Has California's growing budget mess pushed public employee unions into retreat?

Take Service Employees International Union Local 1000, which represents 95,000 state workers in a wide variety of jobs. Last week local President Yvonne Walker told The State Worker, "There are going to have to be cuts. We're going to have to raise taxes" to address the state's cash crunch.

This was the same union leader who last month, after Gov. Arnold Schwarzenegger proposed furloughs and other measures to trim the budget deficit, said, "We'll fight back with everything that we have."

Between Walker's two quotes, the governor threatened to detonate the labor equivalent of a nuclear bomb: layoffs. It's one thing a California governor can unleash without negotiating with unions or legislators.

"We don't get to decide whether the state lays off people," Walker said in an interview. "We make sure it's done fairly and try to offer alternatives to doing that. Realistically, we don't have the ability to stop a layoff if it comes."

State workers, never a monolithic bunch, are divided.

"I don't give the union nearly $40 each month so that they can give in," said Cris Gutierrez, a San Jose state worker.

But Susan Amigh, a staff services analyst in Sacramento, said, "I would certainly prefer a furlough to layoffs."

Some unions are bending.

SEIU Local 1292, which represents employees for the city of Redding, has changed health benefits for future retirees. They'll pay the full premium instead of 50 percent. The city, which is trying to close a $3 million budget hole, currently picks up the other half.

In Orange County, the largest government employees' union there proposed that county workers take time off without pay during the holidays, a potential $20 million savings.

The union came up with the idea after county officials said they would lay off 124 workers – and look for other jobs to cut.

California governments at all levels have been hobbled by the recession. Sales tax revenue is off. Property taxes have fallen in concert with home values.

One significant difference – and state workers know this – is that cities and counties spend a much larger percentage of their budgets on employees than does the state. Bankrupt Vallejo spends about 80 percent of its general fund on salaries and benefits. Most cities in California spend about 50 percent.

State worker jobs this fiscal year, barring layoffs or other cuts, will account for $23 billion. That's roughly 17 percent of California's expenses. So making job cuts won't drain much red ink from the state ledger.

Walker said that lawmakers should prioritize services and then start cutting entire programs. Tax increases are vital but aren't enough, she said.

"I would expect our governor, the Legislature and department heads to be … looking at what the state does and saying, 'This service is nice, but it's not a service we can continue right now,' " she said.

And, yes, that means somebody's going to lose his or her job.

© Copyright The Sacramento Bee. All rights reserved.

Call The Bee's Jon Ortiz, (916) 321-1043. Read his blog, The State Worker, at sacbee.com/blogs

• Read more articles by Jon Ortiz