SACRAMENTO, California – Democrats in California agreed to postpone a increase in the minimum wage for about 426,000 health care professionals to help 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 that the nation’s most populous state has had a multibillion-dollar deficit.
Health care workers were scheduled to receive a raise on July 1, part of a plan to gradually increase their wages to $25 an hour over the next decade. Now, 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 officials estimated.
If this does not happen, the increase will not begin until January 1st at the latest.
The delay preserves a hard-fought victory for one of the state’s largest unions — and one of Democrats’ biggest campaign donors. Dave Regan, president of the Service Employees International Union-United Healthcare Workers West, said workers are disappointed they won’t get raises 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, the crisis in patient care and the healthcare workforce in California must be addressed,” he said in a statement. declaration.
The minimum wage for most people in California is $16 per hour, which is already among the highest in the country. The minimum wage for most fast food workers in the state is $20 per hour, an increase that started in April and had ripple effects across the state.
But increasing salaries for healthcare professionals is more complicated due to the budgetary impact. California employs some health care professionals and also pays medical benefits through the state’s Medicaid program.
The Newsom administration has previously said the minimum wage increase would cost the state about $2 billion. But if it is delayed until January, it would cost the general fund about $600 million — an amount that would increase annually to reflect scheduled raises until it reaches $25 an hour for most health care workers.
California’s revenues, while declining for much of the past two years, have recovered recently.
“We are confident that the initial raise for workers who have not yet received it will happen in the fall,” Regan said.
In total, the budget deal would approve $297.9 billion in spending during the next fiscal year, which begins July 1. Newsom and legislative leaders agreed on $16 billion in cuts, including $110 million for a program that helps students from middle-class families pay. college and $1.1 billion in various affordable housing programs.
But Newsom and lawmakers agreed to abandon some previously proposed cuts, including one that would have stopped paying people for care for some low-income disabled immigrants who are on Medicaid.
Lawmakers agreed to lend US$400 million for Pacific Gas dealership & Electric to help extend the life of the state’s only remaining nuclear power plant — money that some lawmakers opposed because they feared it would never be repaid.
And Newsom agreed to increase the amount the state Medicaid program pays doctors to treat patients — although the amount is much less than he previously agreed to spend. Meanwhile, doctors have qualified a measure for the November ballot that would force the state to pay them more for treating Medicaid patients.
In addition to an overall cut of nearly 8% for state agencies, the deal includes an additional $350 million cut for state prisons. It also includes a temporary tax increase – starting this year and 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 in the future,” Newsom said.
Lawmakers will likely vote on the budget next week. Republicans, who don’t control enough seats to influence legislation, say they have been left out of 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 “fought hard to protect the public services that matter most to Californians.”
This story originally appeared on ABCNews.go.com read the full story
