Schwarzenegger’s reversal was a victory for his opponents, who believe sinking poll numbers and constant protests have damaged the governor’s ability to move his agenda forward. They called on him to abandon any thoughts of a special election this November on issues ranging from teacher tenure to legislative redistricting.

But the governor did not back away from his other changes, saying he would put pension reform before voters in June 2006 if a deal cannot be reached before then with lawmakers and interest groups. He acknowledged that concern from police and firefighters that his plan would eliminate death and disability benefits had overshadowed his attempt to change the public employee pension system.

“These leaders have shared with me their concern that the pension reform proposal could affect the death and disability benefits. I do not want the pension reform debate to be clouded by worries surrounding this issue,” Schwarzenegger said at a Sacramento news conference Thursday, surrounded by representatives of local governments, fire and police chiefs and families of fallen officers.

Speaking in Santa Rosa later in the day, the governor admitted the concerns he was hearing from friends and allies played a major role in his decision.

“I saw friends of law enforcement officers and crime victims and widows, many of them Republicans, saying ‘Please, governor,’ ‘’ Schwarzenegger said. “Then you know this is way beyond what you thought it was.”

Rank-and-file public safety officers, who were not on stage with the governor when he announced his decision in Sacramento, said his move is a good first step, but warned there would be no real negotiations until Schwarzenegger stops bashing unions.

“We’re happy he’s going to sit down and work with us through the legislative process,” said Lou Paulson, president of California Professional Firefighters Association. “But if he goes forward with this special election .. . and you’ve got initiatives that will be harmful to unions, it’s going to be difficult for us to ever be able to say that he is on labor’s side for anything.”

The governor also indicated he might not stick with his demand, made first in the State of the State address and repeated since then, to change the pension system from one that guarantees benefits to a more 401(k)-style plan. He said his ultimate goal is to save money for the state and local governments and is open to looking at different ways of doing that.

Democratic state Treasurer Phil Angelides, who is running for governor in 2006, immediately blasted the governor for pursuing a defined contribution plan in the first place.

“There is no question that today’s news is a clear defeat for the governor, who is running away with his tail between his legs,” Angelides said. “He wasted a lot of time from January to today — precious time that could have been used by the governor to fix the state’s budget — to pursue an attack on teachers and firefighters and police officers.”

Schwarzenegger has been dogged by protests filled with nurses, teachers and public employees who are upset with the pension plan and other issues. And the latest poll by the San Jose State Survey and Policy Research Institute showed the governor has taken big hits among Democrats and independent voters who were critical to his election in 2003.

Phil Trounstine, who heads the center, said Schwarzenegger’s agenda has been hurt because his actions have “forged a coalition that the Democrats themselves have not been able to forge.’’

“Teachers and nurses, and cops, park rangers. You can call them unions all you want, but to the average citizen, these are people who wear the white hats,’’ he said. “It’s like attacking Smokey the Bear.’’

The governor said the polls and protests “have absolutely no impact on what I do.” And in his eternal quest to make everything positive, the governor said his change of heart does not signal a slow down in his ability to get his reforms passed.

“We are right on target with our reforms. We will have reform next year. At the same time, it is never bad, it is always great ... if you feel you can improve on something to go and make the changes,” he said. “What happened today here, to me (is) very exciting. I declare victory on this. This is a victory for California.”

Schwarzenegger noted that campaign groups had already collected 400,000 signatures for the pension plan and said the others were also moving along smoothly.

Union officials joined with the Legislature’s Democratic leaders in calling on the governor to back off the other proposals that he wants to take to voters this year.

“I think many folks now feel the gun has been unloaded as far as the pension initiative is concerned, but the gun still has three bullets in it,” said Assembly Speaker Fabian Núñez, D-Los Angeles. “That has to change in order for us to really clear the air and get back to the table and negotiate on the things the governor is concerned about.”

In addition to pension reform, the governor is pushing initiatives to enact automatic cuts to the budget, redraw legislative boundaries and base public school teacher hiring, promotion, pay and other personnel issues on performance rather than seniority.

But another initiative being circulated that is drawing the wrath of union officials would prohibit them from spending dues on political purposes. They called on the governor to renounce that effort, saying his attacks on unions have poisoned the atmosphere in Sacramento and make good-faith negotiating difficult.

“As long as any initiative is in circulation that hints at the same kind of attitude toward public employees, or public servants, it will become very difficult for us to work on the people’s business,” said Senate President Pro Tem Don Perata, D-Oakland.

Schwarzenegger denied he has been bashing unions and said he has nothing to do with a proposed “paycheck protection” ballot measure.

“I never talked about paycheck protection in any of my reforms,” the governor said in Santa Rosa. “I don’t know where you got that information from or why that is being thrown in the mix.”

But allies of the governor are spending millions to qualify the anti- union initiative and Schwarzenegger refused to say whether he would endorse the measure if it makes the ballot.

“I’m not ruling out anything,’’ he said. “What I’m saying is that I’m not involved with this proposition.’’

Nurses, another group angry at the governor, also won a victory Thursday when a state appellate court refused to stop lower nurse-to-patient ratios from going into effect, something Schwarzenegger had tried to block by emergency order. A lower court had ruled the governor’s action unconstitutional and required the new nurse-to-patient ratios to take effect.

©2005 San Francisco Chronicle

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