Gov. Arnold Schwarzenegger has plenty riding on November's special election. But organized labor's future as a political powerhouse in California also hinges on next month's vote.

Call it what you will: Make-or-break. Do-or-die. Crossing the Rubicon. However this fall's election is described, the fate of organized labor in the Golden State is a central element of the high-stakes contest that is playing out from Crescent City to Calexico.

Moreover, the fork in the road looms before the labor movement at a time when union leaders must contemplate an unsettling landscape across the country.

Organized labor is still attempting to cope with the fissure that has split the AFL-CIO after the Teamsters Union, Service Employees International Union and other labor groups bolted the main organization in July. The unions exited over disagreements about how to grow membership in the organized labor movement and reverse a decades-long decline in union ranks.

The share of the total work force that consists of union members has shrunk in the United States over the past five years. In California, that share is the same as 2000, but down from 2002 levels.

"Absolutely, this is a critical election for labor," said Rose Ann DeMoro, executive director with the Oakland-based California Nurses Association. "There are a lot of bread-and-butter issues at stake."

As a result, the money is pouring in to both sides. Unions have raised at least $80 million, as of early October, in a quest to derail some of the measures on the special election ballot. To support the measures, Gov. Schwarzenegger has raised at least $34 million, records from early October show, much of it from business and anti-tax groups.

"This is the most important election specific to California that I can remember," said Gary Sly, president of the Contra Costa County Deputy Sheriff's Association.

California has become a huge battleground because of the labor movement's strength in the state. While 12 percent of full-time employed workers nationwide belong to labor unions, that number is 16 percent in California, according to data from the U.S. Bureau of Labor Statistics and the UC Berkeley Labor Center. And public-employee unions boast even more of a stronghold in this state: 41 percent of public agency employees nationwide are union members, compared with 57 percent in California. Two initiatives are at the hub of the battle:

• Proposition 75 would force public-employee unions to obtain the consent of their members before they use a portion of dues to finance political activities. Prop. 75 is backed primarily by corporate donors such as the Small Business Action Committee, the National Tax Limitation Committee and the California Republican Party, along with some individual donors.
  
• Proposition 74 would increase the time required before a teacher gains tenure from two years to five complete consecutive school years. Teacher tenure reform is supported by business and taxpayers groups, according to documents filed with the California Secretary of State.

   

"The labor movement is just starting to recover from the fracturing of the AFL-CIO split, so this is definitely a watershed event for California unions," said Arindrajit Dube, an economist with the UC Berkeley Labor Center.

"Prop. 75 is an explicit attempt to reduce the power of public-sector labor unions." The governor has put his political muscle behind these initiatives, including a separate measure to change how legislative districts are fashioned, because he hopes to curb the power of his political and union foes.

Analysts believe if Prop. 75 passes, opponents of unions could eventually seek other ballot measures in and outside of California to erode the power of private-sector unions, according to Charles Baird, director of the Hayward-based Smith Center and an economics professor with Cal State East Bay.

"It's money that talks in politics," Baird said. "Prop. 75 could substantially reduce the amount of money collected from union members designated for political purposes." With the campaign being seen as the equivalent of a poker player going "all in" and betting his entire stash of chips, it's no surprise labor leaders and the governor have gone to extraordinary lengths to triumph in the campaign.

Through most of this year, the unions have put the governor on the defensive, partly through a drumbeat of protests at many of his appearances. On occasion, Schwarzenegger has seemed caught off-guard by the opposition. But the governor has battled back by campaigning almost nonstop and exhorting his allies to bankroll the propositions.

Supporters of the governor agree the election has brought labor to a crossroads. They also believe the campaign has exposed financial strains for one big labor union. Carlos Moreno, controller for the California Teachers Association, filed an affidavit that showed the teachers union had borrowed $14 million to help finance its spending on the campaign.

The sworn statement also revealed the CTA is negotiating an additional $40 million line of credit. The CTA said if it cannot get the new line of credit, it is possible that creditors might call an outstanding $20 million credit line, according to documents filed Oct. 3 with the U.S. District Court in San Jose in a suit brought by some teachers who want to block the CTA's plans to raise dues by $60 a year.

"The teachers union is heavily leveraged and they are trying to get a loan to allow them to perform core functions," said Todd Harris, a spokesman for Gov. Schwarzenegger's campaign committee. "The teachers union has chosen politics over service for its members or for organizing."

But union officials respond that the CTA's financial picture is far from bleak. "This is a great deal being made about nothing," said Barbara Kerr, president of the Burlingame-based California Teachers Association.

Kerr noted that the union gets revenue from teachers' dues only 10 months out of the year --when school is in session -- so at times financing is needed to smooth out the fiscal bumps.

Regardless of the precise health of the CTA's finances, the issue is a further reminder of how much hangs in the balance. "If you have the union members decide where their dues money goes, the political calculus in California could change dramatically," said Lance Izumi, director of education studies with the Pacific Research Institute, a San Francisco-based conservative think tank.

"What is up for grabs is control over where that big pile of union dues money goes and how it is used." That's because while unions could be weakened through passage of Prop. 75 or other initiatives, Corporate California would retain its power.

"The business community can diminish labor's ability to spend resources in the political process, while businesses are not operating under the same restrictions," UC Berkeley's Dube said.

The unions point out that Prop. 75 places no restraints on spending and lobbying by corporations, while curbing the money-raising power of their natural rivals, the labor unions.

Unions cite the corporate support of Prop. 75 as evidence the business community is trying to weaken labor. The election also may determine how well the divided union consortiums can work together in the wake of the split in the AFL-CIO.

"There have been a number of developments of late that show the AFL-CIO and the new union coalition are able to bridge some of the gaps between them," nurses union leader DeMoro said.

"The special election made it clear that it is critical for unions at the local level to stay together despite the differences at the national level." Yet no matter the outcome of the election, unions in California will hardly be free from challenges.

"It's still a tough landscape for unions," DeMoro said. "There are still a lot of questions about how to organize to attract new members and how to protect economic benefits of existing workers."

George Avalos covers the economy, financial markets, insurance and banks. You can reach him at 925-977-8477 or http://www.namefinders.com/privacy.html.