Six weeks ago, things looked good for the unions representing 70,000 California state workers with expiring labor contracts.

A humming economy offered leverage to press Gov. Gavin Newsom for raises. The state was shopping around creative new perks such as a health insurance stipend, and Newsom seemed willing to provide hefty pay bumps for hard-to-keep workers.

The outlook is dimming quickly as the state’s economy absorbs the shocks of the coronavirus.

Seven unions have been bargaining for new contracts since early this year, meeting Newsom’s negotiating team in packed rooms under the glow of what was expected to be a $7 billion budget surplus and $21 billion in reserves.

Now in-person gatherings are limited and the state’s budget is on ice.

“Bargaining has been put on hold until we can see what’s going on with the economy and how deep this pain is going to be,” said Steve Crouch, director of public employees for the International Union of Operating Engineers. The union covers about 11,800 maintenance workers who are up for a new contract, Crouch said.

Depending how quickly the state’s economy recovers, public employers could face budget hits on the scale of the Great Recession, said Tim Yeung, a Sacramento-based labor attorney who advises cities and counties.

“We are early, but … everyone I’ve talked to throughout the public sector is expecting significant budget reductions,” Yeung said.

Great Recession

From 2008 through 2013, California faced budget shortfalls of several billion dollars each year.

Former Gov. Arnold Schwarzenegger and many local governments furloughed workers and cut back hiring to reduce spending. Recent contracts negotiated by Newsom’s administration have eliminated furlough protections that had been in place.

“We’re certainly going to enter another difficult phase,” said Peter Flores, president of California Attorneys, Administrative Law Judges and Hearing Officers in State Employment. “This is an unprecedented crisis. We hope and believe Gov. Newsom won’t take Schwarzenegger’s anti-employee approach.”

The California Department of Human Resources, which manages negotiations for the state, is still meeting with some union negotiators through conference calls and limited in-person meetings, Andrew LaMar, a department spokesman, said in an email.

LaMar declined to discuss negotiations further.

The attorneys’ union, representing about 4,300 employees, has been negotiating a new contract after reaching a one-year agreement with Newsom’s administration last fall.

The union has been trying to address gaps between what state attorneys earn compared to their peers in local government and the private sector. That may become a longer-term goal, Flores said.

“Today, the focus isn’t on the salaries,” he said. “It’s still on dealing with the crisis.”

State correctional officers, scientists, engineers, and health care workers all have contracts expiring this summer, along with the attorneys and maintenance workers.

The union representing state mental health nurses, whose contract expired last year, is waiting for the Legislature to approve a new agreement their union reached with Newsom’s team last year.

About 10,000 more employees’ pay, including managers, supervisors and others excluded from union representation, are affected by the labor agreements that up for negotation.

The groups’ pay accounts for more than half of the roughly $15 billion the state spends from its general fund each year on personnel.

By far the greatest share, about $5.5 billion, goes to the correctional officers who work in California state prisons.

The California Correctional Peace Officers Association reached a one-year contract with Newsom’s administration last year that gave officers a 3 percent raise. The Legislature approved the contract despite misgivings from the Legislative Analyst’s Office.

The union declined to comment, citing ongoing negotiations.

The Professional Engineers in California Government; California Association of Professional Scientists; the Union of American Physicians and Dentists and the American Federation of State, County, and Municipal Employees each have contracts expiring this summer.

SEIU Local 1000 contract

Several large state unions reached multi-year agreements last year, including the state’s largest union, SEIU Local 1000, which represents about 100,000 workers in a range of administrative, safety, health care and other positions.

The state historically has honored multi-year agreements. But the Legislature technically has the authority under the Ralph C. Dills Act, the state’s collective bargaining law for public employees, to approve labor spending each year regardless of the agreements.

Last year’s agreements, with terms of one to four years, included annual salary increases in the range of 2 percent to 3 percent. Some hard-to-fill classifications received special raises that, taken with the general salary increases, amounted to as much as 25 percent over the contracts’ terms.

The Legislature approved the agreements and the governor signed them.

The outlier was the agreement Newsom’s negotiators reached with the California Association of Psychiatric Technicians, who work at the state’s mental health institutions.

The union reached a three-year contract with Newsom’s team in December, after the Legislature had adjourned. The agreement gives the workers a cumulative raise of 8.25 percent.

“We collectively bargained in good faith and we fully expect the Legislature and the governor to ratify the deal we made,” said Coby Pizzotti, a lobbyist who represents the union.

This story was originally published April 6, 2020 at 5:25 AM.