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January 11, 2019

Governor Newsom yesterday released his proposed 2019-20 State Budget (his first as governor) which would fund state government operations for the 12-month period beginning July 1, 2019.

His proposed budget would be the largest in state history.  Total spending next year would be just over $209 billion ($144.2 billion general fund, $59.5 billion special funds, and $5.4 billion in bond spending), about a 4% increase over current fiscal year spending.  State general fund revenue is booming.  In response to a question, the governor said there is likely to be $21 billion in surplus revenue next year.  In November, the Legislative Analysts’ Office had predicted a $15 billion surplus.  This is in addition to the $16 billion held in the state’s rainy day fund and other reserve accounts.

But like his predecessor, the governor preached fiscal restraint, said recession preparations are underway, promised to build the largest reserve held by any state in history, and noted that his new budget initiatives are largely one-time funding proposals.  That being said, the governor did focus a lot of time on new high profile proposals to increase access to affordable health care and prescription drugs, address the housing and homelessness crisis, and provide universal preschool for four year-olds, among other expansions in education funding.

As a result of collective bargaining agreements, the budget proposal includes $1.2 billion in new funding for increased employee compensation (including PECG’s 4% pay raise on July 1, 2019), increased state health care costs for active employees, and the state’s contribution to prefund retiree health care costs for active employees.  Employee compensation costs are likely to go up in the final budget.  The budget summary notes the Administration will soon begin negotiations with 5 of the state’s 21 bargaining units, representing Attorneys and Administrative Law Judges, Correctional Officers, Public Safety, Stationary Engineers, and Psychiatric Technicians, whose contracts will expire in late June or early July 2019.  The Highway Patrol Officers, whose contract expired in July 2018, will also be in negotiations.

The budget proposal also includes multiple new expenditures to pay down the so-called wall of debt that has accumulated over the years.  This includes a $3 billion supplemental payment, in addition to the statutorily required $6.8 billion contribution, to CalPERS.  The additional $3 billion will lower CalPERS unfunded liability and save the state $7.2 billion over the next 30 years in pension costs.

The Governor called it a “disgrace” that 1 million Californians do not have access to clean drinking water, pledged an immediate increase of $25 million in next year’s budget to address the problem, and indicated that he wanted to try again to create a safe drinking water fund financed by all of the state’s water users.  PECG supported a similar plan last year, but Governor Brown and legislative leaders abandoned it after failing to win broad legislative support.

Per past practice, Caltrans staffing for next year is not covered in the January budget proposal.  Caltrans staffing levels will likely be part of the May Budget Revision, in which the Department of Finance releases the latest state revenue projections the Administration and Legislature need to reach final agreement on a budget by June 15.

PECG staff is reviewing the proposed budget for significant changes in staffing and funding in other Unit 9 departments.  If you are aware of a proposed budget change in your program or department that PECG should be aware of, please email the details to pecg@pecg.org.

To access the Governor’s 2019-20 Budget Summary, please click here.

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Work continues to make certain that every PECG member receives the appropriate back pay for the PECG 2018-20 MOU’s 4.5% general salary increase (GSI) and the state experience and geographic pay differentials retroactive to July 1, 2018.

If you have not already shared your GSI back pay or payroll problem with PECG, please email the details to PECG headquarters at pecg@pecg.org so we can follow up with the Controller’s office.

If you have not yet received the experience or geographic differentials, please hold off on contacting us.  The Controller’s office reports back pay checks for the differentials are going out every day and many PECG members report having received back pay for the differentials in recent weeks.

It is also a good idea to share your individual payroll problems with your agency’s human resources department.  That will ensure that the appropriate raises and differentials are keyed on your payroll and in doing so help the Controller’s office generate back pay checks.

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CalHR has announced that the vehicle mileage reimbursement for 2019 will be 58 cents per mile, consistent with the federal authorization and the PECG MOU.

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The password to view the MOU and the members-only sections of the PECG website has recently changed. The new password is winter2019.

January 4, 2019

PECG’s efforts continued this week to ensure that every member receives back pay for the PECG 2018-20 MOU’s 4.5% general salary increase and the state experience and geographic pay differentials retroactive to July 1, 2018.  PECG has forwarded hundreds of your pay errors, discrepancies and omissions to the Controller’s office for correction and will continue to do so.  Progress is being made, but solving all of the back pay issues will clearly take some time.

If you have not already shared your GSI back pay or payroll problem with PECG, please email the details to PECG headquarters at pecg@pecg.org.  If you have not received your experience or geographic differential, please hold off on contacting PECG as the Controller’s office reports these back payments are going out in waves every day.

The Controller’s office requests that Unit 9 members also share individual payroll problems with their agency’s human resources department.  Doing so will ensure that the appropriate raises and differentials are keyed on your agency payroll and help the Controller’s office generate the back pay you are due.

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Gavin Newsom will be sworn in as California’s 40th governor on Monday, January 7 and will release his first state budget proposal later that week – likely on January 10.  Last year, PECG endorsed Newsom based solely on his experience, record in public office, and consistent support of PECG’s position on issues that affect the pay, pensions, health care, and terms of employment of  state engineers, engineering geologists, land surveyors, architects, landscape architects and related professionals.

His defeated opponent, John Cox, ran ads during his campaign comparing public employees, and their pay and pensions, to pigs at the trough.  Last summer Cox said “Caltrans is one of the most inefficient, corrupt and overstaffed agencies in the country. Neighboring states put their engineering work out to bid, but Caltrans hands 90% of those jobs to government staff.”  PECG looks forward to working with the new governor and his Administration on behalf of all PECG members.

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The 116th U.S. Congress began this week in Washington D.C. with Democrats taking control of the House of Representatives for the first time in 8 years.  Republicans remain in control of the U.S. Senate.  In the House leadership, California will be well represented – Bay Area Democrat Nancy Pelosi assumed the Speakership for the second time yesterday, while Rep. Kevin McCarthy of Bakersfield became the House Republican Minority Leader.  While the federal government closure continued this week, negatively impacting millions of Americans and hundreds of thousands of federal employees, there has been at least some talk of the possibility of a bi-partisan agreement on a large federal infrastructure package that would fund billions of dollars in much needed highway, water, energy, conservation and other infrastructure projects during this Congress.

PECG leaders and staff will be working to ensure that the interests of PECG members and the public are protected in any infrastructure package or other infrastructure bills.  Specific PECG federal objectives include expanded federal infrastructure funding with sustainable funding for the federal Highway Trust Fund, opposition to efforts to mandate outsourcing of engineering and related functions on federal projects, and support for a bill to require that construction inspection on federal projects be performed by public employees to protect public safety.

If you would like to help PECG protect your interests in Washington D.C., please consider joining PECG’s FED-PAC.  Like the State PAC, the FED-PAC only helps candidates who support state engineers and related professionals.   Please follow this link to the downloadable PECG FED-PAC authorization form.  Please fill it out, mail it in, and join other PECG members to ensure your voice is heard in Washington, D.C.