Senate Budget and Fiscal Review Subcommittee No. 5 on Corrections, Public Safety, Judiciary, Labor and Transportation

The Senate Budget Subcommitee on Corrections, Public Safety, Judiciary, labor and Transportation will now come to order. Good morning, everyone. We are holding our Committee hearings here in the Capitol and I ask that all Members of Subcommitee number five be present in room 112 so we can establish a quorum and begin our hearing.

Today is an overview of the May revision proposals related to corrections and labor. We will be hearing from the California Department of Corrections and Rehabilitation and various public employment and labor related departments.

The May revision identified a budget shortfall of approximately $12 billion, leaving us with difficult decisions to make as we consider the administration's proposals before us today and move forward towards a final budget. The May revision is a starting point. I want to repeat that the May revision is the starting point and we're an equal branch of government.

I added that to my notes here. And we look forward to working with our partners in the Assembly and in the Administration to structure a fair and and balanced budget that reflects our priorities. With that, colleagues, before we begin, is there any initial comments anyone would like to make? Senator Seyarto?

No, thank you. All right, thank you, sir. I do want to just say in about a half an hour I'm going to have to step out for a little bit, but we're still monitoring the meeting and then I'll be right back. But I do have.

I'm keenly very interested and what our budget is doing and its effect on all of our people, on all of our agencies. And so please don't take that as a sign of disinterest. It's just a meeting I gotta get to and then come right back. Okay, thanks.

There's one thing I would never say is that you were disinterested. You've been a good partner. Thank you, sir. So with that, colleagues, we're going to establish a quorum. Consultant, would you please call the roll? Right. So actually, technically we don't have a quorum as of yet, so we'll forego that in a little bit.

So let's start with our first issue relating to the Department of Corrections and Rehabilitation. Our first issue is regarding the overview of the population projections and potential solutions. We're going to start with CDCR. The Legislative Analyst Office may have some comments, the Department of Finance, and then we'll continue from there.

We do have a pretty big agenda today, so I would ask if you could presenters keep your comments to two minutes. Don't just read verbatim what you've already provided us.

If you could summarize, because we want to make sure we have quite a few Members here in the public that are going to want to weigh in towards the end and we didn't mention that I don't think or I missed it in the script at the end of this full hearing is when we will take public comment and usually public comment is only about 30 seconds so you have enough time to say your name, what organization you're with, and what you support or you oppose.

Okay? With that being said, we're ready for the CDCR to begin.

Good morning, Madam Chair, Members of the Committee. I'm Kathy Jefferson, Deputy Director for the CDCR Office of Research, and I'll be providing an overview of CDCR's spring 2025 population projections. CDCR utilizes historical data, including data on court commitments to predict our future populations.

The spring projections are provided through June 2029 and the estimates include actual data as well as the estimated impact of legislation, policy and process changes in place through December 312024. Overall, we are expecting a net five year decrease of 3.1% for our state prison population from June 302024 to June 30 of 2029.

I believe you were provided a handout of the comparison between fall and spring, so I won't go over that. Now I'll focus on our adjustments that we made with regard to the Prop 36 estimates.

We were able to make two adjustments to our assumptions in this cycle based on new information we we received as Prop 36 rolled out and also as part of our discussions with stakeholders.

The first adjustment has to do with admissions, so admissions began January 2025, but rather than assuming a full immediate impact, we are now assuming that there would be a slow gradual increase from January 2025 through February of 2026, at which point it would level off for the remainder of the cycle.

This accounts for implementation time for local jurisdictions as well as for any individuals who may choose the mandated treatment option. The second adjustment has to do with the impact on parole.

Length of stay is still assumed to be 11 months, but the rate of released parole supervision was reduced from 20% to 3% and the rest are anticipated to go to post release community supervision. These adjustments were what we were able to make during this cycle, but with Prop 36 the long term impact of Prop 36 still evolving.

We do anticipate that we can improve our estimates as we move forward as we receive more data which are monitoring CDCR is monitoring implementation and the new admissions very closely and so I'm happy to answer any questions you have.

Thank you for your Time. Thank you. Yes, ma' am. Good morning, Madam Chair and Committee Members. My name is Cynthia Mendonza. I am the Deputy Director, Office of Fiscal Services. I'll be presenting across each of the three sections for CDCR the proposals and.

And for this section, we're requesting 4.3 million beginning in 25-26 to address increased Department legal costs related to the Coleman Class Action Monitoring as well as Department of Justice increased costs. We're also requesting 2.6 million beginning in 25-26 through 27-28 to Fund increased costs for the Family Liaison Services and Gender Responsive Trauma Informed contract costs.

CDCR is also proposing, due to lowered projected prison population and CDCRs need to reduce its budget to close an additional prison by October 2026. At this point, no prison has been selected. CDCR is working towards that decision and all efforts will be made to mitigate the impact on affected staff and the incarcerated population.

Additionally, the Department plans to align with an external consulting group. We've added a reduction of 125 million in the budget year and we're working to assist. We are working with the consultant who is assisting the Department in assessing various business processes with the methods with the aim of modernization, improvement and efficiency.

The specifics are still to be determined, but CDCR and CCHCX expect most of those reductions to occur at the headquarters level. With that, we're available for questions.

Any comments from the Leg Analyst Office?

Caitlin o' Neill with the Legislative Analyst Office. My colleague and I have comments on a few items in issue one. We'll just go in order of the agenda, if that works for you, ma' am.

So, as you'll recall, in January we raised concerns that the Administration's methodology for estimating the population impacts of Proposition 36 resulted in overestimation of the prison and parole populations. In reviewing the Administration's may revise, which reflects downward adjustments to those estimates, we find the current year and budget year estimates to be reasonable and do recommend approving them.

Orlando Sanchez with the LAO. As mentioned, the Administration has a proposal to authorize the Department of Finance to engage in a contract to identify and create process improvements. This is what led to the 125 operational savings that are listed on the agenda. And then looking for efficiencies in state government is.

Is good practice and something that should be done regularly. As the recent experience with the efficiencies which will be discussed in later panels, this could be a challenge. Especially it could be difficult finding more reductions that do not affect service levels.

While the Administration has provided some high level ideas of where process improvements could happen within the Department. For CDCR. The proposal still has little detail on what changes or how those changes will be implemented. And also the proposal does not envision reporting back to the Legislature on the work of that contractor.

We find that this lacks transparency and given the lack of detail surrounding the proposal and its potential impact on CDCR, we recommend that the Legislature ask some key questions to further understand why what's intended to achieve through this contractor and how it'll achieve the savings that the Department has identified.

Some of those questions we've shared with the Committee, but some of those include if the assumed savings are not achieved, what would the state need to would the state need to identify additional efficiencies for CDCR? How would the Legislature be notified of any problematic changes that might affect service levels for the Department?

And then our office has recommended reporting requirements on this, on this contract and how it affects state departments. But we're also happy to work with the Legislature in the coming days and weeks to identify alternative reductions.

And our final comments on on issue one pertain to the public safety radio replacements item, which was a January proposal for about $20 million ongoing to establish a replacement cycle for CDCR's radio equipment, which the Governor is now withdrawing with the may revise in light of the budget condition, we don't have a recommendation here but really more just issues for your consideration, which is that this is not a permanent solution but rather a delay of cost because these costs will have to be incurred in the future and delaying the replacements may expose the state to increase risk safety risk, which the Department in its January proposal indicated represents a serious safety risk because much of its radio equipment has exceeded its expected life cycle, is no longer supported by the manufacturer and replacement parts are no longer available.

So to better understand this risk, the Legislature may want to ask the Department to report in hearings on the implications of delaying these replacements. And if the Legislature is concerned with this approach, it could identify other budget solutions in order to provide some funding for radio replacement. We'd be happy to assist the Legislature in doing that.

Thank you. Any comments from Department of Finance?

Yes, good morning. Kimberly Harbison, Department of Finance and I wanted to talk a little bit about the contract that was mentioned earlier. So the Department of Finance hired a group called Boston Consulting Group for a three month contract to look at several of our larger General Fund departments.

CDCR is one of those departments and as you guys, you have seen some of the departments have had trouble achieving the goals for the savings efficiencies that we did last year. So we undertook this to give more support to those departments. The three month contract was a scoping exercise to look at where more savings could be achieved.

The departments have worked very closely, sharing data and information, many conversations about their operations. The focus will be on administrative and headquarters type things. Things. It's not about program delivery, it's about being efficient in how they operate. Can they do things with fewer steps?

Do they need to not do things that they're doing because they've always done them. They'll look at four areas in particular which would be headquarters efficiencies, contract management, overtime management and the healthcare service delivery.

And then as was mentioned, there's a 20 million request in the Department of Finance's budget to do a second contract that, that would go into more detail and walk side by side with these departments and help them do this. So it wouldn't be just somebody coming in and saying, here's what you should do.

It will be somebody who can actually train them on how to do these things because they have experience and success in other states having done similar activities. And then I'll pass it to my colleague, Patrick.

Hello? Patrick Plant, Department of Finance, in regards to responses to the Legislative Analyst Office. Yes, can you hear me now? Perfect, thank you. In response to the LAO's responses to May revision proposals, the Administration continues to support the budget proposed through the May revision and looking forward to the continued discussion.

Thank you.

We're now going to have our consultant, our staff establish a quorum, and then that way we can continue business. So hold tight one moment.

[Roll call]

We've established a quorum. So that's an important step in this legislative process. With that, do I have Members who have some initial questions? Senator Siardo? Yes.

Thank you very much. And thank you all for being here today. I had a question with regard to the public safety radio replacement issue. It's $20 million to replace these radios, correct? Yeah. So I'm a little familiar with these radios and not just these, but other radios as well.

I would rather that we reflect an additional savings of $105 million from General Fund in 2025 and 26 and take care of this problem. Because the safety element, the biggest safety hazard for any public safety people is a lack of communication.

And that extends to a lot of the issues we're having with some of our lawsuits about supervision and what's happening and where it's happening. If we don't have adequate communication in our prison system between our correctional officers, that will lead to more problems in that arena. And that'll cost a heck of a lot more than 19.8 million.

And by the way, by two more years, the. That 19.8 will be $25 million. So that's something that I think the Committee needs to recommend that get put right back in because it has no business being taken out.

And another thing, and this is just kind of overall, and it's not just your agency, but all of our agencies, I kind of feel like we're pouring oil into an engine that is a bad engine and needs an overhaul.

And are you aware of any longer term strategic planning for our prison system so that we can make one that more reflects what we want to achieve in the future? Because right now I feel like we're dog paddling. And every year we're trying to pay employees that are just trying to keep up with their cost of living.

That is being driven by policies that we create. And we have to tell them no, because we don't have. We have money. We have facilities that are falling apart. We have radios that are falling apart.

Is there a long range plan in our CDCR system that is that you can point to so we can look at it and decide how much we're gonna have to invest to make this thing work? Right. And like I said, it's not just your agency, it's all of them.

Yeah, I mean, CDCR is obviously very complex and there are a number of efforts within CDCR. We are trying to address that longer range plan. For instance, you'll hear about the facility planning. There is a step back to try to look at the facilities holistically. What are we really trying to accomplish?

How do we really address our needs? And they're vast. The California model is another strategic plan. We are trying to improve and lower recidivism rates through a different way of correctional policy. And that's a culture change and that's taking time. And we are affected by this current budget.

We are trying to bring in a consultant who along like the critical factor here with the consultant is speed. Right. So they bring in best practices that they've implemented across the states in other correctional facilities where they've seen other ways to develop efficiencies.

So we don't want to necessarily lower the workload of, you know, or getting rid of things, but like, how do we just make it more efficient and modernize? So there are these efforts going on. It does take time and it's very difficult in the current budget climate.

But very good people working on these areas and trying to do what we can to implement.

Okay, thank you. Yeah. I'm just really concerned that we're not. Because like we have a prison closure. We have absolutely no idea where this prison closure is going to be or the communities that are affected by it. Because prisons aren't just the prison itself.

It's like out in Blythe, you close the second, you know, they closed the first one. Now if they close the second one, what is Blythe going to do? They have a bunch of people that live out there that support that facility that won't be living out there.

So, you know, that's something that we have to, we really have to understand. And maybe we don't need all of those facilities. And maybe the California model that's modeled after Norway works for some segments of the population of the, of our prison population.

And those are the people that should be there more short term because they've got drug problems or they do minor offenses and that works for that, but it doesn't work for the whole population.

And I just feel like we are, like I said, I feel like we're dog paddling and I want to feel like we're being constructive and we have a goal and we can achieve that goal and hopefully you can get the support you need and your agency needs to do that.

If we have to have somebody on the side that is looking at the longer Range, how do we want this to look and not dividing their time up to do all this other stuff? I would rather do that and give us a chance to incorporate the style of CDCR and rehabilitation that we envision as a whole.

And so, anyway, I appreciate your input today on that. And, you know, I don't really have a problem with the other. The items in here. I just want those public safety radios put right back in. Like I said, they have no business being taken out.

Thanks, Senator Durazo. Thank you.

And I want to ditto what the Senator just said about the public safety safety radio replacements. I think that's an important issue for us to include on the prison closures. And I apologize if you presented this.

Which prisons are on the list for potential closure and how are you applying the criteria for deciding which prisons to close, especially by next year, Within a year?

Yeah, it is a quick turnaround. I think the decision criteria is being evaluated across the whole. We have to look at population, their needs, security needs. There's so many factors. Their health needs, which prisons offer what, where the staff are that can offer, you know, the correct services for these individuals. There is no short list.

There really is just trying to evaluate the population with what the facilities offer. So we do not have a decision yet. And The Penal Code 2067 is also being used to help look at the various factors and what's available in these prisons. October 26th is coming around pretty fast.

So a prison will need to be announced soon because they need at least 12 months to get through the actual closure operations.

I understand. I've been on this Committee for five years on this issue. This topic has come up every single budget. And every time I ask the question about what's the criteria, how do we know which one? I mean, in the next issue, we're talking about new roofs.

And yet we have a prison that was demolished with and just had a new roof done to it the year before. I mean, you know, there has to be far more thinking. I mean, I'm not saying thinking, excuse me, but far more strategic, far more strategy put into how we make these decisions. These are budget decisions.

And I know, and I agree with the Senator that it also has an impact on the community, has an impact on what kind of programs are successful or not. But every year we talk about the same thing. I bring up the same thing. Which prisons? Why are you closing certain ones? What's your criteria? And we can't get.

We can't get that even in the generic. This is what it's going to be these are the prisons being considered. You have to be talking to the communities as well. I mean, it's unfair to those communities because of people who work at the prisons to let them know at the last minute.

I mean, there's too many people involved and impacted the people who work there. Where are they going to go if it closes down? Should they know in advance so they could be placed?

I'm sure these are things that you're taking into account, but they haven't been given to us and the Legislature so that we could help make the decision on, on the, on the budget. So why, why does this happen year after year after year that we can't get that kind of information?

Understand there the population is changing all the time. There is no set. It's very dynamic and the needs of the population are not always the same year after year. And we're also looking at trends in the future and what, which places are likely to best support the current needs.

And as part of the penal code 2067, we are trying to look at those long term investments and where maybe they're in better shape or worse shape. But it is an ever evolving process.

Definitely if there is something that was proposed in this budget that would be taken into account and that prison wouldn't get those fixes if that was selected for closure.

But it is something that there are just so many different factors and it really depends on the population to determine which prisons are going to be most viable for a closure.

I would say, Madam Chair, this is very, very insufficient information for us to be able to participate in deciding a budget where there are billions of dollars at stake and we can't get that basic information. And I would just say to you again, this has happened year after year after year.

We cannot seem to get, we don't get the information we need. Thank you. I'm sorry. And then we're asked to approve other parts of the budget which will exclude people from having health care.

But we can't get the sufficient information on this subject to be able to know are we spending the money the right way that we should be spending it.

Thank you, Senator Durazzo. I'll respectfully request, ma' am, that if you could go back to your Department and let them know, we'd like to know within 30 days the options of being considered a prison closures to this Committee. Okay.

The second thing would be if in the event the Committee makes the recommendation to put the radios back in, is there an alternative that you might want to suggest where a budget cut could be made of that same area.

And we'd like to request that, unfortunately, within about the next two weeks because we are, as you know, making a decision and we'd like to include you in the process. So if you could provide that to us.

Building on Senator Durazzo's point, you're asking for an increase in legal costs due to CDCR's failure to meet court mandated mental health staffing, when maybe we could settle that case and get on and use the money for something else. So it's really critical that the funds are. I think the Committee's been very clear.

I don't want to beat a dead horse on it. Okay. All right, thank you. Next, we're going to go to issue number two, which is capital outlay and facilities overview. Again, I'm going to ask that those presenting spend hopefully two minutes or less.

And I got to ask Members also in our questions if we could try to keep them to about a minute or so. And when you answer the question, if you could do the same. We've got a hard stop at 11:45 and you can see we have a great deal of the public that wants to participate.

So we've got to make sure we include time for everyone. That being said, we'll move forward on issue number two. We're going to start with the CDCR.

Cynthia, Department of Finance. There are a few proposals in this that. Sorry, used to be Department of Finance, Department of Corrections Rehabilitation.

I thought you're leaving already. I know, I'm out of here.

We've proposed a roof funding reappropriation from the 2324 Budget Acts to address reprioritized roof process projects across the state and necessary kitchen repairs. Another proposal in this area is funding to support costs associated with firewatch coverage as well as repair deficient fire alarm systems.

With regard to solutions, we have taken back a proposal for the Americans with Disability act facility improvements to allow more time to prepare for the comprehensive facility wide solutions that I mentioned earlier. And then two other proposals were reduced in scope. The air cooling pilot program.

A pilot program to test alternative processes to cool facilities will now occur at three institutions rather than four and allow for evaluation of air cooling alternatives. And I'll save the last one for the next topic. So with that, I'll turn it over to Dave Lewis if he has any comments.

Hi, Dave Lewis, Director of Facility Planning, Construction and Management for CDCR. Just to reiterate the previous comments, we are doing a comprehensive review of all of our facilities. We're currently undertaking that effort to really take a look at the long term needs of our facilities and examine whether they meet the needs of the Department overall.

We're also committed to not starting anything new as far as new construction or new projects until we're sure of which prison will close so that we don't end up needing to invest money unnecessarily in a prison that's closed.

So we are taking a really, we're taking this very seriously as how to move forward on these issues as we go forward and are really taking a long term look at the Department and its needs so that we can better present proposals in the future that represent the department's long term needs.

Thank you, the LAO's office. We just have an issue for your consideration on one of the items within issue two, which is the withdrawal of the January proposal for a 221,000,001 time General Fund to make accessibility improvements at various prisons similar to the recent radio replacement issue.

Because these ADA improvements are required under an ongoing class action lawsuit, the Legislature may want to consider this more of a delay of costs. And in addition, it's possible that delaying these improvements could expose the state to increased legal risk.

And so to better understand that, the Legislature may want to ask the department to describe the implications of this delay. And to the extent the Legislature is not comfortable with this approach, we could help it identify other solutions.

Thank you. Department of Finance.

Patrick Plant, Department of Finance. While making these improvements is an important task for CDCR to echo what Mr.

Lewis said, the Department is undergoing an internal review of its long term facilities facilities needs across all the adult institutions and therefore the Administration thinks it does make sense to withdraw the funding request so the Ada improvements can be. Viewed in a larger context of all facility projects. Thank you.

Thank you. Any Members with questions? All right, I have a couple of them. What are going to be the implications of the one section that's not going to have the cooling pilot? What is the situation at that particular facility?

We're withdrawing the requests related to the California Medical facility. In General, our approach on this cooling pilot is to do things that can demonstrate the long term viability of cooling. California Medical Facility is a singular facility that doesn't represent any other facilities.

So any solutions that would need to be found there or at our other older facilities really have to be tailored to those. And so it doesn't give us maybe the data for the long term approach that we're looking for. So I don't think it has much of an impact on our study.

But we will continue to examine what the cooling needs would be at all of our facilities. It's just this doesn't represent the scale. Maybe that doing it at the other locations actually represents.

Okay, My follow up question is similar to the radio situation. To delay improvements of Ada as asking us just for a lawsuit and ending up costing us the same money.

So I'd respectfully request, if you could please provide to this Committee if we were to look to put that back in, what would be an alternative you would want us to consider? And we certainly welcome the LAO to work with you on both the radio situation and the Ada.

Because, I mean, that's something again, we're required by law to do so. It's not really good to kick the can. All right. With that being said, we're going to move to issue number three. Healthcare and programming overview. We're gonna start again with you, ma' am, with the CDCR.

Sure. We're requesting resources and reimbursement authority to support the full implementation of calaim. We're also proposing trailer Bill Language, basically licensure of mental health professionals. We want to broaden the pre licensure waiver option to include all mental health professionals employed by CDCR and also trailer Bill to address tuberculosis testing requirements.

The trailer Bill would limit tuberculosis testing requirements to only those employees working in institutional settings and allowing employees to complete their testing during the first week of their employment. We think this would improve operational factors for those things.

And lastly, one proposal was reduced in scope, which is the COVID 19 mitigation efforts that would reduce funding for staff and population for COVID testing and discontinuing the wastewater monitoring. Thank you.

Did you have any comments here?

No, I'm here for questions. Thank you.

You're a lifeline.

I'm a lifeline.

All right. Thank you.

LAO's office. Starting with the San Quentin Rehabilitation center item, as you'll recall. So this is a January proposal that is sustained in the May revision. And as you'll recall, in our analysis of that January proposal, we recommended approving staffing to activate the new educational and vocational center that is being constructed.

But we recommended only improving the remaining portions of the request to make various other programmatic enhancements at the prison, like adding a bachelor's degree program if the Administration was able to come forward with a clear plan for the prison. And it has not done that at this time. So in light of that, we recommend we actually.

And in light of the changed budget situation where this proposal now comes at a cost of other previously identified priorities. And there's no particular urgency to staff and activate this building. We do recommend rejecting the entire proposal at this time. And then there's a couple other items in the May revise.

That we wanted to bring to your attention. Which are not explicitly agendized here, but they are related to the San Quentin Rehabilitation Center. The first is that the may revise proposes 1.6 million General Fund one time. To renovate San Quentin's east block facility. Which was previously the facility that housed condemned people.

So that it can be used to accommodate a General population in a honor dorm type setting. The proposed resources would augment about $800,000. That CDCR has already put into the renovations from its basement budget. And we understand that the renovations needed to make this facility habitable have largely been done.

And that the additional requested resources Would primarily be used toward making enhancements like microwaves and sinks and outdoor yard improvements. To convert it into more of an honor dorm environment. And while those enhancements are not inherently problematic, the lack of a clear plan for the prison.

Makes it difficult to evaluate whether this is the best place for an honor dorm. Or whether other prisons might be a better candidate. Or indeed whether other facility issues in General are higher priority. And moreover, given the state's budget condition, this comes at the expense of other previously identified priorities. So we do recommend rejecting it.

And then the other issue related to San Quentin. Is that there's another housing facility called CO Carson Unit, which the budget reflects resources to operate it as a housing unit. But because of the ongoing construction at the prison. Which has resulted in some rehabilitation programs getting displaced, they're now being operated out of that unit.

So it's not being operated as a housing unit. And so that suggests that there should be some custody staffing savings that exists. Because while there needs to be staffing while programs are operating, they don't need the full complement of 24 hour staffing. That they would need to operate it as a housing facility.

And we think that there could be up to 1.6 million in excess custody staffing. Baked into CDCR's proposed budget for this building. So we recommend directing the Administration to reduce funds Associated with any excess staffing. And that concludes comments on San Quentin Rehabilitation Center.

And I'll pass it to my colleague to discuss a few other Items in issue 3.

Before you pass it on. I wanted to clarify one thing you mentioned. About a strategic plan related to offering a bachelor's degree.

So the January proposal for San Quentin Rehabilitation Center. Includes resources to establish a new bachelor's degree program. That's one of the proposed enhancements that go beyond just activating the new building that's going to be completed, on which construction will be completed this year. There isn't a strategic plan for that specific component.

We haven't, in fact, received, received any strategic plan at all for the entire California model and for San Quentin's transformation specifically. And that's part of our concern.

Thank you. Yes, sir.

Orlando Sanchez with the LAO. Continuing through the agenda, the May revision includes 2.6 million for family liaison services and gender responsive trauma informed contracts. Given the budget condition, we recommend rejecting these increases since they do not meet our office's high bar for spending under the current budget climate.

For example, the Administration provided insufficient information to assess whether these services are cost effective in achieving their intended goals. And I'll cover a couple of other items as well that we want to highlight for the Legislature. There's also changes to how the state funds contract medical services.

When a prison's not able to provide health care services, they'll send someone out in the community either in emergency or specialty care. This these changes result in about 36 million in the current year and 33 million in 25-26. This would bring total funding for this to 396 million in the current year. 391.

However, the Department projects to spend above that 441 million is what they're telling us on contract medical costs, leaving 45 million unaddressed.

While we recommend approving this proposal on a one time basis, we also recommend directing the Department to report how it's going to address these unmet costs and provide the Legislature by January 10th of next year an updated budgeting methodology for these so that the Legislature can consider for the next cycle.

And then finally, the May Revision also includes 2.8 million in 25-26 and ongoing to increase healthcare staffing at the two women's prisons. The Administration didn't provide sufficient justification or need for these positions. Accordingly, we recommend rejecting this proposal. There's two data points that we want to highlight that seem relevant to this.

One is that both the women's prisons have been delegated back to the state from the federal receiver in the court case, the Plata vs Newsom case that's been ongoing that involves the health care. So these facilities now have been delegated through that process.

And then the second is the Inspector General has cycles where they assess medical services provided at all prisons. And in the most recent cycles, both prisons have been found to be providing adequate health care services. So this suggests that these prisons are providing adequate care and do not need additional funding under the existing Staffing packages.

Thank you and happy to answer any other questions.

Thank you.

With our Department of Finance, please. Lenny Shimado, Department of Finance. The Administration continues to support the budget proposed through the May revision, which is a combination of savings and some new proposals. However, in particular, my colleague and I. Would like to to speak to A. Few of the LAO's recommendations.

So for San Quentin Rehabilitation center, the Administration maintains its support of that proposal. Construction is still on track to be completed by January of 2026. And these resources will provide the staffing necessary to begin using the new learning center and expanding the rehabilitative opportunities which can be offered in that new space.

The proposal includes resources necessary to make the project successful and improve the rehabilitative opportunities offered at San Quentin Rehabilitation Center.

Good morning. Alyssa Cervantes, Department of Finance. I'm going to be speaking to the contract medical and the additional staffing at female prisons. So on contract medical. While the proposed methodology does appear to underfund the Department in current year, the current year portion of the population adjustment doesn't actually augment their budget at all.

It's just showing what the estimated impact would be of this methodology. And so the administration's focus on this premise was to create a long term sustainable methodology that both captures increases and decreases in the cost of providing this care.

As for the additional staff at female institutions, although the Central California Women's Facility is delegated back to the state, in the delegation memo, the receiver did mention that they may need additional clinical staff given the size and needs of its population, and directed the Department to assess, reassess, sorry, Primary care and nursing services.

And so this proposal is in response to that. The Department found that Central California Women's facility primary care providers see approximately double the average patients per workday as a statewide average, and nursing staff see approximately triple the statewide average. So we are proposing additional staffing in these areas to rectify those deficiencies. Thank you.

Happy to answer any questions.

Thank you. Madam Chair, just a question. On the pre licensure employment waivers, do you expect that that's going to help with the high vacancy rate for mental health professionals? I understand it's somewhere around 30% and the judge is pushing for that to go to 10%. So if you can talk about that.

Good morning. Duane Reader, Deputy Director for California Correctional Healthcare Services Fiscal Office. Yes, it'll help with clearing vacancies and broadening that language will allow more classifications to be available to cover vacancies within the system. So we'll be reducing fines and it will help us broaden our Search for mental health Clinicians.

Do you have any sense of the timing that it would take? I know you don't have a.

So we worked with CalHR and we've established the marriage family therapist as well as the licensed clinical counselors. Both of those are being hired currently to fill vacancies. So we're already moving on this. This effort.

Okay, thank you.

Yes.

All right, I have a few questions. Number one, why is the full amount of funding for San Quentin programs being maintained given the significant cuts across the board in the May revise? It seems like this San Quentin thing is like our opportunity to showcase this new model. But in light of the transition, tremendous other cuts.

What is the reason for maintaining full funding in all these programs?

So as Cindy Mendoza, as the building is coming online, this will provide the necessary education, resources and training to improve rehabilitation. And with that, the goal is obviously to, you know, as people become more educated and have opportunity, the recidivism does go down.

And so this is a public safety push that we want to see lower recidivism rates and improving the lives of those people re entering our communities. And this is really about culture change. And we've got to keep some momentum going. We need to keep the ball moving forward, even at a slight, the smallest amount.

And San Quentin will inform future programming decisions and how we implement the California model. Overall.

I'm in support of all the rehabilitation. I'm in support of the obvious data that has shown how it works. What I'm sharing with you that as we as Members, we're having to decide also on issues like Medi Cal. So the question would be, should a person who's never committed a crime, should they not have health care? Right.

Those are some of the decisions that we're making. So it's broader than just within your Department. It's considering all of the May revision cuts that have been brought forward due to the Administration. So I support. I'm looking forward to the grand opening and the tremendous success.

But I would also urge if there's any areas where we could cut or minimize. I mean, we're obviously not going to have full implementation of all programs day one of, you know, total numbers.

And so if there's any way we can go back and reshave and look at some of those issues, I think it's worthwhile to the public to do so. With that, what is the implementation status of calaim, the Calaim project?

So Calaim is a reimbursement opportunity for the state to draw down federal dollars. We Implemented the pharmacy piece on February 1st. So we've began collecting reimbursements for the pharmaceuticals 90 days before release and upon release.

And now as of April 1st, we've implemented bundle billing, which is services that we provide in the last 90 days and pre release activities. And so that's been implemented, it is growing. It isn't a full throttle, you know, turn it on and we're going to get all the reimbursement.

It's going to take us little time to, you know, ramp up if you will and fully implement. But we have implemented the two bigger reimbursement opportunities for the Department. We're working with healthcare services. There may be some additional opportunities for durable medical equipment and a few other things.

Upon release, we should have some clarifications and maybe be able to implement a little bit more reimbursement activity in August.

Would you supply the Committee possibly in September? What your kind of phase of implementation for the program that you expect?

Okay.

Sure you'd like that in September? Would you like that now?

Yes, yes, sir.

Okay, sure, we can do that.

And then also building upon the LAO, if we could within the 90 days get the update on the honor dorm of whether the questions at the LAO and asked, should those funds really be spent to make this wonderful honor, you know, dorm, when in fact we're deciding of closing prisons, putting more people together, other issues.

And then also an update on whether in fact now is the time or do you have a plan regarding your bachelor's degree program? That was the other thing that came out. Finally a bigger question that's actually pertinent to this subject, which is healthcare and programming overview that includes some staffing as well.

I remember when we had the hearing and I asked was there sufficient amount of staffing? And I was told yes, we have enough staffing.

And yet when we're looking at the may revise for seeing some of these additional requests, particularly for contracting out and if you could supply to the Committee, why are we requesting contracting out positions in lieu of regular positions of people having the opportunity to work and what is that choice? Or do you have an answer today?

No, we can follow up with some additional information. You know, we, we do look to Silver civil service as much as we can. We've been doing outreach hiring events. We try with our higher classifications to do kind of more of like an Executive recruitment to, to help them onboard easier.

So ideally we'd be able to hire all civil service. That is our ultimately our goal. So contracted staff is kind of a necessary evil, unfortunately. But we do focus on civil service, so we can certainly report back on our efforts, if that's helpful.

Yes. And real specific details like, you know, how many positions you have, how many are being contracted out, what steps are being taken not to contract out, because oftentimes it may initially look like a lower cost, but in the end, as it's projected out, it doesn't really end up being cheaper.

Okay. Okay. We'll follow up with that.

All right. With that. That concludes this particular session. We're going to move on to or I should say issue. We're going to move on to issue number four, which is the overview of the May revisions. Propos.

For issue number four, we're going to start off with the Department of Finance, and then we'll move over to the LAO's office, Legislative Analyst Office. So let's start with Department of Finance first. Good morning. If we could keep the volume down, we're going to start going into the next session. Thank you.

Grace Henry with the Department of Finance.

There, much better.

I'll do my best.

I can't hear you very well. Either closer or.

I'll be providing a brief overview of some of the May revision proposals that are highlighted in the agenda for the Labor and Workforce Development Agency, the Employment Development Department, and the Department of Industrial Relations. To achieve a balanced budget given the projected shortfall, the May revision includes two General Fund solutions for the labor agency.

First, a loan of 400 million from the Labor and Workforce Development Fund to the General Fund and a reduction of three million dollars in one-time funds included in the governor's budget for evaluation of regional coordination model expansion as part of the master plan for career education.

We note that the governor's budget included four million dollars for this purpose, so this retains one million dollars. Moving to the next item, the May revision includes an increase of eight and a half million one-time General Fund in 2025-26 for the unemployment insurance loan interest payment based on updated estimates.

Additionally, the May revision includes an augmentation of federal funding authority for EDD in the current year and budget year to align with anticipated federal allocations under the Workforce Innovation and Opportunity Act.

Finally, there are three workload proposals for the Department of Industrial Relations for apprenticeship training programs, public work IT enhancements, and service rate increases, all of which are funded by special funds. Representatives from the Labor Agency, EDD, and DIR are here today, and we are available to answer any questions that the subcommittee may have. And I will hand it off to my colleague.

Hello. Noelle Fa-Kaji, Department of Finance. I am here to give an overview of the trailer bill for the Department of Human Resources and the request for CalSTRS and CalPERS. So we have one trailer bill before you today related to the administration's ability to set statewide telework policies.

This does not mandate a particular telework agreement, but the statute was written in 1995 and has not been updated.

So the trailer bill is to move the responsibility for setting the statewide telecommuting policy from DGS to CalHR, place the language under the Personnel Administration section instead of the Department of Transportation, and also includes updates to align with current practice, including changing the terminology from telecommuting to telework, removing milestones that have been completed and streamlining Department responsibilities for CalSTRS.

Since governor's budget, we now estimate a 7.2 million increase for the, sorry, compared to governor's budget, for defined benefit contributions and the Supplemental Benefit Maintenance Account. These tie to an update in credible compensation as published by the board in April 2025.

And then lastly for CalPERS, the required contributions have decreased by 103.9 million since the governor's budget due to a decrease in the project, sorry, due to a difference in the adopted required contribution rate compared to the projection included in the governor's budget.

And the budget also includes a 573 million one-time supplemental pension payment to CalPERS using available Prop 2 debt repayment funding. And we have representatives from Kelly Char here to answer questions you may have.

Good morning, Chas Alamo with the Ledge Analyst Office. Regarding the first three issues for this item, so LDWGA, EDD, and DIR. Our office has no specific comments, but happy to take any questions or anything else from the committee.

Well, I'm surprised. Usually you give a fairly in depth recommendations.

We have reviewed the governor's May revision proposals and, no, no, no.

I'm sure you have. I'm just surprised. Did you have any comments, sir?

Yes. So, Nick Schroeder with the LAO, good morning.

Okay, good morning.

So with regards to the components related to employee compensation, we have no comments on the CalPERS or the CalSTRS components.

On the telework issue, we're still evaluating the proposed language, so we don't have a position on it, but it does seem like it's substantive in terms of its a major policy change, potentially by two parts: one, by requiring the employees who telework to be residing in California. And then the other piece is, I'm blanking. There's two pieces.

Anyway, it seems like something that should be addressed probably through the policy committee process rather than through the budget process.

Thank you. And if it comes to you later, feel free to chime in. Any members with any comments or questions? Senator Durazo, thank you.

The telework policy move, is that the same as the return to office policy? Is that a different.

To take that question, Eraina Ortega, Director of CalHR, it is separate from, tt is separate, yes. So the governor's executive order on returning to the office or creating a requirement for a minimum of four days in the office is separate from this proposal.

This is a statute that existed since 1995 and refers to a lot of outdated requirements, and it is housed currently in the DGS sections of the government code. The proposal here is to move it into the CalLHR sections of the government code.

You may know that the funding for the DGS portion of the telework program sunset last year. And so they don't actually have a unit who manages telework issues anymore. And for the most part, any telework issues are managed through CalHR. And so the proposal is to move it over into the body of law that is CalHR's.

To the point on the change of it being required that you be teleworking in the State of California, I don't believe that's a substantive change here. I think that's in the current statute.

Okay, thank you very much. I do have a comment on the. The loan of 400 million dollars going from the Labor Workforce Development Fund. And I'm concerned.

Ma' am, could you stay? Because I had a question also on that same one.

I'm concerned about taking money from the fund that is supposed to help address wage theft. Each year, we lose billions of dollars in taxes because of wage theft. Every year. Here we are. So the workers lose their money because wage theft isn't enforced or dealt with. And they don't pay the taxes into the fund from having worked.

So we lose it on all fronts. And yet we're taking 400 million dollars from that agency away from that agency, which should be using that money to enforce and stop wage theft. That would give us money into the general fund. That would give the workers a better way to support themselves.

And I remember in 2020, we borrowed 100 million dollars from the same fund. I don't know if that money was ever repaid. But here we go again. Taking from something that's truly, truly impactful to those working families, taking away from enforcing, enforcing the laws as we have them. So we need.

Why are we doing that when we could be using the money much more effectively?

Would that be Department of Finance? You want to go first or do you have a representative? Great. Yes, sir.

Jay Sturges, Labor and Workforce Development Agency. At the time, the current proposal does not impact any of the programs that are currently supporting the wage theft programs. Those are primarily funded through a different special fund. And this proposal does leave approximately 120 million in reserves in the fund.

To my knowledge, we have not repaid the previous 120 million dollar loans, but there is a repayment schedule for those. And I believe there is provisional language that will authorize the early repayment of this loan if we get to a position where the programs need the funding.

So you're trying to tell me that this would not impact programs like addressing wage theft?

That is correct.

Oh, that's, that's not my understanding.

I just wanted to provide a little bit more color that the there's another fund called the Labor Enforcement and Compliance Fund that does support a lot of those wage theft activities at the Division of Labor Standards Enforcement.

Okay, but this just doesn't make any sense. Mister.

So I think what you're hearing here is one, could you please provide to this committee within the next 30 days, no later than that, what, what is the original schedule of the original funds that were borrowed?

And then the second question would be why in the world are we accumulating significant dollars if it's not being used for the purpose of what we under, what we're being told it is? So we need an answer to the question of, and maybe you're prepared to give it today, what was the intent originally of the program?

And if that's the intent, why aren't we using the funds to now to the tune of 500 million dollars that's being removed from it?

I can answer the latter for you right now. We've seen a dramatic increase in the revenues over the last several years. Eight years ago, the annual revenues to the fund were about 12 million dollars a year. In the current governor's budget, I think we reflected actual revenues of 200 million dollars in the 23-24 year.

So over a span of a few years, we have increased revenues by 10 times. So because of that, it's been very hard for us to keep track of exactly how much is coming in. It's somewhat of a volatile revenue source and that it's derived from penalties that we don't have control over. Right.

It's when individuals bring claims for through attorneys, they bring that to there is a settlement. There's some kind of resolution to it. So it's not like revenues come in on a regular schedule where we know exactly how much will be coming in each year and can towards it. I'll take a quick look at my notes here.

I believe we expended nearly 100 million dollars in the 24-25 budget in terms of programmatic support from the fund. So it's not like we haven't been using the fund. But you are correct, there's a slight disconnect in that revenues have been coming in faster than we've been spending them.

Okay, so is it possible then also to provide to the committee, I would think you would be reevaluating this, at least on an annual basis.

And if you're collecting more than what you're expecting and it's hard to keep track of it, maybe we could make some considerations of it being used in a different way as opposed to just being held kind of in what the old folks would say, a slush fund, that you could just hold the money and then use it later when we're, when we need some money.

I said it's hard to project the level of revenues that are going to come in on any given year. Right. Because of the nature of how they come in.

I thought those were your words, not mine.

If I could clarify, I don't want to say it was hard to keep track of because I think that leads.

Because of that. We also don't want to overextend the fund. We do have a number of programs that rely on the fund for their operations. The Agricultural Labor Relations Board uses the fund. The labor agency itself uses the fund.

DIR itself uses the fund for annual operations as well as large one-time program expenditures like the California Worker Outreach Program. So those large one-time expenditures mixed in with these annual ongoing expenditures create a relatively volatile or fluid environment. So balancing those things as they come and go is why we have not.

We have more of a reserve. Additionally, with some of this accumulated during the period when Fi$Cal was being implemented, so our accounting records weren't as up to date as they typically are and as they are currently. So some of those balances accumulated while we were working through those challenges of the accounting processes with that new system.

Thank you for the additional information. However, my, my questions still remain the same because, and I would hope that you would be using the funds for some program. But again, the facts speak for itself. If you already borrowed 100 million dollars, now you're borrowing another 400 million dollars. That's 500 million dollars.

Now, almost half of that's approximately half a billion dollars that's not being utilized for its intended purpose. And so we'd like to understand why that is and what could be done potentially in the future for those funds to be best allocated in the best way.

Because half a million dollars is a lot of money to us when we're sitting on a deficit of 12 billion dollars.

And I agree. And I think that's why at this point we've decided the administration's position is this is providing relief and offsetting General Fund reductions elsewhere in the state. So while that wouldn't be our first priority for this fund, given the current fiscal climate, we think that is the prudent next step.

I will say, given the recent PAGA reforms that have been implemented in the 2024 legislative process, we do expect revenues to no longer come in at the levels that they were, I'm sure you guys are intimately aware of I believe, with SB92 and AB2288, where they've reformed the program significantly.

And so those impacts are going to likely reduce in revenue significantly going forward.

Right. The more you talk, the more comments I have. So, what I said in the beginning, I think the administration should keep in mind we're an equal branch of government. It's not just your decision to decide where half a billion dollars goes.

We're a body of people here that have the ability to direct and say, no, it doesn't go there. And we may choose based upon the things we've heard today. Maybe that money should be better spent on the radios. Maybe that money should be better spent on whatever nurses in the women's dorm. Who knows what that is?

But the point is, we also reserve the right. Not just you, not just the department. We reserve the right to understand if there's a significant amount of dollars that's not being utilized. We also have the right to understand that and determine, we may have some other ideas also. That's what I'm saying.

Understood, yes. This is just the administration's proposal, as you indicated at the beginning. I believe it's the beginning of the conversation.

It is. And so what I'm asking is if you would supply the committee with that information of how is it that this form was, this fund was initiated, which you initially described today.

Happy to provide that.

Fair enough? Okay, thank you.

What are some of the other areas maybe of how these funds could be utilized or how could the formulas potentially be changed in some way so we're better utilizing these dollars and not holding them, again, half a billion dollars that could be utilized in some very desperately needed areas.

Mr. Seyarto. Do you have a follow-up?

Thank you very much. So, you know, the funding that we're talking about here, 400 million dollars, is the part that is collected from the government through the various lawsuits and things that we have, the PAGA suits and those things. Right. Because that's usually about 10 percent of what is actually collected.

So we're talking about an extraction of about four billion dollars from businesses.

And when we have 400 million sitting in a pot that we're not really using, I think of things like the UI debt and starting to pay that down, we're about to be asked for another eight and a half million dollars in addition to what we're already paying, which is 643 million dollars for UI debt interest alone.

So those are the type of things I would like to see the administration coming and having some good suggestions with money that has been extracted from employers, and some of it, you know, because they've acted badly or whatever.

But a lot of it is, as we know, the 90-10 rule, and the 90 is 90 percent goes to the attorneys, 10 percent goes to. I mean, I'm sorry, half of it goes.

I think it's like 50 percent goes to the attorneys, part of it goes to the state, and then the plaintiff gets a little piddly amount and maybe rectifies the issue that they had with the fly fans or whatever it was.

So that whole system needs to be fixed so that if we're going to have extra money, it goes back into the pot that helps employers, so that there's more money. Because you can imagine employers getting 4 billion dollars. What they could do with that 4 billion dollars is maybe pay their people a little bit better, and things like that.

So this, to me, that whole system needs to be looked at so that we start benefiting any overages, go back to getting rid of the more debt and the more payments that are going out of businesses so they can put it back in businesses so they can put it back in the pockets of the people that work for them.

So that's kind of what I would like to see that addresses both this and the EDD thing. So that's all. Thanks.

Senator Durazo.

I do want to clarify that this is funding that's used by the Labor Commissioner for wage claim adjudication. And so I'm still looking at how money like this can be used for other purposes instead of for the wage claim. Thank you.

If I can provide one final comment of clarity. The Labor and Workforce Development Fund does have explicit statutory requirements as to how the fund will be used to be general to explain it, generally, it's for the education, enforcement, and outreach of the Labor Code.

So, as the statute is currently written, it can't be used broadly, but it can be used exactly for things like wage claim enforcement.

Understood.

Thank you, sir. All right. See, yes, sir.

And the statutes can be changed, right? That's what we do, and that's what I'm asking you to do is to give us examples of other options that we may want to consider that could best utilize how these funds are being captured.

Sorry. Following up with Director Ortega's comments, I was reminded by what the other issue was, but also to address the issue of the residency status. One of the issues is that we do have state employees who, whose work sites are outside of California. So, like in New York or outside of the state.

And so, by making it so that the telework trailer bill or telework law prohibits out-of-state employees from having telework, it would potentially prohibit those employees from having access to that policy. Secondly, the director mentioned that current law already has a residency requirement.

Looking at the section of the government code that the trailer bill would want to amend, which is 14200, I don't see any reference to residency. It seems, though, that this is an issue that is complicated and that has some policy implications that should be probably better considered by the policy committees.

The second issue that I had forgotten to address when I first spoke is that in the current law, it specifies that it could be telecommuting, be partial or total substitution, so that an employee can be totally working remotely. In the proposed language, just addresses employee dividing their time between working remotely and reporting to the designated workplace.

So it doesn't specify that employees may fully work remotely.

Well, you've heard a couple comments regarding this particular issue. Is this something that would be adopted immediately in this year's budget? Your suggested change in the trailer bill language?

Yes. If adopted as part of the trailer bill language, I believe it would take effect immediately with the other provisions of the trailer bill. To the point about the employees working in facilities, we have folks in Texas and Chicago, and other places, they would not be affected by this change.

They're working today, some of them via hybrid workplace or remotely under the current statute, which does define the telework program, again in the DGS sections of law, as work provided by California employees. So the structure of the telework program as its existence since 1995 assumed we were talking about State of California employees working in the State of California.

Those folks that are working remotely in other states are operating under telework policies and agreements that those departments have put into place. We can certainly clarify that it would not eliminate that possibility. It is certainly not intended to.

The intention of this trailer bill is really to move the law into CalHR's purview instead of the Department of General Services' purview. And that is really related to the budget change that happened last year, which is also why it's being proposed as a trailer bill. The program that DGS had sunsetted with the end of that funding.

And so, essentially, the policy issues are being managed at CakHR today.

And what was the reason of why you felt it would be better with CalHR?

I think it's largely because changes to remote policies are discussed, and are, any change is notified to the employees via CalHR or the department's HR and labor relations offices. The Department of General Services' involvement in the telework program had traditionally been around issues involving commuting and the managing of miles traveled, things along those lines.

That's the part of the program that has sunset and there's no longer a unit who is managing that type of information. The actual interaction with employees around remote policies is really something that is more. More managed by CalHR and the entire body of law around our personnel policies.

Absolutely.

Okay, thank you. All right, well, that's the end of that issue. We're now going to move on to issue number five, which is an update on state operations reductions and vacant positions.

Okay. If you could provide to the committee the clarification, and they might have some follow-up going back and forth that we'd like to clarify.

All right, we're going to start off with the Department of Finance.

Good morning Chairs and Members. This is Han Jiao Min from Department of Finance. I'm presenting on the Control Sections 4.05 and the 4.12 of the 2024 Budget Act.

The 2024 Budget act estimated the 2.2 billion General Fund savings in 2425 and 2.7 billion General Fund savings in 25-26 and ongoing resulting from reductions to state operations of up to 7.95%.

The 2024 Budget act also estimated 1.5 billion, including 762.5 million General Fund savings in 202425 and ongoing associated with vacant positions and the elimination of a primiding10,000 vacant positions beginning in 2025-26 and ongoing.

So control sections 4.05 and 4.12 of the 2024 Budget act authorize the Department of Finance to identify and implement savings associated with those control sections via Executive Order in fiscal year 2425 and require the Administration to propose all ongoing reductions to expenditures or position authority through the annual budget process.

So by working with departments throughout the fiscal year, the Administration identified that a significant portion of the estimated positions and state operations included in the 242024 Budget act were associated with expenditures that was critical to public safety, fire safety, 24 hour staffing requirements and the delivery of mission critical public benefits.

So at the 2025 Governor's Budget, we provided a high level update on savings achieved through those two control sections and since then additional adjustments were made to reflect changes needed due to the Los Angeles Fire Response and Recovery effort, federal funding pullbacks and other adjustments to reduce impact on critical programs.

The Administration has worked with departments to identify final savings at the program and expenditure item and the position levels as identified in the two letters we submitted to the JLBC on May 142025.

With regards to Control Section 4.05, the Finance will reduce departmental budgets in 2425 by 1 billion, including 605 million General Fund the Administration proposed reducing Department budgets in 25-26 and ongoing by 1.6 billion, including 1.2 billion General Fund under Control Section 4.12.

Finance will reduce departmental budgets in 2425 by 502 million including 195 million General Fund the Administration proposed reducing Department budgets in 25-26 and ongoing by 490 million including 182 million General Fund and eliminating 6002 vacant positions in 25-26.

Finance will implement reductions to current year budgets via Executive order after the 30 day waiting period as required by the 2024 Budget act, all expenditures and positions Authority adjustment for 2526 and ongoing are proposed by Administration and subject to legislative approval.

And the GLBC letter we submitted on May 142025 serves finance may revision letter for each impacted departments. So that recaps our control sections overview and we are happy to take any questions.

Thank you.

Did you have a presentation?

No presentation. Danielle Brandon with Finance available for some questions. Thank you.

LAO's office Nick Schroeder with the LAO so looking for efficiencies regularly in government operations is a worthy endeavor and a good endeavor.

I think that the agenda lays out and what Department of Finance just laid out shows is that it can be really difficult though to find reductions in state operations that don't have effects on the services that are being provided to the public.

That being said, as the agenda lays out, it's really not clear how the reductions, Department by Department might affect Department services. And that is because when the Legislature Subcommitee processes process earlier in the process asked departments for specific examples of how they would achieve the reductions, for the most part departments did not provide information.

And now that we're just weeks away from the final the budget process, we probably don't have enough time to get the information from each Department. So there's really kind of a lack of information about the overall effects and the specific effects to departments.

In addition, the agenda also raises valid concerns about the reductions to the special funds and how why those are necessary for a General Fund solution.

Thank you. Any Members with comments. All right, I have a few questions. Number one, these two control sections require the Administration to provide us, the Legislature, with the detailed information about reductions in state operations and elimination of vacant positions. This information was supposed to be provided to us on January 10th.

We did not receive it, unfortunately, until May 14th. Can you share with us why this report was delayed and how is it that we're expected to now do our work in about two weeks with the information, understand?

Daniel Brandon, Department of Finance Again, I just want to speak to first of all, the enormous amount of work that it took for the Administration to work with all of the individual departments given the uniqueness of their programs.

In addition, even before the Governor's Budget, although it was too late for us to change our estimates at the time, the wildfires had broken out and we knew that we had to make some adjustments for that. Shortly after that, you know, announcements of federal funds being cut and we had to take that into consideration.

So all in all, Just the enormous amount of work and then timing of the natural disasters and what's going on with the Federal Government just delayed what we could provide to the Legislature. We understand the position that you are in and we'll do everything we can to help assist.

Okay. Can we hope, though, that this wouldn't occur next year again? Ideally.

Ideally.

Good answer. What is the rationale for the variation in identified savings across your Department that you used, and what was the rationale that Department said, okay, I'm willing to cut 10 million, 2 million, 3 million. Was there any rationale used or just, hey, we didn't use 2 million this year, so we can cut 2 million.

Was there any rationale that was presented?

We did provide direction to our units and to state departments back, I believe, in September as to what items to look at as far as how individual departments worked with their analysts to determine which programs were appropriate for reductions that would have to be handled by the individual departments and analysts, I don't know.

And at any time we're. Did the Department share information of how these. Yes, we can do these cuts, but this will also be the impacts.

That's again going to have to be a discussion with the individual units and departments. We coordinated this drill, but worked directly with the other Finance budget analysts and units within Finance, who then worked directly with the various departments throughout the state.

Our role was coordinating all of this information and the drill itself to gather this information for the Legislature.

Okay. So could you please provide to this Committee, request that that background information be provided of what are the anticipated impacts of these cuts? Impacts in terms of enforcement of consumer protection, public health, environmental standards. I just gave you a few, but I'm sure they have others that they could provide.

We'll work with your consultants to get that information.

Yes, ma' am. Thank you. And what effect will the identified savings to the special Fund expenditures also have on the fees and tax levied to support these funds?

So I believe at this time the direct impact to those fees is unknown. I think the intent is to pass on those efficiencies to. To the public through those fees, but at this time, I don't have a number to assign to that.

Okay, so when you come back to us, if you could provide that information if there were any impacts that we didn't anticipate or if there were benefits. Okay. Seeing no other questions, we'll go on to issue number six. Thank you very much, ladies. Issue number six is employee compensation and collective bargaining.

We're going to hear from the Department of Finance first and then The Legislative and Analyst's office. You're staying. All right. Wow. Okay. So with that, let's begin with your presentation.

Sure. I can start with the presentation of those two control sections and overall employee compensation solutions. So the May revision propose adjustments to prior investment to assist in closing the projected budget shortfall. And this requires the employee compensation be part of the budget solution.

As such, collective bargaining negotiations will commence or continue with all the state's bargaining units to achieve those savings. Beginning with the July 2020 file pay period. The state will make every attempt to reach these savings through collective bargaining.

And additionally, the Administration will include a budget revision to impose reductions if the state cannot reach an agreement with each of the state's bargaining unit.

Could you say that last sentence again?

Sure. So the state will make every attempt to reach those savings through collective bargaining. And the Administration will include a budget revision to impose reductions if the state cannot reach agreement with each of the state bargaining unit. The May Revision assumes savings of 766.7 million, including 283.3 million General Fund for salary and wages.

However, the May revision contains funding for all negotiated 2026 calendar year increases in health care premiums and enrollment for the active state employees. So control Section 3.90 gives finance authority to impose those reductions. And Then Control Section 3.91 allows Finance to suspend the salary increase for the 14 bargaining units with the existing contracts.

Thank you. Anything you want to add? Nothing to add. Thank you. Thank you. LAO's office.

Nick. Nick Schroeder with the LAO. So these two control sections. Control section 391 would suspend the scheduled pay increases that are already that were included in the ratified agreements with the 14 bargaining units. And the 283 million General Fund that Department of Finance referenced is only in relation to Control Section 391.

Control Section 390 would allow the Administration to impose terms on bargaining units that do not reach agreement. And we do not have a specified level of savings that is associated with that control section. And so the proposal would give the Administration significant authority to determine the state's compensation policies for the next year or two.

I should point out that the savings are assumed for two years. And so what the proposal would do is it would give the Administration authority determined by how much to reduce compensation if it needs to be imposed. It would also allow the Administration to determine what policy would be used to impose those terms.

Would also point out that imposing compensation reductions on bargaining units with agreements that the Legislature ratified really can have a damaging effect on labor relations. And because of that, that would be what the Legislature would be weighing when it agrees to allow the Administration to impose terms.

And so we recommend that the Legislature reject the proposed control sections. And if the Legislature determines that it's consistent with its priorities to reduce employee compensation in 2526 we recommend that instead the Legislature adopt control section language that better preserves the Legislature's priorities by specifying a reduction target that the Administration can achieve.

So essentially setting a ceiling for how much of a reduction they can achieve and then identifying what policy specifically could be imposed if the Legislature wanted to allow the Administration to impose terms on bargaining units that already have established. Bargaining unit. Established. Established. Mouse.

And then also to require a legislative review of whatever concessions or imposed terms are established before they go into effect.

Thank you, Members. Any questions? Yes, Senator Durazo, Guess who?

So there's a collective bargaining agreement covering a number of units. And one control section says the Administration can cut the wages down without a specific amount, just gives them the authority to cut the wages. Is that correct?

That's correct. And as we mentioned in our budget summary, we currently impose 766 million, including 283 million General funds.

Yeah, I'm just trying to deal with the process here. And so there's a collective bargaining arrangement in place and the Administration wants the power to undo that in whatever way they see fit.

The state is making every attempt possible to reach goal of those solutions through the collective bargaining process.

The other proposal, the other control section says that if you want to do it with those who don't reach an agreement, then you can cut whatever you want as well. Right.

So basically the Administration has the power to undo collective bargaining agreements, try to negotiate something, but if they can't, they have the power to go forward with whatever they want to do.

Well, those are through. I think the agreement will be through a collective bargaining process. And in our control section, we did mention that we're willing to work with the Legislature upon approval of the budget act before we can implement those. Yeah, Irena.

Senator, Irena Ortega, Director of CalHR I wanted to respond to your question a little more directly, setting a little more context outside of the control section. So the Governor's Budget does propose to delay the pay increases that are scheduled in the budget today.

Our preference is absolutely to achieve that savings through collective bargaining, through having conversations with the represented bargaining units. The control section is there so that if there are not agreements reached and the Legislature and the Governor continue to agree that the savings needs to be achieved, the savings can be achieved through the Control section language.

So this is an approach that has been taken in the past. In the past, we've been able to reach agreement with all of the bargaining units. So I want to just make sure that the intention here is not to cut existing pay. It is to defer the pay increases that are scheduled in the budget.

And that's what the control section would do absent agreements with the bargaining units. Right. I just wanted to clarify that the idea that the purpose of the control section is for us to decrease pay by any amount is not the intention.

It is only to focus on the pay increases that are not yet in individuals paychecks but are scheduled to go into effect on July 1st.

Right. No, I wasn't. I was referring to the process and the fact that there is a collective bargaining relationship, a legal collective bargaining relationship where there is a collective bargaining agreement in place.

And you're asking us to say we can put that aside and if we don't reach an agreement, then we can go ahead and do what we believe is necessary. Right. And that's, that's. Well, I, I don't know if that. You said that that's been done before.

Yes, in my time in this role, it was done in 2020.

Well, we were in the middle of the pandemic then. And again, that was in the middle of the pandemic. So that was a bit different than what we're.

Right. And, and to recognize the reason why this is being proposed is to achieve that $12 billion savings as identified as the gap in the budget proposal. It is one of the many difficult choices that are in the budget in terms of reducing spending.

Yeah. The problem is that when you say you're going to negotiate, but if you don't like what I say, I'm going to do it anyway. So what kind of negotiations is that? I mean, I'd like to be in that situation when I'm buying a car.

You don't like the price, I'm going to, you know, then I'm going to pay you this up front. And you know what I want. So that's where I think. I don't want to change the law to give the power, that kind of power to the Administration.

It should be out of respect for each other having the same, you know, being at the table together and looking for solutions in our, and I trust in that collective bargaining process. That's what it's all about.

When it's when times are good, when times are not so good, whatever it is, there's a process and that's What I very much object to in this proposal, this is not asking us to support a certain cut that's been negotiated. This is asking us to bypass that process. Really have the power to bypass that process.

And so I definitely would be opposed to this. Understood.

Mr. Seyarto.

Thank you. When it comes to labor, there's all. I mean, it's very difficult because you're talking about people's lives, their ability to keep up with inflation and some of the processes that go on here.

My colleague was just talking about the effect of having collective bargaining, not allow that collective bargaining to be operated between the employees and the agencies, and that it's not fair that the Administration steps in. However, we've done that. We've done that. We did that with the healthcare, we've done that with fast food employees.

We have inserted ourselves and mandated a wage and now we're paying for it. That's part of this. $12 billion is all of that. We've also taken on programs that expanded programs, one of which is costing us close to $10 billion.

And when we're talking about cutting or not giving our employees the money or the minimal raises, the 2.5 and the 3%, those are just cost of living raises and their cost of living raises due to the increase.

It costs them to pay for electricity, to pay for food, to pay for all of these things that are all driven by policy in the Legislature and by the Administration. So we're kind of balancing stuff on their backs and we spend all this money on these other programs we tried to do.

As you know, the Administration has weighed in that the Federal Government's cutting money. Some of the money that they're looking at not really cutting. It's that they're going to stop letting us do the money laundering that we were doing with the MCO tax, because that's what that was.

The Federal Government has never paid for undocumented medical care, medical costs, Medicaid or Medi California. And yet we found a way to get them to do that through our MCO tax thing. And now they've figured it out and they're not going to pay for that.

I said two years ago that what we were doing is 100% on the backs of our taxpayers. That includes our state employees who are not going to get a raise. So those are the kind of policies that come back to haunt us.

I feel like a fortune teller because two years ago in budget, we were raising these exact issues with a lot of these policies overestimating, overestimating our savings for various Departments and cost cutting measures for. We're going to reduce the amount of vacancies and all that stuff. Now we're finding it's all been over inflated.

Now we have a $12 billion hole even though we have a $322 billion budget. That is more than we've ever had before. Something is wrong with the way we do finances in California. We need to fix that. So I'm tired of kicking the can down the road.

I would like a more comprehensive look at what we're spending, why we're spending it. And if we want to choose a program that costs $10 billion over being able to Fund all these other little things for 700 million and 60 million and all that, well, then that's our choice.

But that's the choice you have to explain to people when they want to know why they can't keep up with the cost of living. So, you know, that's what I see in this. That's what I see in our budget process right now. And I'm disappointed in this part of it because this is just cost of living stuff.

And people are losing ground in California and when they lose ground, they move out. When they move out, they take their taxpayer dollars with them and that means we have less revenue. It's a downward cycle. We need to stop it.

Okay, I have a few questions and comments as well. We're talking about these proposed salary freezes. Question did we approach our business contracts and ask them to freeze a certain percentage? Was that ever suggested as an option? What other options were considered?

Well, I think in order to solve the 12 billion projected deficit, the state has approached the various solutions. That includes borrowing reductions to various programs that impacting different programs areas. So employee compensation solution is one of them.

But then for other areas, I think it's better to get additional details with the respective budget unit and departments in those areas.

Okay, could you follow up with the Committee on the question that I asked and the reason back in. I'm going to date myself now a little bit. But prior to getting involved in government, I worked for Xerox Corporation. And there was a time when LA Unified was on the verge of bankruptcy. Bankruptcy.

And they actually asked the companies. So I worked for Xerox at the time and they asked the companies to take a hit and to say, look, you know, we're having tough budget times. We're going to need to be able to reduce the contract. A contract they had negotiated with the corporation.

And we reduced that contract and we kept that contract. And I think we did it for like three years or something. So I'd like to know, did we. Who else are we asking to take a haircut on this besides the employees that are working hard for us to do their part as well?

So if you could let us know that, like within hopefully 14 days, because we have decisions to make of whether to support your recommendation. My next question is control.

Section 3.90 contains language that says if reductions in the employee compensations aren't achieved through collective bargaining by July 1, the Director of finance can reduce the employee compensation upon agreement with the Legislature. Can you elaborate on what is meant by agreement by the Legislature? Are you saying, would we agree to this in budget trailer language?

Is there going to be another time when you're going to come to us and say, are you willing to do this? What do you mean by agreement by the Legislature?

More specifically, we are seeking agreement with the Legislature on the overall budget act.

Excuse me, on the overall budget act. On the overall what?

Budget act.

Budget act. So you're saying it will be in trailer language that you're proposing? We would accept this and if we didn't agree, we would put that in the budget language.

We are willing to work with the Legislature on suggestions in this process. But, yes, can we have those suggestions? When can we get those? We are willing to work with the Legislature on if any suggestions that you may have.

Okay. zero, our suggestions. So one of my suggestions is, who else are we asking to take a haircut?

Yeah, we'll get that information and get back to you.

Okay. And the Committee and other Members may want to submit some other ideas as well. And we're open to your ideas also of what else we could do because I'm not willing to support this as it stands. Yeah, just a minute. I want to finish my question. Thank you. I got you. I got you. I got you.

Okay. Also, in this language of making the freeze, someone brought up the question, there's no ceiling.

So, like, let's say if the employees were to agree to a certain amount of freeze, does the freeze just go through the two years, or is in fact there a ceiling that if we achieved it within six months or nine months, then there's no longer a freeze?

Our current budget proposal includes two fiscal years, including the current budget year and the 2627 as explained in our eight pages. We do have other budget solutions like assumed savings, but those items are still subject to collective bargaining. And we are trying our best to reach agreement.

And the goal is to minimize the impact on the state employees while achieve our Similar savings, but because the confidential collective bargaining process, we can't share additional details at this time.

Okay.

But to answer the question, it sounds like there's no identified ceiling at this time. We don't have a target to work towards. But then you have a ceiling of time but not a ceiling on amount. Not at this time. Okay, thank you. Those are my questions. I think also the Committee will probably submit more.

Senator Wahab, you Thank you.

So I, I have concerns about this. I'll just be very Frank. I think it kind of echoes some of the comments that were made here both by all of our Senators here.

You know, it, it was said by the Administration and different Members that represent the Administration that the, let's say, efficiency of our government, you know, we're different from the national effort for efficiency because it's not, it's done with people versus, you know, to people. That was kind of something that was mentioned.

I will highlight that this is very specific to people. The fact that 21 collective bargaining units has, you know, the ability to potentially, you know, the Director finances Finance has the authority to make reductions to employee compensation achieved through collective bargaining. Those bargaining efforts do need to be honored.

And I want to be very clear about this because the effort to reduce that employee compensation is the complete opposite of what has been proclamated in public that, you know, we work with people.

I will also highlight that the fact that we are in this inflationary time, everything's going up and we're telling people, zero, I'm so sorry, we're going to also cut your pay. So from two ends they're getting harmed. I just don't understand how we would do that.

Part two is to the chair's point that if we were to do this to programs or products, and I think that that's really what we need to talk about. I just want to highlight for the public, the Senate, when I use the Outlook email, we are still on Outlook 2016.

I want to highlight that because just alone in the Microsoft contract for all departments across the State of California, for every single employee, what is the cost of a license for Microsoft product? Right. Annually it's several $100.

Every single government contract has language in it that says that we can either stop these contracts, not renew, not true up necessarily be stagnant.

And I just want to highlight again that there's probably far more money in the contracts and the conversations that we can have with, with outside entities regarding products that could save millions if not billions of dollars across the board. And I only give Microsoft as An example because everyone uses it, right.

Do I need the latest and greatest Microsoft Word or Excel? No. Right. So I highlight that because it's deeply disappointing. Also when we've talked to, you know, the bargaining units that really I'm going to highlight the engineers. Last year we were talking with the engineers.

There was a lot of back and forth between the Administration and the engineers and trying to find a deal and that deal was to go into play this mid year.

And the fact that that's not even in play and we're saying that in July 2025, these seven state employee bargaining units who are currently in negotiations, whose contracts expire in July 2025, we're looking to reduce it. Right.

And these are our attorneys, these are our correctional peace officers, the same folks that we say, hey, we're going to fully Fund and fully back the correctional peace officers are the engineers in California when we also have fires, we also have transit and transportation issues, the operating engineers as well as, as as far down as we want to go into AFSCME that provide health and social services for our community Members.

Right. How are we going to justify saying we're going to cut their pay, not honor their contracts, not increase their contracts and again from, to be as blunt as possible, screwing them in two different ways? That's really what it is.

And so I will say that I think that the majority of us, and we only represent a small portion of the Senate, but I think the majority of the Senators are going to push back on this. This is not fair.

This does not honor the negotiations that have taken months, if not a year and a half between the bargaining units and the Administration. Contract negotiation terms are in play and now we're rolling it back. That is not fair. It's a non starter.

So I really just wanted to highlight that I know that we are in a times of a budget crisis, if you will. I will also say that year over year we've talked about the budget. We've always talked about, you know, whether it's over inflation, numbers or some of the programming.

I'm going to be honest, even as a Senator, I'm like, why are we doing this? Right? What are we doing? These are the shiny gimmicky things that people are promoting at the end of the day, what people care about both as a resident as well as an employee as well as just an institution.

People need to be paid fairly. People need basic issues addressed. Housing, food, health, hopefully a pension and much more. Right. These are the basics that need to be protected for all people, whether you are a resident or an employee. So I highlight that as much as possible because those are the concerns that I have.

In particular to the fact that we are also reneging on some of the promises to the public when we're talking about what we are doing in public safety, what we are doing in health and social services versus increasing money to groups that have not even asked for it and are not hurting.

So I just want to again highlight the need that we are only as good as our people and honoring the commitment to our people. So thank you.

Well, alrighty then. Thank you, Senator. With that, let's. We're going to. I just have a couple more. I know.

Can I put them on the table and then.

Yeah, just like 30 seconds. Because it's my understanding, I was getting ready to say we have about this many people who are outside waiting to come in and we have a hard stop at 11:45, which is 45 minutes.

So I'll just ask a question and then get. Yes, yes, Senator Durazo. Thank you, Madam Chair. This is with regards to employees who will be losing the 3%. Could be losing the 3% wage increase, but how the cost of the return to office policy or decision impacts them as well.

So do you have an estimate as to how many employees would have to relocate because of that policy? How many accepted jobs because they were advertised as remote only? And basically how it's going to impact the employees overall, including more money for guests, parking, any childcare, things like that. So if you would please address that. Thank you.

Thank you.

Is there a quick. Okay. If you could provide that information to the Committee? Unless you have a quick answer. Okay. All right. With that being said, that concludes issue number six. We're now going to move to public comment and closing.

The public may comment on any of the issues on the agenda to ensure that everyone has a chance to be heard. Please limit. Please limit your comments to 30 seconds. We will have. If we could have your attention, please. You guys have been wonderful, by the way. Just amazing.

We will have a timer, so when the timer comes on, we're going to have to turn you off. I would strongly suggest you focus on your name, the organization you represent and what you're supporting or you're opposing. 30 seconds or less. And again, we appreciate all of you being here today for participating.

At the end, we will give you the option if you'd also like to submit further comments for the record, we most certainly will accept those and be reviewing them. With that being said, having heard everything on the issues, we're ready to begin the public comment? Yes, sir.

Thank you very much Madam Chair, Members. Steve Baker with Aaron Reed and Associates representing the professional engineers in California government. On issue 5, control sections 4.05 and 4.12.

Our Members are 98% specially funded and it doesn't make sense to cut those special funds because it just means that the public isn't going to get those services that they want. On issue 6 on employee compensation compensation, we'd just like to thank all of the Members of the Subcommitee.

We also oppose the Governor's proposal to cut employee compensation.

Thank you.

Madam Chair, Members, Ted Toppin for the Association of California State Supervisors here to urge you to reject all components of the employee compensation piece in issue six. Among those who would lose out on cost of living increases are all super supervisors and managers related to the 21 bargaining units.

This is simply not the way it is supposed to go down. Under the Exclude Employees Bills rights or the DILS Act. These decisions are to be made prior at the table and not be proposed and held down from on high from in the may revise. We would urge you reject the proposal.

Hi, my name is Steven Gonzales. I'm a proud SEIU Member and employee at the Water Resources Control Board. Thank you for your comments. I appreciate your support of the working people of California. These issues, these compensation issues are going to hurt real people with real families.

And we've already been furloughed once in the last decade and we can't afford it again when we're already getting hit from the Fed and as taxpayers with the disastrous costs of the rto. Thank you for your time.

Thank you.

Hi, my name is Gabriela Garcia. I am with Transformative Programming Works. I'm here to ask for your support of the Right Grant funding. Right Grant funding ensures that people in prison have access to critical rehabilitative programs that help them turn their lives around and re enter society successfully.

These programs don't just benefit the individuals inside and help make facilities safer for residents and CDCR staff. They also lead to lower rates of recidivism. Folks who participate in these rehabilitative programs recidivate at half the rate of those who don't. These lower rates of recidivism in turn lead to safer communities and long term savings for taxpayers.

Thank you. Thank you.

Good afternoon. Thanks for the opportunity. My name is Jesse Estrada. Estrada. I served 30 years of life of a life sentence in prison. While incarcerated I had the opportunity to participate in the Pathways to Kinship program. That experience had profound positive impact on my life. I'VE not been home and thriving for nearly two years.

I am living proof that community based healing programs do work. I've not only seen the impact on others, I've also experienced a life changing power firsthand. Thank you for the continued support of the Wright grant program. Your investment in these programs is an investment in everybody else. Thank you.

Thank you.

All right. Good morning. I really appreciate your discerning ingenuity in approaching this incredibly challenging task. I heavily oppose the reduction in the salary of state workers. As you know, the state provides clean water, clean air infrastructure, prevents catastrophic wildfires and provide essential services to the public.

With the federal reduction in the Clean Water Act and other essential environmental conditions, we cannot have employee attrition because the handoff between employees that leave for a better job will be catastrophic.

Thank you.

Hello. My name is Karina Grove. I am a state worker at the State Water Resource Control Board. And I'm the recording secretary of my union, CAPS UAW. I'm speaking today to urge you to oppose the proposed 767 million in payroll cuts to state workers in the May revision of the state budget.

The state scientists spent the last four and a half years fighting for a contract that was just fully ratified last fall. Our contract's in effect till 2027. We'll fight back against any attempts to violate our contract and deny state scientists the respect we deserve. Balancing the budget on the back of state workers is unacceptable. Thank you.

Good morning. My name is David Jimenez. I serve as Vice President Secretary Treasurer for SCIU Local 1000, representing nearly 100,000 state workers across California. I work for Department of Social Services. I've been a state employee since 2004 and a proud state employee. The proposed Governor's.

The proposed cuts are nearly 767 million for state payroll and denies workers a raise we already bargained for and earned. We're stepping up at every time the state, we've stepped up every time the state needed us through wildfires, Covid, staffing shortages. State workers showed up and we keep services going. Now's the time to bring to balance.

Not the time to balance the budget on state workers. Thank you.

Hi, my name is Jan Perez. I'm an environmental scientist. I work for the Department of Conservation. Proud union Member. My colleagues and I engineers administrative class with SCIU. We show up every day for the betterment of California. We can't afford this pay cut. We honestly can't.

We ask that the, the Legislature not go through with the the pay cuts. We just can't afford it. Thank you.

Hello, my name is Hannah Johnson. I'm a California State scientist and on behalf of all my fellow state scientists and my union, CAPS UAW local 1115, I want to urge you all to reject the administration's proposed elimination of nearly 300 vacant scientists positions across departments.

State scientists protect health, environment, food, water and the natural resources we all depend on. State scientists are ensuring the standards set through legislation to keep Californians healthy and safe are being followed and accomplishing the goals they set forth.

The proposed vacant position eliminations will be detrimental to many of these already understaffed programs and prevent California from reaching its climate and health goals. Thank you.

Thank you. Don Antonowicz, senior scientist at DPR. Please have the fortitude to stand up to this lame duck Governor. He. Excuse me. He's got a stacked deck against us. We either not negotiate, he gets his way.

We either negotiate and we give in and he gets his way, or we go negotiate, reach impasse and he gets his way. Unless we can convince PERB that we've reached an impasse. And then we call a nation, a statewide strike of all of the unions and that's our only option. Our hands are tied.

Thank you, sir. Thank you.

Good morning. My name is Sue Choi with KIWA in Los Angeles. KIWA organized immigrant workers in Los Angeles, many of whom face wage theft, unsafe conditions and retaliation for speaking up. Through the California Workplace Outreach Project, we have been able to train thousands of workers to understand their rights, recover stolen wages and take collective actions.

We strongly urge you to expand funding for CWOP and oppose the 400 million loans from the labor and Workforce Development funds. Thank you for your time.

Thank you.

Good morning all. My name is Jorge Medrano and I represent Valley Voices of 501C3. Through the California Workplace Outreach Project, we have been able to engage directly with dairy workers by hosting various Know Your Rights presentation and workshops. The distribution of PPE to workers.

During these outreach efforts, we have revealed numerous workplace violations including wage theft, discrimination and harassment issues that impact our frontline workers. We ask the Committee to reject the Governor's proposal to take 400 million from the Labor and Workforce Development Fund. Thank you.

Thank you.

Good morning. My name is Romeo Vasquez and I'm representing Valley Voices. You know, we collaborate with CWOP which is California Workplace Outreach. Given the backlog of staffage shortage like agencies like Labor Commission and CalOSHA, our proactive work saves CalOSHA state money and prevents costly claims. For example, recent supports.

We recently supported Octavio Mayordoma at a local dairy. He invited us to a health safety meeting. With this crew we provided vital education and began addressing workers concerns before formal complaints were needed.

Thank you.

Thank you very much.

Thank you.

Good morning Committee. My name is Jose Amasquita with the nonprofit called the Ring of Democracy. I'm here and speaking today in support of the California Workplace Outreach Project. CWOP has allowed us to reach over 6,000 young workers here in Sacramento to educate them about their workers rights.

And today we're asking that you reject the Governor's proposal to take 400 million from the labor and Workforce Development Fund. Thank you.

Thank you.

Greetings Madam Chair and Senators. My name is Cynthia Thornburg Ruffin. I'm from the Earth Lodge Center for Transformation in Long Beach. In the house. And I want to just tell you a little bit more about the impact of the California Worker Outreach Program in Long Beach.

Now, the Earth Lodge is an urban oasis that teaches nurture based wellness and holistic health. And our program, Well at Work Work Shouldn't Hurt, is just one of the examples of the way in which we support the community in the pursuit of health.

As trusted messengers in the community, our participants understand that we have the expertise to help them with the concerns such as racism, sexism, wage theft and this promotora, and each one, each one mortality will ultimately save money and will allow us to reach our community members. Thank you.

Good morning. My name is Dawn Modkins. I'm the Director of the Southern California Black Worker Hub where we represent over 30,000 black workers all over each of your districts, L.A., San Diego, I.E., Long Beach, High Desert, those counties, those regions. We appreciate your support of protecting worker rights.

We want you to refuse the attempted theft of workers money in our CWOP account. These have been going towards trusting almost 90 organizations across the state in partnership with state agencies, the Labor Commission and DIR. We have already reached over 4 million workers. Thank you.

Thank you, ma' am. Thank you for your time.

Good morning. My name is Mandeep Kaur. I'm with Jakara Movement. We've been part of CWOP since the pilot year serving the Punjabi community's across the Central Valley along with nearby areas like Yuba City where Punjabi is the third most spoken language.

Through CWOP, we provided education not only to workers, but also to employers and farm labor contractors who often don't fully understand labor laws themselves. During COVID we were able to bring awareness and help many foster farm employees in Livingston who were not receiving sick pay, COVID leave or much needed PPE while they were working.

CWOP gave us the tools to step in, provide education in Punjabi and support workers. Thank you.

Good morning. My name is Helen Thompson. I'm a senior environmental scientist with the California Department of Fish and Wildlife and proud Member of CAPS UAW. I am in a small but mighty team working on the State Wildlife Action Plan, SWAP, which conserves over 1000 species of greatest conservation need. We do this work with bare-bones staff.

Payroll cuts proposed in the May revision will directly reduce our morale and ability to conserve the most threatened species in the most biodiverse nation, In the nation. Biodiverse state in the nation. Balancing the budget on the backs of state workers is unacceptable. What was done during COVID cannot be the standard solution. Thank you.

Good morning. My name is Ben Takemoto. I'm a community organizer for the Fresno Madera Tulare King's Central Labor Council. I'm here today asking you to reject the Governor's proposal to take $400 million from the Labor and Workforce Development Fund. That Fund is dedicated to making California's strong workplace rights real by funding CWOP and other essential programs.

Ending tax breaks for the wealthy is the equitable way to balance our budget. Thank you.

Thank you.

Good Morning. I'm Rachel Vangenhoeven with Worksafe. Thank you, Senator Durazo, for being a champion for CWOP and workers rights. It is vital. It is effective.

We ask that the Committee increase CWOP funding and reject the Governor's proposal to borrow from the labor and Workforce Development Fund and tell them to stop balancing the budget on the backs of those who can least afford it and take it out of tax breaks for the wealthy instead.

We're also in support of AB 694, funded from the OSH Fund to address the agency staffing crisis. Thank you.

Thank you.

Francesca Wander, Department of Housing and Community Development, SCIU Bargain Unit One Representative, I would like to suggest that if Governor Newsom is interested in instilling public faith and confidence and trust that he not try to renege on a legally binding contract which was negotiated in full faith and passed into law by this illustrious body and that he not blackmail his state workers with threats of furloughs and instead he could retract his ill-conceived, politically-motivated RTO mandate at a cost of 870 million to $1 billion.

Thank you.

Thank you.

Good morning. My name is Kimberly Palacio, lead organizer with the San Diego and Imperial Counties Labor Council, serving 136 unions and over 200,000 working families across the southern border region.

As a Member of OPIU myself, I specifically work with marginalized workers, including farm workers in Imperial County, already facing displacement and replacement with a potential onset of Lithium Valley. I urge you to reject the proposed labor and Workforce Development loan instead further funding CWOP to empower our working families. Thank you.

Thank you.

Good day. My name is Clyde Cossing. I'm with the Pilipino Workers Center and we help domestic workers and home care workers in the care industry. Through the California Workforce Outreach Program or CWOP. We have been able to meet caregivers who work in isolation, are most vulnerable for exploitation and more likely to be victims of wage theft.

We provide education and training on the labor rights so caregivers can assert their rights, confront employers who violate labor laws. We request additional CWOP funding to maintain our presence in the community as trusted messengers of workplace rights by making CWOP a permanent state program.

Thank you very much.

Good morning. I'm Grace Diaz from the Pilipino Worker Center. I work with caregivers and I'm also a caregiver myself. I was isolated because of my nature of the nature of the job and I don't know my rights. But PWC helps me find community and dignity with my work.

California Workplace Outreach Program allows me to help and educate my fellow caregivers to know their workers rights. Up to now there are still a lot of caregivers receiving $120 for a 24-hour work. Thank you so much.

Thank you.

Good Morning. My name is Govenal Solano, Community Organizing Director with MICOP. We support indigenous agricultural workers who work in the strawberry industry and other crops to learn about their rights. A week ago, a farm in Ventura County, immigration agents attempted to enter to the field to conduct an operation.

However, because the person guarding the gate knew his rights, he immediately acted, requesting a judicial warrant which the agent didn't have and therefore were unable to enter. This confirmed that when we know our rights, we can safely exercise them. Thank you.

Thank you. And again, I want to thank all of you for your patience of us only giving 30 seconds. It's my understanding there's still more people outside, so we're trying to give everyone a chance to weigh in. So thank you for working on that timeframe. Yes, go ahead.

Hi Senator, Steven Sander, proud union member, state scientist and Member of CAP UAW's Board Bargaining Committee. We're now facing the prospect of going six out of the last seven years without any sort of raise.

If this is allowed to happen when we're already paid 30 to 50% less than our peer classifications, when we do the same work side by side, it is devastating. Especially when we've had to cope with, like the Senators have mentioned, record inflation and now the costs of returning to the office.

It's incredibly unfair for the state to unilaterally renege on this agreement. Thanks for realizing that. Have a great day.

Thank you.

Good morning. Thank you. My name is Calvin Yang. I'm a state scientist at the Department of Water Resources and I'm a Member of my union, CAPS UAW. I appreciate hearing your comments and I also urge you to oppose these payroll cuts to state workers and they may revise. State workers deserve a just compensation. Thank you.

Thank you.

Hi, my name is Melissa Hoagie and I'm a proud SCIU member. I appreciate your comments and support of us today. As both a taxpayer and a state worker, I am appalled at the lack of fiscal responsibility that the state has shown.

Instead of the state implementing cost saving measures, my colleagues and I are again being asked to fund unnecessary expenses expenditures like procuring additional leases for return to office and funding shortfalls at the expense of our salaries while giving tax breaks to the wealthy.

State workers work very hard to keep our to keep California running in every crisis and are constantly being asked to make it work with less resources. Slashing hard government workers salaries is not a cost saving measure. Thank you.

Thank you very much. Thank you.

Good morning, Senators. My name is David Egan. I Work for the Department of Housing and Community Development as a special specialist. And I'm a proud SCIU 1000 member. I'm asking you to go with your instinct and reject the Governor's proposal to cut any state employee compensation.

As one of the Senators said, this is to keep up with the cost of living. It's extremely expensive to live in California. We're voters, we're constituents, we're taxpayers. And the right thing to do would be to honor our contract and not allow CALHR or the Governor to basically not negotiate in good faith for this in future contracts.

Thank you.

Thank you.

Francis O' Rourke. I'm California State Lottery proud member of SCIU Local 1000. I'm here also to oppose any, the $400 million proposal to cut employee compensation.

The other thing I wanted to say is I saw something recently that in the 22-23 budget, $20 million was saved by giving up office space, which was to balloon to 80 million within like a two or three-year period. So my question is, why can't we consider that?

Thank you.