Teamsters Economist to CSU: Invest $1.7B Surplus in Fair Pay for Workers

CSU Skilled Trades Bargaining Team: Our team brought in enlarged versions of the letters from Gov. Newsom and Lt. Gov. Kounalakis, both of which urge the CSU to agree to implement salary steps for Skilled Trades workers in their new collective bargaining agreement.

Teamsters Economist to CSU: Invest $1.7B Surplus in Fair Pay for Workers

Our Teamsters Skilled Trades Bargaining Team met with CSU administration Jan. 23 and 24 and kicked off economic negotiations with lengthy discussion of the CSU’s unusual budgeting process with the State of California. Our team brought International Brotherhood of Teamsters Economist James “Jim” Kimball, Ph.D., to provide expert testimony on how the CSU can afford to pay our Skilled Trades workers fairly and implement salary steps. The CSU brought in their budget expert, Ryan Storm, to explain how money is allocated to the CSU by the State. Storm claims the CSU cannot build in a “permanent” budget increase over many years, thus preventing them from implementing guaranteed salary steps.

According to the CSU 2019-2020 operating budget published on their website, CSU was guaranteed funding of $4.1 billion by the state for 2019-2020. Any needs above that not covered by income from tuition/fees, bonds, sales/services or other revenue generated by the CSU must be submitted through the incremental budgeting process each year.

Dr. Kimball with the Teamsters agreed that the CSU budgeting process is unusual and likely difficult to navigate. However, the CSU has built a surplus since 2014 of $1.7 billion that would cover salary steps for all current Skilled Trades workers at all CSU campuses many times over. This surplus mostly comes from unspent tuition income, which the CSU underestimates every year, making it reliable income, according to Dr. Kimball.

“With its $10 billion annual budget and billions in surplus, CSU can well afford to pay workers fairly. The $1.7 billion surplus results in large part from salary savings derived from CSU’s failure to provide step increases; it’s totally appropriate to use a fraction of the surplus funds to solve the problems created by inadequate compensation of Unit 6 workers.” said Jason Rabinowitz, Secretary-Treasurer of Teamsters Local 2010.