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May revise targets employee compensation savings; LAO and unions urge negotiation and legislative guardrails
Summary
The governor's May revision assumes $766.7 million in employee compensation savings, including $283.3 million in General Fund, by deferring or reducing scheduled salary increases unless unions agree to alternative savings; the LAO and unions urged a negotiated solution and legislative safeguards.
The Assembly Subcommittee 5 on State Administration reviewed administration proposals in the May revision that would defer or reduce scheduled employee compensation increases as part of the effort to close a projected budget shortfall.
Hanjou Ming of the Department of Finance said the May revision assumes $766.7 million in employee compensation savings, including $283.3 million of General Fund savings, and that the administration will attempt to achieve those savings through collective bargaining starting in July 2025. The May revision includes control-section language (discussed as control sections 391 and 390 in testimony) that would suspend scheduled pay…
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