Vernon disincorporation strains alliance between Assembly Speaker John Pérez and labor

Assembly Speaker John Pérez began his career working for a local painters union, then spent more than a decade as a political director of the United Food and Commercial Workers International Union, which recently named him Person of the Year.

As one of Sacramento’s top Democrats, he’s considered a key advocate of organized labor.

But as he pushes a plan to disband the troubled city of Vernon, he’s finding himself suddenly at odds with those traditional allies. Maria Elena Durazo, head of the Los Angeles County Federation of Labor, is siding with labor groups who argue that disincorporating the heavily industrial city south of downtown could result in major job losses as businesses flee higher taxes and more regulation under another government entity.

Pérez’s plan has garnered the support of many top Los Angeles Democrats, including Mayor Antonio Villaraigosa and Los Angeles County Supervisor Gloria Molina. But the fissure in the traditional Democratic-labor coalition is likely to be a central part of the debate as the disincorporation bill, AB 46, goes to the state Senate this week.

The bill was overwhelmingly approved by the state Assembly in May, with backers saying it represented the only way to end decades of corruption in the city that has led to indictments of three top leaders in the last few years.

Still, the standoff shows a rare breach in the Democratic-labor alliance in Los Angeles The plan has forced labor leaders to make a choice between their union allies in Vernon and their political allies in Los Angeles and Sacramento. It’s created some unlikely alliances in Sacramento — with labor and Vernon corporations on one side, and on the other, a liberal Assembly speaker joining forces with some conservative Republicans who support disbanding Vernon.

There’s no question Pérez “anticipated a fight, but I’m not sure he anticipated the degree to which labor would be split on this,” said Jaime A. Regalado, head of the Edmund G. “Pat” Brown Institute of Public Affairs at Cal State L.A. “It has become an escalated issue within labor.”

Less than 100 people live in Vernon, nearly all of them leasing houses and apartments owned by the city. But about 50,000 people work there and an estimated 10,000 of those workers belong to unions.

The city is home to major employers such as Farmer John, Gavina Gourmet Coffee and Overhill Farms. Key unions in the city include the Teamsters, which has about 4,000 active members in Vernon, the International Brotherhood of Electrical Workers and the United Food and Commercial Workers International Union. All three have been fighting AB 46 since it was introduced in December.

Vernon officials and the city’s Chamber of Commerce are also fighting disincorporation, often in concert with local unions. The city has hired Chris Lehane, a high-profile political strategist who has worked closely with labor groups. At a hearing and events, hundreds of union members have shown up to protest the disincorporation bill.

Union leaders say Pérez miscalculated his legislation, underestimating its economic effect and the opposition it would draw from workers.

Durazo says Pérez didn’t understand the complexity of disincorporation when he drafted AB 46 (the bill is thought to be the first attempt ever made by the Legislature to dissolve a charter city and some argue that it would violate the state Constitution). In discussions over the last several weeks, she has been trying to persuade him to consider alternatives.

“I’m not one that easily falls to threats by employers to close down and run away, I don’t believe in that,” Durazo said in a recent interview. “But this is real. This comes from the rank-and-file and the union reps who understand the industries. They don’t get easily spooked.”

Durazo agreed with Pérez that Vernon City Hall is in need of reform — particularly after revelations of high salaries and alleged public corruption in the last year. But she’s proposing a less radical approach: placing Vernon in a temporary receivership, with an appointed monitor overseeing operations and serving as a watchdog against corruption.

Durazo also said she fears that if Vernon is disbanded, it could be swallowed up by another government entity seeking to grab its hefty tax base. If the city of Los Angeles took over Vernon, for example, that could mean more taxes and regulations — something that could drive some businesses away, she said.

“Cleaning up corruption should not come at the cost of the thousands of working families who rely on jobs in Vernon,” she said.

The labor pushback has given some legislators’ pause. Assemblyman Tony Mendoza (D-Artesia) removed his name from a long list of coauthors of AB 46 before the Assembly vote in April and state Sen. Kevin De Leon (D-Los Angeles) said he was still unsure how he would vote when the bill reaches the Senate.

In an interview, De Leon said he supports the intentions of Pérez’s bill but added that labor groups have raised valid criticism that must be addressed. He said he is most concerned about the possibility that a change in government could result in higher taxes that could drive out businesses. He said he wants to see more evidence that AB 46 won’t cause job losses before he votes.

In response to labor criticism, Pérez introduced more details of his plan last week, outlining a new community services district that would replace the city if AB 46 passes. The district, which would be overseen by the Los Angeles County Board of Supervisors, would take over operation of Vernon’s Fire Department and power utility, along with other health and environmental services the city offers.

As he has defended the bill, Pérez has repeatedly said “no one takes the issue of jobs more seriously” than he does. His staff was hopeful that the community services district would win over the support of some of the unions.

John Vigna, a spokesman for Pérez, said he did not think the rift with labor would jeopardize the bill — or Pérez’s standing with unions. “Everyone understands that this is a one-off issue,” Vigna said. “None of the labor guys has ever called the speaker’s labor credentials into question.”

But Vernon city spokesman Fred MacFarlane was more bullish about the rift, saying labor’s opposition to AB 46 could be a “game changer.” Labor leaders have worked with the city on a recent series of governmental reforms — such as City Council pay cuts — designed to address Pérez’s concerns.

Regalado, the Cal State professor, said the Vernon fight reminded him of a battle between labor groups and Pérez’s predecessor, Democratic Assemblyman Fabian Nuñez, who refused to support their attempt to gain collective-bargaining rights for employees of Indian casinos.

In the case of Vernon, he doesn’t expect Pérez and the unions to reach a compromise.

“The stakes are so high and the sides are so fiercely opposed that I don’t see a middle ground at this point,” he said. “It could develop, but I don’t see it at this point.”

sam.allen@latimes.com