Biweekly news digest from the California State University Employees Union
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BUDGET UPDATE
WHAT DO THE SJ AND SD PENSION VOTES PORTEND?
WISCONSIN SENATE GOES DEMOCRATIC
BEE URGES TRANSPARENCY IN CHANCELLOR SEARCH
CLF EXPOSES “ZOMBIE LOOPHOLES”
STUDY ENCOURAGES INVESTING IN COLLEGE STUDENTS
CALPERS TO HOST RETIREMENT PLANNING FAIRS
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Budget Update
by Pat Gantt, President, CSUEU
CSU Budget
I attended a CSU budget webinar on Monday, June 11, featuring several CSU administrators answering questions from employees and other concerned community members. No new budget information was presented that had not already been presented at a previous trustee meeting or the recent State Budget Advisory Committee (SBAC) meeting. There were also no obvious solutions presented. There were questions and answers about previous budget cuts, furloughs and impacts. No decisions have been made at the system or the campus levels to mitigate the $250 million trigger cut that will be enacted should Governor Brown’s tax measure fail to pass on the ballot in November.
Read the document that was used at the trustee meeting presentation (PDF).
View the SBAC presentation.
The Office of the Chancellor hasn’t yet posted FAQS generated in the two webcasts.
State Budget
June 15 is the deadline for the legislature to present the governor with a balanced budget. So far, this fall’s $250 million trigger cut from the May Revise is still in there, as proposed by Governor Brown, an increase of $50 million from the governor’s budget in January. We are watching closely to see if there are any late amendments and especially any trailer bills that could impact our members. The Senate and Assembly met yesterday afternoon. The key difference between the legislative budget and the governor’s May Revise is about $2 billion in cuts. The legislature does not want the cuts to social programs to be as deep as the governor proposes and does not think the governor’s idea of retaining a $1 billion reserve is needed. They also look at the cuts as one-time, while the governor is looking more at permanent base funding cuts. We will have to see how close they get by the end of the week and whether the governor will accept a legislative budget or use a veto to try to force some of his issues.
One very important contrast between the CSU and civil service is that most of the budget cuts in civil service—including salary reductions—are effective July 1, 2012. That’s why Local 1000 is at the bargaining table now to deal with some impacts. The CSU budget cuts, on the other hand, are linked to this fall’s trigger cuts, which could be effective January 1, 2013, in the event the ballot measure in November fails to pass.
The California Highway Patrol officers union already bargained an agreement on the budget cuts, as detailed in this June 9 Sacramento Bee article.
As far as we know so far, no campuses are considering layoffs yet, but the potential could exist as a way of dealing with the $250 million trigger cut this fall.
It’s important to note that the CSU hasn’t put furloughs on the table yet, and no one in any CSU union is suggesting them either.
We will keep you posted on any developments in the near future.
What Do the San Jose and San Diego Pension Votes Portend?
With San Jose and San Diego voters endorsing pension reform on election day last week, it’s left many to ponder the fate of California’s statewide pension programs.
As this June 7 San Francisco Chronicle article details, any drastic overhaul is unlikely as long as Democrats continue to control both houses, though some measure of reform will no doubt make its way to the governor’s desk in the months to come.
As the article points out, some union leaders have cautioned not to make too big a deal out of two cities passing ballot measures.
“It’s a foregone conclusion that there will be reform coming out of Sacramento,” said Steve Maviglio, an organizer with Californians for Retirement Security, an umbrella group that represents most of the state's major unions.
But there will be a political cost for leaders, especially Democrats who take on unions at the ballot box.
“Chuck Reed will never get union support again as long as he lives,” Maviglio said.
Read a CSUEU FAQ about Gov. Brown’s 2011 pension reform proposal.
Wisconsin Senate Goes Democratic
Despite retaining his seat, Wisconsin Gov. Scott Walker lost control of the state Senate with former state Sen. John Lehman’s (D) victory over Walker ally state Sen. Van Wanggaard in last week’s recall election. Lehman’s narrow win gives Democrats a one-seat (17-16) majority in the state Senate.
Wisconsin Senate Democratic Leader Mark Miller said in a statement on election night: “By electing a Democratic Senate, the people of Wisconsin have opened the door to responsible dialogue and, if needed, provided a bulwark against continued political extremism and restored checks and balances to the Wisconsin legislature.”
The district - closely matched between Republicans and Democrats - has been one of the most volatile in recent Wisconsin history, flipping back and forth five times between the two parties in the last 22 years.
In November, 16 of Wisconsin’s 33 Senate seats are up for election.
Sacramento Bee Urges Transparency in Chancellor Search
In an unusually critical editorial, on June 3 the Sacramento Bee urged the CSU Board of Trustees to conduct the search for a new CSU chancellor in as open a manner as possible:
The CSU board of trustees is in the process of selecting a search committee and also will hire a search firm. CSU’s 1997 search process was marred by a board decision to conduct the search in secret, a process “completely confidential up until we announce who the new chancellor will be,” said the board chairwoman.
The CSU board still is setting parameters for conducting its search; there’s time for the public to weigh in before the board’s July 17 meeting. The search committee should be broadly representative.
While initial screening and interviews must be confidential, finalists should be publicly announced. Finalists also should have a schedule of public visits, so the board and public can see how they interact with faculty, staff, students, alumni, state political leaders and civic and business leaders.
The Bee’s stance echoes CSUEU President Pat Gantt’s comment when Chancellor Charles Reed announced his retirement three weeks ago: “Reed’s retirement provides a chance for the CSU Board of Trustees to bring in a new era of administration more aligned with the California Master Plan for Higher Education’s goals of low-cost access to the highest standards of excellence in public higher education. It’s imperative for the trustees to choose the next chancellor in as open and transparent a way as possible.”
California Labor Federation Exposes “Zombie Loopholes”
According to a new California Labor Federation (CLF) web site, zombies are a primary reason of our ongoing budget crisis. Or, at the very least, Zombie Loopholes are devouring our state’s budget.
On June 1, CLF launched ZombieLoopholes.com to highlight the devastating impact that budget-killing corporate tax breaks are having on our state. It exposes a number of wasteful corporate tax breaks that are bleeding our state of billions each year and contributing to deep budget cuts to K-12 and higher education funding, services for seniors, and public safety.
There’s almost no evidence they help our economy or create jobs. In fact, they’re just big fat giveaways to corporate bosses and multimillionaires, secretly inserted into previous budget deals by legislators looking out for corporate interests. And, thanks to California’s two-thirds majority rule to get rid of any tax break, these zombies are extremely hard to kill.
As CLF Executive Secretary-Treasurer Art Pulaski puts it, “Zombie Loopholes pose a very real and immediate threat to schools, public safety and other essential services our families and communities rely upon.”
CLF is ramping up a big effort to raise awareness about zombie loopholes that includes an online petition that will be delivered to California legislators. The site highlights the revenue that four Zombie Loopholes are ripping off from the state:
• Elective Single Sales Tax
• Oil Severance Tax
• Change-of-Ownership
• Enterprise Zone (EZ)
The loopholes highlighted on the site were recently identified in a report (PDF) by California Tax Reform Association Executive Director Lenny Goldberg, which found that wasteful corporate tax breaks are costing the state more than $6 billion per year.
Study Encourages Investing in College Students for Future Pay-off
The Campaign for College Opportunity has released a new study, “California’s Economic Payoff: Investing in College Access & Completion,” that outlines the benefits of investing in higher education. Conducted by researchers at the Institute for the Study of Societal Issues at the University of California, Berkeley, the study found that for every dollar that the government invests, it receives a "dividend" of $4.80 for every college graduate. For those who enter college but fail to graduate, the state receives only $2.40.
The report concludes that college education pays off for every Californian. The state’s initial investment is paid in full by the time a graduate reaches the age of 38. And, past graduates from the University of California and California State University provide ongoing returns to the state averaging $12 billion annually.
Californians who earned a college degree average $1,340,000 more in life-time income over peers who only receive a high school education. Californians who attend college will be employed for three more years than someone who only graduated high school, and a Californian who graduates with a Bachelor's degree or higher likely would be employed for an additional seven years beyond that.
The Campaign for College Opportunity was founded in 2003 with the mission of keeping California from breaking its promise of college opportunity to its next generation of young people.
CalPERS to Host Retirement Planning Fairs
CalPERS is hosting retirement planning fairs this summer to help members plan for a more financially secure future. The fairs begin in Sacramento on August 10 and 11, continue in Anaheim on August 17 and 18, and conclude in Santa Clara on August 30.
All CalPERS members are encouraged to attend. Fairs will provide valuable planning information for members who are new to the workforce, are mid-career, or nearing retirement.
Each fair offers more than a dozen information tables on topics such as the self-serve features of my|CalPERS, services available through CalPERS regional offices, CalPERS health benefits, how service credit affects retirement benefit, and CalPERS Supplemental Income Plans. Members will also have an opportunity to speak with experts from Social Security, the State Savings Plus Program, the ScholarShare college savings plan, and retiree organizations.
More detailed information about the fairs, including maps, driving directions, and workshop schedules is available on the CalPERS web site. CalPERS members can pre-register for a fair in the “My Education” area of the my|CalPERS site.
The complete schedule of the 2012 CalPERS retirement planning fairs is as follows:
• August 10 – 11 in Sacramento, 9 a.m. – 4 p.m., Sacramento Convention Center, 1400 J St.
• August 17 – 18 in Anaheim, 9 a.m. – 4 p.m., Sheraton Park Hotel, 1855 South Harbor Blvd.
• August 30 in Santa Clara, 9 a.m. – 4 p.m., Santa Clara Marriott, 2700 Mission College Blvd.
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