August 19, 2011
Pursuant to Elections Code Section 9005, we have reviewed
the proposed constitutional
initiative regarding public employee collective bargaining rights in California
(A.G. File No. 11‑0020).
Background
According to the U.S.
Census, California state and local governments employed in March 2009
more than 1.8 million full-time equivalent employees with a monthly
payroll cost of $10 billion. These public employees include California
state, higher education, K-12 education, and local public employees.
Under state law, most
public employees have collective bargaining rights. Collective
bargaining is a negotiation process through which an employer and
exclusive employee representative bilaterally determine conditions of
employment. These negotiations result in a contract, or memorandum of
understanding (MOU). Among other provisions, MOUs typically establish
wages, health benefits, employee retirement contributions, working
hours, overtime, grievance processes, and term of contracts. Most public
employees with collective bargaining rights currently are working under
a collectively bargained contract. These contracts typically last for
less than five years. Some employees—mostly managers and supervisors—are
excluded from collective bargaining, in which case a jurisdiction’s
governing authority determines their employee compensation.
Major Provisions
This measure
prohibits any state, school, or other local government entity from
recognizing any labor union or other employee association as a
bargaining agent. The measure also prohibits these public employers from
entering into any agreement relating to public employees or their
employment.
Fiscal Effect
Fiscal Effect of Measure May Not
Begin Immediately. The United States and California
Constitutions have provisions safeguarding the provisions of contracts,
which would likely include current collective bargaining contracts. As a
result, state and local agencies may be required to implement the terms
of their current collective bargaining contracts, including payment of
wages at specified levels, until the contracts expire. To the extent
this occurred, the fiscal effect of this measure on state and local
governments would be delayed.
Uncertainties Concerning Future
State and Local Savings. Within a few years, virtually all
existing public employee collective bargaining contracts will expire. At
that time, state and local employers could establish wages and other
terms of employment without securing the agreement of an employee
association. In order to maintain their workforces, however, state and
local government employers likely would set wages and other forms of
compensation at amounts similar to those offered by other public and
private employers. Whether any public agency’s employee compensation
costs would increase or decrease, therefore, would depend in part on the
difference between its current compensation and those offered by other
employers to similar employees. Because the overall effect of this
measure would be to strengthen state and local governments’ authority to
set employee compensation at levels that are lower than that which an
employee association would agree to, we would expect that some state and
local agencies would experience net reductions in their employee
compensation costs. The amount of these state and local government
savings would depend on future actions by state and local governments.
Fiscal Summary. This
measure would have the following major fiscal impact:
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Potential state and local government
employee compensation savings. The amount of savings would depend on
future compensation decisions by state and local governments.
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