Senate GOP Budget Spotlight: February 9, 2017

Thursday, February 9, 2017

The full Budget and Fiscal Review Committee met on Thursday, February 9, to vote on two proposals to give pay increases and bonuses to state employees and to review a new costly budget and accounting IT system.

New Bonuses for State Employees Contrast with Reductions for Child Care and Scholarships.  The Governor’s recent budget proposal estimates a state budget deficit of $1.6 billion, but to Sacramento Democrats that apparently is no reason to hold back on handing out more raises and bonuses to public employee unions.  While pay increases for public safety groups are warranted, the Senate Budget Committee approved agreements with 13 other groups of state employees that will cost $5.2 billion cumulatively (total funds) to hand out pay raises of up to 14 percent and other increases over the life of the agreements. On top of the generous annual pay raises, the state is handing out “signing bonuses” of $2,500 per employee represented by the Service Employees International Union—though most employees that will receive these hand-outs already work for the state.

In stark contrast to these generous raises, the Governor is proposing budget reductions that will hurt regular Californians across the state, including eliminating college scholarships for middle-class students, freezing pay rates for child care services, and pulling back funds to train doctors. Had Democrats simply withheld the so-called signing bonuses, the state could continue with previously approved rate increases for child care or provide the funds for scholarships and doctor training.  Senate Republicans believe that the state should look out for the interests of regular Californians across the state rather than narrow special interests favored by the majority party in Sacramento.

The committee voted along party lines to approve the pay increases (Senate Bill 28 and Senate Bill 47), with all Democrats voting to approve and Republicans voting either to reject or abstaining.

Financial Project Continues Long Line of State IT Delays and Cost Overruns. The Committee heard testimony from state departments tasked with setting up “FI$Cal,” a new budgeting and accounting system the state is building.  The process of establishing the beleaguered system began over 12 years ago, and the Governor’s experts do not expect to complete it until 2019.  The latest cost estimate includes an increase of $237 million (35 percent) above the previous figure from 2014, bringing the total to $910 million.  Independent agencies that are reviewing “FI$Cal,” including the State Auditor and the Legislative Analyst’s Office, expressed concerns that the project is likely to see still more delays and additional cost increases before completion. 

The Committee expressed bipartisan concern regarding the state’s apparent inability to effectively manage its IT systems, a troubling irony considering the success of Silicon Valley not far from Sacramento.  Senate Republicans called for greater accountability and reforms in response to yet another troubled state IT project blowing its budget by hundreds of millions of dollars.