SACRAMENTO, Calif. – As governor, Arnold Schwarzenegger quickly learned to use his office’s bully pulpit to get his way.

But last month as he sought $300 million in concessions from California’s prison guards, the governor’s megaphone mysteriously went silent.

Lawmakers and others who follow corrections issues suggest that Schwarzenegger may have believed he was on the verge of securing an overall budget deal and was focused on quickly putting the prison piece of the puzzle into place. He saw it merely as another budget issue, not in the context of trimming the power of the guards union or reforming prisons.

“I think they cut such a bad deal because they were in such a rush to get a deal done by June 30. He was still under the belief that he could get a budget on time,” said state Sen. Jackie Speier, D-San Mateo.

On June 30, Schwarzenegger wound up agreeing to just $108 million in salary concessions from the guards’ union in exchange for a series of controversial side deals.

The administration contends the 30,000-strong California Correctional Peace Officers Association, with a valid contract until July 2006, had the governor in a corner and that Schwarzenegger’s bargaining position was undercut by the Democratic-controlled Legislature.

“We got the best deal under the circumstances and they were very difficult circumstances,” said Peter Siggins, the governor’s legal affairs adviser.

The governor’s failure to confront the union has angered U.S. District Court Judge Thelton Henderson. The San Francisco-based judge, fretting that the union has too much influence over prisons, served notice last week he is considering naming a federal receiver to run the beleaguered Department of Corrections.

His three-page letter to Siggins and Corrections Secretary Roderick Hickman has sent the administration scrambling to defend the deal. Monday, a Senate committee is scheduled to hold an informational hearing on the new provisions.

Sen. Tom McClintock. R-Thousand Oaks, a member of the panel, said he doesn’t know why Schwarzenegger seemingly blinked in signing a contract addendum. But, in his view, the result has been disastrous.

“The prison budget over the past 10 years has been growing at about twice the rate of the prison population. This is a department whose costs are simply out of control.

“There are two ways to bring those costs under control. One is to rescind the salary increase” – a power he says is nullified by the contract changes. “The other way to control of costs is to reduce a work force that has priced itself out of the market and the addendum makes that impossible as well.”

State Sen. Gloria Romero, D-Los Angeles, who has been pushing for prison reforms, acknowledged Schwarzenegger was in a weakened position. “We’re the ones who wanted something. So from that standpoint you walk in from the position of an underdog.” And she added that under those conditions it’s “not necessarily wise to beat your chest out there in public.”

Under the agreement, which must be approved by lawmakers, guards who were due an 11 percent raise July 1 will instead get 5 percent now plus another 5 percent Jan. 1. Next July, the guards are due to get at least another 5 percent raise.

Moreover, several sources said that under current law even if the new deal is rejected, the old agreement, with the 11 percent pay raise, could still take effect.

The addendum also includes a no-layoff provision unless there is a significant drop in the state’s prison population of 163,000 inmates.

One high-ranking administration official described the talks, which occurred over 150 to 200 hours, as spirited. The official, who spoke on the condition of anonymity, laid out the following scenario:

The administration’s goal was to save $300 million through postponing raises and achieving savings on pensions and, especially, sick leave and overtime.

Schwarzenegger had not earmarked funds for the raises but lawmakers inserted the money into the budget. “After the money came back in the budget, CCPOA said “we’ll give you $100 million’ ” but any other concessions would require a trade-off, the senior aide said.

The governor didn’t go to the mat with the union because the administration had to walk a fine line since it was seeking concessions and didn’t want to antagonize the union membership, the official said.

When lawmakers restored money for salaries it “undercut the governor’s authority in these negotiations,” said state Sen. Jim Brulte, R-Rancho Cucamonga.

But Lance Corcoran, executive vice president of the guards’ union, sees it differently. “We knew the governor could blue pencil it,” he said, referring to Schwarzenegger’s line-item veto power.

In Corcoran’s view, the bargaining dynamic changed after thousands of guards and their families rallied in mid June to defend the contract. “All of a sudden,” he said, “$100 million wasn’t such an unreasonable counter.”

Plus, Corcoran noted, the guards are the only state employees who have “ponied up” a salary concession. Indeed, Schwarzenegger has dropped demands to freeze salaries for members of the California State Employees Association who are due a 5 percent pay raise in October.



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