2010 Legislative Update

What is Local 1000’s 2010 Legislative Agenda? Top Priorities State Budget Legislation Pension Reform Initiatives

Governor’s Proposed Budget 5/5/5 plan: Increase in PERS contributions by employee (5%) “Workforce cap” (5%) Salary reduction (5%) “Trigger” Additionally: Reduction of $152.8 million by contracting for lower cost health care coverage either directly from an insurer or through CalPERS Decrease of $98.1 million for pre-funding health and dental for Annuitants 5% increase in PERS contributions by employee (reduction to employer by same amount) $405.8 million) 5% salary reduction ($529.6 million savings) 5% across the board cut (“workforce cap”) to departments in personnel costs (through attrition/vacancies) $449.6 million savings (not constitutionals, since they already had reduction. Additional 5% salary reduction if CA doesn’t receive $6.9 in federal stimulus money This totals a 15% salary reduction for state employees - $1.6 Billion GF Also: Reduction of $152.8 million by contracting for lower cost health care coverage either directly from an insurer or through CalPERS Decrease of $98.1 million for pre-funding health and dental for Annuitants

LAO’s Analysis of Governor’s Proposals Increase in PERS contributions by employee (5%) Analysis: PERS increase is “risky” if done legislatively Recommendation: pension reform for new employees Collective bargaining “Workforce cap” (5%) Analysis: Workforce cap won’t work Recommendation: Don’t do it but if done, don’t touch CDCR Who determines what gets cut and what doesn’t? There is no legislative involvement so it is up to departments – they will cut what the Governor says. CDCR – this would be about another $300 million in reductions in addition to the $1.1 billion that the Gov. proposed on top of the 2009-2010 reducations to corrections that the legislative is still trying to figure out how to do. Also, why doesn’t this apply to operating expenses and equipment? Why does this apply to federally or specially funded departments? LAO says the state has little to give – we negotiated a 5% pay cut, two holidays and numerous other things non monetary (flexible work schedules, etc) Forced bargaining – essentially forcing unions to bargain FOR furlough days. Administration can implement reduction for excluded and exempt employees without legislative action Dills Act – Any provision of an MOU requiring expenditures may not become effective unless approved by the legislature in the annual budget act Recommendation: pay cuts by bargaining unit or classification Across the board salary reductions but provide the administration and BU’s with time to develop an alternative. Cuts could be permanent or temporary

LAO’s Analysis of Governor’s Proposals Salary reduction (5%) Analysis: Pay cut is the only way to go Recommendation: CUT STATE EMPLOYEE SALARIES

Furlough Legislation AB 1215 (De La Torre) SBX8 29 (Steinberg) This bill would exempt public employees from furloughs who are in positions that are funded at least 95% by sources other than the General Fund . AB 1215 is currently on the Senate’s Third Reading File and requires a majority vote to be sent to the Governor’s desk. SBX8 29 (Steinberg) Same bill but in Extraordinary Session that the Governor called on January 8, 2010 – Legislature must convene by February 22, 2010

Other Legislation AB 1699 (Hernandez) Continuous Appropriations bill in the event a budget is not in place by June 15, 2010 Reincarnation of AB 1125 Due to multiple court decisions, if there is no budget in place by June 15, 2010, state employees are subject to being paid the federal minimum wage required under the Fair Labor Standards Act, which for most employees is $7.25   This bill will ensure that state employees receive their full salary in the event a budget is not passed by June 15, 2010, by continuously appropriating employee payroll Had 8000 letters/emails delivered to Legislators in 4 days

MOU Update Assembly Bill 964 Assembly Bill 88 Failed to pass Assembly by January 31st deadline (because it was a two-year bill) Assembly Bill 88 2 year bill Location: Senate Floor Next Steps: Need 2/3 approval from the Senate by August 31, 2010 to send to the Governor’s desk.

Local 1000 Sponsored Bills EDD SCIF Transparency Rural Health Care Equity Program CDCR BOE SPB State Bar MOU EDD one stop Centers – in person unemployment benefit assistance paid for with existing EDD money for the admin of the unemployment compensation program SCIF bills – board members ratified by senate; insurance agents must meet the same requirements (licensure) as those who sell insurance in private practice. DDSD- SCO audit of federal funds provided by SSA DMV- spot bill to provide annual report on effectiveness of all new procedures, programs and incentives to provide drivers with the most accessible service. Transparency – Governor’s Executive Order as legislation Rural Health Care Equity Program – reinstatement, but no funding CDCR – educators bill BOE – sale of sick building SPB – restrict departments from renewing disapproved contracts Investigation period two years State Bar MOU

Pension Reform Return to pre SB 400 retirement formulas Repeal SB 183

2010 Initiatives Ballot Measurers Certified for June 8 Primary Property tax: new construction exclusion: seismic retrofitting. Elections: open primaries. Political Reform Act of 1974: California Fair Elections Act of 2008. New Two-Thirds Vote Requirement for Local Public Electricity Providers. Initiative Constitutional Amendment. Allows Auto Insurance Companies to Base Their Prices in Part on a Driver’s History of Insurance Coverage. Initiative Statute.

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