SACRAMENTO -- Demanding a 5 percent pay cut is a curious way to reward some of your strongest political allies. But taking a slice from the hide of labor has become a key component to Gov. Jerry Brown's strategy of getting voters to pass his tax hikes in the fall.
Though he criticized billionaire Meg Whitman, his GOP rival in 2010, for vowing to cut 40,000 workers from the state payroll, Brown himself has rolled back the workforce at a brisk pace. Fifteen thousand jobs have been cut in the 16 months he has been in office -- and he's proposing the elimination of 15,000 more in his budget for the next fiscal year.
Brown has taken away cellphones from state workers, offered a 12-point proposal to roll back health and pension benefits, and is now seeking more than $400 million in annual general-fund cuts to public employees' compensation.
"When he comes asking voters for revenues, Brown can say he's been fiscally prudent and he's making a statement about going after public employees," said David Latterman, a political analyst at the University of San Francisco. "This is for public consumption. The money is something, but it's not huge, so this is about using his leverage for optics."
Whether he'll get all he wants is not at all clear. Democratic legislators, who have strong ties to labor, have moved slowly on Brown's proposed pension reform. Before the November election, they may ultimately approve legislation to end the practice of "spiking," in which workers boost their pensions by artificially inflating their pay at the end of their careers, and "double-dipping," when employees collect retirement benefits while working at another public job.
But labor has resisted the governor's proposal of requiring new state workers to depend more on a 401(k)-style plan, which would be more subject to the whims of the stock market. Labor leaders have also frowned on Brown's proposal to raise the retirement age to 67 for most state workers.
To be sure, it's a complex arrangement between a governor and his benefactors, who supported him with tens of millions of dollars in his 2010 campaign and expect to pour in millions of dollars more for his tax measure in the fall.
Brown knows labor leaders have no one else to turn to, and they've been happy to have a governor who listens to them, compared with the animus they felt toward his predecessor, Arnold Schwarzenegger, who waged war with labor for eight years.
Labor has been in deep consultation with the governor's office over his pay-cut proposal, something that never happened with Schwarzenegger. They have similar interests: Brown's ballot measure, a tax boost on the highest-income earners and a quarter-cent sales tax hike to generate about $7 billion annually in new revenues, would alleviate pressures to make even more drastic cuts than the $8.3 billion he's proposing. That could include massive government layoffs.
Under the governor's proposal, most state workers would move to a four-day, 9.5-hour-a-day workweek, losing two hours a week, or 5 percent of their pay. The SEIU Local 1000, which represents 95,000 of the 214,000 state employees, had proposed four-day, 40-hour workweeks, which would essentially prevent state workers from getting paid for overtime. And the union has signaled it's willing to look at other cost-cutting moves.
The 21 bargaining units that could be affected are under contract through July 2013, but Brown is seeking a side agreement that deals solely with work hours, which would require the Legislature's approval. It's not clear whether the shortened hours would last beyond the next fiscal year, nor whether the compensation would be deferred, to be paid back at a later date.
"Under the previous governor, our input was not sought. In fact, it was dismissed. Under Gov. Brown, we have a seat at the table," Yvonne Walker, the president of Local 1000, the largest state employee union, said in a letter to her members. "We have offered our own proposals to deal with this crisis. ... I will continue to offer additional cost-savings measures."
Brown already included one of labor's ideas in his budget: cutting back on outside contracts for services.
Still, some state workers say they're being used to make a political point.
"We're an easy target," said Jill McAuliffe, 61, a Caltrans analyst, a 30-year employee who makes $51,000 a year and drives a 19-year-old Toyota. "This isn't unusual. Everybody goes after state employees. The public thinks we make a lot of money and we don't work for it. But we're like all the rest of the middle class. I have to ask myself: Now, where do I cut? It's the groceries. I'll turn down the air conditioning."
Brown has spoken consistently about the good that state workers do -- that is a core part of his message for wanting to raise taxes: to support teachers, firefighters and police officers. But he appears to be making a distinction between those workers supported by the public and those who fill a vast state bureaucracy scorned by voters, said Mark DiCamillo, director of the Field Poll.
"When voters think of waste in government, they're not thinking of cutting schools or public safety; they're thinking about bureaucracy in Sacramento," DiCamillo said. "That's what it seems the governor is going after. It's probably a relatively safe move."
Push for tax hikes
But a strategist for Brown's ballot-measure campaign insisted the governor is not trying to make an example of state workers for political gain. But, he acknowledged, showing that the state can tighten its belt can go a long way in persuading voters to support a tax hike.
"Making it through this budget is a big part of the public's perception of the ballot measure," said Sean Clegg, a principle with SCN Strategies, the political consulting firm running the campaign.
"But it's not directed at any specific group," Clegg added. "The governor is sincere. It's not really a political call. His position on pension reform (and worker pay cuts) isn't a political strategy. It's a strategy to get the state back on track."
Some political analysts say that Brown's credibility took a hit when he approved a budget last year that assumed $4 billion in revenues that never materialized -- but allowed legislators to claim they'd produced an on-time budget and avoid their own pay cuts. (A new law, approved in 2010 by voters, cuts legislators' pay for every day they fail to pass a budget after the June 15 constitutional deadline.)
"He's struggling to define his own path with the budget, letting the politics of the Legislature and the monster of the budget itself define him," said Rob Stutzman, a Republican political strategist. "Taxpayers are not interested in punishing state workers, but it helps define a crisis to see salaries are being cut."
General-fund payroll: $7.2 billion
Employee benefits paid out of general fund: $3.3 billion
Total general-fund budget: $91 billion
Source: State Department of Finance