Brown Ignored Union Bill's Warnings

OCT. 19, 2010

By ANTHONY PIGNATARO

One of the few actual, honest issues in the California governor’s race has also been one of the least reported. And while it’s an old issue – dating back to 1977 – it’s nonetheless fascinating.

“Back when Jerry Brown was governor nearly 35 years ago, in his first day in office, he gave public service unions the right to collective bargaining,” Republican Meg Whitman said back in April. Her time was off by two years, but the point of her argument was true enough: that granting public employee unions the right to bargain collectively for better pay and benefits paved the way for our state’s current unfunded pension liabilities, which may top half a trillion dollars.

For his part, Democrat Brown looks back at that time with fondness. “I’m very proud to have created this system that gave workers a choice,” he told members of the Service Employees International Union – the most powerful union in California – back in March.

But the fascinating thing about the current discussion over the import collective bargaining played in our state’s current pension troubles is that it’s largely one of hindsight. Records at the California State Archives paint a surprising picture of the evolution of the bill. At the time, though collective bargaining was indeed controversial – the Sacramento Bee editorial page railed against it – the true significance of Brown’s signing of SB839 – the State Employer-Employee Relations Act (SEERA) – seems to have been missed.

Indeed, two biographies of Brown written while he was still governor – Roger Rapoport’s California Dreaming (1982) and Robert Park’s Jerry Brown: The Philosopher-Prince (1978) – don’t mention SEERA at all. According to Rapoport, Brown really only pushed for one bill in 1977, and that dealt with school financing.

The terse press release announcing Brown’s signing of SEERA was mind-numbingly dull. Sen. Ralph C. Dills, whose 42 years in the state Assembly and Senate made him the longest serving legislator in state history, authored SB839 and eventually earned the nickname “Mr. Collective Bargaining” but didn’t even send out a press release at all when his bill became a law.

“I tried to look that up in old California Journals, but I couldn’t find a lot on it,” political historian and California Target Book editor Tony Quinn told me. “I don’t think people really paid attention to it at the time. I think it was just one of those things that no one really saw the ramifications of when it passed.”

The Archives’ records seem to confirm this, though they also show a few notable exceptions – legislative staffers and department heads who seemed to see the potential for exactly the kinds of big problems that face the state today.

Collective bargaining’s exact role in our state’s current pension debacle is still debated. Some analysts, like Chapman University Fellow Joel Kotkin, see it as the beginning of the end.

“Encouraged by ‘reforms’ backed by Brown – such as the 1978 Dill Act (sic), which legalized collective bargaining for them – the public-employee unions became the best-organized political force in California and currently dominate Democrats in the legislature,” Kotkin wrote in the Summer 2010 issue of City Journal. “According to the unions, public funds should be spent on inflating workers’ salaries and pensions – or else on expanding social services, often provided by public employees – and not on infrastructure or higher education, which is why Brown famously opposed new freeway construction and water projects and even tried to rein in the state’s university system.”

Others, like FactCheck.org, say the 1999 bill SB400, signed into law by Gov. Gray Davis, is actually at fault for out of control pension growth. “Joe Nation, an economist who teaches public policy at Stanford University and who served as an advisor on the study (that estimated a half trillion dollar-unfunded pension liability), called SB400 ‘a remarkably generous bill’ that passed with overwhelming support at the time,” FactCheck reported in July. “Nation told us: ‘SB 00 was a bipartisan failure. There is enough blame to go around, but you really can’t tie Brown to this specific law.’”

Ironically, though California is often pointed out as the state that “leads the way” for the rest of the nation on various political movements, it lagged in granting public employee unions the right to bargain collectively. President John F. Kennedy signed an executive order back in 1961 granting collective bargaining rights to federal employees, but it wasn’t until 1972 that the state Senate created the Joint Committee on Public Employer-Employee Relations. It began holding hearings in 1973, with Dills as chairman.

“(A) time for action has come,” Walt Taylor of the California State Employees Association (CSEA) told Dills’ committee during a May 22, 1973 hearing. “We’ve been back year after year, asking for collective bargaining rights for state employees. The matter’s been studied and studied and studied. The reports have been issued and they’re being ignored.”

This wasn’t surprising. Ronald Reagan was governor, and his view on collective bargaining was well-known: “Oppose any legislation calling for collective bargaining for public employees,” stated one undated governor’s office memo found in the committee files at the Archives.

It wasn’t until Brown’s election in 1974 that unions – like the CSEA, which would eventually sponsor SB839 – found someone in the governor’s office they could deal with. Still, it would be three more years before the Legislature would put a bill on Brown’s desk.

The exact role Brown’s office played in the passage of SB839 isn’t clear from the files in the state Archives. Dills died in 2002, and Archives researchers could find no file on SB839 among his papers. Brown’s campaign spokesman also didn’t return an e-mail asking for comment. Brown himself has given vague explanations for his relationship with the Legislature.

“I think that a mistake chief executives often make is they lay the gauntlet down, and they push the Legislature,” Brown is quoted as saying in Park’s Philosopher-Prince. “I often am involved in the process, but I may not actively assert my participation.”

What is known is that SB839 started out making only modest changes to state labor laws concerning public employees. But in late August, the bill suddenly transformed into one that legalized collective bargaining (though not strikes or binding arbitration).

The move infuriated anti-union activists, including the California Taxpayers Association, which awarded its “dipsy-doodle play of the year” to the bill in a Sept. 1, 1977 Cal-Tax News editorial. The same story noted, somewhat ambiguously, that SB839’s passage “is greased.”

As late as Sept. 9, 1977, Dills – a master politician – tried to make the case that his bill was still nothing special. “I believe that SB839 is a most modest proposal, and falls far short of a full collective bargaining bill,” he told the Senate Governmental Organization Committee.

Dills must have put on a good show, because the vote wasn’t even close. SB839 passed 70 to 7 in the Assembly and 24 to 3 in the Senate.

Attention shifted to the governor’s office. The California Highway Patrol, which hated the bill, calling it “much too broad and vague,” asked Brown to veto it, and even drafted a suggested veto message for him. In one report, the CHP also said that unnamed officials in the Brown Administration had shut it out of negotiations.

“The Department was deferred to the Governor’s Office of Employee Relations during the embryo stages of the bill,” the CHP noted in a report to Brown. “Consequently, we have not had an opportunity to express our concerns.”

Of course, other departments and legislative analysts had expressed their concerns, but it’s unclear what, if anything, came of their warnings.

One of the most intriguing reports came from Public Employees’ Retirement System (PERS) CEO Carl J. Blechinger, who ran the office from 1975 to 1983 (he died in 2009). Blechinger found a few problems with the bill, at least one of which would prove prescient.

“The preemption of section 22790 requiring PERS to contract for certain kinds of benefits could be administratively difficult if each employee organization demanded different sets of benefits,” he wrote in a report for Brown on Sept. 19, 1977. “Currently PERS contracts with eleven different insurance firms from which employees choose one. If each of the ten employee organizations had different benefits, PERS would have to have 110 contracts (Eleven insurance carriers times ten groups).”

Though Blechinger noted that Employee Relations Office staff stated that such a situation “would not exist,” events have largely shown Blechinger was close to the mark. Indeed, a list of the 2011 health plan rates for CalPERS shows dozens of possible different plan and employee association combinations.

The issue of how much S 839 would end up costing the state wasn’t resolved by the time the bill reached Brown’s desk. “Indeterminate, but significant” is how the Department of Finance put it in their report on SB839.

Assembly Ways and Means Committee analyst Mary Jane Jagodzinski addressed the issue of how the bill would affect employee pay and benefits – an issue that goes to the heart of today’s campaign. Her conclusion was as clear as it was astute.

“The effect of broader employer-employee relations on the level of state salaries is debatable,” she wrote in her committee report. “The first year effects of collective bargaining in Pennsylvania yielded over a 40% increase in state salaries; similar experience in Oregon yielded a 22% increase. It is not known how much of the increase was a catch-up. There is the potential for higher increases in compensation than current experience.”

Jagodinski, who works today for a community housing non-profit in San Diego, Jagodinski didn’t respond to a request for comment. Back in 1977, she ultimately recommended that the committee support the bill – she pronounced it “in good shape technically” – but she also offered her personal queasiness about how the bill might ultimately harm the Legislature itself.

“I have a philosophical problem with collective bargaining for public employees when there are separate Legislative/Executive branches, as at the state level,” she wrote at the end of her committee report. “I think the Legislature’s role could be reduced to a rubber stamp, and its attempts to set budget priorities would be more limited when there is the added uncertainty about memorandums of understanding with state employee groups.”

The Archives show Brown received three letters and two telegrams from Californians urging him to vote against SB839. The bill “basically promotes over-unionization,” Alan Lambert of Los Altos telegrammed. Arthur G. Fuller of San Diego wrote Brown saying that passage of the bill “will open the door to the union bosses’ eventual demands that state employees pay tribute which could be equal to, or possibly even more than, the dues, fees and assessments charged union members – or be fired!”

But Brown also received letters from Attorney General Evelle Younger, California Labor Federation Executive Secretary-Treasurer John F. Henning, CSEA President William A. Craib and Senator Dills asking for his signature.

“It is my belief that this legislation represents a new era of employer-employee relations for state government and its employees,” Dills wrote on Sept. 19. Just 10 days earlier he had told his Senate colleagues that his bill was “modest,” but that was now forgotten. “I will conclude by thanking you for your cooperation and interest throughout the critical days of this bill.”

Brown signed SB839 on Sept. 30, 1977. If he felt any great sense of accomplishment or pride, he certainly didn’t show it in his press office’s two-sentence statement to the media.

“Gov. Edmund G. Brown Jr. has signed SB 839 (Dills, D-Gardena) enacting the State Employer-Employee Relations Act providing most state employees with meet and confer rights similar to those given employees of local agencies under the Meyers-Milias-Brown Act,” the release stated. “The act will be administered by the Public Employment Relations Board which will replace the Educational Employment relations Board as the administrative body for school employment matters.”

And that was that, as far as Brown was concerned. Dills remained in the Senate until 1998. In 1986, his colleagues renamed his beloved SEERA “The Ralph C. Dills Act.”

For their part, newspaper editorial boards at the time of passage were split on what the bill would ultimately do. The Los Angeles Times deemed it a good law: “The most effective place for toughness in negotiations is at the bargaining table, not in some courtroom or out in the streets.”

But the Sacramento Bee disagreed, editorializing that “A system of union elections and collective bargaining for state employees could weaken the civil service system and, what is worse, could put union leaders in positions where they could dictate to elected officials on government policy.”

This infuriated Dills, who wrote a stinging rebuke to the paper four days later. “Such fears must be rooted in an unreasoning fear either of organized labor or government, or both,” he wrote.

Given the power that unions hold in the Legislature, history would deem the Bee, and not Dills, the more talented seer.