California Democrats agreed to delay a minimum wage increase for about 426,000 health care workers to help balance the state’s budget.
The agreement between Gov. Gavin Newsom and legislative leaders is part of a larger plan to close an estimated $46.8 billion deficit – the nation’s most populous state’s fourth consecutive deficit. Two years later, there was a deficit of billions of dollars.
Health care workers were scheduled to receive a raise on July 1 as part of a plan to gradually increase wages to $25 an hour over the next 10 years. Now, if approved by the Legislature next week, they could get a raise on Oct. 15, but only if California’s revenue from July to September is at least 3% higher than officials estimate.
If that doesn’t happen, the raises won’t begin until January 1 at the latest.
The delay provides a hard-earned victory for one of the state’s largest unions and one of the Democratic Party’s largest campaign donors. Dave Regan, president of the Service Employees International Union-United Healthcare Workers West, said workers are disappointed they won’t get a raise this summer.
“But we also recognize and appreciate that legislative leaders and the governor listened to us as we mobilized and spoke out this year, insisting that despite historic budget deficits, California’s patient care and health care workforce crises must be addressed. resolved,” he said in a statement. statement.
The minimum wage for most people in California is $16 an hour, which is already the highest in the country. The minimum wage for most fast-food workers in the state is $20 an hour, an increase that began in April and has had ripple effects across the state.
But as budgets impact budgets, increasing health care workers’ pay becomes trickier. California employs some health care workers and also pays for health benefits through the state’s Medicaid program.
The Newsom administration has previously said raising the minimum wage would cost the state about $2 billion. But if delayed until January, it would cost the general fund about $600 million — a figure that would rise each year to reflect scheduled increases until most health care workers reach $25 an hour.
Revenues in California, while declining for much of the past two years, have rebounded recently.
“We believe initial raises for workers who have not yet been paid will occur in the fall,” Regan said.
The budget agreement would authorize a total of $297.9 billion in spending for the next fiscal year, which begins July 1. .
But Newsom and lawmakers agreed to abandon some previously proposed cuts, including ones that would stop paying to care for some low-income disabled immigrants on Medicaid.
Lawmakers agreed to provide Pacific Gas and Electric Co. with a $400 million loan to help extend the life of the state’s last remaining nuclear power plant – money some opposed because they feared it might never be repaid.
Newsom agreed to increase how much the state’s Medicaid program pays doctors to treat patients, although the amount was far less than what he had previously agreed to pay. Doctors, meanwhile, have approved a measure on the November ballot that would force the state to pay more to treat Medicaid patients.
In addition to across-the-board cuts of nearly 8 percent for state agencies, the agreement includes an additional $350 million in cuts for state prisons. It also includes a temporary tax increase — starting this year and lasting until 2026 — on businesses with taxable income of more than $1 million.
“This agreement puts the state on a path to long-term fiscal stability — addressing current fiscal shortfalls and building future budget resiliency,” Newsom said.
Lawmakers are likely to vote on the budget next week. Republicans, who do not control enough seats to influence the legislation, say they are being shut out of negotiations.
Senate President Pro Tempore Mike McGuire said it was a “difficult budget year” but that elected officials were able to “close the budget gap, protect our progress, and maintain responsible reserves.”
Democratic Assembly Speaker Robert Rivas said the Assembly “fought hard to protect the public services that matter most to Californians.”
