The State Worker

Analyst says state contracts will cost more than Jerry Brown thinks

How expensive are the 13 state labor contracts that are going to ratification votes this month?

About $100 million more than Gov. Jerry Brown’s team estimated when it tallied up the costs of the deals, according to a new report from the Legislative Analyst’s Office.

More than half of the state’s workforce is voting on labor agreements this month that generally would raise their pay by about 11.5 percent over four years while adjusting a number of other policies that may drive up spending on overtime and allow employees to cash out more of their unused vacation time.

The state Human Resources Department estimates that the deals will increase spending on compensation by $2 billion in 2020.

The new analysis suggests the total cost may be closer to $2.1 billion that year, mostly because of increased overtime.

“The higher salary levels provided by these agreements could increase annual state overtime costs by tens of millions of dollars,” the report warns.

The analysis also suggests the labor contracts could swell spending on pensions beyond what the Brown administration anticipates, and they may prompt managers to call for higher raises in coming years.

Analysts suggested the bill could come due in a recession.

“Employees will expect to receive the pay increases provided by the agreements, regardless of the condition of state revenues during the terms of the agreements,” the report says.

The report pertains to proposed contracts for state workers represented by SEIU Local 1000, AFSCME, the International Union of Operating Engineers and the California Association of Psychiatric Technicians.

Adam Ashton: 916-321-1063, @Adam_Ashton