For Clients & Friends of The Gualco Group, Inc.
IN THIS ISSUE – “Stunning Failure & Sheer Bad Luck”
MASTER OF DISASTER
- Pressure Builds on Newsom to Navigate Re-Opening
- Left in the Dark, Newsom Calls for Probe
- Rolling Blackouts: “A Stunning Failure & Sheer Bad Luck”
- Satellites Watching California Burn
- Reclassify Hydropower…Keep the Lights On
AND SOME GOOD NEWS
- There is Good News: Tax Revenue Increase Starts California Fiscal Year
- Nation’s Largest Green Fuel Plant Opens in…Bakersfield
FORGOTTEN PAY CUT
FOR THE WEEK ENDING AUG. 21, 2020
Capital News & Notes (CN&N) harvests California legislative and regulatory insights from dozens of media and official sources for the past week, tailored to your business and advocacy interests. Please feel free to forward.
READ ALL ABOUT IT!!
Pressure Builds on Newsom to Navigate Re-Opening
Pressure is building on Gov. Gavin Newsom to figure out a reopening plan after San Diego, California’s second-largest county, fell off the state’s coronavirus watch list Tuesday and hospitalizations, case rates and deaths continue to decline statewide. Orange County appears poised to follow tomorrow.
The news came a few days after Santa Cruz was also removed from the watch list, though outbreaks continue to flare in the Central Valley and in some rural counties — including five added to the watch list Monday.
- San Diego Mayor Kevin Faulconer on Friday:“What does a county do when it gets off California’s COVID watch list? No one knows because state guidelines haven’t been set. … (This) exacerbates an increasingly difficult economic situation, and undermines the credibility of and compliance with the state’s public health order.”
Hundreds of hair salons, barbershops and tattoo parlors across the state pledged to reopen for indoor service Monday — exactly five months after they were first shut down — and stay open as long as possible.
- Lu Garcia Reynoso, owner of Barber Society in Gardena:“On one side I can lose it all. But if I wait around for another five months, I’m gonna lose it all anyway.”
Meanwhile, two private Christian schools in Fresno reopened in defiance of state orders, and another in Sacramento reopened under the guise of day care. Some California schools are holding day care programs in their classrooms, where students work on distance learning under the supervision of a substitute teacher.
Schools are eligible to reopen in counties that stay off the watch list for 14 days, though day care and elementary schools can reopen under different conditions — uneven and contradictory standards in the eyes of some superintendents and elected officials.
Facing its biggest crisis in two decades, the manager of California’s electricity grid is suspending a form of power trading that it says has made the grid more volatile and contributed to two nights of rolling blackouts.
Separately, Gov. Gavin Newsom jumped into power controversy, demanding an investigation into the weekend’s blackouts, declaring a state of emergency and signing a proclamation that suspends air-pollution regulations that could inhibit the use of portable and stationary generators.
“These blackouts, which occurred without prior warning or enough time for preparation, are unacceptable and unbefitting of the nation’s largest and most innovative state,” Newsom wrote in a letter to the grid manager, the Energy Commission and Public Utilities Commission. “This cannot stand.”
Newsom’s statement came after the California Independent System Operator said it’s temporarily banning “convergence bidding,” a complicated system in which power generators and traders buy and sell electricity a day before it’s needed as well as in real time.
Experts say these trades can lead to price swings that can hurt the availability of supplies, and can be used to manipulate conditions on the grid.
“As a result of the record-breaking heat wave that has led to load curtailments, the California ISO has determined that convergence bidding is detrimentally (affecting) the ISO’s ability to maintain reliable grid operations,” the agency said in a brief notice on its website.
It marked the first rolling blackouts in California since the 2001 energy crisis — when state officials later discovered that the ISO’s system was being routinely exploited by crooked power traders at Enron Corp. and other companies.
The energy crisis was partly responsible for former Gov. Gray Davis’ political downfall and Newsom has been eager to get on top of the issue.
Robert McCullough, an energy consultant in Portland, said convergence bidding is “the area most susceptible to manipulation in their system.”
McCullough, a frequent critic of the ISO’s trading system, said convergence bidding lets traders place major bets on electricity prices at hundreds of physical points, called “nodes,” the day before the power is consumed, and then cash in a day later.
“This is purely financial,” said Severin Borenstein, an ISO board member and UC Berkeley economist.
McCullough said these wagers then have a major influence on actual prices and the volume of electricity that power generators will provide in real time — the moment when the power is needed to feed the hungry grid.
“If you can influence prices, you can have an impact on the real world,” he said.
Yet Frank Wolak, a Stanford University energy economist and former member of the ISO’s market surveillance committee, said convergence bidding is actually designed to send the proper price signals so power generators, seeing prices rise, will be willing to pour additional electricity into California.
He said he’s skeptical that convergence bidding is hurting grid reliability, despite what the ISO said. Rather, he believes the ISO is trying to simplify grid operations by removing some of the trading mechanisms. “They’re saying, ‘We’re engineers, we know how to run the system. We don’t want all this financial stuff complicating our lives.’ ”
The ISO board was scheduled to meet Monday morning to discuss the blackouts.
The 2001 blackouts resulted from a multitude of market manipulation schemes cooked up by Enron and others, all designed to withhold supplies from California until prices rose. One scheme, nicknamed “megawatt laundering,” involved moving power out of state and then re-importing it. That enabled traders to evade price ceilings on power generated within the state.
Investigators later determined that this gamesmanship had cost utility customers tens of billions of dollars. Under pressure from state officials, federal regulators ordered power companies to make billions in refunds.
New York Times
Everybody had known for days that a heat wave was about to wallop California. Yet a dashboard maintained by the organization that manages the state’s electric grid showed that scores of power plants were down or producing below peak strength, a stunning failure of planning, poor record keeping and sheer bad luck.
All told, power plants with the ability to produce almost 6,000 megawatts, or about 15 percent of the electricity on California’s grid, were reported as being offline when temperatures surged last Friday. The shortfall, which experts believe officials should have been able to avoid, forced managers of the grid to order rolling blackouts in the middle of a pandemic and as wildfires across the state were spreading.
But even if all of the missing capacity had been available, California would probably still have struggled to deliver enough electricity to homes where families were cranking up air-conditioners. That’s because the manager of the grid and state regulators were relying on power from plants that either had permanently shut down or could not have realistically achieved the targets set for them.
For example, the California Public Utilities Commission had assumed that hydroelectric plants would provide as much as 8,000 megawatts when demand peaked this summer. But that number appears to have failed to take into account low water levels at many dams, including the Big Creek Hydroelectric Project high in the Sierra Nevada. And those plants delivered only 5,514 megawatts last Friday, according to data from the nonprofit that manages the state’s grid and maintains records about power plants, the California Independent System Operator.
“This is like brain surgery,” said Robert McCullough, a utility industry consultant in Oregon. “You don’t make mistakes. People actually die when you mess it up.”
The last time power plant outages in California totaled 15 percent or more during the summer peak was in 2000 and 2001, when the state was grappling with an energy crisis created by a botched deregulation of the industry and market manipulation by traders at Enron and other companies, Mr. McCullough said. As they did then, wholesale electricity prices in California spiked in recent days because of the supply shortfall.
“It’s bizarre. It’s unbelievable,” Mr. McCullough said, adding that North American grids are typically designed to handle plant outages up to about 7 percent.
Other plants that the grid manager listed as being down or producing at lower levels should never have been on the list. A natural gas unit at the Inland Empire Energy Center, southeast of Los Angeles, was listed as down for planned maintenance — though state regulators had approved its demolition back in December. A state official said Thursday that about half of it had been torn down.
Other mistakes might have led grid managers to believe more plants were affected than was the case. The Geysers geothermal power plant, about 72 miles north of San Francisco, was listed as operating at less than its usual capacity, but its owner, Calpine, said on Thursday that it had in fact been generating electricity at normal levels.
In a statement on Thursday, California I.S.O. said that some of the plants on its list were out of state and that some might have been providing power outside its system. In addition, the organization said some plants, including those that burn natural gas, might have been producing less power because it was too hot for them to operate normally.
Almost a week after the blackouts began, neither the grid operator nor state energy regulators have offered a clear and detailed explanation of why California was so short of power even though peak demand was lower than it had been during other hot days in recent years. They have broadly attributed the energy shortage on their inability to secure more electricity from other states and sources.
In a letter to Gov. Gavin Newsom late Wednesday, the heads of three agencies that oversee the state’s electricity system said they were working to determine what had gone wrong. They acknowledged that the electricity demand on Friday and Saturday— when hundreds of thousands of homes and business went dark — was “high but not above similar hot days in prior years.”
When utilities cut power to their customers, the peak demand had reached 47,000 megawatts on Friday and 45,000 on Saturday. Those were far below the highest day — 50,270 on July 24, 2006 — or the 50,116 clocked three years ago.
Perhaps even more baffling is that the agencies did not turn to the state government for help until just before the blackouts began. Had they done so, Mr. Newsom could have called on power plants that the state and municipal utilities control to generate more power or made a plea to businesses and homeowners to conserve power — steps he took on Monday after the scope of the problem became clear.
“The lack of transparency around the reality of this situation contributed to the problem,” said Carrie Bentley, chief executive officer of Gridwell Consulting and a former official at the California I.S.O.
Mr. Newsom, a Democrat, sharply criticized state regulators. “Grid operators were caught flat footed, unable to avert disruptive blackouts and to adequately warn the public,” he wrote in a terse letter to energy officials.
Mr. Newsom has ordered an investigation into what went wrong, and state lawmakers have called for public hearings.
California’s electricity system has been under scrutiny for two decades. After its last energy crisis led to rolling blackouts and skyrocketing electricity prices, the state has worked to end its reliance on fossil fuels and shift to carbon-free energy sources, chiefly solar power. Dozens of power plants have closed because of environmental concerns and competition from cheaper renewable sources of electricity.
In addition, the state’s nuclear fleet is in its final years. The San Onofre plant in Southern California shut down in 2013 after a failed upgrade proved too costly to repair, and the only remaining nuclear plant in the state, Diablo Canyon, is set to close by 2025.
The current energy emergency has focused attention on the Diablo Canyon plant, which Pacific Gas & Electric owns. The utility recently asked federal regulators to allow it to inspect and potentially repair one of its two units without shutting down the plant.
“It’s akin to having someone change your brake pads while you’re still rolling down the road in your car,” said Arnold Gundersen, a nuclear engineer and consultant.
If regulators require PG&E to shut down the unit before inspecting and repairing it, the loss could further strain the state’s grid.
California I.S.O., which manages 80 percent the state’s electricity operations, depends heavily on power imported into its system, from other utilities in the state like the Los Angeles Department of Water and Power and from plants in neighboring states. But the heat wave engulfing the West has increased demand in other states, too, tying up some resources.
Climate change, the main reason California is seeking to move to carbon-free energy sources, has become a hurdle in itself.
Summer temperatures are regularly breaking records, and recently hit 130 degrees in Death Valley. The heat and lack of rainfall have turned the summer wildfire season into a year-round phenomenon, putting yet more pressure on the grid.
Although California I.S.O. “could not have predicted the specific series of events that ultimately required power outages, better communications and advance warnings about tight supply conditions were possible, and should have been done,” the agencies said in their letter to Mr. Newsom.
Steve Berberich, president and chief executive officer of California I.S.O., on Tuesday defended his organization’s decision to order rolling blackouts rather than dipping into reserve power supplies set aside for emergencies. He said the grid had to keep some reserves on hand in case a plant like Diablo Canyon unexpectedly shut down.
Some conservatives have blamed California’s growing reliance on solar and wind power for undermining the reliability of the state’s grid. President Trump said on Twitter that the state’s Democratic leaders had “intentionally implemented rolling blackouts — forcing Americans in the dark.” He added that the Green New Deal, a proposal for 100 percent renewable and zero-emission energy embraced by many liberals, “would take California’s failed policies to every American!”
But Mr. Berberich said the reliance on renewables was not a factor because the state was facing such a huge shortfall in generating capacity. “It’s simply a matter of raw capacity.”
Satellites Watching California Burn
On the day California ran out of electricity, where did the state turn to find more power?
To the oldest and cleanest form of electricity there is – hydropower. Considering that California is going out of its way to make hydropower more expensive and less available, you don’t have to be an electrical engineer to see the disconnect.
This heat generated incredible electrical demand. Even with the millions of solar panels and thousands of windmills installed over the last decade, California couldn’t meet that demand.
The California Independent System Operator was forced to black out nearly 2 million people. No warning, no recourse, just silence as all their electronic gear went dead in parts of Los Angeles, San Francisco, Stockton and Merced.
This wasn’t supposed to happen. When demand surges, California usually orders up more power from Arizona or Washington. But temperatures hit 116 in the Valley of the Sun and nearly 100 in eastern Washington; there was little or none to spare.
Cal ISO officials have been predicting such a scenario for years. With so many people working from home in the pandemic, peak-demand times have gotten later – when solar panels are unable to help meet demand. That left millions in the dark.
So far, we’ve gotten no good explanation. Isn’t the California Public Utilities Commission supposed to play a role in guaranteeing the reliability of public utilities – like electricity?
Such failures are why I asked the Legislative Audit Commission for a full-scale review of the CPUC last winter. That request could not be fulfilled, but the necessity is clear.
So how did Cal ISO finally get the lights back on? It turned to hydropower, the oldest form of electricity generation there is.
The U.S. Bureau of Reclamation – which operates the Glen Canyon, Hoover and Davis dams – increased generation flows, surging power into California. Bureau officials had anticipated the need and were ready to act.
That won’t surprise the people of Assembly District 21. We’ve been making hydroelectricity for, oh, about 100 years. We’re still making hundreds of megawatts at Don Pedro Dam and Exchequer Dam, among others.
Outrageously, people living in my district have been forced to pay a premium for their power – a penalty for having the foresight to invest in meeting their own needs. This penalty was legislated into their electricity bills by the state of California by SB 100 in 2018. This poorly planned law set a timetable for every power provider – publicly or privately owned – to load up on officially anointed “renewable” energy.
Inexplicably, SB 100 ruled hydropower – the most reliable and cleanest renewable energy – wouldn’t be considered “renewable” until 2030.
So even those who generate their own hydropower – like San Francisco, Modesto, Turlock and Merced – are now forced to buy more expensive solar and wind power. Those extra costs can be found on our power bills every month.
Why is this? California’s environmental community hates our dams, where power is created, so they also hate the hydroelectricity made at those dams. Yet electricity made at dams in Washington and Colorado, for instance, is perfectly acceptable to the green movement.
With the setting sun obscured by clouds and smoke, all those windmills and solar panels could meet only 18% of California’s demand. California’s “renewable” generators – who claim to provide a third of all power generated in California – failed to meet the test.
Gas-fired generators needed a longer ramp-up time, so they couldn’t help. That left it almost entirely up to dam operators to meet the challenge. Hydropower helped save the day.
If we are going to meet California’s urgent power needs, we cannot relegate our most affordable and reliable clean power to second-class status. Making hydropower more expensive reduces any desire to create more of it. That’s as dangerous as it is ridiculous.
Yes, millions of solar panels are capturing the sun. That’s wonderful. But they simply cannot meet spiking demand. Hydropower isn’t just an inexpensive form of renewable, clean energy; in a heat wave it’s a lifesaver.
Don’t be blinded by the promise of a solely solar-powered future. The choice is ours: reclassify hydropower now, or risk being left in the dark.
Assembly Member Adam Gray
State Dept. of Finance
Preliminary General Fund cash receipts for July, the first month of the fiscal year, was $2.580 billion above the 2020-21 Budget Act forecast of $27.792 billion, largely related to unexpected strength in the 2019 tax year. Preliminary General Fund agency cash receipts for the entire 2019-20 fiscal year were $1.135 billion above the 2020-21 Budget Act forecast of $123.395 billion, or 0.9 percentage point above forecast. Total collections for March through July of 2020 are actually down by 6 percent from the same period in 2019.
Personal income tax cash receipts for July were $2.7 billion above the month’s forecast of $21 billion. Withholding cash receipts were $1.6 billion above the forecast of $4.5 billion. Other cash receipts were $1.1 billion higher than the forecast of $19 billion. Refunds issued in July were $47 million lower than the expected $2.1 billion. Proposition 63 requires that 1.76 percent of total monthly personal income tax collections be transferred to the Mental Health Services Fund
(MHSF). The amount transferred to the MHSF in July was $49 million higher than the forecast of $375 million.
Sales and use tax cash receipts for July were $602 million above the month’s forecast of $1.285 billion. July is the first month of the 2019-20 fiscal year and includes the final payment for second quarter taxable sales, which was due July 31. This year July likely includes a significant amount of delayed payments from the first quarter of 2020.
Corporation tax cash receipts for July, the first month of the fiscal year are $306 million below the forecast of $4.801 billion. Estimated payments were $193 million below the forecast of $3.127 billion, and other payments were $45 million lower than the $1.743 billion forecast. Total refunds for the month were $68 million higher than the forecast of $69 million.
California’s civilian employment decreased by 2.8 million (-15.3 percent) in the second quarter, with
an additional 2.1 million becoming unemployed and 720,000 leaving the labor force. In addition, 576,000 Californians were furloughed and the number of involuntary part-time workers increased by 660,000 (82.8 percent). During the Great Recession, California’s civilian employment decreased by 926,000 (-5.5 percent) from the peak in the first quarter
of 2008 to the trough in the first quarter of 2010. California’s unemployment rate averaged a record-high 15.9 percent in the second quarter of 2020, up from 4.4 percent in the first quarter and 3.6 percentage-points higher than the previous record of 12.3 percent during the Great Recession. California’s nonfarm jobs decreased by 2.3 million or 13.0 percent in the second quarter. For California and the nation, job losses were largest for low-wage sectors, with leisure and hospitality losing around 40 percent of its total jobs over one quarter.
California’s continuing claims for unemployment benefits increased by 3.3 million from 425,000 in the first quarter of 2020 to 3.7 million in the second quarter (including continuing claims for Pandemic Unemployment Assistance). This is more than quadruple the 840,000 average in the second quarter of 2009, at the height of the Great Recession. The increase in continuing claims is larger than the increase in officially unemployed, as people who are only partially unemployed can also claim unemployment benefits. Furthermore, those who are not able to actively look for work due to COVID-19 can claim unemployment benefits but are not counted as unemployed since they are not in the labor force.
California housing units authorized by building permits totaled 71,100 units in June 2020, up 2.8 percent from May 2020 but down 43.5 percent from February’s 125,800 units. In June, single-family units increased by 54.6 percent from May
to 47,500 units while multifamily units decreased by 38.6 percent to 23,600 units. Year-to-date, authorized residential housing units averaged 92,600 (down 12.3 percent from the same period in 2019), split into 49,700 single-family units (down 6.3 percent) and 42,900 multifamily units (down 18.3 percent). California’s nonresidential building valuation in June was $28.2 billion, up 92.8 percent from May 2020 and up 6.4 percent from February’s $26.5-billion valuation. Year-to-date, nonresidential building valuation averages $22.7 billion, down 33.2 percent from the same period in 2019.
The state’s largest biodiesel producer gave a glimpse into the continued expansion of its local plant Wednesday, as it continues attempting to increase its production by 50 percent.
Crimson Renewable Energy, located south of Highway 223 in southwestern Kern County, is in the process of creating a facility designed to distill and purify the biofuel it produces from a variety of used oils and animal fats. The project began in December 2019 and is expected to be operational by summer 2021, according to Chris Dixon, Crimson’s quality manager.
“All of our operators and managers have worked really hard to bring the volume up to max capacity at this point, that’s been the hardest part,” Dixon said. “It’s like a symphony. Every little piece has to be working properly and in-tune.”
Rep. TJ Cox was in attendance on the tour as were various local media outlets. Cox, a former chemical engineer himself, stressed the importance of renewable forms of energy to help the state transition away from fossil fuels.
“We have to create quality, affordable fuel — clean fuel — for the Central Valley,” Cox said. “I’m just so grateful that it’s happening right here in our own district.”
Crimson typically utilizes corn oil from Pixley and cooking oil from restaurants in Chico, Richmond and Oregon as sources for their product. However, due to reduced availability of those items during the COVID-19 period, Crimson has been using primarily rendered pork fat from Hanford, Dixon said.
The oils are heated, filtered and treated with chemicals to remove any glycerol to create a crude biodiesel, Dixon said. The final product is a red-tinted liquid that’s typically shipped to other facilities to be purified and distilled.
Dixon explained that while their biodiesel is typically tailored toward transportation, it can also be utilized in backup generators.
Following the tour, Cory Busby, Crimson’s director of operations, spoke at a news conference alongside Cox. He discussed the future of renewable energy as California faces a potential energy crisis that’s sparked rotating blackouts in some parts of the state.
“You can’t stick a straw in the ground and expect anything to be there,” Busby said.
Cox added it’s important for Kern County to “diversify” its energy production as he considers it the “top energy producing county” in the U.S. He emphasized that the future of renewable energy will likely use the same kinds of plants and refineries that are used for oil locally.
“There’s going to be a transition (from oil) and it matters how we handle that transition,” Cox said. “I just want to thank Crimson for making the investment here and putting people to work and making sure that families have the opportunities to grow (through jobs).”
Busby said that Crimson is currently hiring and has about 120 daily employees.
He emphasized the important role that biodiesel plays when it comes to improving the environment. Busby noted the particularly gray and smoggy horizon that surrounded Crimson on Wednesday morning.
“Hopefully one of these days the sky will be blue over Bakersfield,” he said.
Gov. Gavin Newsom said he and the rest of the state government’s workforce would take 10% pay cuts when he announced broad cuts to state spending in May because of the coronavirus outbreak.
Those cuts for most state employees took effect last month, but Newsom did not reduce his own wages, according to pay data the State Controller’s Office provided in response to an information request from The Sacramento Bee.
State Controller Betty Yee was the only one of the state’s eight elected constitutional officers — such as the treasurer, secretary of state and attorney general — to take a pay cut last month, according to the data.
The four elected members of the Board of Equalization and lawmakers in the state Legislature also didn’t take cuts.
After questions from The Bee on Wednesday, Governor’s Office spokesman Nathan Click said an oversight by the office resulted in Newsom keeping his full pay, which for July was $17,479.
Newsom sent a letter to the Controller’s Office Wednesday asking Yee to reduce his pay retroactively to July 1.
Statewide elected officers, including the governor, are exempt from the pay cut orders in budget legislation that reduced pay for most of the state’s workforce. Newsom’s chief of staff, Ann O’Leary, sent an email to the constitutional officers Wednesday afternoon encouraging them to request reductions immediately.
By about 4:15 p.m., the Controller’s Office had received requests from Treasurer Fiona Ma, Lt. Gov. Eleni Kounalakis, Superintendent of Public Instruction Tony Thurmond, Attorney General Xavier Becerra and Insurance Commissioner Ricardo Lara requesting reductions, said Controller’s Office spokeswoman Jennifer Hanson.
A spokesman for Secretary of State Alex Padilla said Padilla would also request the reduction. The Board of Equalization didn’t return a message.
Yee requested the reduction on July 20, in time to reduce her pay that month, Hanson said.
“Millions of Californians have lost their jobs, and our state continues to reel from a pandemic-induced recession,” Yee said in an emailed statement. “State workers absorbed a pay cut to help balance the budget. It is important to me to make the same sacrifice as my team.”
The California Citizens Compensation Commission makes recommendations on pay for state officials and legislators. At its annual meeting in May, the commission instituted pay freezes — not cuts — while encouraging officials to go further and surrender part of their pay. Newsom at that time was already pledging to reduce his pay.
Yvonne Walker, president of SEIU Local 1000, the state’s largest union, expressed confidence Thursday in the governor’s intentions.
“If there’s one thing we know, it’s that our governor keeps his word,” Walker said in an emailed statement. “We can only imagine that with all the things going on in our state — the COVID-19 pandemic, an economic recession, and incidents of police brutality combined with years of systemic racism driving our fellow citizens to the edge of their sanity, and now a record-breaking heat wave taxing our power grid — it wouldn’t be surprising if processing the necessary paperwork has taken a backseat to more pressing matters. We remain confident that this will take place as promised and that it will be retroactive.”
State unions negotiated pay cuts for the vast majority of state workers. Generally, the terms of the agreements also applied to managers. Pay records show that agency secretaries, the next-highest-ranking employees after the constitutional officers, had their pay reduced.
The state made the reductions for most workers using a personal leave program, which cuts workers’ pay by the equivalent of two days of work — 9.23% of their monthly pay — and in exchange gives them two flexible days off to use at their discretion.
Constitutional officers requested straight pay cuts of 9.23% in their letters to the Controller’s Office on Wednesday.
The actual reductions in take-home pay for rank-and-file workers are less than that, since the state is temporarily suspending the contributions workers normally make to their retirement health care. Workers normally contribute between 1.4% and 4.4% of their pay toward a fund for the health care.
The cuts were projected to save the state $2.8 billion per year. The state also suspended raises many state workers had been scheduled to receive in July.