The State Worker

California state worker raises to cost $5.6 billion under Gavin Newsom’s new contracts

Nearly two-thirds of California state workers will receive raises in the coming months based on new contracts their unions negotiated with Gov. Gavin Newsom’s administration this year.

The state is boosting pay for about 147,000 of its 235,000 employees through the contracts, giving raises of about 3 percent per year to most while increasing salaries for some hard-to-fill jobs by as much as 25 percent.

Pay, benefit and health care changes in their contracts, which have terms of one to three years, will cost the state about $5.6 billion, according to the California Department of Human Resources.

Last year, the state spent about $18.4 billion on wages and about $8.2 billion on retirement and health benefits, for a total of about $26.6 billion, according to State Controller’s Office data. That’s up from about $19 billion 10 years ago.

The state’s total payroll hovered between $14 billion and $15 billion from 2009 to 2014, when it started ticking upward as the economy recovered.

Newsom took office in a year when contracts with six state worker unions were expiring, including its agreement with SEIU Local 1000, the largest state worker union representing about 100,000 workers. The state also was sitting on a budget surplus.

After a slow start, negotiations went relatively smoothly, avoiding the strike threats and standoffs that peppered some of the negotiations with former Gov. Jerry Brown’s administration. Newsom signed legislation Oct. 13 finalizing the new contracts.

State workers with the new contracts received salary increases that are in line with those being negotiated by cities and counties, where workers’ unions have been negotiating 3 to 5 percent raises, said Tim Yeung, a labor and employment lawyer with Sacramento-based firm Sloan Sakai.

Newsom’s bargaining team demonstrated willingness to offer special raises for job classifications with recruitment and retention problems, authorizing hefty increases for workers in select jobs. This year’s contract agreements include a couple novel arrangements, such as a new $3,100-per-year health insurance stipend and the diversion of part of a California Highway Patrol raise to help pay for retirement benefits.

Taken together, the contracts reflect a bargaining approach aimed at bolstering the state’s workforce while minimizing the pay increases that add the most to the state’s pension burdens, Yeung said.

“Historically the state has been conservative in their general salary increases for public employees, and I think these contracts preserve that position,” he said. “To the extent they’re having retention problems, it sounds like they’re trying to target particular raises for those positions, which makes sense to me.”

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In addition to new raises and perks, many of the contracts call for slight increases to what state workers pay toward their retirement benefits, including changes that move employees closer to a 50-50 split with their employers in making annual pension contributions.

Just one union with an expired contract, the California Association of Psychiatric Technicians, didn’t reach a new agreement. A spokesman for the union, whose workers care for mentally ill and developmentally disabled people in state facilities, declined to comment on where negotiations stand. When contracts expire, employees keep working under their last contract’s terms.

Highlights of the six new contracts are below:

The Local 1000 contract was the first to include the new health care stipend. The $260-per-month stipend, which isn’t pensionable, is equal to the average monthly health insurance premium payment for Local 1000 members. The union’s represented workers, ranging from nurses to IT specialists to food inspectors and custodians, will receive a 7 percent raise over their three-year contract, with some specific job classifications receiving additional 5 percent raises.

The California Correctional Peace Officers Association, representing about 28,000 employees, will receive a 3 percent raise in a one-year contract.

The California State Law Enforcement Association, representing about 7,300 workers in jobs ranging from dispatchers and security officers to park rangers, will receive a 10 percent raise over four years, with some receiving special salary increases of up to 24 percent.

The California Association of Highway Patrolmen’s 6,700 members receive automatic pay increases based on an average of raises among peace officers in the state’s largest local departments in Southern California and the Bay Area. In its new contract, the union agreed to give up a half-percent of an anticipated 3.5 percent raise next year to help pay down pension debt.

State attorneys and administrative law judges will receive the same health care perk as Local 1000, plus a 2.75 percent raise, in a one-year agreement. California Attorneys, Administrative Law Judges and Hearing Officers in State Employment, representing about 4,300 workers, is eager to return to the bargaining table to try to close pay gaps between its workers and attorneys working for other public organizations.

A group of about 1,000 blue-collar workers who maintain heating and cooling systems at state prisons, manage water and waste at state parks and handle HVAC at other state facilities will receive raises of 8.5 percent over three years. Some of the International Union of Operating Engineers’ tenured workers in high-cost areas will receive salary increases up to 25 percent.

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Wes Venteicher anchors The Bee’s popular State Worker coverage in the newspaper’s Capitol Bureau. He covers taxes, pensions, unions, state spending and California government. A Montana native, he reported on health care and politics in Chicago and Pittsburgh before joining The Bee in 2018.