A tentative labor contract for California’s state craft and maintenance workers hikes costs to taxpayers more than any deal bargained by the union in at least 11 years, according to a new report by the non-partisan Legislative Analyst’s Office.
The pact with International Union of Operating Engineers Bargaining Unit 12, adds a total $473 million over four years to the state’s pay and benefits costs, the analyst’s office estimates. The figure includes increased pension, health care and other costs for the roughly 11,000 employees in Bargaining Unit 12 from July 1, 2016 to July 1, 2019.
In sum, the analyst wrote, “this agreement would increase annual state costs more than any of the Unit 12 agreements ratified since at least 2005 (when the Government Code was changed to require our review of labor agreements).”
Salary and other cash payments to Unit 12 members totaled nearly $530 million in calendar 2015, according to state payroll data analyzed by The Bee. Pensions, Social Security, health care and other non-salary benefits typically add one-third to the state’s employee cost – and also significantly reduce state workers’ take-home pay. Those expenses aren’t captured in the payroll data crunched by The Bee, but the analyst’s contract estimate includes them.
The agreement would also have an impact on managers and supervisors, the analyst’s report says, because the administration will likely increase those wages, too. Most state managers and supervisors are excluded from collective bargaining.
“We think it is reasonable to estimate that extending a comparable increase in compensation to Unit 12 supervisors and managers will increase state annual costs by between $30 and $50 million by 2019-20,” the analysis states.
The agreement, which awaits ratification by the rank and file, would also impose higher employee contributions to fund retiree health benefits. Unit 12 members have been contributing 0.5 percent of pay to the fund. The tentative agreement incrementally increases those payments to 4.6 percent of pay beginning July 1, 2019. The state would match employees’ retiree health contributions.