BILL ANALYSIS Ó
AB 837
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Date of Hearing: April 29, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
837 (Roger Hernández) - As Amended March 26, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill prohibits the University of California (UC) from
paying any employees a salary exceeding $500,000 in any fiscal
year and requires an annual report regarding UC employee
salaries. Specifically, this bill:
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1)Provides, as a condition of receiving state funding, that UC
not pay its employees or officers a salary in excess of
$500,000 in any fiscal year.
2)Requires UC to publish as specified, by February 1, 2016 and
annually thereafter, the following regarding each UC employee
for the prior calendar year:
a) Location of employment;
b) Original date of hire;
c) First and last name;
d) Title of employment;
e) Regular pay, overtime pay, gross pay, and other pay;
f) Cost of employer-paid defined benefit plan
contributions;
g) Cost of employer-paid contributions to deferred
compensation other than defined benefit plan contributions;
h) Cost of employer-paid contributions toward medical,
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health, or welfare benefits, or any combination of benefits
thereof;
i) Total annual cost of employer-paid contributions toward
deferred compensation and medical, health, or welfare
benefits;
j) All sources of funding for compensation costs in dollar
amounts by funding source;
aa) Personnel program.
bb) The three-character Occupational Subgroup Category Code
if the employee is nonacademic staff, or the
three-character Class Title Outline Code if the employee is
academic staff.
3)Requires UC to publish, for April and October of each year,
statistical summary information, as specified, of UC employees
at each campus.
FISCAL EFFECT:
Given the large number of data elements in the required report
and the complexity of UC's funding structure-UC indicates it has
over 60 different fund group codes representing potential fund
sources of employee earnings-General Fund cost would be around
$200,000 for two position to produce the detailed annual report
on employee earnings and the biannual summary reports. Ongoing
costs for future reports may be somewhat less.
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According to UC's 2013 annual wage database, 387 individuals had
earnings exceeding $500,000, with 328 (85%) being faculty
members in the health sciences, whose earnings principally came
from clinical and research funds.
The total wages for these 387 individuals was $273 million,
consisting of: $180 million (66%) from health sciences
enterprises; $23.5 million (9%) from the General Fund; $17
million (6%) from auxiliary enterprises (such as athletics); and
$52.5 million from other sources (such as federal research funds
and philanthropic funds).
Only three individuals received General Fund compensation
exceeding $500,000, by a total of only $47,000. About one-half
of the 387 individuals received a portion of their earnings from
the General Fund, for an average of about $120,000 for each
person.
To the extent a $500,000 salary cap would result in many of the
impacted individuals leaving UC, the system would incur
recruitment-related costs to replace these individuals.
Moreover, the loss of some individuals from enterprise
activities, such as health care and athletics, could impact the
revenue-generating potential of these activities.
COMMENTS:
Purpose. According to the author, "the UC's stance on increasing
student tuition while at the same time continuing to pay its
staff over half a million dollars is disturbing. In 2013
calendar year, 387 employees made over $500,000 in total annual
salary, with 29 others earning more than $1,000,000 per year. In
contrast, the remainder of the 268,442 UC employees earns an
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average annual wage of $43,520. According to AFSCME, the total
UC spending increased by 40% during the 2007-2013 timeframe,
while spending on UC's richest employees increased by 270%
during the same timeframe."
"There is substantial public concern about the high salaries
paid, out of taxpayer dollars, to some University of California
officers and employees. It is important to place limits on
excessive pay at UCs as the use of taxpayer funds is being
mismanaged. UC cannot only look at tuition increases as a way
to balance its financial books. This bill provides an
alternative solution to off-set the tuition increases that hurt
California's hardworking families."
Assembly Budget Subcommittee #2, which is conducting a detailed
review of UC expenditures, reported in February that the number
of UC employees earning over $200,000 almost doubled between
2007 and 2013, to almost 6,000, and the gross pay for employees
at this salary level increased from about $840 million to $1.8
billion over this time period. Many of these employees are
athletic coaches or medical center personnel not supported by
state funds. The list does, however, include professors,
attorneys, and administrators who are supported by the state.
The database that provides this information does not break down
the fund source(s) of these salaries.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
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