State Bargaining Unit 9 and State Bargaining Unit 12.

The California Senate Committee on Budget and Fiscal Review has put forward legislation modifying state employee compensation agreements and benefit programs for Bargaining Units 9 and 12. The measure ratifies new memoranda of understanding while implementing changes to personal leave and retiree health care prefunding programs.

The bill establishes the Personal Leave Program 2025, requiring a 3% pay reduction for affected employees in exchange for 5 hours of monthly leave credits from July 2025 through June 2027. This represents a significant adjustment from the previous program's 10% reduction and 16 hours of credits. The program excludes retired annuitants and certain entities specified in the 2025 Budget Act.

For retiree health care prefunding, the legislation suspends employer contributions during fiscal years 2025-26 and 2026-27. Beginning in 2027, employees will contribute 1.4% of pensionable compensation, increasing incrementally to 4.1% by 2029. After 2030, both employer and employee contributions will adjust annually to maintain equal cost sharing, with changes limited to 0.5% per year.

The measure reduces appropriations in the 2025 Budget Act by $88.7 million across multiple funds - including $18.2 million from the General Fund, $47.2 million from special funds, and $23.2 million from nongovernmental cost funds. These reductions align with the negotiated agreements between the state and the affected bargaining units.

Implementation of the memoranda provisions requires specific legislative appropriation of funds. If funding is not provided, either the state employer or the bargaining units may reopen negotiations on all or part of the agreements.