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January 23, 2006 - We revise our December 14, 2005 summary of the fiscal effect of the MOU with Bargaining Unit 2, Attorneys and Hearing Officers, based on a side letter which changes the retirement provisions of the previous MOU. We estimate that current annual costs for salaries, salary-related costs, and health benefits for Unit 2 members total $396 million ($144 million General Fund). The proposed MOU would require 2005-06 expenditures of about $409 million (an increase of $13 million, or 3.3 percent). The MOU would require 2006-07 expenditures of about $436 million (an additional increase of $27 million, or 6.7 percent). The side letter reduces the amount of savings the MOU otherwise would have produced for the state. The magnitude of the foregone savings is unknown since it would have depended on future decisions of Unit 2 employees.
February 24, 2005 - The Governor proposes shifting $469 million in General Fund teacher retirement costs to school districts and/or schools. Due to current law requirements, it is likely that the proposal would require a $469 million upward “rebenching” of Proposition 98’s minimum guarantee—nullifying the proposed General Fund savings. In addition, from a long-term perspective, the proposal on its own would not address the retirement system’s shortcomings—the lack of local control and responsibility.
February 22, 2005 - California “defined benefit” pensions in the public sector raise certain benefits and cost issues. The Governor proposes shifting all new public sector employees to “defined contribution” plans to address the high cost of the current system. Defined contribution plans address concerns with defined benefit pensions, but also introduce issues of their own. The Legislature could also address the benefits and cost concerns of current retirement plans within the existing defined benefit structure or with other pension plan alternatives.
February 18, 2004 - To reduce budget costs, the administration proposes to issue bonds to finance almost $1 billion in scheduled retirement contributions. A Superior Court has thus far prevented the state from issuing such bonds. Regardless of its legality, incurring decades worth of debt to avoid an annual operating expense is poor fiscal policy. We recommend the Legislature reject the administration’s proposal. The administration also proposes having current employees contribute more of their salaries to retirement. The idea is worth pursuing in collective bargaining, but the Legislature should be aware of what this provision might cost the state in return. For new employees, the administration proposes rolling back retirement benefits to those in place in 1999. We recommend that the Legislature also consider alternatives such as Tier 2 and defined contribution plans for all new employees. These alternatives would result in more state savings and benefits compared to the administration’s proposal.
February 19, 2003 - To reduce budget costs, the administration proposes to finance up to $2.5 billion in scheduled retirement contributions to the Public Employees' Retirement System (PERS) and the State Teachers' Retirement System (STRS). We recommend rejecting this proposal because incurring decades worth of debt to avoid an annual operating expense is poor fiscal policy.
February 20, 2002 - We recommend that the retirement proposals be rejected because they are very costly. These costs would total over $13 billion, be paid over many years, and tie up future state revenues. In present value terms, the proposal is equivalent to getting about $2 billion worth of fiscal flexibility at a cost of well over $4 billion.
December 6, 1999 - We estimate that the employee compensation package approved by the Legislature in September will cost $286 million in the current year, increasing to almost $1.3 billion in 2001-02. Enhanced retirement benefits will cost over $400 million per year beginning in 2001-02.
February 16, 1999 - Workforce Investment Act
February 19, 1997 - Agricultural Labor Relations Board
April 28, 1995 - Presented To Assembly Budget Subcommittee No.4 on State Administration - Assembly Member Willard Murray, Chair
April 18, 1995 - Presented To: Assembly Budget Subcommittee No.4 on State Administration - Assembly Member Willard Murray, Chair
February 22, 1995 - Analysis of the 1995-96 Budget Bill, Business and Labor Chapter
March 1, 1994 - A major portion of state government expenditures is for compensation of state employees. Expenditures for state employee compensation (excluding higher education employees) will approach $10 billion in 1994-95. In this reprint from the Analysis of the 1994-95 Budget Bill, we discuss the employee compensation issues and options the Legislature should consider in enacting a Budget for 1994-95.