020 is eliminated, or no later than June 30, 2022.” The presumably means that the $260 health care subsidy will be eliminated at the same time as the PLPs. Depending on where our members are on the salary scale, the $260 per month subsidy represents anywhere from 2% to 5% of your salary. Interestingly, the OPEB suspension is not directly tied to the elimination of PLP 2020 and is set to continue through June 30, 2022. This is good news, because the starting point for negotiations will be that our members should continue to be relieved of the obligation to pay the 2% employee OPEB contribution even after the PLP 2020 ends.
While all of the foregoing is welcome news, there is much that is still unknown at this time. It is important to keep in mind that this is simply a proposal, and the Governor and the Legislature will spend the next several months working out all aspects of the budget. Moreover, depending on how revenues come in over the next few months, all of the proposals are subject to change. Finally, we do not yet know any details, i.e. whether the rescission of PLPs will be retroactive or prospective only, which pay period they will be removed, and many other details.
We will keep you updated as more information emerges on these topics.
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As always, your support of CASE and your colleagues in Bargaining Unit 2 is greatly appreciated.
The CASE Board of Directors