HARRISBURG Tentative contract freezes wages

The four-year contracts call for raises in the third and fourth years.
HARRISBURG (AP) -- An hour before labor contracts covering tens of thousands of state employees were to expire Monday night, Gov. Ed Rendell announced a tentative settlement with three unions, including two of the largest state unions, that would freeze wages for two years.
"I congratulate the union leaders; by no means did we get everything we asked for," Rendell told reporters at an 11 p.m. news conference on the steps of the governor's residence. "This was a fair agreement under the most difficult of circumstances."
Rendell repeatedly cited the state's weak revenue collection as he outlined agreements with Council 13 of the American Federation of State, County and Municipal Employees, the Pennsylvania Social Services Union and the United Food and Commercial Workers union.
The agreements, which are subject to ratification by the union rank and file and funding approval by the Legislature, call for four-year contracts that would freeze wages for two years, with a 3 percent raise in the third year and a 31/2 percent raise in the fourth year.
The unions will give up some health benefits, which were not specified, and workers will begin paying monthly premiums in the contract's third year, beginning at one-half percent of their annual salary per year, officials said.
Yearly raises known as longevity payments are frozen in the first year and go up to 21/4 percent of annual salary per year after that, they said.
Message to lawmakers
Rendell stood with leaders of the three unions, who endorsed the proposals.
The contracts, Rendell said, contain a "good solid pay increase" and he encouraged lawmakers to approve the contracts, saying that "the Legislature should understand that this is not a freebie."
When negotiations began nearly three months ago, the administration had proposed significant contract concessions, including a wage freeze and employee contributions toward their health insurance premiums, which are currently covered by taxpayers.
AFSCME Council 13, which says it has 37,000 members, is the largest state-employee union. The social-services union, which is part of the Service Employees International Union, speaks for 9,900 workers, and the UFCW represents about 1,500 liquor store clerks.
Value of deal
Rendell said the total value of the package was still being calculated. Contract talks with 12 other labor unions with contracts expiring Monday night were still in progress.
The agreement came as the Employee Benefits Trust Fund, a pool of money that finances health benefits for 88,000 state employees and retirees, was headed toward bankruptcy. Had negotiations persisted for two more weeks, the unions would have been saddled with a zero balance in the trust fund and a "bare bones" health benefits plan, Rendell said.
Altered benefits, like deductibles and premiums, will help replenish the trust fund, giving it an estimated $1 billion surplus over four years, officials said. Without the revised health benefits plan struck Monday, the trust fund was facing a $1.3 billion deficit over four years, Rendell said.