Newsom proposes cutting California state employee telework stipends due to budget gap

Say hello to California’s budget shortfall. And potentially, wave goodbye to telework stipends.

Ending the stipends is one way California Gov. Gavin Newsom plans to address a projected $38 billion shortfall.

While Newsom’s finance department says no furloughs are planned, the budget does propose one small, although likely controversial, cost-saving measure involving state employees: cutting the state employee telework stipend.

“That’s something that we will bargain with the unions,” said Joe Stephenshaw, the department director

California first offered the telework stipend to state workers as part of the 2021-22 budget. The cut proposed Wednesday would save the state an estimated $51.2 million, according to the budget summary. The stipend would be eliminated at the end of the current fiscal year, on the July 2024 pay period.

Employees designated as “remote-centered” currently receive $50 per month in a telework stipend, and office-centered employees receive $25 a month. Close to 47% of the state’s workforce teleworked in October 2023, according to the latest available data from the Department of General Services.

Members of all but four of the state’s 21 bargaining units receive such a stipend. Employees whose union contracts don’t include a telework allowance include Highway Patrol officers, correctional officers, firefighters and protective services employees.

The Department of Finance already imposed an “expenditure freeze” on departments last month to shore up spending. That freeze suspended the state’s popular leave buy-back program for the 2023-24 fiscal year. It also cracked down on spending for office supplies, new office equipment and cell phone upgrades, among other costs.

“It’s going to be a drop in the proverbial bucket,” said Tim O’Connor, president of the California Attorneys, Administrative Law Judges and Hearing Officers in State Employment (CASE).

“It’s completely misguided for him to do this. To me, it looks like he’s doing this more for theater than for any realistic solution,” O’Connor said.

“I’m guessing our members are going to be very unhappy.”

The potential for furloughs or a mandatory leave program is likely top of mind for state employees. State civil servants took a 9.23% pay cut in 2020 in exchange for two days of mandatory leave to try and solve a projected shortfall at the time, which later ended up as a surplus.

Some state workers will also remember the furloughs under former Gov. Arnold Schwarzenegger that led to a multi-year court battle and embittered employees.

As of now, those measures aren’t options on the table.

“There’s no furloughs. There’s nothing related to paid leave programs in the budget,” said Stephenshaw..

A tough bargaining year ahead

Two unions will enter bargaining this spring amid the budget chaos: the California Association of Highway Patrolmen, which represents Highway Patrol officers, and Cal Fire Local 2881, representing state firefighting personnel.

“I think every public sector union would say the ideal situation to enter into collective bargaining is NOT during a budget deficit year like 2024,” wrote Jake Johnson, newly elected president of the CAHP, in an email last week.

Johnson declined to elaborate on specific bargaining strategies, but noted that the union hopes the new contract will include assistance to fill officer vacancies within CHP. Notably, Newsom’s proposed budget encourages departments to maintain vacancies as a cost-saving measure.

“The CAHP has always been sensitive to the state’s needs as well as the needs and wants of our membership, both in good and bad budget years,” Johnson wrote. “As with years past, our plan is to enter into bargaining in good faith like every union should.”

Also contending for a piece of a shrinking budget is the union representing California’s state scientists, which staged a historic three-day rolling strike late last year.

The California Association of Professional Scientists has been bargaining with CalHR, Newsom’s representation at the bargaining table, for more than three years and have yet to secure a new contract. Newsom’s administration proposed its “last, best and final offer” shortly before the Christmas holiday. CalHR has yet to announce whether it will impose portions or all of the offer.

CAPS members rallied outside the Capitol Swing Space on 10th and O Streets to call attention to their fight.

“This governor claims to be a champion of fair and equitable pay for all Californians,” read a Tuesday call-to-action email from CAPS leadership. “He touts California’s cutting-edge programs to fight climate change as a model for the world while refusing to provide a raise that could attract and retain the skilled workforce required to run those programs.”

The governor on Wednesday made no mention of the scientists’ labor actions in his presentation, but he reiterated the state’s commitment to its climate goals.

Newsom also said his administration did not project “a dramatic swing between now and May” as has materialized in years past.

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