Thursday, January 16, 2025

Balanced Budget? David Crane, President of Govern for California, recently wrote about California’s “balanced budget”. He gave WECA permission to republish his observations.

Last Monday, Governor Newsom issued a press release previewing a "balanced" budget for 2025-26, so imagine our surprise when his proposed budget released today disclosed that balance was achieved by transferring $7.1 billion from the Rainy Day Fund. In your household do you consider your budget balanced if you dip into savings to cover a deficit? We don’t. In fact, when the Monday press release extolled that "state revenues are up by $16.5 billion," we expected the proposed budget would not only not draw from the Rainy Day Fund, but also would pay back $4.9 billion taken from the Rainy Day Fund last year. It’s misleading to characterize such a budget as "balanced", and worrisome that Newsom keeps taking money from the Rainy Day Fund when the economy and stock market are vibrant and reserves might be needed more than ever. We’re still reading through the document and will have more to say, but this is not a good start.

Crane followed up with additional analysis:

Governor Newsom’s proposed budget includes a paragraph entitled “GOVERNMENT EFFICIENCY AND COST SAVING MEASURES”, but the measures mentioned there are a tiny fraction of the inefficiencies and costs added under Newsom. E.g., in the year Newsom took over from Jerry Brown, the Executive Branch hosted 211,000 jobs on whom the state spent $19.5 billion in salaries.

Since then, Newsom has expanded staffing and salaries in favor of public sector unions that are also his political supporters, with the result that the proposed budget shows staffing up 21% and salary spending up 44% to $28.1 billion per year.

Schedule 6 of the budget, which includes State employees outside the Executive branch, shows a sharp drop in efficiency. E.g., employees per 1,000 population is up 17% and General Fund expenditures per Capita are up 65%. Have public services per Capita improved at all — much less 65% — since Newsom took office?

Another contributor to declining efficiency is rising spending on benefits for retired employees, another Newsom supporter. E.g., spending on Other Post-Employment Benefits (OPEB) is up 74% and takes more than $4 billion per year from the General Fund. California's OPEB benefits are multiples of those provided by other states. On top of that is pension spending of $14 billion, up 46%. The same issues handicap efficiency in schools, colleges, universities, cities, counties and other agencies funded and governed by the state.

As with his untruthful claim of a balanced budget, Newsom’s claim about an efficient budget is misleading.

Learn more about Govern for California here and consider supporting their work.

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More Pain for Employers The Legislative Analyst’s Office (LAO) released “Fixing Unemployment Insurance,” finding that the “anticipated annual shortfalls” between revenue and benefits paid out “will add to the state’s looming $20 billion outstanding federal UI loan” and “expects the loan to grow by billions of dollars before federal surcharge UI taxes are high enough for the state and employers to begin making progress toward repaying the loan.” The LAO recommends the legislature “increase the taxable wage base” on which employers are required to pay UI taxes, from a maximum of $7,000 to $46,800, which would “place California among the ten states with taxable wages bases above $40,000 and all other Western states,” but notes “this step alone would not be sufficient to address the state’s solvency problems.”

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Litigation Filed to Enjoin SB 399 Prohibiting Mandatory Meetings During Union Organizing On January 1, 2025, Senate (SB) Bill 399, went into effect in California, which joined other states, including Illinois, Connecticut, Hawaii, New York, and Oregon, in enacting statutes that prohibit “captive audience” meetings, similarly limiting employers’ ability to conduct mandatory meetings on religious or political matters, including a labor organization. Several business groups have filed a federal lawsuit challenging the constitutionality of SB 399 and seeking declaratory and injunctive relief. The lawsuit, filed in the Eastern District of California, argues that the law infringes on employers’ rights to free speech and equal protection under the First and Fourteenth Amendments of the U.S. Constitution. The plaintiffs contend that SB 399 discriminates against employers’ viewpoints on political matters and restricts the content of their communications with employees. They argue that the law stifles employer speech and is preempted by the National Labor Relations Act (NLRA), which protects employer free speech under Section 8(c). Story

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Falls and Construction Lead in Workplace Fatalities





 

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Senator Hawley Circulating Framework for Labor Reform Senator Josh Hawley (R-MO) is circulating a framework for potential labor law reform legislation. The framework calls for:

• notice posting requirements on employees’ collective bargaining rights;
• safety provisions for warehouse workers, including a prohibition against work speed quotas;
• banning captive audience meetings;
• ambush elections within 20 business days;
• a 10-day time period for the employer and union to begin negotiating following a representation election; and
• civil penalties, increased damages, and employees’ right to seek remedies in court if the employer violates the NLRA.

Hawley and the Teamsters are sharing the framework with Senate offices, looking for additional support. Hawley’s comment to the press regarding the framework was that he “look[s] forward to advancing meaningful legislation for working people this Congress.” While it’s difficult to weigh in on the consequences of the proposal without seeing actual legislative text, these concepts could trigger First and Seventh Amendment concerns.

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Higher OSHA Penalties Kick-in This Week The Department of Labor last week announced its annual inflation adjustments to OSHA civil penalties for 2025, taking effect for violations issued on or after Jan. 15, 2025. Below are the maximum penalty amounts:


 

·       State plan workplace safety agencies are required to increase their maximum penalties in alignment with OSHA’s penalty increases to maintain at least as effective penalty levels.

·       Other DOL civil penalties are similarly increasing. More information can be found in the final rule.

READ MORE

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SOMAH Decision Workshop, February 11, 2025, 1:00 p.m. - 3:00 p.m. PT The SOMAH Program will host a workshop in compliance with the California Public Utilities Commission’s (CPUC) Final Decision D.24-11-006. This workshop will provide an opportunity to explore upcoming program changes and engage in discussions on key topics, including:

·      New incentive levels for paired storage systems

·      Potential impacts on tenant benefits, budgets, and SOMAH goals

·      Updated safety rules for storage installations

·      Alignment with SGIP rules and incentives

·      Opportunities for prior SOMAH applicants to enhance existing systems with storage

·      Strategies to achieve SOMAH’s 300 MW target

Register

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Former EEOC Commissioner and Acting WHD Administrator Announced as Pick for Deputy Secretary of Labor On January 14, 2025, President-elect Trump named former U.S. Equal Employment Opportunity Commission (EEOC) Commissioner Keith Sonderling as his pick for deputy secretary of the U.S. Department of Labor (DOL). This is a significant appointment as it places an experienced labor and employment attorney, who has served in both the EEOC and DOL, as second-in-command under the previously announced Secretary of Labor pick Lori Chavez-DeRemer. Sonderling began his career as a management-side labor and employment attorney in his native state of Florida. After spending nearly 10 years in the private sector, he joined the DOL in the first Trump administration. There he held several roles, most notably serving as the acting and deputy administrator of the Wage and Hour Division (WHD). In 2020, Sonderling was tapped to become one of five commissioners at the EEOC. He was strongly supported by the business community and confirmed by the U.S. Senate with bipartisan support. He finished his tenure at the EEOC in August of 2024. Story

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Lawsuits Dangle Compensation Lure to California Wildfire Victims While the cause of the Southern California wildfires is still under investigation, several lawsuits have been filed claiming utility equipment is responsible for one of the largest blazes. Attorneys working with ClassAction.org are now looking to file a class action lawsuit on behalf of people who were injured by or suffered losses due to the wildfires, including the Palisades, Eaton, Kenneth, Hurst, Lidia and Sunset fires. Those who were forced to evacuate, who were injured, whose homes were damaged, whose businesses were impacted, or had a sleepless night because they worried about fires may be able to take action. Looters gotta loot!

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Higher Electricity Costs Expected Electricity bills in California — already among the nation’s highest — could soon skyrocket. In addition to killing two dozen people and destroying at least 12,000 structures, the devastating wildfires in Los Angeles have also damaged the region’s electrical system, writes Politico. “Ultimately, ratepayers will foot the bill,” said Travis Miller, a utilities analyst at Morningstar. And that is just one of the expected costs to residents. “Customers face a triple whammy here, with potentially higher insurance costs, higher utility bills and the recovery from property damage they suffered,” Miller said. The total damage from the fires is expected to rise north of $250 billion—making it one of the nation’s costliest disasters.

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Cal/OSHA’s Workplace Violence Plan Since July 2024, California employers have been working under the requirements of SB 553 for workplace violence (WPV) prevention. After several years of planning to enact a new Cal/OSHA regulation, the Division of Occupational Safety and Health will take the next steps in the new year to combine the law with its own vision. That work officially begins on January 24th, 2025, with an advisory committee meeting via video conference. SB 553 requires DOSH to forward a rulemaking proposal to the Standards Board by the end of 2025. The Board must adopt a regulation by the end of 2026.