State Bargaining Unit 9 and State Bargaining Unit 12.

The California Assembly Budget Committee proposes significant changes to state employee agreements and benefits through legislation that modifies personal leave programs and retiree healthcare funding for State Bargaining Units 9 and 12. The bill establishes a new Personal Leave Program 2025, requiring participating employees to accept a 3% pay reduction in exchange for 5 monthly leave credit hours from July 2025 through June 2027.

The measure suspends employer contributions for prefunding other postemployment benefits during fiscal years 2025-26 and 2026-27. Beginning in 2027-28, the bill implements a graduated schedule of employee contributions, starting at 1.4% of pensionable compensation and increasing annually to reach 4.1% by 2029-30. After 2030-31, contribution rates will adjust to maintain equal cost-sharing between employers and employees, with annual changes capped at 0.5%.

To offset costs associated with these agreements, the legislation reduces fiscal year 2025-26 budget appropriations by $88.7 million across multiple funds: $18.2 million from the General Fund, $47.2 million from special funds, and $23.2 million from nongovernmental cost funds. The bill requires legislative appropriation for provisions requiring expenditures, though allows either party to reopen negotiations if funding is not provided.

These changes aim to balance employee benefits with fiscal constraints while maintaining stable funding mechanisms for future retiree healthcare obligations. The measure takes effect immediately upon enactment as budget-related legislation.