|Budget Issue:||Budget for State Active Duty (SAD) employees|
|Program:||California Military Department (CMD)|
|Finding or Recommendation:||Reduce CMD's budget in 2013-14 by $600,000 in General Fund and $700,000 in federal funds to reflect the middle salary range of State Active Duty employees, consistent with CMD's actual expenditures and the practice in most state departments.|
Background. The CMD operates the Army National Guard, the Air National Guard, and the State Military Reserve. In the current year, the department is authorized to have 808 positions, which includes 271 civil service and 537 SAD positions. The SAD employees are active members of the National Guard or State Military Reserve and carry out various administrative, training, security, and other functions within CMD. The SAD positions are funded from a combination of the General Fund and federal funds.
The state provides a salary range for each civil service and SAD classification. The salary an individual state employee receives within that range is generally based on his or her years of experience within that classification. The salary ranges for civil service classifications are generally set by the agreements between employee bargaining units and the state. By state law, the salary ranges for SAD employees are set equivalent to the federal pay ranges for active duty military personnel. While the annual budgets for most state agencies assume that, on average, their employees receive salaries in the middle of their salary ranges—since agencies will generally have a mix of newer and more senior employees within each classification—this is not how CMD has budgeted for SAD employees.
Proposed Budget Assumes SAD Employees Receive Salaries at Top Step. The Governor’s proposed 2013-14 budget includes $153 million for CMD, including $45 million from the General Fund. This is an overall decrease of about 2 percent, or $3.5 million, over the 2012-13 budget. The proposed budget, as well as the enacted budget for 2012-13, assumes that all SAD employees at CMD earn salaries at the top of the available salary range rather than in the middle of the range as is typical for most state agencies (and for CMD’s civil service positions). According to the administration, this is because most SAD employees are believed to be more senior with salaries at or near the upper limit for their ranks. However, based on our analysis of actual CMD expenditures for SAD positions in 2011-12, we find that SAD employees, on average, actually receive salaries somewhat below the middle step for their rank. Consequently, the proposed budget for CMD includes more than is necessary to fund its authorized SAD positions. As a result, we estimate that CMD’s budget for SAD positions exceeds the mid-range for its positions by about $1.3 million in the budget year.
LAO Recommendation. We recommend reducing CMD’s budget in 2013-14 to reflect the middle salary range of SAD employees, consistent with CMD’s actual expenditures and the practice in most state departments. Specifically, we recommend that the Legislature reduce CMD’s budget by $600,000 in General Fund and $700,000 in federal funds.