Schwarzenegger’s budget plan puts unions in the cross-hairs

Gov. Arnold Schwarzenegger has put organized labor squarely in his cross-hairs in 2010, opening a fight that will largely determine the shape of his final year in office.

Schwarzenegger’s proposals would cut the size of the union workforce, reduce pay, shrink future pensions and roll back job protections won through collective bargaining.

Labor and the unions’ Democratic allies are already girding for battle.

“It’s a continuing jihad against organized labor,” said Steve Maviglio, a Sacramento-based Democratic strategist. “The governor thinks public employee unions are Enemy No. 1.”

Among the plans in the governor’s budget: privatize prisons, which would strip members from the influential guards union; curtail seniority protections for teachers, a key union-won protection; and reduce the number of sick, disabled and elderly Californians cared for through the state’s In-Home Supportive Services program -- almost all union jobs -- while cutting what their caregivers are paid.

Schwarzenegger also wants to permanently lower state workforce salaries by 5% without returning to the bargaining table with public-sector unions. And he would require state workers to chip 5% more into their retirement plans.

“The public sector also has to take a haircut,” Schwarzenegger said, arguing his policies would save California billions of dollars, now and in the future.

Matt David, Schwarzenegger’s communications director, says the governor’s proposed budget makes hard but necessary choices, given a $20-billion deficit.

“This budget wasn’t about attacking any specific group,” he said. “It was about trying to fix what’s broken in this state and prioritize the funding we have so we can protect education.”

Yet even in nonbudget proposals, union leaders see an antilabor agenda. For example, Schwarzenegger has pushed to limit seniority protections for teachers and expand charter schools, which are largely staffed by nonunion teachers. He argues both moves would improve the quality of schools.

Union leaders see their members as the targets. “That seems to be his goal, to basically change a unionized sector of the economy to a nonunion sector,” said Marty Hittelman, president of the California Federation of Teachers.

The unions have spent millions to thwart some of the governor’s past initiatives and hope to do so again.

“To go after unions means tearing down the middle class,” said Laphonza Butler, head of United Long Term Care Workers, a branch of the giant Service Employees International Union that represents 180,000 in-home services workers.

Democratic lawmakers, who hold the majority in the Legislature and are the largest recipients of union campaign money, thus far have given the governor’s plans a chilly reception.

“I did take note that in his State of the State address [the governor] said that we had only Sophie’s choices,” said Sen. Mark Leno (D-San Francisco). “Do we harm seniors, do we harm the disabled, do we harm the poor? But you didn’t hear him suggest there were tax loopholes we could close to pinch corporations.”

State Treasurer Bill Lockyer, a Democrat, explained the legislative balance of power during impassioned legislative testimony last fall: “It’s impossible for this Legislature to reform the pension system,” he said. “I don’t think anybody can do it here -- because of who elected you,” he added, making a barely veiled reference to labor’s power.

Top Democratic lawmakers have suggested Schwarzenegger is driven by a corporate special interest agenda.

Assembly Speaker Karen Bass (D-Los Angeles) dismissed the governor’s prison privatization plan as a sop to “another special interest, and that’s the private prisons industry.” One company that operates private prisons, the Corrections Corp. of America, donated $100,000 to the budget ballot measure campaign championed by the governor last year.

From his earliest days as a candidate, Schwarzenegger has railed against the grip of “special interests” on Sacramento. More often than not, he has defined them as organized labor.

Joel Fox, a business advocate who worked closely with the governor during his last big union battle in 2005, said that agenda “goes back to his election in the recall.”

“He had a mind to fix the problem and restructure the way government operates,” Fox said. “The structure right now is heavily controlled by the unions.”

In 2005, Schwarzenegger went to the ballot with four measures that would have rolled back pensions, unions’ abilities to collect dues and job protections.

The unions fought back with a $100-million campaign and defeated all four of the governor’s proposals. Schwarzenegger vowed a more contrite approach en route to his reelection in 2006.

But 2010 has seen a return to confrontation. In part, that’s driven by the state’s huge deficit. In some state programs, particularly healthcare, most of the money pays directly for services. But in most other parts of the state budget -- schools, prisons, parks -- cutting spending mostly means tackling payroll.

One notable shift from the 2005 battle is that Schwarzenegger has moderated his tone. This year he justified privatizing prisons because it would “save us billions of dollars.” In 2005 he vowed to put “the corrupt people in our prisons on the same side of the bars.”

The strategy of softening rhetoric while still pressing severe proposals dovetails closely with the negotiating philosophy of his influential chief of staff, Susan Kennedy: Always leave interest groups with something to lose.

The California Correctional Peace Officers Assn. has responded to the governor’s plans with a TV ad declaring itself part of the solution for “real reform” in the state’s beleaguered prison system. The union stopped short of attacking Schwarzenegger directly.

“It’s politically smart not to scream bloody murder for your own pet cause when everyone is being slashed,” said Maviglio, the Democratic strategist. But he predicted that Schwarzenegger’s “divide and conquer” strategy -- forcing each union to defend its turf simultaneously -- could result in a reprise of labor’s united, multimillion-dollar political fight of five years ago.

“It wouldn’t surprise me,” he said, “to see the same 2005 coalition resurrected.”

shane.goldmacher @latimes.com