Uncertainty over state employee benefits as new governor takes office

No one knows yet just how Gov.-elect Jerry Brown’s policies will affect California’s 238,000 state employees.

But with Brown’s election, new scrutiny is being directed at state workers’ benefits and their impact on the state budget.

When Brown was governor from 1975-1983, he championed for state employee rights – indeed, he signed legislation allowing state workers to bargain collectively. He has been actively supported by unions ever since.

But as governor, it’s not clear what his policies will be vis-à-vis the unions, largely because the state’s fiscal condition is so dire.

Although Brown fought for state employee rights during his former years as governor, Brown’s new platform focuses on public education, green jobs, the environment and infrastructure improvements — while cutting public spending.

Brown believes investment in these fields will stimulate California’s economy to balance the budget. At the same time, he argues, cutting public spending should eliminate the deficit.
Brown wants to invest heavily in education. During his campaign, Brown wrote out a detailed plan on how to improve the educational system in California. He wants to set aside extra money for English language learners, low income families, and other obvious needs.

That means other programs will have to be cut in order to fund education. Those cuts will entail tough political choices.

Brown wants to phase in a new system over time that includes instituting a completely flexible “base amount” grant to all districts with a separate targeted amount on top to school districts based on identifiable needs. The grants will be related to what the state expects students to know and be able to do.

Furthermore, Brown wants to use public and private funding to enable teachers to become principals through a new leadership academy. He wants to revamp current curricula including online and virtual programs, enhanced teaching materials, partnerships with high tech companies and hands-on learning opportunities.

These programs are not cheap to implement and will require billions in state funds in addition to Brown’s proposals to create green jobs and a clean environment.

Brown believes green jobs will get California out of the recession.

He wants to spend $1 billion per year to create energy jobs, plus create a top administrative post to designate one person, who will be responsible for ensuring that all energy jobs goals and deadlines are met. His proposal to provide loans to enable people to make their houses energy efficient has no return value – requiring more state money.

Brown also wants to stimulate the economy through business startups and expansion with a focus on construction and infrastructure. His top priority is fixing the levies and the Delta and ensuring a sufficient and reliable water supply. These reparations also include investment in roads, highways, bridges, ports, airports, and public transportation. In addition, Brown intends to expand ports and upgrade railways. California’s extensive infrastructure system will require much state funding to repair.

But these expenditures will leave even less money for state employee benefits.

SEIU Local 1000, the largest state employee union which represents 95,000 state employees, has ratified a contract for wages, benefits, and holidays. The agreement includes reducing furloughs from the equivalent of a 14 percent pay cut to 4.62 percent, and increases pension contribution by 3 percent.

State fiscal officials say the government needs $400 million from state employees to close a projected $25 billion deficit.

Brown has calculated that under his budget, workers should contribute at least 10 percent of their pay to their pensions.

Using those numbers the SEIU agreement appears favorable indeed to its members.

In the end, however, Brown apparently believes he has the authority to cut benefits if he needs to in a fiscal emergency – a move that would spark a major legal battle.

But he enters office with Democratic majorities in both the state Assembly and Senate and a newly-approved simple-majority vote required for the state budget.

Together, they help him get what he wants.