Governor’s Battle With Labor Is First Round in a Long Bout

With California’s special election three days away, Gov. Arnold Schwarzenegger and his rivals in organized labor neared the climax Saturday of a fierce power struggle that will test the strength of each as they prepare to battle yet again in 2006.

For the Republican governor, the balloting Tuesday threatens to expose the downside of his prized tactic of putting his plans to a popular vote when Democratic lawmakers thwart his will.

For unions, the election called by Schwarzenegger to validate his political agenda has sparked a costly confrontation at a time of deep trouble nationally for organized labor.

On Saturday, the contest played out in true California style: Schwarzenegger dashed across Southern California by bus to plug four of the initiatives he supports, hoping to prove wrong polls that have found strong public resistance to his most far-reaching proposals. He was joined by Sen. John McCain (R-Ariz.) at one point and trailed much of the day by a busload of nurses, firefighters and teachers -- his most relentless critics this year -- and a Hollywood acting duo: Warren Beatty and Annette Bening. The couple created a stir at the start of the bus tour, publicly squabbling with Schwarzenegger’s aides when they were excluded from an invitation-only rally.

“We’ve got to fix this broken system, because the only thing you recalled was the governor,” Schwarzenegger told supporters at the airport-hangar rally in San Diego. “The broken system is still in place, and the same people are still out there in Sacramento, the same union bosses, the same special interests, the same legislators.”

Not so, Beatty told 200 union rank and file at another San Diego rally, his backdrop a firetruck.

“These propositions are Trojan horses,” he said. “On the surface, they may seem like good things, but when you read the fine print, they’re nonsense.”

About 6.6 million Californians -- 42% of the state’s registered voters -- are expected to cast ballots in the special election, and nearly 2 million of them have already voted by mail, according to Secretary of State Bruce McPherson. Turnout was 76% in the November 2004 presidential election in California, 61% in the 2003 recall, and 51% in the 2002 governor’s race.

A smattering of local contests will also take place Tuesday. San Diego voters will pick a new mayor. In San Francisco, a gun ban is on the ballot. Residents of the Los Angeles Unified School District will vote on Measure Y, a $4-billion school construction bond issue.

As much as anything else, Tuesday’s election offers a vivid reminder of how the initiative system, set up in 1911 to give Californians a chance to overrule those who control the state capital, has evolved into a thriving industry of consultants who profit from the nasty back-and-forth of TV ads and campaign mail. So far, the yes and no campaigns on Tuesday’s eight measures have spent more than $225 million.

“If you have enough money, you can get anything on the ballot,” said Jack Citrin, a UC Berkeley political science professor.

Beyond the spending by labor and Schwarzenegger, the bulk of the money plowed into the election has come from the pharmaceutical industry. It is trying to defeat Proposition 79, a drug-discount proposal sponsored by unions, and pass its own alternative, Proposition 78.

The election’s defining conflict, however, is the one between Schwarzenegger and labor, as the clashing bus tours Saturday underscored. The tussle is part of a long tradition among the Republican Party and its business allies -- Schwarzenegger’s most loyal partisans -- to curb labor’s power in California.

Swept into office by the popular revolt against Gray Davis, the governor describes his scrap with unions as a natural consequence of his attempt to impose the people’s will on a dysfunctional Sacramento establishment that he says favors organized labor over the public.

His broadest proposal to change the way Sacramento runs is Proposition 76 -- but polls show it is also the least popular. It would set new limits on state spending, give the governor more budget power and change the minimum school funding rules set by voters in 1988 when they passed Proposition 98.

Schwarzenegger also faces an uphill fight on Proposition 77, his plan to put retired judges in charge of setting district boundaries for lawmakers. The race is closer on his other two measures: Proposition 74, which would lengthen the probationary period for teachers from two years to five, and Proposition 75, which would require unions for public employees to get written consent from members each year to spend their dues on political campaigns.

GOP efforts against organized labor in recent decades have not ended in the party’s favor.

In the 1958 governor’s race, Republican nominee William F. Knowland was outspoken in his support for a ballot measure to outlaw the mandatory union shop, setting off a torrent of labor donations to his Democratic rival, Edmund G. “Pat” Brown.

“There’s no question that was a huge boost to Brown’s campaign,” said Ethan Rarick, the author of “California Rising: The Life and Times of Pat Brown.” Brown won the election, and voters rejected the ballot measure.

In 1998, Republican Gov. Pete Wilson took on labor by pushing Proposition 226, a move to require all unions -- not just those of public workers -- to get written consent from members to steer dues money into campaigns. A labor backlash ensued. The vast union mobilization not only killed the measure, but also helped labor’s candidate, Davis, win the Democratic nomination for governor.

Citing labor’s 1958 and 1998 victories, Davis political strategist Garry South said Schwarzenegger’s political team has displayed a “fundamental misunderstanding” of California politics by taking an excessively hostile approach to unions.

“They thought they could basically run a pogrom against organized labor and yap on about union bosses and yada yada, but this has never been an anti-union state,” said South. “They must think this is Texas or Nebraska or Utah.”

By Schwarzenegger’s account, public-employee unions “buy off” lawmakers who, in turn, waste taxpayer money on overly generous wages and benefits, including pensions that exceed private-sector norms.

Bill Hauck, president of the California Business Roundtable, said the governor’s plans would help to fix a “badly broken” state government. Of unions he said, “The status quo is working for them, so if they’re able to maintain the status quo, that’s their objective.”

Yet given the political beating Schwarzenegger has taken from labor’s television ads, even Republicans who back him have questioned the broad scope of his conflict with labor. Denouncing “union bosses” can work well in a Republican primary, said GOP consultant Jim Nygren, but tends to fall flat with a broader California audience.

In previous campaigns, Schwarzenegger took pains to maintain a centrist image. But his agenda this year -- and labor’s counter-assault -- has triggered a collapse in his support among Democrats, shrinking his core of solid support to Republicans and conservatives.

At the height of his popularity, said Citrin of UC Berkeley, Schwarzenegger seemed to believe he could “sell anything.” Nearly every powerful Democrat in the state joined his campaign for two budget measures on the March 2004 ballot. Both won by overwhelming margins. His subsequent threat to seek voter approval of his plan to cut the cost of insurance for workers injured on the job led Democratic lawmakers to compromise.

But he campaigned in late 2004 for Republicans trying to capture seats from Democrats in the Legislature. His increasingly partisan rhetoric and policy agenda further antagonized the Democratic majority.

“Pretty clearly, he had started to lose the capacity to frighten the Legislature,” Citrin said.

This year, no major Democrat backs any of Schwarzenegger’s initiatives. The Democratic Party is spending heavily to defeat the redistricting plan, Proposition 77, which it paints as a GOP power grab. The party has also poured resources into the campaign against Proposition 75, the union paycheck measure, which Democrats fear could choke the financial lifeblood that labor provides them.

Passage of Proposition 75 is labor’s biggest fear. Schwarzenegger says his goal is to protect workers from being forced to support campaigns they oppose. Labor leaders stress that current law lets members opt out of having their dues spent on politics. They say the proposition is a plot to undercut labor.

Beyond the four ballot measures the governor is actively promoting, he has taken the side of pharmaceutical companies on the drug-discount measures and backs the electricity industry’s campaign against Proposition 80, a labor proposal that would roll back part of the deregulation that led to the California energy crisis under Davis.

Schwarzenegger has muted his positions on those initiatives, as well as his endorsement of Proposition 73, which, with some exceptions, would bar abortion for minors until 48 hours after notification of a parent. But the GOP has promoted his support of the measure in mail to millions of voters. It has also hired Gary Marx, an operative from President Bush’s reelection campaign, to promote Proposition 73 among evangelical church networks to spur a higher GOP turnout for Schwarzenegger’s main ballot measures.

The California ballot fight comes amid a long national decline in union membership and major political setbacks in Washington, D.C., with Republican adversaries controlling the White House and Congress. Several major unions bolted this year from the AFL-CIO amid a dispute over how to strike a balance between political spending and labor organizing.

And in a state with more union members than any other, the clash with Schwarzenegger has sapped huge sums of labor money -- close to $100 million.

“It’s unquestionably a defensive battle, and it takes a lot of energy,” said labor historian Nelson Lichtenstein, a professor at UC Santa Barbara.

By forcing labor to spend so much to defeat his proposals instead of pursuing its own causes, he said, Schwarzenegger and his allies “are winning even if they lose.”

Yet California unions have stuck together in the campaign despite the national rupture within labor. Whatever the ultimate cost, some union leaders see their cohesive effort against Schwarzenegger as a model for political action by labor that transcends the national breach.

An open question, though, is how the governor and labor’s Democratic allies in the Legislature can work together next year to address budget shortfalls, freeway traffic, immigration, substandard public schools and other problems. The governor will be seeking reelection; labor will be trying to unseat him.

“The governor and labor are going to have to find a way to work together, because the fact is they are both very powerful forces in California,” union strategist Steve Smith said. “Having an all-out war between those two forces is not helpful to the body politic solving problems.”

Times staff writers Peter Nicholas and Joel Rubin contributed to this report.

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BEGIN TEXT OF INFOBOX

The What, Why and Why Not on the 8 Propositions

The Nov. 8 special election ballot contains eight statewide propositions.

Proposition 73: Abortion for minors

What it would do

Amend the California Constitution to bar a patient younger than 18 from having an abortion until 48 hours after her physician notifies a parent or legal guardian. Defines abortion as causing “the death of an unborn child, a child conceived but not yet born.”

Chief supporters

California Catholic Conference of Bishops; Traditional Values Coalition; California Pro-Life Council; Mexican American Political Assn.; Gov. Arnold Schwarzenegger

Major donors backing the measure

James E. Holman, publisher of the weekly San Diego Reader and four lay Catholic papers; vintner and former Republican state legislator Don Sebastiani; Domino’s Pizza founder Tom Monaghan of Michigan; Paul Griffin, CEO, Griffin Industries, and wife Marsha, of Westlake Village

Chief opponents

California Medical Assn.; Planned Parenthood; League of Women Voters of California; California National Organization for Women; California Nurses Assn.; American Academy of Pediatrics, California District IX

Major donors fighting the measure

Planned Parenthood; American Civil Liberties Union; former Republican state Sen. Rebecca Morgan; Women’s Political Committee; NARAL, Pro-Choice California Foundation; California Family Health Council Inc.; Andrew Grove, former chairman, Intel Corp., and wife Eva, of Palo Alto

Main arguments in favor

Parents have a right to know if their minor daughters are seeking abortions. Without secret access to abortion, teenagers will avoid “reckless behavior” that can lead to pregnancy.

Main arguments against

Laws cannot compel healthy family communication. Teenagers afraid to tell their parents, or confused about how to obtain a judicial waiver, will face health risks from self-induced or later-term abortions or visits to unsafe providers.

Proposition 74: Teacher employment

What it would do

Extend probationary periods for new teachers from two years to five. Would simplify the dismissal process, allowing school districts to fire a permanent teacher without advance notice if the teacher has two consecutive unsatisfactory evaluations.

Chief supporters

Gov. Arnold Schwarzenegger; George Schulz, chairman of the Governor’s Council of Economic Advisors; Peter G. Mehas, superintendent of the Fresno County Office of Education

Major donors backing the measure

California Recovery Team, whose major contributors include William A. Robinson, founder of air freight carrier DHL, and A. Jerrold Perenchio, chairman of Univision television network

Chief opponents

California Teachers Assn.; California Federation of Teachers; California Supt. of Public Instruction Jack O’Connell

Major donors fighting the measure

Public employee unions, including California Teachers Assn. and California Federation of Teachers; Alliance for a Better California, a labor coalition

Main arguments in favor

California’s teacher tenure law makes it costly and difficult to replace poor-performing instructors. Longer probationary periods would give schools more time to evaluate new teachers before granting permanent status.

Main arguments against

Would hamper efforts to recruit new teachers and keep qualified veterans. Would force school districts to divert millions of dollars from classrooms to new administrative expenses.

Proposition 75: Union dues

What it would do

Require public employee unions to obtain a member’s permission each year before using his or her dues for political campaigns, including donations to candidates and initiative efforts.

Chief supporters

Sponsored by Lewis Uhler, president of the National Tax Limitation Committee. Other supporters: Gov. Arnold Schwarzenegger; many Republican lawmakers and politicians; some union members

Major donors backing the measure

Robin P. Arkley II, owner of a real estate and loan company in Eureka; California Republican Party; investment banker Frank Baxter, who helped found a conservative political action committee; A. Jerrold Perenchio; homebuilder William Lyon; Small Business Political Action Committee (contributors include mortgage company Ameriquest Capital, late Wal-Mart heir John Walton, California Business Properties Assn.)

Chief opponents

Major unions including California Teachers Assn.; California Federation of Teachers; California Professional Firefighters; California Nurses Assn.; California State Employees Assn.; American Federation of State, County and Municipal Employees; most Democratic lawmakers and politicians

Major donors fighting the measure

California Teachers Assn.; California Federation of Teachers; California State Council of Service Employees; Service Employees International Union; California State Pipe Trades Council; national AFL-CIO

Main arguments in favor

Currently, workers in most unions who do not want their dues spent on politics must drop out of the union, giving up their voice in contract and bargaining decisions. Would allow members to avoid having their money spent on promotion of candidates and propositions they do not agree with.

Main arguments against

Would make it hard for unions to campaign for initiatives and for lawmakers who share their concerns, and to battle efforts to harm education, public safety or healthcare.

Proposition 76: State spending restrictions

What it would do

Cap the amount of money the state could spend each year, tied to average increase in state revenue over three previous years. Lower the amount of money guaranteed to schools when economy improves. Give the governor new authority to make midyear cuts.

Chief supporters

Placed on ballot by California Chamber of Commerce and California Business Roundtable. Other supporters: Gov. Arnold Schwarzenegger; antitax groups, including the Howard Jarvis Taxpayers Assn. and the California Taxpayers Assn.; League of California Cities; California State Assn. of Counties

Major donors backing the measure

Gov. Arnold Schwarzenegger’s California Recovery Team; California Chamber of Commerce; A. Jerrold Perenchio; William A. Robinson, founder of air freight carrier DHL; Silicon Valley money manager John A. Gunn

Chief opponents

California Teachers Assn.; California Nurses Assn.; California Professional Firefighters; school groups including California State PTA and California School Boards Assn.; unions including the American Federation of State, County and Municipal Employees and Service Employees International Union; League of Women Voters

Major donors fighting the measure

California Teachers Assn.; Service Employees International Union; California Correctional Peace Officers Assn.; California School Employees Assn.

Main arguments in favor

Would help end deficit spending. Would prohibit lawmakers from raiding transportation funds for other purposes, which in turn would help the state invest in needed infrastructure projects.

Main arguments against

Would hurt schools by dismantling the funding formulas for education that voters put in place more than 15 years ago. Schools would lose $3.8 billion a year that the current system provides, according to the nonpartisan legislative analyst’s office. Police, firefighters, public hospitals and schools could be subject to unpredictable budget cuts.

Proposition 77: Redistricting

What it would do

Give three retired judges the job of redrawing congressional, legislative and Board of Equalization districts, now done by the Legislature. Would require new districts, normally redrawn every 10 years with new census data, to be determined immediately, subject to voter approval in the next general election.

Chief supporters

People’s Advocate Inc., an anti-tax group, which oversaw qualification of the measure for the ballot; Gov. Arnold Schwarzenegger; several Republican members of Congress and the Legislature; business groups, including California Chamber of Commerce; consumer groups, including Common Cause, California Public Interest Research Group and TheRestofUs.org

Major donors backing the measure

California Business Political Action Committee (funded by Ameriquest Capital Corp., State Farm Mutual Automobile Insurance Co. and others); Netflix Chief Executive Reed Hastings; Los Angeles high-tech executive William Mundell; insurance commissioner candidate Steve Poizner; California Republican Party; Stockton developer Alex G. Spanos

Chief opponents

Democratic legislative leaders; California Democratic Party; League of Women Voters of California; Mexican American Legal Defense and Educational Fund; Asian Pacific American Legal Center; Congress of California Seniors

Major donors fighting the measure

Stephen L. Bing, head of Shangri-La Entertainment; American Family Voices, a nonprofit group that advocates for low- and middle-income families; Voter Registration and Education Fund (supported by businesses, unions, Indian tribes with casinos); Committee to Protect California’s Future (funded by Democratic lawmakers and unions)

Main arguments in favor

Lawmakers have distorted voting districts to favor incumbents and stifle competition. No seat changed parties in the 153 congressional and legislative races on the November 2004 ballot.

Main arguments against

Three judges chosen by politicians cannot represent California’s diversity. Requiring that new lines be drawn immediately would disenfranchise roughly 3 million people new to California since the last census, in 2000.

Proposition 78: Prescription drug discounts

What it would do

Establish a program for drug companies to voluntarily offer discounted medicines to low-income Californians.

Chief supporters

Pharmaceutical Research & Manufacturers Assn.; Gov. Arnold Schwarzenegger; business groups, including several chambers of commerce; patient groups, including the California Arthritis Foundation Council; California Senior Advocate League; several NAACP chapters

Major donors backing the measure GlaxoSmithKline; Johnson & Johnson; Merck & Co.; Pfizer Inc.; Abbott Laboratories; AstraZeneca; Amgen Inc.; Aventis Pharmaceuticals Inc.; Bristol-Myers Squibb; Eli Lilly; Novartis Pharmaceuticals; Wyeth Pharmaceuticals

Chief opponents

Consumer groups, including the Consumers Union and Consumer Federation; health groups, including Health Access California; senior organizations, including AARP; California Alliance for Retired Americans; League of Women Voters

Major donors fighting the measure

Alliance for a Better California, a labor coalition; AIDS Healthcare Foundation; Consumers Union

Main arguments in favor

Millions of Californians with family incomes of up to $58,000 a year could buy drugs at projected discounts of 40% or more. Could take effect immediately.

Main arguments against

Drug companies can already offer discounts if they want to. Measure is voluntary, provides no consequences for drug makers that do not offer discounts. State can end the program any time if companies don’t participate.

Proposition 79: Prescription drug discounts

What it would do

Cap drug prices for low-income residents, penalize companies that don’t offer discounts and allow lawsuits against firms deemed to be charging too much.

Chief supporters

Consumer groups, including the Consumers Union and Consumer Federation; health advocacy groups, including Health Access California; senior organizations, including AARP, California Alliance for Retired Americans; League of Women Voters

Major donors backing the measure

Alliance for a Better California, a labor coalition

Chief opponents

California Senior Advocates League; California Arthritis Foundation Council; California Citizens Against Lawsuit Abuse; Valley Taxpayers Coalition Inc.; several NAACP chapters; several chambers of commerce

Major donors fighting the measure

Pharmaceutical Research and Manufacturers Assn.

Main arguments in favor

Up to 10 million Californians -- nearly twice as many as the program proposed by Proposition 78 -- would be eligible to buy drugs at discounts projected to be 50% or more. The state would have the authority to shift business from drug companies that decline to provide discounts.

Main arguments against

Would allow individuals to file lawsuits against pharmaceutical companies whose prices are thought to be unreasonable.

Note: If Propositions 78 and 79 both receive majority approval, the initiative with the most votes will take effect.

Proposition 80: Electricity providers

What it would do

Put all retail sellers of electric power under the same government regulation applied to investor-owned utilities such as Southern California Edison Co. Would limit sales, mainly to large industrial and commercial users, to the 11% of all electricity consumers who now participate in the open retail market.

Chief supporters

Utility Reform Network, a consumer advocate group; Alliance for a Better California, a coalition of labor unions

Major donors backing the measure

Alliance for a Better California; California Teachers Assn.; Democratic State Central Committee

Chief opponents

Independent electricity providers; business and manufacturing groups; large energy users; California Public Utilities Commission; Gov. Arnold Schwarzenegger

Major donors fighting the measure

Electricity producers Constellation Energy Group of Baltimore; Calpine Corp. of San Jose; Mirant Services LLC of Atlanta

Main arguments in favor

Retail markets must be suppressed to protect the state’s consumers from being overcharged by energy companies that made billions of dollars in profits during the 2000-01 energy crisis.

Main arguments against

State regulators have created a stable electricity market in the wake of the energy crisis. The measure could curtail that progress, scare away investors and slow the building of new power plants.