BILL ANALYSIS Ó
AB 2019
Page 1
Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2019 (Santiago) - As Amended March 31, 2016
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|Policy |Higher Education |Vote:|7 - 6 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill establishes, as the policy of the state, providing
intermediate step increases-of 2.65%, or the percentage of the
increase, if any, during the period between the intermediate
steps, in the California Consumer Price Index (CPI) for All
Urban Consumers, whichever is higher-for salary adjustments for
academic employees of the California State University (CSU).
FISCAL EFFECT:
At the minimum increase of 2.65%, estimated General Fund costs
AB 2019
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to provide the MSA in the first year would be $48 million, and
would increase about 5% annually thereafter. These increases
would be greater in years when the CPI exceeds 2.65%.
COMMENTS:
1)Purpose. The sponsor of this bill, the California Faculty
Association (CFA), indicates that, in 1945, the Merit Salary
Adjustment (MSA) system was created in statute for state civil
service employees. The MSA is a 5% annual salary increase for
employees below the maximum step of their salary range. The
MSA is contingent on satisfactory job performance and is
effective on the employee's anniversary date. CFA argues CSU
academic employees should be treated like other state
employees and be provided annual salary increases similar to
those provided to civil service.
CFA notes that until the early 1990s, faculty pay increases
mirrored those provided to state civil service employees, and
they received MSAs. In April 1994, however, during collective
bargaining, the CSU Trustees proposed that MSAs be replaced
with discretionary performance pay. Labor fought this proposal
but, after exhausting the statutory impasse procedures of
mediation and fact-finding, the CSU unilaterally withdrew
steps on April 1, 1996. The MSA was replaced with the Service
Salary Increase (SSI). The value of an SSI was cut in half,
from 5% to 2.5%. Perhaps more importantly, SSIs are not
automatic like MSAs and are awarded only in years when they
are funded. As of 2016, the last SSI of 2.65% was granted
eight years ago, in 2007-08.
2)Recent CSU/CFR Agreement. On April 7, 2016, the CSU/CFA
announced a tentative agreement, including all of the
following:
AB 2019
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a) All Faculty Unit Employees on active pay status, or on
leave, June 30, 2016, will receive a 5% General Salary
Increase;
b) All Faculty Unit Employees on active pay status, or on
leave, July 1, 2016, will receive a 2% General Salary
Increase;
c) All Faculty Unit Employees on active pay status, or on
leave, July 1, 2017, will receive a 3.5% General Salary
Increase;
d) There shall be a 2.65% SSI during FY 2017/18 effective
on the eligible Faculty Unit Employee's anniversary date;
and,
e) Effective July 1, 2016, the minimum increase on
promotion shall be increased from 7.5% to 9%, which shall
apply to faculty who are promoted through the 2015-2016
promotion cycle and in future Academic Years.
3)Opposition. CSU notes it would cost $48 million dollars to
implement at a step increase of 2.65%. According to CSU,
"without guaranteed funding from the state, AB 2019 would
cause the CSU's budget to erode as it attempted to cover this
proposed mandated salary increases to the detriment of the
campuses and its students. This drain on the CSU's budget
would be magnified whenever the state budget has to be cut due
to downturns in the economy, but CSU would still be required
to provide these increases in salaries."
CSU employees are exempt from civil service and are instead
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covered by the Higher Education Employer-Employee Relations
Act (HEERA), which provides a framework to regulate labor
relations. Salary terms are a negotiated item in collective
bargaining agreements and subject to CSU Board of Trustees
approval.
4)Comment. This bill would add another category of mandatory
costs to CSU's budgeting practice. Meeting such mandatory
costs during periods of severe state budget constraints could
increase pressure on discretionary parts of CSU's budget, like
enrollment levels, and/or increase pressure to raise revenue
through higher tuition.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081