July 28, 2022

The California Department of Finance recently reported that preliminary General Fund agency cash receipts for fiscal year 2021-22 ending June 30, 2022, were roughly $2.2 billion below projections. These shortfalls are attributed to lower proceeds than expected from personal income tax, which was approximately $4.5 billion below the forecast of $148.4 billion. Other revenue sources, particularly sales and use taxes and corporation taxes, exceeded expectations by a combined total of about $852 million. In addition, nearly $1.3 billion more in deposits from the Federal Emergency Management Agency were received in May and June than anticipated. This is the first preliminary monthly cash report to fall short of expectations since April 2019 and the first not to exceed the amount forecasted at the end a fiscal year since July 2017.

Additionally, on July 21, 2022, CSAC submitted public comments on the California Public Employees’ Retirement System’s (CalPERS) proposed rulemaking action, which seeks to define “limited duration” employment and provide clarity and uniformity for CalPERS-covered employers.

As reported previously, the proposed rulemaking action limits an appointment of a retired annuitant to an initial period of two years, which could be extended by an additional year up to two times, for a total of four years, if certain requirements are met. For current retired annuitants, the two years would be counted from when the regulations go into effect.

In submitting public comment, CSAC noted that these proposed regulations come at a time of significant labor disruption and difficulty hiring at all levels. Some counties are reporting 20 and even 30 percent vacancies, not just for traditionally hard-to-fill positions, but for positions at all levels. Layering these new restrictions and administrative requirements will lead to greater disruptions in county services. CSAC’s comments shed light on this fact by seeking technical amendments to address administrative barriers associated with extension requests, requesting the reduction of the administrative burden for counties through technical amendments, requesting that the regulations exempt from its application all appointments to perform work related to elections, and petitioning for a process for counties to request CalPERS to waive some or all of the requirements of this proposed rulemaking action during a declared local or state disaster emergency, public health crisis, or another emergency.

Counties that wish to provide comments should refer to the Notice of Proposed Rulemaking, Initial Statement of Reasons, and of course the Text of Proposed Regulation.

Any interested person or their authorized representative may submit written comments relevant to the proposed regulatory action by 11:59 p.m. on August 1, 2022. Comments may be submitted by e-mail to Regulation_Coordinator@calpers.ca.gov.