With no federal aid package, California state worker pay cuts are here to stay
It’s official: Pay cuts for California state workers are here to stay.
Thursday was the deadline for the federal government to send financial aid that could have undone cuts that took effect in July. The reductions will remain in place for two years for most of the state’s 230,000 employees.
Gov. Gavin Newsom and the state Legislature instituted the cuts, which reduce most workers’ pay while giving them two flexible days off per month, as part of the state’s budget response to a projected $54.3 billion deficit. The pay reductions are expected to save about $2.4 billion per year, according to the Legislative Analyst’s Office.
The budget included “triggers” that would have restored $11.1 billion in spending — for state workers, education and other areas — if the federal government provided enough unrestricted aid.
While California has received federal money during the coronavirus outbreak through designated state-federal programs, Congress hasn’t approved a package that would have restored more general spending.
“The federal government has failed to advance any additional economic stimulus package for struggling workers and businesses, nor have they agreed to any relief for state and local governments,” Finance Director Keely Bosler said in a Thursday letter to the Legislature.
The U.S. House of Representatives, with a Democratic majority, approved an aid package called the Heroes Act in May, but the bill didn’t make it past committee hearings in the Republican-held Senate.
The act, with an estimated cost of $3 trillion, would have restored the state’s spending in full, according to Bosler’s letter.
Stimulus talks are still underway in Washington despite an Oct. 6 Twitter post from President Donald Trump saying he had told his representatives to stop negotiating with Democrats until after the Nov. 3 election.
Trump has recently suggested he wants a big package, and Treasury Secretary and House Speaker Nancy Pelosi continue to exchange ideas, though the two sides remain far apart on how much to spend.
The Trump administration appears willing to offer some aid to states, and the Senate plans to hold an unusual late October election year session starting next week to consider a scaled-down stimulus plan. The House does not plan to meet but can be recalled quickly if necessary.
The California Finance Department will continue to “monitor and report on federal developments,” Bosler said in her letter.
Details of state workers’ pay cuts vary depending on their work and which union represents them, but most of the agreements start with a pay cut of 9.23%, the equivalent of two days of work per month. Workers receive two unpaid days off in exchange, which they can bank and use later.
The reductions to their pay are softened by a suspension of the contributions workers normally make to their retirement health care, which for most is a few percentage points.
This story was originally published October 15, 2020 at 10:59 AM with the headline "With no federal aid package, California state worker pay cuts are here to stay."