Will Newsom Really Cut State Worker Salaries by 10 Percent?

Scott Adams of Dilbert fame wrote many years ago that, “There is a right way, a wrong way, and the weasel way.” Often the way of the politician and the weasel are indistinguishable.

Newsom Moves the Goal Posts Again

Recently, our embattled monarch, Gavin Newsom, has been moving the goalposts of reopening California businesses in reaction to all the pushback that he has received. Barack Obama called this style of leadership, “Leading from behind.” Newsom is being forced to let California resume operations not because he wants to but because the revenue is falling frighteningly short of projections and the natives are getting restless. (Oh, and for the first time in 22 years, Republicans just picked up a House seat in last week’s special election.)

Today Newsom redefined the requirements for opening California counties for business. Please note the science has not changed since last week, only the politics.

The changes eliminate requirements that a county have zero deaths and no more than one case per 10,000 residents over 14 days.

Gov. Newsom: Sports, Haircuts Could Be Coming Back Sooner As California Relaxes Some Reopening Criteria

Johnnie Does nailed this very point on our blog a few days ago.

Newsom estimated 53 of 58 counties could meet the new criteria.

Twenty-four counties in mostly rural Northern California had already been cleared to move faster under the old standards.

Folks, in part, you have Elon Musk to thank for this change not you local county supervisor. Elon has embarrassed the crap of out of the unelected bureaucrats and made sure the whole nation knew what horse’s asses the Alameda County Health guy is and by extension, Newsom as well.

Alameda County is allowing Tesla to restart, while the vast majority of other businesses in the county must remain closed.

Coronavirus Crisis: Tesla CEO Elon Musk, Alameda County reach deal for Fremont plant reopening

Oh, lastly, we get this little nugget about Sacramento County.

“In all the hospitals in the county, there are a total of 15 people with COVID, so that’s an example of how the epidemiological data has gone down,”
–Dr. Peter Beilenson, Director of Sacramento County’s Department of Health Services

Sacramento County Meets New Criteria To Relax Stay-At-Home Order, Will Submit To State For Approval

OK, so now even the densest amongst us learn we’ve been sheltering in place for two months for no reason; 15 people hospitalized in the whole county. WTF?

State Worker Pay-cut

As a “good” Democrat, Newsom is promising that State workers will feel the pain of California’s economic shortfall as well but will they really? Will Newsom really cut State worker wages by ten percent?

The better question, is ten percent of what? What state workers make now or what they will make in the new fiscal year starting July first? Or something else?

First remember that a government budget cut has nothing to do with current expenditures. A cut is measured in terms of what fiscal planners wanted to spend next year versus what they actually got. For example if the boat patrol agency wanted to increase spending by ten percent and the legislature and governor gave then six percent, in budget language, the boat patrol agency had a four percent budget cut even though in real dollars they were given six percent more than last year.

Given the above, exactly what budget cut is the governor talking about? The only thing you know right off is that it wouldn’t really be as simple as paying workers 90 percent of what they got this year. Thus, we need to invoke the weasel way of budgeting. Only by invoking weasel logic can you divine the likely way Newsom gets to claim his ten percent salary cut without actually having to cut ten percent.

Given the above, how does he get to ten percent?

Here’s my best guess based on what I know combined with some early trial balloons for accounting gimmicks. Look for the plan to include these four points:

The following is based on SEIU contracts which cover over 90,000 State employees; other unions will vary.

First, the promised pay raise of 2.5 percent is gone.

Also, the promised healthcare stipend of $260 per month may go away also. It was set to start in the new fiscal year beginning July 1.

The CERBT may be suspended to backfill a cut in pay so workers won’t feel the pain as much. (Remember, weasel way.)

Gov. Gavin Newsom’s administration could offer some relief from potential pay cuts for state workers by temporarily eliminating one of the paycheck deductions workers see each month, according to an Association of California State Supervisors web post.

Newsom this week proposed reducing state workers’ pay by 10 percent on Thursday in a budget that aims to reckon with a projected $54 billion deficit.

To soften blow of state worker pay cuts, California might suspend $2,600 health deductions

Most state employees pay roughly $2,600 per year toward the benefit, although the amount varies by salary and bargaining unit, according to a State Controller’s Office report. Public safety workers, who typically retire earlier than other employees, pay much more.

The deduction shows up as “CERBT” on state worker pay checks, which stands for California Employers’ Retiree Benefit Trust Fund.

Back in 2016, the CERBT fund was implemented as a way to deal with unfunded liabilities related to healthcare of retirees.

The retiree health care contributions are intended to pay down an unfunded $74 billion liability that the state faces.

SEIU Local 1000 contract deal includes delayed raise, $2,500 signing bonus

The CERBT fund was capped at 3.5 percent of employee wages per the contract between SEIU and the State.

SEIU Contract

Other unions may have different arrangements with the State.

Oh, and look for a hiring freeze or similar gimmick.

Lastly, buried somewhere in the agreement will be something that backfills the money at some point in the future, either in the form of employee retirement being calculated on the basis of no cuts or something similar. Somehow, I think Gavin will make the unions whole at some point in the future or else…