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

Alright, everyone. The Senate budget subcommittee number 5 on corrections, public safety, judiciary, labor, and transportation will now come to order. Good morning, everyone. As I said, we are holding our committee hearing in 1021 O Street. I ask that all members, which actually all that are gonna be present, are here now in Room 2100 so we can establish a quorum and begin our hearing.

Today's hearing is an informational item only. We will be discussing budget item 9,800 and the lack of funding for bargaining unit tens, special salary adjustments. We'll take public comment at the end of the hearing, and now we'll begin to establish a quorum. Consultant, would you please call the roll?

Richardson?

Richardson, here. Gerrazzo Sciarto? Here. Sciarto here. You have a quorum.

Here.

Thank you. The consultant notes that a quorum has been established. This is our last sub five hearing of 2026, we think, unless we hear otherwise. So before we dive into our main issue, I I wanna make a couple of couple of comments about what we've achieved this year and what remains to be done. This year, we six secured tens of millions of dollars for critical programs to fight human trafficking, to provide services to victims of crime, and to support rehabilitation and reentry.

And one of our top priorities was funding the court system so we can provide justice for all Californians fairly and without delay. We also secured a $100,000,000 for new judgeships, a $150,000,000 for court maintenance, and over $1,700,000 for court construction. I wanna compliment, Senator Sayardo. He's been certainly in lockstep with me of the need that, justice delayed is certainly justice denied. And many counties that we have that are really growing in terms of population and caseload certainly need additional attention, one of which, Senator Sayardo represents.

So we made a lot of headway in this area, and I think it certainly is one of the highlights of this session. However, despite our, amazing, accomplishments that we have done, in 2022, the judicial council estimates that we need almost a 100 judges. The LAO has estimated that the court construction projects identified in 2019 would cost over $20,000,000,000 to complete. And we have over $5,000,000,000 in deferred maintenance needs to keep our existing courthouses operational. And these needs keep growing and outpacing our current investments.

Prioritizing these limited resources is critical, and I will continue to be looking at ways of how we can allocate additional resources next year. I believe we should prioritize the fastest growing counties with the highest demand for new judgeships and the facilities that would benefit most from the court users.

We're also talking about salaries and compensation today, and there is more to do on judicial salaries as well, which we'll discuss at the end of the presentation to make sure that we're able to recruit and retain judges statewide. I also believe that there is more work to do to improve our prison system to make it more efficient by potentially consolidating critical functions as much as possible.

I look forward to continuing to push on these issues and other critical sub five issues in the next session, not to mention transportation, labor, and so many issues before us.

Colleagues with that, let's begin with our issue number 1 today. Did you have anything to add, Senator?

No. Thank you very much. I just wanted to, warn everybody that, I have another cleanup project at, about, 10:00 sharp. So I'm gonna step out, but I will come back. And it's not disinterest.

It's just dueling, dueling meetings going on this morning. And, so I'm anxious to get on with this hearing so we can get some of this done while I'm here. Thank you.

Thank you, Senator. And also to be noted, your staff is here. That'll take copious notes and make sure you're informed. So let's move forward on to issue number 1. Issue number 1 is an informational item related to bargaining unit ten, the California Association of Professional Scientists, and special salary adjustments that were scheduled for 07/01/2026.

We have the following witnesses that will come forward at this time. Nick Schroeder with the Legislative Analyst's Office. Paul Starkey, Deputy Director of Labor Relations, CalHR. Rosanna Wynne, program budget manager of department of finance. And Hanzo, Ming, principal program budget analyst with the department of finance.

If you would all please come forward. And, the baby can join us as well. It's always nice to hear something nice, in the day that we have. We will start with the legislative analyst's office. Thank you. Can you hear me? Sure. Is

this better? Okay. Alright. Okay. Now, it'll be perfect.

Okay. So you have the the handout I'll be using as my, Kinda notes for my presentation. Overall, what we're gonna be talking about is the collective bargaining process and the legislature's role in, that process. And then we'll be talking about how the economic provisions of labor agreements that are ratified by the legislature are incorporated into the annual budget act, so how they're actually funded.

And then we'll be turning to talking about Uniten specifically and the 2627 special salary adjustment that was excluded from the budget and talk about how it came to be that it was excluded.

So turning to page one of the handout, first talking about the collective bargaining process. The collective bargaining process was established by the Ralph C. Dills Act in, 1977, establishing collective bargaining rights for state civil service rank and file employees. Negotiations are the governor and the employees organized into 21 bargaining units. And at the bargaining table, the governor is represented by the Department of Human Resources, CalHR, and the bargaining units are represented by their union.

And at the bargaining table, they negotiate a tentative agreement that they then transmit to the legislature for its determination. And an important part of that is that a tentative agreement only goes into effect if it's ratified by both the legislature and the union members. If either the legislature or the union members reject an agreement, between two and three years. Although, there are MOUs, that have terms of less than two years and more than three years. But that's kind of the normal range, two to three years.

And during that two to three year term, the parties can meet and amend an agreement, and that's typically done through a side letter, an addendum, or some other amendment to the agreement. And the last point on this page is as part of the collective bargain process is that, although the legislature ratifies the agreements, it does not it it reserves its right to not fund economic terms of, an economic provision of agreement going forward.

And so this is really to preserve the legislature's constitutional power of the purse and to not buy in the hands of a future legislature to make, budget decisions. So turning to page two, we'll be talking specifically about the legislature's role in the collective bargaining process. When the tentative agreement is submitted to the legislature, the legislature cannot amend it.

The decision that is before the legislature is either to approve the agreement or to reject the agreement. And if it is accepted if it adopts it and the union adopts it as well, it becomes the memorandum of understanding which is the controlling agreement. And the second bullet on this page is talking about what happens if the legislature chooses to exert its right to not, fund an economic term of the agreement. Two things happen in that case.

The unfunded provision of the agreement does not go into effect.

And the second thing is that either party, so the governor or the bargain units, may reopen any or all of the provisions of an MOU. So turning to page three, we'll be talking about how the economic provisions of a ratified labor agreement are incorporated into the budget act each year. And so one thing is that the base funding levels for department for employee compensations, that'd be the funding that has been approved in the past, is already in department's budgets each year.

And in most cases, employee compensation constitutes a significant share of a department's state operations expenditures. Any augmentations to employee compensation appears in the budget under a single item, which is item 9,800.

And item 9,800 within the budget bill itself is just one line, you know, by fund showing a dollar amount. You can't actually tell by looking at that what which economic provisions of a labor agreement are being approved or not being approved. Administration provides the legislature each year the item 9,800 log. And that is a technical budget document that they provide to the budget committee committees as well as to the LAO.

And it itemizes what economic provisions are being funded under their assumed dollar amount for item 9,800.

And although it's routinely provided to the legislative offices, administration's electronic budget website. But through our communications with the administration leading up to this hearing, it's our understanding that it is a public document that anybody can request and receive going forward. Augmentations. Do we pull on employee compensation? The last poll is talking about how reductions to employee compensation typically are done through the budget.

And most typically, the way it's done is through a control section, where the legislature directs the administration to achieve some where the legislature directs the administration to achieve some dollar of savings, some level of savings, either through collective bargaining or through administrative actions. And typically, the administration proposes that control section language. It is negot it's debated in public hearings and then either adopted or not into the budget act.

An example of this would be all the furloughs between 02/1989 twenty twelve, thirteen, as well as PLP twenty twenty and PLP twenty twenty five. Turning to page four, we're now going to be talking specifically about bargaining unit ten and the labor relations between the state employer and unit ten.

The agenda gives a lot of information about unit ten itself. They represent the professional scientists and state employment. Relations with the unit ten to understand is that there are a number of classifications within unit ten that are similar to classifications that are represented by unit nine, which represents professional scientists. And one of the issues, the main issue that has been a kind of a long standing disagreement between the union and administration is the pay parity between unit ten classifications and similar classifications represented by unit nine.

In addition to that, there's been disagreements about the unit ten rank and file workers compensation compared with that of their own supervisors within unit ten as well.

And so those two factors have been a long standing disagreement And it had led to a deterioration of the relationship. Ultimately, in 2023, the union approved and actually implemented a three day strike in November 2023. And this was the first time in state history since 1977 when the deals act established collective bargaining rights that a civil service bar unit did go on strike. So turning to page five, we're talking about the actual pay increases in question.

So the policy to provide a special salary adjustment in 2627 was established through the ratification of the 2024 MOU.

So the parties after, the union had done the strike in 2023, the parties, met again and they came to an agreement and submitted an agreement to legislature that was ratified in 2024 is also ratified by the union members. And a big, significant piece of that agreement is that it provided three SSAs or special salary adjustments in an effort to address the pay equity concerns.

And, the final of those three pay increases is the '26, '27 pay increase, which as the agenda indicates, will provide between a 45% pay increase to employees at the top step of their salary range, and will provide a 3% pay increase to the employees, at other levels of their salary range.

When the administration submitted the 2024 MOU to the legislature, it included its cost estimates of all the economic provisions of the agreement, including the costs in 2627 associated with the implementation of the agreement or of the SSA. And then in 2025, the legislature essentially affirmed the state policy to provide a SSA in 2627 with a subsequent agreement.

So in 2025, the administration negotiated new bargaining agreements with all 21 of the bargaining units to achieve budgetary savings through PLP 2025 and some other economic provisions that are discussed in the agenda. In case of unit 10, the agreement affected a number of elements of compensation, but notably, it did not affect the 2627 SSAs. It made no change to that.

And in the fiscal estimates that are provided by the administration to the legislature, there is no indication that those would not be provided funding in the subsequent budget. One thing that the agenda indicates is that the 2020 agreement includes a reopener clause.

And it does include a reopener clause where essentially if the legislature would not appropriate fundings for any of the economic provisions in 2627 budget that it would allow either the governor or the unions to reopen negotiations on any or all of the MOU provisions. In our mind, this is no change from existing law under the Dils Act and the state the legislature's constitutional power of the purse. It's really just kind of a reassertion of of existing law.

So then on the final page, talking about how we got to where the units ten's SSA is not included in the budget. When the administration submitted to the legislature, it's 9,800 log for the 2627 budget.

It submitted a 9,800 log in January and then again in May as part of the original January proposal and then in revision proposals. And in both of those 9,800 logs, the, twenty six twenty seven SSA was omitted from the log. And so through that omission, it was not funded. The administration indicates that if it had been included, it would be $8,600,000, general fund.

One thing we would note is that the 9,800 log included other pay increases, including pay differentials for, specific duties, longevity and seniority pay differentials, the Unit five general salary increase for high patrol officers that's established in statute as well as their MOU.

And notably, it included longevity pay differentials for Unit ten that is included in the same labor agreement that established this SSA for 2627. And and the final bullet, there was really no communication from the Could

you repeat that last couple of sentences?

Sure. So the nine eight hundred log omitted the, SSA, but included other pay increases, including a pay increase for unit ten members that was included in the same agreement as the SSA. And in the last poll, we discussed that there was no communication from the administration to the legislature change in the policy that was established in 2024 and affirmed in 2025, that the state provide unit ten, members and SSA in 2627.

Further, the administration indicates that this decision was made based this decision was made based on the state's budget condition. But we would note that it was not included in any of the solutions list that the administration provided us to identify savings that they were scoring in the budget.

So my presentation. I'm happy to answer any questions that you have.

To, Paul Starkey, Deputy Director of Labor Relations for CalHR.

Good morning. Thank you very much.

Use his microphone. Yeah. You two are sharing today.

More than happy to do that. How's that? Is that a good sound check? Thank you. So again, thank you to the committee to the committee and and thank you for the opportunity for this informational hearing.

I wanna start off with that. I'm the deputy director of labor relations. In that role, I'm bargaining units. We have an assigned negotiator and have had assigned negotiator for unit ten for several years. And that person is the principal negotiator for that contract.

I wanna give that a little bit of context. And I don't wanna be argumentative, but I don't want to, for the record, accept everything Mister Schroeder has said and has characterized as being the way that I would characterize it. And Just

focus on your testimony, not on his.

Right. And and thank you. And and so the the purpose we're here for today, I I understand, is to explain how, you know, how did we get here? How we're why are we here? And what's that for my role, what's the impact on collective bargaining?

And so from our perspective, this is an ongoing issue in terms of the the budget problem. And I'm gonna let the Department of Finance speak to the budget problem. But with respect to labor relations, we we have a cycle of labor relations where typically the the governor's budget is brought out in January. We will then do what's called sunshine where we'll provide public notice to the public about what the proposals are are going to be. And then after that period of time, we enter into negotiations.

The thing that is critical for me to to help you to understand this is that this isn't a snapshot of what happened in January '26 or January '25. The whole history of this is that in bargaining, the parties were looking at a budget crisis. And I put out a a notice to all the unions that there was going to be there was an issue with the budget. And we were aware of that and there was Mister Schroeder had mentioned there are control sections.

And the control section basically put out that the state was directed to negotiate the issue of this this potential loss of funding with all the unions.

We had some unions that had open contracts and that followed the normal bargaining process. With Bargaining Unit ten, they had a closed contract. And and typically, you don't open closed contracts, but this was the type of emergency and given the control language, we went we made the announcement to to all the units, unit ten, that we wanted to reopen negotiations. And we did that. And we have been in negotiations with unit ten.

As you know from the record, there was an agreement reached, then there was a subsequent agreement reached with the what's called the side letter. And I think the side letter gives the perspective to this particular problem in front of us today because the parties knew there was a budget issue and they are bargaining, which is a process which is wholly separate from the bark from the the budgeting process. I am just given instructions to, you know, get contracts with the information that that we have.

And that information is is fluid and it's in it's expected to be fluid. The way the deals act is constructed, it contemplates that the legislature is gonna be going through a budget process at the exact same time the state is negotiating and it has been every year negotiating salaries and benefits for various unions as those union contracts come open.

So the in my mind, I look at this as like two tracks. There's there's my track, the bargaining track, and then there's the budgetary track. And until the the legislature has done the bargaining piece, Until that point in time, we really don't know what the budget is going to be. It all kinds of things can happen. And and this is not abnormal.

This is expected. It's built into the deals act. And so when you look at the side letter, that side letter which is is a public document and online, it's comprehensive. The parties went back to the drawing board. They negotiated in good faith.

They looked at all the things that were, you know, on the table, came up with resolutions, and then had that side letter to memorialize to become the the agreement. Critical in my mind, that side letter is that the parties put the language in there, a mechanism, a process. So in the event the legislature doesn't fund any item, under the deals act, a party can reopen any or all of the contract. And in fact, that process had happened just the year before.

And so this is again, I I wanna really emphasize this is not a snapshot.

Look at this date or look at this date. This is a bargaining process. And that bargaining process is ongoing right now. We when we knew what the budget was, per the agreement, we gave notice to the union, and we are now in the process of of getting dates to meet with respect to that side letter. So in my mind, this process is is is it unusual?

Does this happen every year? No. But is it contemplated? Absolutely. And so, again, looking at the process, the parties have been meeting.

The parties have had every opportunity to, you know, look at all the pieces and come to an agreement. They did that. It's in the side letter. We're honoring that, and we just move forward through that process.

The parties have had every opportunity to, you know, look at all the pieces and come to an agreement. They did that. It's in the side letter. We're honoring that, and we just move forward through that process.

Absolutely.

Unless you have any other questions.

I do. I just but I let you finish first before I get into questions. And

there's No. My thank you. Thanks, Shidar. My main point is that this is a bargaining process that I'm involved in, that we are on our track. We do what we we we work with the information that we have.

And and and it's it's a process that and and I hate to say this because it sounds terrible, but it's adversarial. It's adversarial in nature. It comes out of the National Labor Relations Act. The deals act was fashioned on on on the National Labor Relations Act. And at its heart, it's adversarial, which means both sides are advocating for for their interest.

Right? It is not intended to be a different kind of bargaining process that you have in other jurisdictions where there is sharing of information and and things like that. The deals act has a process for that, but at its heart, it's adversarial. So I say that because working in good faith with our partners, we there are mechanisms in place to get information and we do that and we have a disputes about that, which we work through.

And again, the deals act through the public labor public employment relations board, you know, affords us these processes.

So we're we're in that process. So with that, I'll conclude. Thank you.

Thank you. Next, we'll have Rosanna Wen.

Good morning, madam Chair and members of the committee. Rosanna Wen from the Department of Finance. We don't have a formal presentation prepared, but we are here to answer any of your questions.

Thank you. And Hanzhao Ming?

Good morning, Chair. Hanzhao Ming from Department of Finance. As Rosanna said, we don't have a presentation and have nothing to add to what already been presented. We're here to answer any questions.

Okay. Thank you. Do we have let's see. Is there an opportunity for unit ten to speak?

Sure. If you'd like to have

Okay. Do we have a representative from unit ten who's here? Thank you. I always believe in hearing all sides. You don't have to he'll make his presentation from there.

Good morning, madam Chair, members of the committee. Alberto Turico on behalf of UAW CAPS. You know, in the legislature, oftentimes most times, we'd like to argue on policy grounds, what's good policy. Sometimes, people like to argue process. And that's when that's an immediate red flag.

And what I've heard this morning is all about the process, about the previous conflicts over the last ten years over a confrontational system. Well, the conflicts were resolved, and the members of UAW reached a collective bargaining agreement with the administration. The administer that collective bargaining agreement had three critical provisions in mass migration. One were savings generated by concessions by the employees. Those concessions have been fully implemented to the tune of $8.08 over $8,000,000 conveniently.

Number 2, there's provisions for raises, which apparently there's a budget crisis now, and we're talking about less than $9,000,000 of general fund. 9,000,000. And the third provision, I think, is is the reopener and the reliance on the Charles de La I just wanna know for the record that every single collective bargaining agreement has the language that they're relying on the Ralph Dole Act that the money is subject to appropriate by legislature.

But in my experience, which is fifteen years as a lobbyist, six years as a member, and ten years as a labor lawyer, I can't recall an instance where there was a collective bargaining agreement where the money wasn't funded unless there was an emergency. And and it was and the parties were informed of said emergency.

So this contract has reopener language. And it's very important to note what it says. It says that the party shall mean confer in good faith on or before 07/01/2026. Remember that date, because it's very critical for this conversation. The administration did not put the raises in the budget.

They took the savings. They didn't do it in January. They didn't do it in May. They still took all the savings. The contract was ratified by the by the legislature by the two thirds vote.

They didn't put it in the final budget. Now was there a meet and confer request in January? No. Was there a meet and confer request at the May revise? No.

When did they make the request to reopen the negotiations? June 30. One day before the deadline. They could have the language is clear. Meet and confer in good faith on or before July 1.

So it's very convenient that they asked to reopen on June 30 when the budget negotiations were over. So I'm I'm sorry. It does it doesn't pass the smell test. If you're gonna make a deal with your workers, and your workers are gonna give up things in their retirement and other other aspects of their compensation, and you've promised a raise, then I object to the use of the process. I object to the use of claiming there's a I look.

I under we all understand the state is under fiscal I get it. But this was not done in good faith, madam Chair. I'm sorry. It was not. And now this needs to be resolved.

This is this is an this what are we saying to the other unions for the state that you're gonna negotiate in good faith, take concessions, accept the raise, and then we're gonna we're just gonna send a letter on June 30 and say, sorry, we didn't fund it. This this is this is not an acceptable result. I was hoping to hear that it was an oversight. I really was. I was hoping to hear that there was a mistake.

So we can we can go on our merry ways and fix it in the budget trailer bills. I was hoping that Department of Finance would come up here and and give us some explanation of fiscal pressure. I didn't hear any of that. I heard that it was that the deals act allows it, therefore, we're gonna do it. Well, I would like to hear when it's been done before.

When the parties were notified of a fiscal emergency, when everybody was taking a haircut. I have I haven't heard that. So I I don't I don't I don't accept the premise that this is processed. I don't accept the premise that this is allowed. It's irrelevant whether it's allowed or not.

It's wrong.

Thank you very much. I'm gonna start with a few questions and then we'll open it up to the public and then I may have some subsequent questions based upon public's brief comments. Let me start off with a couple of things. First of all, were other raises appropriated in this year's budget?

Finance. There's no new employee compensation related to the funding in the budget this year.

So are you saying to make sure I'm clear, I'm hearing you. No state employees regardless of their contracts

received raises this year? There's no new employee compensation related fundings. No.

That's not my question. My question is, are there any existing contracts that employees have that include raises such as the case of Unit 10? Were there are there any contracts in the state of California where employees have an existing contract which they did at this time and they received their schedule races? Not new races but their scheduled races based upon their contracts.

So if the adjustment was included and approved in the previous budget, for example, the B. O. Ten's longevity pay differential case, those were continue being funded in the 2026 budget. But if there's any new employee compensation related items such as the SSA item, they were not included in the budget.

Okay. Let me say this in a different way. I'm not just limiting this to union unit ten. Are there any state of California contracts inclusive with employees that had an agreement? In the agreement included step increases that were withheld, not new in their current agreements of any employees in the state of California?

Yes. There were few pay differentials including the 9,800. But as I mentioned, those are the previously approved and included in the budget in the previous years. So the twenty twenty six is not representing a new employee compensation item. Those items are funded.

Okay. Let's talk a little bit about the budget. It's my understanding that in June excuse me. In January, the governor, when he presented his budget, he presented the budget that we had a deficit. Although, he expected, that we would have potential additional revenues that would be able to assist in that.

Isn't that correct? In January? Yes. That's correct. Okay.

And isn't it also correct that in May, when the governor did his May revise, he also noted the potential additional revenue that was gonna be anticipated that was going to be able to help with the budget. And in fact, those numbers were, utilized as we were determining and working on the budget.

Yes. That's true.

Okay. So given the fact that that's true, when the program manager says that there was a budget emergency, being one of the subcommittee chairs, that certainly we were aware that we had a budget deficit. In fact, we still do. We were able to pay down, I think, it's 50% of that and we still have more a little more to do. But and, certainly, there was an effort to make sure that we were watching our spending wherever we could, make cuts wherever we could.

I mean, all of that was true. But was there any communication to all departments that said, okay, you can expect potentially additional cuts that are gonna occur?

Rosanna Winn, Department of Finance. So can you repeat the the last part of your question about the departments?

So what's been testified here is that a part of opening this is determining if in fact there is a budget emergency. And my question is, was only unit ten the bearer of what was determined to be a budget emergency and employees would not receive a raise that they were anticipated? Or was this considered to be across the board with all employees?

So I think we need to step back a little bit and think about it, the 2025 budget act. You know, we were dealing with a projected shortfall and that's when we removed all of the salary increases for all employees and went back to the bargaining table as Paul had mentioned and renegotiated concessions such as the PLP program and other adjustments to OPEB. So at that point in time, we did not include any salary increases for both the 2025 budget, as well as the 2026 budget.

Moving forward, what I will say is as we're developing the 2026 budget, it was a the administration decided that we were not going to fund any new employee compensation increases in the governor's budget. So at that time, the items that were included in the 9800 log that was referenced did not include these salary adjustments.

Okay. Were there other contracts that were approved in 2025 that went into effect in 2026 that included raises for employees?

No, there's no salary increases in 2026 for the other bargaining contracts.

Okay. But I thought in unit ten there were other employees that received raises.

Those are the existing adjustment items that was included and approved in the previous bucket. So the 2026 is just a carry on of the existing item and is not a new item.

So maybe you could clarify for me better how was unit ten's contract deemed new versus being existing if it had just been signed and approved?

So for example, the longevity item that was a 2024 agreement item and that was implemented in three years based on my understanding and the culture you can tell me if that was incorrect. But in 2024, that was a decision or agreement raised in twenty twenty four's MOU and the first year would implement first tier of the pay differential adjustment and the 2025 with the second tier and the 2026 being the third tier. But it's a continuation of the existing item.

In contrast, 2026, '27 is a special salary adjustment is a new employee compensation item.

Okay. Were there any other contracts that were similar to that? Because it's it seems to me that it's a little odd, because if someone had just negotiated a contract due to their no fault at own no fault of their own, if someone had negotiated a contract two years ago, then theirs isn't considered new. But someone who happened happened to certify theirs the year before, well, theirs is new so they don't get theirs. It's not their fault when their contract comes up for renewal.

Can you repeat your question? You want to know whether there's other contracts?

Yeah. What I'm trying to understand is this contract happened to have been negotiated the year before, which is why you're saying that their increases were considered new. Right? That's what you're saying?

For the 2026, '27 of the adjustment.

Yes. And what I'm saying is due to no fault of their own, their contract came up, you know, I mean, they don't control whether their contract comes up two years ago, one year ago, or two years from now. They don't control that. Their contract happened to come up. So what I'm saying is people other units that their contracts maybe came up two years prior that included their increases, they got theirs.

Isn't that correct? Because they were approved in that previous year's budget.

But in 2025, as Rosanna just explained, we we went into a budget situation that we have to implement a solution where we removed all the salary increases that is existed in the budget and we went back to the table and then renegotiated. So that's when the new side letters with all the back new units come become effect and those side letters do not include any salary adjustments for 2025 and the 2026 budget years.

Okay. Mr. Starkey, were there any other unions or bargaining units that received side letters that were not that kind of alerted them to, hey, you know, you may not be getting your increases.

The process that we have

Could you use the mic, please, for the record?

Apologies. The process we had, as I explained, was that it this started in May '25. And that's when I sent notice to all the unions about needing to come back to the table and negotiate over what was control item section three nine 3.9 o. Basically saying that there is, you know, a finding that the savings will likely be needed to maintain the sound fiscal condition the state. So we we started that bargaining process with all unions.

And and as I mentioned, some of those contracts were open and we're gonna go through the regular process anyway. So we just went through that process. And then with unit 10, that contract had recently been agreed to. And so we entered into what we ended up with as the the side letter, which was negotiated by the parties comprehensive covering everything they want to cover including the the mechanism for what would happen if the legislature didn't fund the the the entire package.

Were there any units that received the side letter that did not receive the scheduled increase?

My understanding is that we negotiate after negotiation with all units. The only issue was with unit 10.

Okay. So can you restate that for the record? Because that's really important.

It's my understanding and and and I'll maybe I should reserve the right to go back and check and make sure I'm correct on this. But my understanding is that through our negotiations in '25, we and all the different exchanges that went forward and the agreements that we had and the side letters that only unit ten presented a problem.

So since you knew that unit ten had a problem, Didn't you think that it might be appropriate to maybe do a little more attention, calls, follow-up, something certainly before the day before to let them know that this was gonna impact them if it wasn't impacting all the others?

There there's actually two things I need to respond to in your question. With respect to the latter, this idea about, well, you know, the the surprise announcement. The agreement of the parties was that when we knew when the state knew there was no money appropriated, we would notify the union. The budget negotiations went right up to the wire. And then as soon as we knew, we provided that notice.

Mister Starkey, I'm I'm trying to be very fair, but I think it's important, and I'm gonna choose my words carefully. How long have you been with the state?

I've been with the state for thirty five years.

Okay. And how long have you been doing this?

I've been the chief negotiator since May 2019.

Okay. So six plus years. Wouldn't you say that the budgets are open every year until, you know, we get to the last day? I mean, that that's nothing new. You you don't know for sure we submit things, we hope, whatever.

But until we actually vote, you don't know for any year for the last six years that you've been in this position, you didn't know that it was done until it was done.

That's absolutely true. And and that I believe that's where the problem

that's true. My question is, don't you feel that maybe, within your office, I'm not saying it's necessarily you. I don't know what role you have with direct negotiations. But given the fact that this was probably, you know, you see the train wreck is coming. You you know that there's only one union that potentially could be impacted.

My question to you is don't you think, we could have probably maybe aired a little better to have had some conversations either with unit ten, more with the administration, certainly with the legislature. Can't you agree that we probably should have started having this conversation? I can tell you, I think I had no less than maybe six budget hearings. It's not like we weren't available.

Don't you think that since this was the only union potentially impacted, certainly at least advising that this is the position that the administration has taken in their form 98 twice leading up that there should have been a little more communication.

As I stated in my opening remarks, and again, I hesitate to say this, but the nature of this process, and I'll use the word process, is set up as an adversarial process. It's not the kind of situation where in other, there are other situations where there is a requirement to, you know, share lots and lots of information. The way this process is set up is that the if the union had requested the 9,800 or any other information, we would engage in that providing of the information.

That's part of the duty to bargain in good faith. And in this particular case, there have been and and I do not want to go behind the the bargaining process, which we consider to be highly confidential.

There there's a lot of give and take and we don't talk about it in the open. But I think it's fair to say it it is public record that there is a duty to provide information upon request. And and so that that process is in there.

Okay. That's enough. That's enough. Mister Starkey, unfortunately, your comments is what conveys why we need unions. Because, you know, if if employees have to request and track and, you know, go through all that, you know, unions have to exist to hold departments, agencies, companies accountable.

And that's why they have to exist. And if if we didn't view things adversarial and just did the right thing, we probably wouldn't have an adversarial action that would take place. So I would actually say maybe your you or your department's activities cause causes the adversary. But that that being said, let me ask you a few other questions.

As a part of the three year contract with BU ten, that was ratified by the legislature and signed by the governor, the administration negotiated three different SSAs scheduled for 2024, 2025, and 2026.

Since the MOU is legislatively approved, since the MOU is a legislatively approved statute, what gives the administration the authority to admit the appropriation necessary to fund the SSA that was scheduled for 01/01/2026. And if I'm hearing you correctly, miss Ming, your testimony is the reason why you had the authority was because in 2024, there wasn't the actual increase. And 2020 well, let me let you answer the question for the record. But I think I know the answer, but go ahead.

First of all, I think I respectfully disagree the the comment about the administration have the authority to omit the the funding. So I think we proposed our budget in the government's budget that reflects the administration's priorities and policy decisions at that time. And item 1,900 reflects the employee compensation item that we are funding for this fiscal year and that is the administration's policy decision was no new employee compensation related fundings are included in the budget. And so we never really put in the budget.

So I don't think we really omitted it or removed it from the budget.

So to be clear again and sorry we're pulling hairs here, but my job is this this informational hearing is to get a clear understanding of what happened and why. In the unit ten's contract, the new increases were only taking effect in what year?

Can't clarify which new increases?

Their salary increases that they were anticipating. They weren't in effect in 2024 and '25. Correct?

Yes. So that's a three year separate SSA adjustments. So they received in 2024 and they received in 2025 which is fully offset by the PLP program.

But was it an increase?

Yes. It's a salary adjustment increase.

Okay. So if they had what was different from their salary increase in 2024 and 2025 and the one that's in dispute which is 2026. What's the difference? And thank you for your patience but, you know, this is, you know, I'm I'm delving into this issue as we speak. Yes.

So So I think that the according to the deals act, any items that require funding would be included in the approved annual budget. I think this for twenty twenty six, twenty seven, the administration's policy decision was not to include the funding.

No. I I heard you with that. My question is I thought you both testified to. Okay. So my question was, then I asked, did 2024 and 2025 include an increase?

And I thought you said, yes. Is that not correct? That's correct. Yes. Okay.

So then how is 2026 and I I thought I heard you say that the ones that you did approve were already ones that were approved in 2025. So it was Kinda continuing the year's budget. Right? Yes. For for those items.

Okay. So then my question is if they had a raise that was approved and appropriated in 2024 and 2025, why was that not considered to be ongoing in 2026 like the others? It's because they had a higher increase or what was the reason of the difference of what happened from 2025 and 2026 and how that relates to all the other contracts?

So in 2024 and the twenty twenty five's budget, we did include the funding for fund those items and the other employees. So once the salary adjustment was approved and the building the budget, they carried in the baseline so employees don't lose those. And the 2026 salary adjustment is a new budget item that we need additional augmentation to fund those items. Those are not included in the budget.

And so why wasn't it included in the baseline for 2026?

Because we we did not propose to include in the budget.

Okay. Why did the administration wait until June 30 after the budget was enacted to notify the unions, the union, and the legislature other than the adversarial relationship that you assume that you don't give information unless asked? Why did the administration wait until June 30, after the budget was enacted to notify the legislature and the union that the salary adjustments were considered new and were not going to be, included other than the adversarial part.

And I I wanna if I may, I believe that we have a working relationship with Bar Unit ten. We have been in regular constant negotiations with them back and forth over the last, you know, up till we got the agreement and then getting the signed letter and up to the present day. So I don't wanna I I really don't wanna characterize our relationship with unit ten as adversarial.

I'd I'd meant I just mentioned as a matter of process, the information is not readily given to the other side. That's not the part of the bargaining.

So but with respect to why didn't we notice them until, we had been providing various contacts with with b u ten and they and and this was in the context of before the side letter. Let me get my chronology if I have this right.

So but with respect to why didn't we notice them until, we had been providing various contacts with with b u ten and they and and this was in the context of before the side letter. Let me get my chronology if I have this right.

Yeah. So in the in as I mentioned this in the summer of of twenty five or even before then, in in May and June, we were talking about the need to to come back and bargain. Then in 07/02/2025, we requested to caps to reopen and they responded and they they would reopen the the agreement for for bargaining.

On 07/22/2025, we commenced that bargaining. And then during the course of the bargaining, again, this is not abnormal caps, UAW filed an unfair labor practice, which among other things alleged bad faith and alleged that we were basically over noticing them about the the budget process and that matter got resolved. So the the UPC is is is part of the public record, the settlement agreement is not. But my point is is that we have been talking to CAP QAW the entire time.

And the side letter in my mind represents an understanding of both parties that this might not work out.

And so this was the agreement. Again, this is the process. Bargaining is the process. And I'm quite proud of the process. And the policy which is set forth in the deals act.

So when we negotiate in good faith and got this side letter, it's clear on his face that we had hoped that the recognize there that might happen or that's an eventuality, and they then put into this side letter. If that happens, we go back to the table.

Okay. My question was, and I'll restate it. Why did the administration wait until June 30 after the budget was enacted to notify the union and the legislature? So what did you do to notify the legislature that the salary adjustments would not be given to BU 10 members? Because the obligation was also to the legislature.

That process is followed up by once we know what the budget is, then we go into the bargaining process. When No.

But you were supposed to notify the legislature. My question is, did you notify the legislature at any time and to who that these salary adjustments would not be given to the members? Did you? Yes or no?

As I said, I I really don't know. I don't know. I'd have to go back and

check. Okay. Alright.

If we if we did notify the legislature in the manner that you're discussing, we normally do that by sending a letter to basically through the Department of Finance. When a when a contract is reached, for example, there's a legislative there's a summary that we provide to them in in terms of the budget bill.

Okay. So the Department of Finance, did you receive notification that the salary adjustments would not be given to BU 10 members?

Well, as we were building the budget for the 2026, we did not include the funding. And so upon release of the governor's budget and again during the main revision, we send information to both the legislature and the legislative analyst office in the form of the 9,800 log. And though the 9,800 log would detail all of the employee compensation items that were included in the budget. And so for

Excuse me. So just a second. So are you saying so you were aware by the fact that you didn't include it in the budget that you would not be doing the salary adjustments for b u ten. Yes. Correct.

Okay. Alright. And it's your testimony that because you in the 9,800 form letter that you sent to the LAO and the legislature, it was up to us to understand that this was the only unit that you left out and didn't provide salary adjustments for.

Well, generally, in the log, it's what we include. We don't necessarily detail what is excluded because there are other items that you know might not have been included. So it's you know the the log is really sharing the information that these are the items that we're including, in the budget.

Okay. So Mister Schroeder, can you tell us a little bit in your testimony, you did mention the form 9,800. Could you just share with us a little bit when you get the form 9,800, was it something that you guys identified and said, oh, oh my goodness. Budget unit ten isn't getting their salaries? Or how were you and I supposed to have seen that?

So the process, and they followed this process, is that it's submitted to the legislature and us, with their January budget proposal, and their May revision proposals as as part of the budget backup. And, the only communication to the legislature that we're aware of, certainly to our office, the only communication that they were intending to deviate from the policy that was ratified by the legislature was the omission of the funding in the 9800 log. There's no communication that there that that was omitted.

So, really, there was no proposal presented to the legislature to on which to base a decision of whether or not to to fund this particular provision. We were supposed to just notice the omission.

Could you tell from the form 9800 that, this unit was omitted? That they were the only unit in the entire state of California that was omitted?

For so looking at the 9,800 log, you could see that there were pay differentials and other pay increases including the general salary increase for unit five. And you could see that for Unit 10, there's also the pay differential for the longevity pay differential that's being phased in under the agreement, which we would argue is by definition, by including those costs into the 9,800 log, those are by definition new new funding for provisions because it's not included in the base.

And so by looking at that, we you can see that there was a line in the log for unit ten's longevity pay differentials, but there was no line for their SSAs. And so it's just the lack of a line in the Excel sheet was the only indication of this proposal.

And does the line say SSAs zero or it just doesn't say SSAs at all?

There is no line.

Okay. So that's probably one of the issues that needs to be considers considered is we may have to be more prudent in what we identify in the form 9,800, which will cause more work for you. But if that's the only way in our this adversarial relationship that we're gonna know whether something's funded or not, then we may have to require more specific information. Okay. Let me go to my next question that I wanna, defer to, the Senator to see if he has any other questions.

The administration has cited a provision in the b u 10 cited letter that says if funds are not appropriated for any provision of the contract, the two parties can reopen Mister Starkey, you've testified that you guys are now having those conversations. And you've said to them, you know, you guys are open and you need to reopen this. That provision also says that the parties shall meet and confer in good faith on or before 07/01/2026.

Can you tell us how your department or the Fight Department of Finance met and conferred in good faith on or before 07/01/2026?

We just started the process.

So then it's your testimony that you did not meet or confer in good faith on or before 07/01/2026.

That would have been an impossibility because we didn't know what the budget held.

I'm gonna I need for you a yes or no answer. Did you or did you not meet and confer in good faith on or before 07/01/2026?

Again, we initiate the process, which is part of the meeting conferrer. And

No. The question is, did you meet did you meet did you meet oh, we'll do one one section at a time. Did you meet in good faith on or before 07/01/2026 regarding this?

We did not.

You did not. Did you confer and confer normally means conversation, discussion, hey, this is coming down the pipe. Did you confer in good faith on or before 07/01/2026? You sent a letter on July 3 on June 30. But did you confer in good faith on or before 07/01/2026?

We have not conferred.

Okay. Thank you. Thank you for just answering it honestly. Okay. Mister Seardo, would you like to join me in this conversation?

Yes. Thank you for your indulgence here and and I hope I don't repeat anything that you may have said before I got in here. But I just, you know, you've covered a lot of of ground and I wanna make sure that I understand this right. So one of the things that I I caught out of this is if you ignore a negotiated contract and, don't put it in your budget, that's and you just don't fund it, that's the way you open up negotiations again.

In other words, you know, okay.

I I saw that. Like, I I said it confusing way. It seems like ignoring a negotiated contract is as easy as choosing not to fund what you negotiated and agreed to in an MOU. So what good is the process if that's all it takes is us not putting a line in and hoping nobody notices it?

Senator, I'm gonna say the process is very good and the process resulted

It obviously is not. We are here today dealing with a a a problem that shouldn't be here. We shouldn't be in this process right now. We shouldn't have this meeting. These people should have got their MOU done.

They they should have fulfilled the the obligations of the MOU. So I respectfully disagree with you on that. So go ahead.

No. I I'm just gonna say the parties have a negotiated side letter which was the process to deal with this eventuality.

Okay. So let's talk about the eventuality. Usually, organizations and I've, you know, I was in city government and I was in county employment before. So I understand both sides of this process. Usually, when we're going to freeze or reduce salaries, it's because we had a budget shortfall.

We had less revenue than we thought we were gonna have. I have never seen a situation where we have $25,000,000,000 of increase in revenue that we had not anticipated. And then we leave one bargaining unit out of their thing. Usually, what you do is you take care of your obligations first and then you figure out where to spend the rest of the money. In this case, it appears that the administration had their priorities, like you guys said.

And one of those priorities was not fulfilling the obligations of a contract that they already had. So why did they not consider that a priority? Because that's the first thing you hear is, well, you know, it's not just 25,000,000,000 because we have to go $7,000,000,000 goes to the prop 98 fund and this we have all these obligations. But this was extra money. This is money we didn't anticipate.

How could that not be How could this not be a priority in in the administration's deliberations over the budget?

Well, what I will say is that, you know, these are also discussions that are a point in time. So as we were developing the 2026 budget, you know, that was a policy decision that the administration made. And then once the governor's budget was released, you know, we did we did not make any adjustments in in the May revision accordingly.

Right. Even though we already knew that we had a substantial increase. At the time, it was only 20. It was only $20,000,000,000. But by the time we got to the May revised, then it was $25,000,000,000.

I would have thought that you at at some point, we would recognize that, hey, we have this obligation already. We're gonna make sure that obligation gets taken care of even if we thought we're going to not honor it by leaving the line out and hoping nobody notices. Why? I I just don't understand this type of of governance. And and it's the kind of governance that it really, really frustrates people.

Because if you were counting on a 3% raise and and all of a sudden you don't get it and you're seeing a state that's bragging about a $25,000,000,000 increase in revenue and a state that's saying, we have the fourth highest GDP. It doesn't seem like there's a financial or fiscal emergency that would, justify not honoring something you're already should be obligated to to honor.

What I will say is that, you know, a lot of the the the funding that became available, the revenues were one time funding. And so I think to to the extent the administration just was not looking at any funding, any new employee compensation increases across the board. So I think the items that are in the agreements, you know, obviously are are subject to appropriation. And again, those were some decisions that were made in governor's budget and was not revisited in the May revision.

So I'm going to work with my staff and and our finance folks to come up with

a list of things that are not one time funding that was funded with this twenty five billion dollars. Because that that is an indicator that the people that you're that are working, that are doing the job for the state of California and the citizens, are not a priority. Because I can guarantee you, I can find lots and lots of money that is not one time funding that is in our $350,000,000,000 budget this year. Take out schools, it's $250,000,000,000.

It's $20,000,000,000 more than it was last year, I think, somewhere around there.

There is no good reason to omit this one bargaining unit's agreed upon thing. The, you know, agreed upon salary increase. Somewhere between now and when we get done, I'm hoping that that'll be rectified because if if that's the way the state's gonna do business, we're not gonna have a lot. We'll have even less confidence in what we're doing than we already have. And I'm tired of it.

Tired of people looking at me like I'm part of the state process and the state process can't be trusted. And when our answer is, hey, they didn't catch it. That's ridiculous. We had an agreement. We should have honored that immediately.

We should have honored it before the excess revenues came in. And certainly, when the excess revenues came in, we should have that's the first thing you should have jumped on and said, hey, you know what? This is one bargaining unit we left out. We're gonna put them back in. We're good to go.

And then we wouldn't be here. So that's my only comments. I don't I don't have any more questions that you've covered a lot of them. Miss Chair and I appreciate that.

Thank you, Senator Seagardo. With that, thank you for your recap. I think that covered, some very key points. We're now going to go to the public, that will have a minute and we I really should do thirty seconds, but in light of, I think, the severity of this issue, we wanna give you that additional time. So we're gonna have the public can come over here to the mic to your left for one minute each, and then we will wrap this up.

I appreciate the representative who's here with Cal HR to answer the questions regarding the judges, but we we shouldn't be too much longer and then we'll go to that as we close out. Okay. Come forward. Please state your name and, your point within one minute, please, each.

Good morning, Chair Richardson, Senator. My name is Jacqueline Tack. I'm the proud president of CAPS UAW Local eleven fifteen. We are the state workers in bargaining unit ten doing the critical work every day to protect public health, the environment, our food, our water supply, and the natural resources Californians depend on. State scientists went four years without a contract from 2020 to 2024.

In 2024, we reached an agreement with CalHR and ratified a three year contract. CAPCUE W members overwhelmingly ratified it, the legislature also ratified it, and the governor signed it into law. Last year, we were forced to go back to the bargaining table because of the 2025 budget deficit.

This year, we were shocked to hear that our raises were not funded in the 2026 budget In the past few weeks, we have met with a lot of our representatives in the Senate and the Assembly and every time we heard the same, we were not aware. We also found out after July 1.

We've heard today that the administration had no plan to fund our 2026 raises, even though our 2025 side letter did not pertain to 2026. You have been told the union and CalHR are engaged in the bargaining process and dialogue since last year about our 2026 raises. In fact, we never had an agreement or knowledge that our 2026 raises were not forthcoming. Nonetheless, the state took the savings.

The contractual 2026 raises that are in our three year MOU have been in place since that MOU was ratified by our members and by the legislature in 2024.

We negotiate in good faith, and we believe that a deal is a deal. We need to be able to count on the language in the MOU that is negotiated and ratified. Thank you so much for your time today. I really appreciate it. Thank you.

Please try and stay within the one minute, but she's the president of your, organization, so I wanted to respect that. Yes. Go ahead.

Good morning, committee members. My name is Marisol Paskier. I am a staff research scientist and injury epidemiologist at the Department of Public Health. And I am a proud CAPS UAW member and an elected head steward. I have worked for CDPH since 2019 and my fellow epidemiologists and I work on preventing injuries including traumatic brain injuries, older adult falls, e bike injuries, and suicide among many others.

Like Jacqueline said, in 2024, when we reached a tentative agreement for a three year MOU, the agreement was overwhelmingly ratified by our members with huge participation. The contract provided much needed salary adjustments, and they were in a step in the right direction of fixing our longstanding pay gaps. As has been discussed, this year's salary increase is about, $28,000,000 We've already saved the state close to $9,000,000 through last year's side letter in a very difficult budget year.

I want to emphasize that a vast majority of state scientists like myself are funded through special funds, not, not the general fund. It only costs $8,000,000 from, the general fund.

And I'll close really quickly to say that, like Jacqueline said, a deal is a deal, and just to respect the deal. Thank you.

Hello, everyone. My name is Elijah Portugal, and I'm a senior environmental scientist with the California Department of Fish and Wildlife. I've been with the department for eight years, and I'm also, you know, a single father of two school aged children. And I just wanna speak just kinda from the heart here for a moment. I mean, we're talking about $9,000,000, and it's just totally ridiculous that we're squabbling over here in this adversarial way when people are really suffering.

Like, I work with people in my office. I have a another environmental scientist with a master's degree who has to sleep in his car because he can't afford to pay, you know, child support and rent in this state. We have people having to commute from, like, you know, really far away now that we're being forced back into the office, so that's effectively a pay cut too. And it it's just ridiculous.

I mean, the governor speaks out of one side of his mouth praising the work that we do.

I'm managing a project that's, like, a $65,000,000 project in the tidal wetlands. We're doing incredible work for the state and for the people of the state, and yet we can't even get enough to, like, make our basic ends meet. I'm looking at having to sell my house to get my kids childcare, and it's just it's ridiculous. Thank you.

Thank you.

Kim Lewis representing the California Coalition for you, then not to take away from this hearing, but I just wanted to make one last appeal for the, like, homeless youth emergency services housing program and the homeless youth pilot program. Notice this just went out last week that these programs are gonna have to close on December 31. We're gonna have a bunch of homeless young people who are gonna be spending their holidays not knowing where they're gonna go and sleep at night.

We're gonna have a bunch of more young people with no safe beds losing hundreds of beds. That's not on the agenda for I know.

And they need $10,000,000 to continue that program for one more year. Thank you.

Thank you.

If you're here not speaking on the agenda, just state your name and what the issue is.

Good morning. My name is Christian Moore, and I'm directed you know, formerly incarcerated from Barry j to LRP to LP. And I'm speaking on behalf of Ramp LA, And they showed me nothing but love, and they showed me work work or, like, things to work. I wrote it down. My bad.

And then Rampice helped me get into the MTC program to get go to trade school. And then through that trade school, I graduated and I'm an ironworker. And now they're also helping me get custody of my daughter back into my life. And this Friday, I'm going to get an apartment. And I'm just saying with more LRPs like ramp, I really honestly think that with the funding, there more youth can have help.

Yeah.

So thank you.

Thank you, and good luck.

Thank you.

Thank you. Yes. Again, your name, the organization, and what you're supporting.

Hi, Chair. My name is Jesus Alvarado, and I'm here also to represent Ramp. Ramp has helped me in a great I I just can't explain how much, but because I had a short period of time, but I just wanted to let you guys know that I got a job. I'm working. I'm out of prison recently.

They're helping me go back into college. They're funding everything for me. You know? So the RAMP is really an organization that really needs help for all the people that are coming out. It's really about safety.

A lot of people coming out from prison, they don't really know how to adjust and navigate back into society, so I'm here to advocate for them for funding.

Thank you.

Thank you.

And good luck.

Hello, madam Chair and members. My name is Joshua Pinedo. I'm a deputy director of Healing Dialogue and Action. We work with, the SYTF population in the Credible Messenger program in LA, and we also work with survivors in the community. California has led in criminal justice reform, and I'm standing here as a result of that.

I had a life sentence, and because of all these changes, I stand before you today. But one thing survivors have not been given equity. They have not been given the resources. We have a survivor program that has not been funded by the county or the state, yet we've just been given an award by the Office of Victim Services in Los Angeles. So I'm here to advocate for $2,000,000 to support our survivor program.

Thank you.

Thank you, and good luck.

Hi, madam Chair and committee. Michael Mendoza with Latino Justice, also formerly incarcerated. My peers and I here are just concerned about some organizations that have been omitted from the budget. And if we're really concerned about crime in this state, and criminals like myself coming home, who don't consider ourselves criminals, then we need to support these organizations that are really providing services to help us stay out, and and not commit crimes.

And so we just ask that you take a look at these organizations that have been omitted and that you support them with the resources that they need to improve public safety.

Thank you.

Thank you. And if

there's any specific organizations that you're looking to be funded, could you write them down and give it to the sergeants over here to your left? Thank you. Yes. Go ahead.

Absolutely. So good afternoon, madam Chair and members. My name is Jason, and I'm the founder and CEO of FreeWorld. I'm also formerly incarcerated. And in the twenty years since I've been released and working with Justice Impacted Populations, the one solution that I have consistently see work time and time again is giving people a legitimate pathway toward a living wage career.

And when we give people that option, mindsets start to shift, generations become brighter, and society benefits as a whole. FreeWorld is a national nonprofit program. We, have deployed in California back in 2021 and since then have helped over 600 Californians get their commercial driver's license and get into jobs that pay $72,000 a year within their first year alone. Our recidivism rate is less than five percent. And just to think about that for a moment, California spends over a $134,000 per person per year.

And so we're helping to take people from the expense side of the column over to taxpayers with a career.

Please, summarize. Sure. Because I am familiar with the program, and we have, advocated.

Absolutely. So so, in closing, we respectfully request a $6,000,000 investment in the August budget action to continue to help California close the labor gap with truck drivers.

Thank you.

Thank you.

Good afternoon, Chair and members. Espa Nunez with Actum on behalf of FreeWorld Healing Dialogue and Action and Ramp LA. I caused harm when I was younger, and I carry that and I always will. What I learned is that shame doesn't repair anything. The only way to do so is to spend your life paying it forward.

I'm able to do that because people invested in me with support, love, and a door held open. But not everybody gets that. Almost no one does. Free World holds the holds that door open with a career. HTA holds it open by sitting with survivors through the worst years of their lives, and Ramp holds it open with a home and a trade.

Every one of them is somebody's chance. Please fund them. Thank you.

Thank you.

Hello. Hello. Anaia Martinez with Mesa Verde Group here on behalf of Gavilan Joint Community College District to uplift the college's district joint request for the San Benito County local transportation authority for 5,000,000, to fund student transportation fees and business route collecting connecting from Hollister and Gilroy campuses. Being in the college district that serves rural California, transportation is significant chance for our communities to access educational programs, which can transform the trajectory of students and their families. All in this simple right.

Thank you. And please, provide the information to your left over here to the sergeants. Yes.

Thank you.

Good day.

Hi.

My name is Darius Ali. I am a graduate of Free World, and what I can say is Free World has been a answer from God. I pray to pray to God, you know, please help me find a situation when I come home. I did fifteen years, and I still have reservation for crime. I didn't know how I was gonna, you know, sustain a living situation and then take care of my wife and, you know, children and whatnot.

And, Jeremiah twenty nine eleven, you know, God said my plans for you is for a future and a hope. And, I I came home. I was I was hopeless. I worked at Del Taco, and it was it was rough. Catching the bus here and there.

Free World came out of I I I had no idea about Free World, and that's why I say it came from God. It had to be a blessing because I I never signed up. It's just I got the call. Hey. You're on parole.

You wanna you want a chance at getting your CDL. I took it. They took care of me while I was going to class. They gave us stipends, and it just helped a lot. It helped a lot for me and my wife.

And I grabbed my my my my CDL, and I've been working as a operator in the operator, engineers union. I just received my crane certificate, and I'm going to be a crane operator, Lord willing, within the next few weeks. And it changed my life. I I don't even know who I am anymore. You know?

It's a complete one eighty. Who I used to be isn't that's that that man is dead, and I have I have god to thank first and and free world close second. So thank

you. And good luck.

Yes. Yes, ma'am.

Thank you.

Good morning. Sanjita Nohar here on behalf of Californians for Safety and Justice. In fiscal year twenty twenty five, the California Victim Compensation Board approved 47% fewer applications than in 2019 and provided 27% less in compensation. We respectfully ask for your support for $10,000,000 for a flexible assistance for a survivor's pilot program to help survivors get the support they need. We also ask for support for $1,000,000 for a record clearance pilot program in Los Angeles to help people clear old records and move forward successfully.

Thank you for your consideration.

Thank you. Seeing no other members of the public to speak, for those of you who spoke about, additional programs, we have officially, for all intents and purposes, closed the budget process. There are a few items we're dealing with that we're fixing, some issues that we had, but it's not like we're considering new items. However, we're gonna be back here in just a few more months back at this again, and I appreciate your feedback, and we'll certainly, be considering for those, going forward.

That being said, Mister Sciardo, did you have anything else you wanted to add?

No. It just seems like every year we have a process that happens in the last two weeks where all sorts of things get get accomplished including more stuff gets spent, more money gets spent in the budget. So I I would like us to try to ensure that if there is a means to address this issue this year, that would be that would be most beneficial for everybody.

Thank you. With that, all the individuals who've participated in the public testimony today, we thank you for being here present. If you were not able to testify, please submit your comments or suggestions in writing to the budget and fiscal review committee or visit our website. So for you individuals that testify, thank you. I know it was, it's always uncomfortable when we have to go back and, you know, fix things.

But, it's better that we fix that we learn about things, versus ignoring, and don't have a path forward. I cannot, for the members of unit ten who are present, I'm not in the position to make a decision, but I am in the position to write a letter and make a recommendation, and I will be doing that.

But I thank you all for being present, for bringing this to our attention, because it is our responsibility as Senator Sayardo said, to fulfill our agreements, and we certainly should be fulfilling them with our own employees. So, this meeting is not adjourned, however, because I do have a few questions for CalHR regarding the judges, but for those of you who testified, thank you for being here.

We may have a few follow-up questions that we would ask for your, expeditious response as we you know, we only have a few days here that we're dealing with this issue.

So we'll certainly be in touch. But thank you for being here. Thank you for your honest testimony. And, you know, look forward to lessons learned from this experience. Thank you.

For the representative of Cal HR before we close, could you please come forward so I can ask a couple questions? Okay. Could you state your name and position for the record?

Good morning. Anthony Crawford, deputy director of CalHR.

Thank you for

having me.

Thank you for being here. I just have four questions, but I'll open it up of why I'm asking the question. We received communication from some of our judges with the state that, apparently, their salary is tied to some formula that's tied to other positions. So I'm not really familiar with that. So trying to understand that.

And that so that's the first issue is if you could help us understand how their salary is determined, how increases are determined. And then, apparently, in some cases, some positions that are tied to their same formula have received increases that the judges haven't. So that's what our questions are essentially surrounding. Now I realize you may not handle that, but if at least you can tell us what you do know and who we should seek to get, further answers to the questions.

So my first question is, what role does CalHR play in determining salary increases for judges?

Sure. Yeah. Thank you for the question. So, the mechanism for the judicial and, justice and judges salary increases is a government code, 68,203, and that defines how those salary increases would be determined. CalHR does not have authority any salary setting authority or authority over any benefits or pension contribution rates for these employees.

But the specific statutory requirement calls for CalHR to do what I refer to as the calculation. And the calculation is looking at our state employee workforce, and we look at what the average percentage salary increase is that our state employees received. And the product of that calculation, if it's a positive amount, is what is then provided to the judges and justices.

Okay. And, let's say over the last five to ten years, I don't know if you have that information, what increases have the state employees received on average and what has that been consistent with the judges to your knowledge?

Yeah. I I don't have that in front of me, but Okay. We can definitely, look back and and get that for you. Yeah.

Okay. But it's your understanding, if I'm understanding your answer, that whatever formula was determined for the state employees that was in turn then applied to the judges. Because it's my understanding they haven't received increases in some time. So

Yeah. For the state employees, I wouldn't call it a formula. It's what we collectively bargain. It's what we negotiate, and then we do the calculation after the fact. So we look at what the current fiscal year, holds for our state employees.

We perform the calculation, and the statute says that if it's a positive amount, that is the amount that is then provided, to the judges. So to the extent state employees are not getting an increase or, in this case, we're reduction. The statute allows for those pay reductions to be included in the calculation. So last year, for example, the calculation yielded a negative percent as the average salary increase for our state employees. And therefore, the judges did not receive an increase because that was a negative percentage.

Okay. And this whole determining that, the judges are tied to this formula, this is a statutory requirement?

Correct. Yeah.

Okay. And it would require an act by the legislature to change or make any amendments to that, I'm

formula or make any adjustments to that process. Yeah.

Okay. And because judges oftentimes work with prosecutors, defense attorneys, all different sorts of people who may not be state employees, is there at any point that there was a consideration that, you know, maybe their salary is should include some additional things to consider besides what every state employee might have happened to have received because they're not, you know, doing the same work obviously.

Yeah. I can't speak to the the legislative history of that statute. It's been around for many years. I don't know what was taken into consideration but the statute is very explicit that it's only looking at salary. So it doesn't take into any any considerations into other forms of compensation beyond that.

Okay. And how old is that statue approximately?

I'll have to get back to you. I know the first iteration talks about an increase on 07/01/1980. So I would say Wow.

to at least the eighties. Yeah.

Back

Okay. Well, that helps us understand. You've answered the next question. How are salary increases determined for judges? We get that.

What would the legislature have to do to change the formula that sets the salary increases?

Yeah. So again, there would have to be a statutory amendment that would revise the current statute.

Okay. And then, in addition to the salary increases of employees, one of the things that happens is that there are other things, benefits that people receive besides their salary that can contribute. Maybe it's not a direct salary increase, but if, you know, you got more in retirement or whatever it is. Last year, it's my understanding that we suspended other post employment benefits, OPEB, for contributions for the state and state employees. Did that include the judges?

That did not include the judges. So, again, what we negotiate with our state employees, we don't have any authority or collective bargaining rights over the judges. So so, yes, last year, we negotiated as part of the, salary reduction PLP agreements. We agreed to suspend the pre funding of other post employment benefits for many of our state employees, as part of that, we'll call total compensation agreement, that had many elements. But the OPEB suspension is not an element of the the calculation performed pursuant to the statute.

So that's not taken into consideration.

And have you all had any discussions to maybe say, this doesn't quite seem right? Have you approached the legislature or the governor? Because it seems like I mean, I get that you're not a negotiating body with them, but it seems that if their salary is tied to the state employees, certainly, the benefits would be as well and other points. It's just that that's what the statue says and that's what you do and that's it? Or has anyone kinda gone, this doesn't smell right?

Yeah. I can't say on

the CalHR side, we've explored that. Again, our responsibility and oversight is with our state employees that are within the executive branch. And and so we don't really look at the issues tied to, the judicial branch. So I can't say on behalf of CalHR as long as I've been there, we haven't had conversations about what should or should not be, included.

Okay. And then last question for me, Who has the discretion or authority to suspend to suspend the judge's contributions to OPEB?

Honestly, I don't know the answer to that. If I was asked a question, I'd probably start with judicial counsel. But I am not sure where the authority lies when it comes to health benefits, retiree benefits, or pension contract.

Given that we're in the last couple weeks of this situation, could you assist us in finding out whether it's judicial counsel, whether it's department of finance with the governor, who is it that would actually have the authority, or the legislature other than a statutory change? Who would have the ability to say that judges similar to other state employees could suspend their post employment benefit contribution.

Sure. Yeah. We'd be happy to work with your staff and

In the next twenty four hours?

Sure. Thank you. Do that.

Time is of the essence. Understood. And last I'm sorry. I said last question. But do you know how many years the state employees have postponed their benefits so we would know specifically what to ask for?

Yeah. We can get you a chart. It is different for different bargaining units as we negotiate different agreements. Currently, it's suspended for a two year program for most of our bargaining units. And then back in 2020, when we negotiated PLP agreements during that time, we also suspended the employee contributions as well.

But we have charts that we can provide to your staff to give you the history of the OPEB contributions.

Okay. And if you could include for us not only OPEB, but any other benefit adjustments that you might have done for other bargaining bargaining units? Because there might be something that I don't even know that applies to them.

Yeah. There's a lot of forms of compensation, so we can include pension contribution changes that we've made recently. And then there's also health and vision contributions for your active health care while you're active. So, yeah, we can work with your staff on that.

And did you say your name was Crawford?

Crawford.

Yes. Thank you for coming on such a short notice to deal with an issue that is important. Thank you for waiting through the entire, presentation that we had. And, we do appreciate your participation.

Of course.

Thank you. Thank you. Alright. Thank you everyone for your hearing. I did I left out one sentence here.

Any comments, or suggestions that people have for us, they're very important to us. Please include them, in a written form to the committee. And, with that, the Senate budget subcommittee number 5 on corrections, public safety, judiciary, labor, and transportation is hereby adjourned.