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MOU Fiscal Analysis: Bargaining Unit 5 (California Highway Patrol)

August 18, 2006 - We provide a fiscal analysis of the proposed MOU with Bargaining Unit 5, which includes CHP officers. The administration's estimate of additional 2006-07 costs is reasonable. We estimate, however, that the annual fiscal impact after 2006-07 will be substantially more than shown in administration estimates because its projections assume (1) relatively low growth in the statutory pay formula for CHP officers, (2) no increases in state health premium costs after 2007-08, and (3) no change in required employer retirement contribution rates. By 2010-11, annual state costs could be $100 million higher than suggested in the administration estimate. In addition, various factors including pay and benefits for CHP and funding demands in the Department of Motor Vehicles are likely to put stress on the financial condition of the state Motor Vehicle Account, which funds Unit 5 personnel costs.

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MOU Fiscal Analysis: Bargaining Unit 16 (Physicians, Dentists, and Podiatrists) and Bargaining Unit 19 (Health and Social Service Professionals)

August 4, 2006 - We provide a fiscal analysis of proposed MOUs with Units 16 (physicians, dentists, and podiatrists) and 19 (health and social service professionals). The administration's estimate of costs resulting from the MOUs in 2006-07 is reasonable, but the estimate for 2007-08 is likely too high by $6 million due to a high estimate of inflation. We estimate that total compensation costs would rise to about $579 million in 2006-07 for a cost increase of over 10 percent. More than 40 percent of this increase results from factors other than the MOUs, such as court-ordered pay increases. In 2007-08, we estimate that costs would increase an additional 6 percent to about $610 million. In addition to these costs, we expect that future court orders related to correctional and mental health programs will increase pay for some members of these units by an unknown amount.

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MOU Fiscal Analysis: Bargaining Unit 12 (Craft and Maintenance) and Bargaining Unit 13 (Stationary Engineers)

July 28, 2006 - We provide a fiscal analysis of proposed MOUs with Bargaining Units 12 (craft and maintenance workers) and 13 (stationary engineers). We believe that the Department of Personnel Administration's (DPA) estimate of costs resulting from the MOUs in 2006 is reasonable, but that the estimate for 2007-08 is likely too high by around $7 million due primarily to a high estimate of inflation. We estimate that total compensation costs (including benefits) for Unit 12 and 13 rank-and-file employees would rise to about $740 million in 2006-07 under the proposed MOUs for a cost increase of almost 7 percent. In 2007-08, we estimate that costs would increase to over $760 million, or more than 3 percent above 2006-07.

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MOU Fiscal Analysis: Bargaining Units 1, 3, 4, 11, 14, 15, 17, 20, and 21 (SEIU Local 1000)

July 6, 2006 - We provide a fiscal analysis of the proposed MOU with the nine bargaining units represented by Service Employees International Union (SEIU) Local 1000. We believe that the Department of Personnel Administration's (DPA) estimate of costs resulting from the MOU in 2006-07 is reasonable, but that the estimate for 2007-08 is likely too high by around $65 million due to a high estimate of inflation and not accounting for health care savings. We estimate that the total compensation costs (including benefits) for rank-and-file employees represented by SEIU would rise to over $5.5 billion in 2006-07 under the proposed MOU for a cost increase of almost 7 percent. In 2007-08, we estimate that costs would increase to $5.7 billion, or more than 3 percent above 2006-07.

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MOU Fiscal Analysis: Bargaining Unit 8 (Firefighters)

June 2, 2006 - We provide a fiscal analysis of the proposed MOU with Bargaining Unit 8, Firefighters. We believe that the Department of Personnel Administratrtion's (DPA) estimates of additional costs resulting from the MOU are too low. We estimate that net costs for the state will likely increase by at least $13 million in 2006-07 and $12 million in 2007-08 ($6 million more than indicated by DPA in each year).

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MOU Fiscal Analysis: Bargaining Unit 2 (Attorneys and Hearing Officers)—Revised

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.