BILL ANALYSIS
AB 1764
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Date of Hearing: April 7, 2010
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Alberto Torrico, Chair
AB 1764 (Portantino) - As Amended: March 10, 2010
SUBJECT : State employment: salary freeze.
SUMMARY : Prohibits specified state employees whose annual base
salary is over $150,000 from receiving a salary increase until
January 1, 2013. Specifically, this bill :
1)Prohibits a person employed by the state whose annual base
salary is over $150,000 on the effective date of the bill from
receiving a salary increase while employed in the same
position or classification.
2)Defines "person employed by the state" as any person employed
by the executive, legislative or judicial branches of
government, appointees to state boards and commissions, and
employees of the California State University system and
specifically excludes from the definition local trial court
employees.
3)Exempts from these provisions a state employee whose salary is
governed by Memoranda of Understanding, as set forth in the
Ralph C. Dills Act, the Meyers-Milias-Brown Act, or pursuant
to another collective bargaining agreement, a person who
occupies a classification that is deemed necessary to public
safety and security by the Governor through an executive
order, or a person whose salary is set by the State
Constitution.
4)Authorizes the Controller to reject a request for a
disbursement of funds that violates these provisions.
5)Urges the University of California system to adopt this
policy.
6)Specifies that this section will remain in effect until
January 1, 2013.
EXISTING LAW:
AB 1764
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1)Requires the Department of Personnel Administration (DPA) to
set and adjust salaries for each classification in state
service.
2)Defines "trial court employee" as a person who is paid from
the trial court's budget and is "subject to the trial court's
authority to hire, supervise, discipline, and terminate
employment."
3)AB 2936 (Ridley-Thomas), Chapter 240, Statutes of 2006, among
other things, gives DPA special salary setting authority for
certain statutorily exempt employees, primarily department and
agency secretaries, commissioners, and directors allowing DPA
to make salary determinations on a case-by-case basis after
considering a number of factors, including growth in the
position's stature and responsibilities, compensation paid in
similar positions in other jurisdictions, the need to avoid
salary compaction, and special recruitment needs.
4)AB 257 (Chesbro), Chapter 748, Statutes of 2006, among other
things, allows the Board of the California Housing Financing
Agency to set the compensation of key exempt management
positions, including the executive director, chief deputy
director, the general counsel, director of financing, director
of homeownership programs, director of multifamily programs,
director of insurance, and financial risk management director.
5)SB 269 (Soto), Chapter 856, Statutes of 2003, allows the
boards of administration of the California Public Employees'
Retirement System (CalPERS) and the California State Teachers'
Retirement System (CalSTRS) to set the compensation for
specified key executive and investment positions. These
include the chief executive officer, system actuary, chief
investment officer, and other investment officers and
portfolio managers whose positions are classified managerial
by state civil service standards. In setting these salaries,
the Boards must be guided by the principles contained in
existing civil service laws, to compensate employees at levels
competitive with the compensation paid to employees in other
retirement and financial service entities. AB 1317 (Mullin).
Chapter 333, Statutes of 2007, expands the list of key
positions to include the general counsel.
6)AB 743 (Keeley), Chapter 792, Statutes of 1999, requires that
supervisors of state employees represented by Bargaining Units
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(BU) 5 (California Highway Patrol Officers), 6 (correctional
peace officers), and 8 (state firefighters) receive salary and
benefits that are at least generally the economic equivalent
to the salary and benefits granted to the employees they
supervise.
7)AB 2801 (W. Brown), Chapter 762, Statutes of 1994, establishes
the policy of the state to compensate sworn members of the
California Highway Patrol at the average compensation,
including specified benefits, paid to the equivalent officers
in five specified agencies. Any increase in compensation is
determined through collective bargaining.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "California is currently
grappling with a fiscal crisis. As a result of the recession
and a $20 billion plus California budget shortfall, important
state services and programs have already been cut or eliminated,
with more likely to come in the next year. California is
continuing to face an economic crisis that could soon leave the
state without cash to pay its expenses. Given the state fiscal
crisis and with unemployment rates in California hovering around
the 12 percent, it is not unreasonable to place a salary freeze
upon the highest paid state employees.
"Similar to my previous proposals, this measure will impose a
strict, categorical prohibition on any compensation increase for
state employees earning over $150,000. The legislation will
allow the Governor to make exemptions for certain safety
employees and exempts employees governed by a memorandum of
understanding, individuals covered by certain collective
bargaining agreements.
"California currently faces a $20.7 billion shortage, a figure
that reflects budget shortages from 2009 through 2011, with $6.3
billion in the first year and $14.4 billion in the second year.
Freezing the salaries of the State's highest paid employees is
a fiscally responsible way to preserve money for social programs
and education and help ease California's budget deficit."
According to opponents, the prohibition contained in the bill,
"?would directly affect the University's core education mission
of teaching, research, and public service, and could compromise
UC's academic reputation nationally and internationally with the
loss of renowned faculty drawn to other institutions that are
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able to offer more competitive salaries, including the potential
for merit increases on a regular basis. This bill could lead to
the University's inability to attract and retain the highest
quality faculty at the campuses. Faculty salaries already lag
in comparison to the market as a result of years of underfunding
the University's budget. Currently UC faculty salaries lag the
market by 11.2%."
This bill is similar to AB 53 (Portantino) of last year which
died in the Assembly Appropriations Committee and ABX2 1
(Portantino), ABX3 80 (Portantino), ABX6 2 (Portantino), and
ABX8 33 (Portantino) all of which were introduced but never
heard.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
California State University
University of California
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957