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Gov. Brown Signs $8B In Cuts, Urges Unions For Concessions

SACRAMENTO (CBS / AP) -- Gov. Jerry Brown signed bills Thursday that cut $8.2 billion from the state's $26.6 billion budget deficit. Combined with a series of transfers, Brown's office said the bills cut the deficit by $14 billion.

"We're only halfway to the goal line and we need to find more revenues or we need to make more and more drastic cuts. Certainly the next round of cuts will be much more painful and much more disruptive than the budget reductions to date," Brown said.

Nikki Medoro Reports for KCBS:

The cuts signed into law included an estimated $7.4 billion slash for the state's welfare-to-work program, services for the developmentally disabled, the state's health insurance program for the poor and other programs.

Brown said Thursday that he has told his labor union allies they should be open to concessions that Republican lawmakers are seeking on public employee pensions in exchange for GOP votes on the budget.

The Democratic governor has warned that if Republicans fail now, conservatives could try for even bigger giveaways with a future ballot initiative. As if on cue, Republicans filed two such initiatives with the state attorney general on Thursday.

KCBS and Chronicle Insider Phil Matier Comments:

A group of GOP lawmakers wants pension reforms, looser business regulations and a state spending cap in exchange for their votes to call a special election. Brown wants to ask Californians to extend temporary increases enacted two years ago on the personal income, sales and vehicles taxes for another five years. The tax hikes are scheduled to expire this year.

Republican lawmakers who have been negotiating with Brown say he has not considered their suggestions seriously because he is unwilling to confront public employee unions, which contribute heavily to Democratic candidates. Brown points the finger at Republicans, saying they are holding up budget negotiations with unrealistic expectations.

Nevertheless, he said Thursday that he remains open to their demands and has warned unions about the possible consequences of resisting change.

"I tell my union friends, you're going to have to make some changes now, or much more drastic changes later," Brown said.

The governor spoke with reporters before meeting with the board of the California State Association of Counties, which voted overwhelmingly later Thursday to back Brown's budget plan. It includes shifting a host of responsibilities and funding from the state to local governments.

Steve Maviglio, a spokesman for a group representing about 1.5 million public employees, said unions gave up $400 million in benefits as part of a statewide deal last year, and local government pensions have already been scaled back. He said unions are open to other reasonable changes, such as preventing the final-year spikes in pay that lead to inflated pensions.

"The notion that unions already haven't given at the office is false, and we're more than happy to discuss additional changes that make sense and are lawful," he said.

Brown needs at least two Republican votes in each house of the state Legislature to get a special election on the ballot, but time is running out to have an election in June, as he had hoped.

The governor hinted Thursday that he is considering alternatives, such as collecting signatures for a November ballot initiative, if he isn't able to get his special election approved in the Legislature soon.

"I'm not excluding any pathway to give the people the right to vote. I find it shocking that elected representatives can so cavalierly say to the people, 'Shut up, you have no right to weigh in on this.' We know the people do not want these cuts," Brown said after signing the budget bills.

On Thursday, former state Assemblyman Roger Niello, a Republican, filed a proposed initiative that would limit public employee pensions at all levels of government to 60 percent of a worker's highest 3-year salary average, require employees to contribute an equal amount and set 62 as the minimum retirement age.

Jon Coupal, president of the conservative Howard Jarvis Taxpayers Association, filed a proposed initiative that would set a spending cap, limiting the state Legislature's ability to increase the budget beyond accounting for changes in the cost of living and population.

Both proposals need approval from the state attorney general's office before their proponents can collect signatures in hopes of qualifying them for the ballot.

Maviglio said voters rejected two proposals in 2005 to limit unions' influence.

"Californians have a long history of rejecting ballot initiatives that are against the interests of working families," he said.

During the meeting with county officials, Brown challenged Orange County Supervisor John Moorlach's suggestion that Californians should also be asked if they want to cut taxes, not just continue them.

"The real debate here is what is the level of tax? And you can't just say as an absolute dogma every time we reduce the tax we generate wealth. You also have to educate kids. You have to have great universities. We need a great transportation system. We need water, and if you want water, you have to pay for stuff," Brown responded.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services may have contributed to this report.)

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