Contracts that Gov. Gray Davis' administration negotiated with politically powerful state employee unions to save money this year will jack up costs in the future, and Republican lawmakers said Thursday they might withhold support.

"It looks to us like the deals are pretty sweet," said Assembly Republican leader Dave Cox of Fair Oaks.

Lawmakers, scheduled to adjourn for the year today, also sent Davis one bill to allow property tax increases to pay for local government pensions, and are considering another measure to authorize higher retirement benefits for local police and fire employees.

The contract arousing the most scrutiny is with Professional Engineers in California Government, representing more than 10,000 engineers.
In return for giving up a 5 percent raise in the next year, the engineers would later get salary increases to lift them to parity with their counterparts at local governments. The difference is estimated to be 25 percent.

This gap would be made up over four years, starting in 2005.

"They're crappy deals," Assemblyman John Campbell, R-Irvine, said as details first emerged Wednesday. "They're typical of this administration, which is, 'Oh, we've got a recall going. Let's make it look good now and shove everything else off another couple of years.' "

Public employee unions have been among the Democratic governor's biggest supporters, and some of the unions that renegotiated contracts have contributed in the past few months as Davis has raised money to try to survive the Oct. 7 recall election. The engineers union, for instance, gave the governor $15,000 in June.

The administration defended its actions, saying that the state had to offer something to get the unions to talk.

"The governor's task this year was to reduce the budget by billions of dollars," said Davis spokeswoman Hilary McLean. "In order to get reductions in salary expenditures, you have to get bargaining units to the table."

Marty Morgenstern, the governor's director of personnel administration, said that the state eventually would probably have made many concessions anyway to stay competitive.

"How long can we stay behind local governments and keep employees?" Morgenstern asked.

Republican support could be important in determining how much money the state saves in the current fiscal year.

If the Legislature approves the revised contracts on a two-thirds vote and union members ratify them, the savings would begin to accrue right away.

But if Republicans withhold their support, the bill passed by only Democrats would not become law until January.

The administration would have to find other ways to achieve payroll cuts of $1.1 billion, as required by the state budget signed last month.

On Wednesday, the state reached agreement with the California State Employees Association, the largest public employee union, and three others. In all, 126,000 state workers agreed to forgo 5 percent salary increases for one year, including some who came to agreements earlier.

In return, state negotiators made concessions in health benefits, vacation days, salary increases and payments into the retirement system.

The revised contracts would allow workers to take an extra day off each month. These days can be used or banked until the worker leaves state service and are converted to cash.

The state agreed to cover 80 percent of health care coverage for workers, and 80 percent for their dependents. Unions that agreed to longer contracts will get 85 percent for the worker in 2006.

This represents a change from recent years, when the state negotiated with unions over how much of the increase in health care premiums it would cover, said Lynelle Jolley, a spokeswoman for the Department of Personnel Administration.

The cost to the state in the first year is expected to be $66.8 million.

The state will also continue for one year an earlier arrangement to cover employees' contributions to the retirement system. That's expected to cost the state $202 million, to be paid to the retirement system over 15 years with interest. The provision is contingent on approval next week by the board of the California Public Employees' Retirement System.

Another union, representing sworn officers such as park rangers, also got an agreement to tie its members' wage increases to those given to the California Highway Patrol, which is getting salary boosts to reach parity with certain city and county law enforcement agencies.

This year, the state figures it will save $195 million from the wage concessions, taking into account the higher health care costs.

In a last-minute bill also related to government workers, public safety employees would be able to earn pensions equaling 100 percent of their salaries, an increase from the current 90 percent. The author of SB 53, Sen. Joe Dunn, D-Santa Ana, said it would cost the same or save money because employees would have to work three more years to get the better pension. It would apply to state and local government workers. Dunn's bill was pending as of Thursday evening.

Still another bill sent to the governor Thursday, AB 94, would allow 25 cities and one county to increase special property tax rates to cover higher pension costs. A court case allowed local officials to exceed the 1 percent property tax rate set by Proposition 13 to pay for pension programs set up before the 1978 initiative. But the Legislature froze these rates in 1985.

The California Taxpayers Association said the bill, by Assemblywoman Judy Chu, D-Monterey Park, will open the door to "unjustified property tax increases of enormous proportions."