Calif., New York Budgets Build On Shaky Ground

State employee unions have been a major political powerhouse in California. They were the financial force behind Jerry Brown's successful bid for governor. But now, state workers are wondering if Brown will be friend or foe as he tackles a $28-billion state budget deficit. It's a situation comparable to another big state's dilemma; New York, where newly elected Gov. Andrew Cuomo proposes a one-year pay freeze for state workers as part of his emergency plan to get New York on stable ground.

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LIANE HANSEN, host:

Many states across the country have some big budget holes to fill this year and public employees are worried about what that means for them.

In New York, newly elected Governor Andrew Cuomo wants to slash state agencies and freeze public workers' pay for a year.

And in California, which is struggling to close a $28 billion deficit, Jerry Brown is sending mixed signals to the labor allies who helped him get elected governor.

NPR's Richard Gonzales reports.

RICHARD GONZALES: Jerry Brown's return to the governor's office after nearly 30 years was a stripped down, no frills affair. And he wasted no words warning that California's budget promises pain and sacrifice.

Governor JERRY BROWN (Democrat, California): Choices have to be made and difficult decisions taken. At this stage of my life, I've not come here to embrace delay and denial.

(Soundbite of applause)

GONZALES: Brown said closing the budget gap means putting everything on the table - schools, prisons, the environment.

Gov. BROWN: We'll also have to look at our system of pensions and how to ensure they're transparent and actuarially sound and fair - fair to the workers and fair to the taxpayers.

GONZALES: That line drew no applause from the labor-friendly audience. Two hours later, Brown dropped by a union-sponsored inauguration party featuring free hot dogs and mariachi music.

(Soundbite of music)

GONZALES: It was called The People's Inauguration Party and its organizers, the Orange County Employees Association, had hoped Brown would address the crowd of several thousand. Instead, he and his wife grabbed a quick hot dog, chatted with a few dozen people and then abruptly left.

More than a few of the assembled union members felt dissed.

Mr. STEVE TROMBETTA (High School Teacher): They put a speaker up here and everybody says he's going to be here and then he doesn't even show up. I mean, he shows up and shakes a few hands, has a hot dog. You know, it's crap.

GONZALES: High school teacher Steve Trombetta said he had waited two hours to hear Brown speak.

Mr. TROMBETTA: You know, speak to the people. He doesn't have to kowtow to the unions but he has to at least come out and say something, you know.

GONZALES: One can only speculate whether Jerry Brown intended to send a message that he isn't beholden to unions that spent millions on his reelection campaign. But even if Brown is trying to stand tough with the public employee's union, it's clear that he'll need them to go along with his budget slashing program, particularly in the area of pensions, which cost the state about $5 billion a year.

Mr. ED MENDEL: He's not a newcomer to this issue.

GONZALES: Ed Mendel writes an influential blog on California's public pension crisis. He says when Brown was last governor in the early 1980s he proposed scaling back pensions for new state employees.

Mr. MENDEL: When he was running for governor this time he had an eight point pension plan, and two of the points were higher contributions from employees and lower pensions for new hires.

GONZALES: Now, he has to sell those ideas to a handful of public employee unions. The ever-unpredictable Brown recently appointed two attorneys with long records of representing unions to negotiate on his behalf.

Mr. STEVE MAVIGLIO (Democratic Campaign Strategist): To me, it's like stealing two pitchers from the other team right before the World Series.

GONZALES: Democratic campaign strategist Steve Maviglio.

Mr. MAVIGLIO: These two guys have lived and breathed labor relations their whole lives, so they're trusted by labor. And, you know, as you send somebody you trust to deliver the news, and there's going to be a lot of bad news delivered.

GONZALES: The biggest union without a contract is the prison guards who clashed with Brown's predecessor, former Governor Arnold Schwarzenegger. Ryan Sherman is a spokesman for the guards union.

Mr. RYAN SHERMAN (Spokesman, Prison Guards Union, California): I'm certain bad news that he's going to be delivering is there's not going to be a pay raise. Everybody in the state understands that, you know, the tough fiscal times, and it would make sense if you've got a guy that's fair sitting across the table from you that understands where you're coming from. Makes it a lot easier to negotiate even during tough fiscal times.

GONZALES: During the election campaign, Brown's critics predicted he'd give away the store to the unions. But in California, there's no money to give away.

Richard Gonzales, NPR News, San Francisco.

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