PRISON GUARDS TO DEFER RAISES IN POSSIBLE DEAL

SACRAMENTO - California's 31,000 prison guards could be asked to defer raises over the next two years to help the state balance its budget, but would eventually receive a full pay increase under a deal being fine-tuned by state and union negotiators, legislative sources briefed on the deal said Tuesday.

New details emerged from contentious talks at the prison guard union's West Sacramento headquarters as Gov.  Arnold Schwarzenegger confirmed Mercury News reports that the state is close to a deal with the influential group.

Although the proposal would save the state less than a third of what Schwarzenegger had sought, the Republican governor called it a "huge victory" for California.

"Every time someone sits down and negotiates and gives up something it is great news for the state, and it will make it possible for us to balance the budget," Schwarzenegger told reporters.

Legislative leaders offered muted praise for the deal.

"It's a modest step forward," said state Sen.  Jackie Speier, the San Mateo Democrat who has been a leading critic of the contract.  "The administration took some action.  Not as much as we would have liked, but $108 million beats a blank."

Under terms still being finalized, the state would phase in two scheduled pay raises over the next two years so that guards slated to get a 11 percent raise when the new budget takes effect would instead see an immediate 5 percent increase.  The remainder would take effect in six months.

The same formula would be used next year for an expected 6.8 percent raise so that in January 2006, guards would end up with the full amount they are slated to get under the current contract.

Both sides remained in prolonged talks Tuesday and the deal could still face challenges in the Legislature and among rank-and-file prison guards.

Lance Corcoran, executive vice president of the California Correctional Peace Officers Association, said he remained hopeful that a deal could be worked out.

State Sen.  Gloria Romero, D-Los Angeles, called the proposal a "step forward" that should help lay the groundwork for more serious talks with the union when the contract expires in 2006.

"We need to plan for the future," she said.  "Is this as far as I would have liked to go? No.  But does it represent some progress? I think so."