Lawmakers passed a budget Friday that assumes hundreds of millions of dollars saved from cutting state worker pay by 5 percent, but there's a catch: It's not clear how it will be done.
Gov. Jerry Brown said last month he wanted to negotiate the pay cut in time for the savings to take hold by the July 1 start of the fiscal year. But as the constitutional deadline for lawmakers to pass a budget before midnight loomed, some unions were holding out.
"We met with the administration yesterday," Bruce Blanning, executive director of the 12,000-member state engineers' union, said Friday. "They made a proposal, but it's safe to say we didn't get anywhere."
Brown has been pushing a controversial 38-hour workweek for most employees that would put them on four 9.5-hour shifts and close most of the government on Fridays or Mondays.
On Friday, unions representing state firefighters, correctional officers and psychiatric technicians all in 24/7 jobs not subject to Brown's proposed shortened workweek tentatively agreed to take a 5 percent pay cut starting next month.
As of Friday evening, the largest state worker group, the 93,000-member SEIU Local 1000, hadn't finalized a deal.
The budget that was passed Friday counts on $839 million in savings from reducing state payroll by 5 percent in the coming fiscal year. At the same time, Democrats excluded key budget language Brown wanted that would have given him permission to furlough employees whose unions didn't negotiate the pay cut. Labor leaders pushed Democrats to make the change.
With all of the unions under contract and no furlough option, Brown has little leverage other than layoffs a process that can take six months or more to pressure any holdouts to accept pay cuts.
"As long as we are still at the bargaining table, we're not going to say anything about layoffs," said Lynelle Jolley, spokeswoman for the Department of Personnel Administration, which acts as Brown's labor relations arm.
Democrats, who control both houses, further weakened Brown's hand to deal with holdouts with their decision to meet the letter of California constitutional law and to keep their pay and per diem checks flowing by passing a main budget bill Friday and leaving many details to subsequent legislation. That diminished the sense that Friday was a serious deadline for pay talks.
"The negotiation dance is based on deadlines," said mediation expert Christine Eberhard of Simi Valley-based CommuniQuest. "That's what brings opposing sides to that final move and gets the deal done."
Agreements reached this week with the prison officers, firefighters and psychiatric technicians mirror a deal reached with the Highway Patrol officers' union last week that deducts a day's pay from their monthly paychecks but allows them to take the time off later.
The arrangement likely will result in a deferred cost for the state, because those employees will take their furlough days before they take paid leave that can be cashed out when they exit.
Budget talks between the governor and Democratic legislative leaders will continue next week. In coming days, lawmakers could still enact legislation that restores some or all of the furlough authority Brown wanted.
Some of the labor leaders holding out might actually prefer that outcome, said Daniel Saling, a Dana Point-based labor relations mediator.
Any deal reached at the bargaining table would have to be sold to the rank and file, he said, a difficult task when you're talking about pay reductions for employees who haven't seen significant raises in several years.
If Brown imposed furloughs, the holdout union leaders could parlay it into a rallying cry and sidestep the touchy politics of concession.
"They could say to their members, 'We didn't do it. We didn't give in. We didn't turn our backs on you,'" Saling said.