Saturday, February 26, 2011

Showdown brewing over CA state employee pensions

But a different type of showdown is simmering in California as business and taxpayer groups and Republicans are ratcheting up the pressure on Brown to ask for more concessions from public employee unions to help fill the state's $25.4 billion budget deficit.

While union supporters gathered in Sacramento and Oakland on Tuesday night for vigils to show solidarity with their brethren in Wisconsin, the buzz among the 200 business leaders at the Sacramento Metro Chamber of Commerce earlier in the day was how "in a budget crisis, everything should be on the table," said James Beckwith, president and CEO of Sacramento's Five Star Bank.

"It's the 800-pound gorilla in the room," Beckwith said. "You can't have real budget reform without pension reform."

That "isn't just a state problem, it's far worse in cities," said Marcia Fritz, president of the California Foundation for Fiscal Responsibility, a nonprofit pension reform group. While several sources said Brown administration officials have been quietly meeting with union officials about possible concessions, Brown has yet to offer a proposal.

"We need the leader of California to stand up and lead on this issue," Fritz said. "And if he doesn't, we'll go around him, just like people did on Proposition 13 (in 1978 during Brown's first stint as governor). And I don't think he wants that."

On Tuesday, Assemblyman Allan Mansoor, R-Costa Mesa (Orange County), introduced a bill that would strip public employees of their ability to collectively bargain for retirement benefits.

Brown adviser Steve Glazer said Tuesday that Brown "is focused on one thing: the budget."

In Wisconsin, union leaders have agreed to GOP Gov. Scott Walker's proposal to increase contributions to their health and retirement plans to help close a projected $3.6 billion budget hole over the 2011-13 budget cycle. The move would cut the take-home pay of many union workers by about 7 percent.

But union leaders nationwide are incensed about Walker's additional proposal to strip public employees of their collective bargaining power - the lifeblood of a union. Walker did so while offering tax breaks to businesses that create jobs in the state.

Sixteen other states are considering or are expected to consider laws that would curb union power. The battle is pivotal to unions, as more of its members - 7.6 million - belong to public-sector unions than private ones.

"(Walker) just doesn't want to take collective bargaining off the table," said UC Berkeley Professor Harley Shaiken, a labor expert. "He wants to take an ax to the table."

That's unlikely to happen in California, Shaiken said, as Brown believes in using the collective bargaining system to gain any concessions. In 1978, Brown signed the law giving collective bargaining power to state government employees.

Public opinion appears to be going against Walker's plan. A nationwide Gallup Poll released Tuesday found that 61 percent of the respondents would not support a law in their states that would remove "some collective bargaining rights of most public unions."

Unlike California, Wisconsin's Legislature is controlled by Republicans. Union-controlled independent expenditure campaigns contributed $20.2 million to Brown's gubernatorial run and $4.9 million against Meg Whitman during the 2010 election cycle, according to a report compiled for The Chronicle by the nonpartisan MAPLight.org.

"I don't think Brown wants to take on his union pals," said Steven Greenhut, author of "Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation."

But union officials in California say their members have been making sacrifices. Brown's budget proposes $12 billion worth of tax extensions and $12.5 billion of cuts to state programs - many of which would affect the careers, benefits and take-home pay of state workers.

In 2010, labor agreements with 15 of the state's 21 collective bargaining units included take-home pay reductions of between 8 and 10 percent for most state workers.

"It's very clear that workers here are willing to be part of the shared sacrifice," said Laphonza Butler, president of the Service Employees International Union's long-term care workers unit, whose members have been threatened by Brown's proposed cuts. "There's going to have to be some kind of change made around pensions, but workers' organizations have to be at the table for that part of the discussion."

E-mail the writers at jgarofoli@sfchronicle.com and cmarinucci@sfchronicle.com.

This article appeared on page C - 1 of the San Francisco Chronicle

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