California Democrats agree to delay health care worker minimum wage increase to help balance budget
SACRAMENTO, California — California Democrats have agreed to a increase in the minimum wage for approximately 426,000 health care workers to balance the state budget.
The deal between Gov. Gavin Newsom and legislative leaders is part of a larger plan to close an estimated $46.8 billion deficit — the second year in a row, the nation’s most populous state has run a deficit billion-dollar deficit.
Healthcare workers would get a raise on July 1, part of a plan to gradually increase their wages to $25 an hour over the next decade. If approved by the Legislature next week, they could get that increase on Oct. 15 — but only if California’s revenues between July and September are at least 3% higher than what officials have estimated.
If this does not happen, the increase will start no later than January 1.
The delay ensures a hard-fought victory for one of the state’s largest unions — and one of Democrats’ biggest campaign donors. Dave Regan, president of 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 to insist that, despite a historic budget deficit, California’s patient care and health care workforce crisis must be addressed ”, he said in a speech. rack.
The minimum wage for most people in California is $16 an hour, which is already among the highest in the country. The minimum wage for most fast food workers in the state is $20 an hour, an increase started in April and has had ripple effects across the state.
But increasing wages for health care workers is more difficult because of the budgetary impact. California employs a number of health care workers and also pays for medical benefits through the state’s Medicaid program.
The Newsom administration had previously said raising the minimum wage would cost the state about $2 billion. But if it is postponed until January, it will cost the general fund about $600 million — a figure that would rise annually due to the planned increases, until it reaches $25 an hour for most health care workers.
Although revenues in California have fallen over the past two years, they have recently rebounded.
“We are confident that the first pay increase for employees who have not yet received them will occur in the fall,” Regan said.
In total, the budget deal would authorize $297.9 billion in spending for the next budget year that begins July 1. Newsom and legislative leaders agreed to $16 billion in cuts, including $110 million for a program that helps students from middle-class families pay for college. university and $1.1 billion for various affordable housing programs.
But Newsom and lawmakers agreed to give up some previously proposed cuts, including one that would no longer pay for people care for some low-income, disabled immigrants who use Medicaid.
Lawmakers agreed Borrow $400 million to the utility company Pacific Gas & Electric to help extend the life of the state’s only remaining nuclear power plant — money that some lawmakers opposed because they worried it might never be paid back.
And Newsom agreed to increase how much the state’s Medicaid program pays doctors to treat patients — though the amount is far less than he previously wanted to spend. Meanwhile, doctors have qualified for the November ballot a measure that would force the state to do so pay them more to treat Medicaid patients.
In addition to nearly 8% cuts across the board for state agencies, the deal includes an additional $350 million in cuts to state prisons. It also includes a temporary tax increase — starting this year and running through 2026 — for businesses with more than $1 million in taxable income.
“This agreement puts the state on a path to long-term fiscal stability – addressing the current deficit and strengthening fiscal resilience over time,” Newsom said.
Lawmakers are likely to vote on the budget next week. Republicans, who do not hold enough seats to influence the legislation, say they have been left out of the negotiations.
Senate President Pro Tempore Mike McGuire said it was a “difficult budget year” but elected officials were able to “reduce the deficit, protect our progress and maintain responsible reserves.”
Democratic Assembly Speaker Robert Rivas said the Assembly “has fought hard to protect the public services that matter most to Californians.”