Gov. Gray Davis' administration says it is unlikely to approve plans for substantial reductions to the state payroll until the middle of next month.

That makes it likely that the impact of the cuts -- in thousands of layoffs and in reduced state services -- won't become public until after the Oct. 7 recall election.

Davis' finance director, Steve Peace, said he wants to hold off until his office gets a complete picture of how the reductions will affect state services. Cuts in one part of the budget, he said, might conflict with reductions elsewhere.
Also, Peace said, he wants to avoid sending out layoff notices until he is sure they are necessary.

But in the politically charged environment leading up to the recall election, in which Davis is struggling to save his job, some see an attempt to postpone the fallout, in layoffs and service reductions, of the budget Davis signed last month.

Republican lawmakers said the administration has been reviewing reduction plans for more than a year.

"Last year, this guy held all the bad news until after the election," said Assemblyman John Campbell, R-Irvine. "There's no reason to think that he would do anything different this year."

Senate Republican leader Jim Brulte of Rancho Cucamonga said the timing was "just foot-dragging on the part of the administration."

"The Department of Finance and the agencies have hundreds, if not thousands, of employees whose task it is to track budgets and expenditures," he said.

Public employee unions have been one of the Democratic governor's largest campaign contributors, but the administration says the motivations for taking time are practical, not political.

The Department of Finance gave departments an Aug. 11 deadline for submitting plans for how they would cut 16 percent from their operations. Many departments missed that deadline.

Peace said his office has now received most of the plans and is working with departments on alternatives and trying to foresee all the implications.

Much of the staff was sidetracked by the late state budget, he said.

"This is a painstaking effort," he said.

The Department of Finance has told some small departments that their reduction plans pass muster. But Peace said he decided to hold off giving any departments formal approval until he is sure all the layoff plans work together as a whole. If two departments collaborate to provide a critical service, for instance, he wants to make sure they don't both cut staffing to the bone, he said.

One goal, Peace said, is to minimize layoffs. He said he also wants to avoid giving workers layoff notices and disrupting their lives, only to reverse course later.

"It's not efficient. It's not good business. ... It's a morale-breaker of huge proportions," he said.

The state has already given about 12,000 workers 120-day notices that they are "surplus" and subject to layoff.

Once the state decides to let workers go, they would get 30-day layoff notices.

"The way the budget process came out and the amount of detail it takes to work through all this, it's not surprising" that it's taking this long, said Michael Cohen, director of the state administration section in the nonpartisan Legislative Analyst's Office.

The need to resort to layoffs was lessened Wednesday when the state's largest union, the California State Employees Association, and three other unions agreed to forgo a 5 percent salary increase for one year.

But the one-year savings, like in earlier agreements with other unions, could be partially offset by higher costs in future years. Workers will get an extra day off each month.

Those vacation days can be used or converted to cash when the worker retires. The state also committed to covering a fixed portion of employee health-care coverage.

The latest agreement also has a new twist.

It calls for the state to extend an earlier arrangement in which it covers the worker's contribution of 5 percent of his or her paycheck to the state's retirement system, said Marty Morgenstern, the governor's director of personnel administration.

That part of the bargain is contingent on a finding that it is fiscally sound from the California Public Employees' Retirement System, Morgenstern said. The CalPERS board is scheduled to consider the proposal next week.

The state would pay the retirement system about $360 million over 15 years, plus interest.

Brulte said the deals include "very little savings up front and create huge liabilities in future years."

"The negotiations the administration is conducting are just one more action kicking the problem beyond the election," he said.

The union concessions will, however, help the administration meet the budget's requirement to cut $1.1 billion in state operation costs through wage reductions, layoffs and other measures.

The budget calls for 16,000 positions to be shed from the payroll. Some of this could be done by eliminating vacant positions instead of layoffs.

The contract concessions will save the state about $195 million in the fiscal year that started in July, Morgenstern said. And the administration could still strike deals with other unions, although the revised contracts would have to be approved by the end of the session Friday to avoid a delay until next year. Union members also still have to ratify some of the contracts.

The total savings from the union contracts will help determine how many layoffs have to be made to meet the budget requirements.