Contract talks kicking off this month between the state and four employee unions present Gov. Jerry Brown with a political dilemma: How does he deal fairly with his key labor constituency without exposing himself to charges he's kowtowing to them?
The 73-year-old Democrat needs labor's continued backing if he decides to run for another term, but California's $9.2 billion state budget deficit limits what he can offer at the bargaining table.
Beyond that, Brown wants to put a tax increase before voters in November, but employee contracts that don't share the fiscal pain would give opponents plenty of ammunition to blast the initiative.
"The governor will say to the unions, 'You guys have got to give me something or I'll never get the tax increase,' " said Jack Pitney, a political scientist at Claremont McKenna College.
The unions are coming off several lean budget years that fueled epic battles with Brown's GOP predecessor, Arnold Schwarzenegger, over their pay and pensions.
Ken Murch, who will negotiate in the coming months for the 7,000-member California Association of Psychiatric Technicians, said that even though Schwarzenegger is long gone, the budget picture remains bleak. He's not expecting a big payday for his members.
"Jerry Brown is a pragmatist, and he understands the collective bargaining process," Murch said. "But my clients are not expecting much, to be honest with you."
The psychiatric technicians union is one of four whose state contracts run through July 1, the first day of the 2012-13 fiscal year. The others represent doctors and dentists, building maintenance workers and health and social service professionals – roughly 24,000 state employees in all.
The state has set a series of public meetings this month and next, during which the unions and the government may publicly disclose their opening contract proposals.
Early on, high-level labor and state officials will hammer out general principles for an agreement and then hand them off to negotiators to bargain the specifics.
The Schwarzenegger years were grim for state labor. Confronted by a series of fiscal shortfalls, the Hollywood star-turned-politician ordered state workers on furlough and twice tried to hold their pay hostage when budget talks broke down. Union executives often complained that he bargained in bad faith.
Schwarzenegger left office last year having parlayed the state's financial mess into pay and pension concessions from unions representing about two-thirds of the organized state workforce.
Six unions refused to go along. Labor relations were in tatters.
By contrast, Brown signed the 1977 act that unionized the state workforce during his first term as governor. He returned to the Governor's Office nearly 34 years later with the unions' strong support and a promise to heal the state's labor-management rift.
But when Brown bargained with six out-of-contract unions a few months later, the agreements looked like Schwarzenegger's deals: reduced retirement benefits for new hires, a dozen unpaid days off and higher employee pension contributions, offset by a few union gains such a no-furlough guarantee and deferred raises for top-step employees.
"Precedent is always very important" in labor talks because it sets a template for subsequent terms, said Dave Gilb, the former director of Schwarzenegger's Department of Personnel Administration. The department negotiates contracts with a dozen unions covering about 200,000 state workers.
The new round of talks resets those terms because Brown doesn't have to factor in the deals reached with Schwarzenegger, Gilb said.
"They are really the first agreements to be unencumbered by any past precedent," he said.
Asked whether the governor has specific goals for the negotiations, Brown spokesman Gil Duran said in an email, "The state continues to face some serious financial constraints that require fiscal discipline. We don't discuss details of negotiations before they start, but putting the state's fiscal house in order will continue to be the underlying theme."
Pitney expects Brown will make that argument at the bargaining table, "but labor has heard the cupboard is bare many times. They may not buy it."
Murch, the psychiatric technicians' labor negotiator, said he doesn't expect Brown will shower unions with money.
"People say, 'Oh my God, we've got this liberal Democrat in office,' " Murch said, "but he's not going to give away the store."
If raises are off the table, union negotiators will probably turn their attention to other issues that don't directly inflate payroll.
For example, SEIU Local 1000 and Schwarzenegger three years ago agreed to a deal with no raises but with a $2 million training fund for the union's lowest-paid members, Gilb said.
Lawmakers didn't ratify the contract.
Other examples of matters that could land on the bargaining table include safety concerns, how overtime pay is calculated, paid time off and scheduling rules.
Brown might ask the unions to agree to a streamlined layoff process, anticipating that he may have to shrink the workforce if the state's budget woes continue.
"That's normally the alternative to get an agreement," Murch said, "especially when there's not an economic package on the table."
The experts said health insurance costs will probably come up at the table, as will pensions. Brown has proposed a ballot initiative to change state and local pensions, but the unions say retirement is a compensation issue that should be bargained.
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