Arbitrator Says California Owes Prison Back Pay

SACRAMENTO, Calif. — State officials incorrectly calculated wages and benefits for prison workers and following an arbitrator’s ruling, the state must pay nearly $440 million during the next two years to make up for the mistake.

According to the ruling, the state must pay $200 million in back pay and health benefits from July 1, 2005, to 30,000 correctional and probation officers, and other employees. The state must also pay a 3.1 percent increase retroactive to the start of this year, which will cost the state about $80 million for the fiscal year 2007 budget and $160 million for the FY 2008 budget.

Deficit spending will be avoided by funding the budget modifications with $153.5 million from state reserves and $46 million in cuts from other state agencies.