By Jon Ortiz The Sacramento Bee
Published: Thursday, Oct. 7, 2010 – 12:00 am | Page 3A

They finished the narrative on Friday, cast the villain and set the story in motion. Then on Monday, the California Supreme Court blew it up.

With the state budget three months late and $19 billion upside down, lawmakers agreed last week to whack $896 million from employee compensation. Negotiators agreed on the figure by extrapolating savings from recent contract concessions made by six unions representing 37,000 state workers.

Legislative leaders settled on an approach that would let Gov. Arnold Schwarzenegger – who is in talks with another half-dozen labor groups representing 160,000 or so employees – furlough state workers whose unions didn’t agree to concessions.

The Republican governor was suited to the role. For nearly two years, he claimed the executive muscle to impose unpaid days off. The administration even had a line for the media: “State workers need to cut back, just like every family and business in California.”

After furloughs commenced in February 2009, the Democratic-controlled Legislature passed budget measures that assumed unspecified employee cost cuts equal to the payroll savings from furloughs.

When the governor continued the policy, Senate President Pro Tem Darrell Steinberg condemned it and put up legislation to exempt some state employees. (The measures failed.)

“I was at the table fighting as hard as I could,” Steinberg told The State Worker last October, to keep Schwarzenegger from ordering three furlough days per month that whack state worker pay and hours by 14 percent.

“The governor didn’t have to furlough,” Steinberg said.

In retrospect, the Sacramento Democrat was fighting the Legislature’s furlough policy.

The state high court’s decision Monday said governors can’t furlough because the power to set wages and working conditions ultimately rests with the Legislature. But, it added, lawmakers tacitly approved the policy and made it retroactively legal by approving a budget that assumed furlough savings.

The ruling upended last week’s carefully crafted plan for legislators to authorize employee cost cuts again and leave the grubby furlough work to Schwarzenegger. They’d holler about it later.

To read entire story, click here.