Billions in labor pacts on the line

Contracts affecting almost half the state’s 350,000 union workers expire this summer. Negotiations may test Brown’s ability to limit spending.

SACRAMENTO — When Gov. Jerry Brown needed help pushing his tax plan last year, public-worker unions rallied to his side with millions of dollars and thousands of campaign foot soldiers.

Now Brown’s administration will be negotiating with some of those unions on labor agreements worth billions. Contracts affecting almost half of all 350,000 state workers — engineers, administrative staff, librarians, corrections officers and more — are due to expire this summer.

The talks may test the governor’s ability to continue limiting spending as California edges free of its yearslong budget crisis but continues to face heavy debt.

Numerous budget experts say that with the state’s financial recovery still in its infancy, it’s far too soon to lock in new expenses. And California already pays its employees significantly more than other state governments, according to the Palo Altobased Center for Continuing Study of the California Economy.

The average state worker salary in California in 2011 was $70,777, nearly $16,000 higher than the national average, according to the center.

Still, public workers were furloughed and repeatedly went without raises as the state grappled with yawning budget gaps. Some labor officials see an opportunity to win at the bargaining table this year, as money from the tax increases they championed f lows into state coffers.

“The atmosphere is different,” said Bruce Blanning, executive director of Professional Engineers in California Government. “It’s easier to negotiate increases

when there is money available.”

In the budget he proposed last month, Brown would end furloughs and other programs that reduced many state workers’ pay by 5% to 14% per month for more than four years. Such reductions saved an estimated $817.6 million in the current budget.

The governor also wants to restore $59.1 million in home care for the elderly and disabled, giving more work to union members who provide those services. And his proposal includes $502.1 million for raises of 2% to 5% for many employees and coverage of higher healthcare costs, under the terms of contracts already on the books. Such increases could help compensate for the cuts to the public workforce in recent years. But public employees still remain a strain on California’s budget.

Executive branch salaries are estimated to increase nearly 10% to $15.7 billion in the fiscal year that starts in July. Salaries will be almost 11% of all state spend- ing.

That figure doesn’t include the rising costs of pensions and healthcare for retirees. A decades-old deal grants lifelong health insurance to employees who work at least 10 years for the state, and the bill is expected to reach $62.1 billion more than Sacramento has set aside for it over the next three decades. Amid California’s financial problems, a contract approved by Brown in 2011 allowed corrections officers to save up unlimited vacation days and cash them out when they retire.

“It’s important not to demonize public employees,” said David Crane, an advisor to former Gov. Arnold Schwarzenegger — who was constantly at war with public worker unions — on pensions and the economy. “But that’s where the money is.”

Assemblyman Jeff Gorell (R-Camarillo), vice chairman of the Assembly Budget Committee, said any additional spending on public workers could come at the expense of other government programs.

“The hope is that [Brown] goes into these negotiations with the same sense of austerity he’s been talking about,” Gorell said.

Officials from unions and the Brown administration will begin presenting their initial bargaining offers at the end of this month.

Among the most generous donors to Brown’s successful tax-hike push was the Service Employees International Union, which represents the greatest number of state workers. It pitched in more than $4.3 million.

SEIU has nine state contracts coming due this year, involving more than 90,000 office personnel, technicians, nurses and other workers. Union officials declined to comment on the upcoming negotiations.

A union newsletter says its “bargaining team will work to protect and expand upon hard-fought gains from prior contract campaigns including wages, benefits and retirement security.”

The United Domestic Workers of America, whose members include home care aides, gave $300,000 to the Proposition 30 campaign.

Professional Engineers in California Government contributed $100,000.

Gil Duran, a spokesman for the governor, said campaign donations are not linked to contract negotiations. “The two are completely separate things,” he said.

Brown saluted California labor in his State of the State speech last month. Although he also recognized lawmakers, business leaders and others in the address, his reference to unions loomed largest to some observers.

Larry Gerston, a political science professor at San Jose State, said Brown and the public employee unions need each other. “The governor knows he can’t move forward with the rest of the administration without union support,” Gerston said. “The unions know they’re likely to get more from this governor than an alternative.”