The Knowles administration has reached a tentative agreement with the first of the dozen unions it is negotiating contracts with this year.
The tentative three-year contract with Public Employees Local 71 provides $1,200 payments to all members this July, followed by a 2 percent raise in the pay scale in 2001 and a 3 percent raise in 2002.
Under the deal, the state also agrees to contribute more to employees' health insurance.
The contract, approved by union leadership, still has to be ratified by the members of the labor, trades and crafts union. The additional costs to the state also have to be approved by the state Legislature.
New costs of the deal will total about $2.2 million in the first year and a total of $10.4 million over the three years of the contract, according to state Commissioner of Administration Bob Poe.
``The economic package represented in this agreement is fair, reasonable and entirely warranted,'' Gov. Tony Knowles said in a news release.
Legislative leaders have expressed a reluctance to spend more on employee contracts because the state already faces a gap between revenues and spending.
Sen. Sean Parnell, co-chairman of the Senate Finance Committee, didn't make a firm commitment today on whether the Legislature would or wouldn't fund the deal with Local 71.
``It sounds like an expensive increase, but we want to take a look at the new contract, and basically we'll see how it fits into the budget plans,'' he said. ``At this point I hesitate to go further than that because we just haven't looked at anything other than the press release.''
Union members received no pay increase last year and received raises at half the rate of inflation the three years before that, said Poe.
``If you want to have capable state employees who are able to do more with less . . . you have to hire very capable people, and you have to keep them, and that means you have to compensate them fairly,'' he said.
The union represents highway, airport and building maintenance workers, snowplow operators and food service and custodial workers in the state's pioneers' homes.
``The new agreement provides stability for our members and a chance for them to keep up with the increases in the cost of living,'' Local 71 Business Manager Don Valesko said in a news release.
Of Local 71's 2,000 members, about 1,500 work for the state. About 250 work in Southeast Alaska and roughly 100 of those are in Juneau, Valesko said.
In addition to the increases in base pay, those workers with 15 years of service who have been at the top of the pay scale for two years will be able to move up to a new step on the scale, which will provide them with an additional 3 percent increase.
Under the tentative contract, the state's contribution to union members' health insurance will go from $550 per month to $570 starting July 1. That will increase to $590 the following year and $630 the year after.
The state is offering similar packages to the other 11 unions it's negotiating with this year. Poe said agreements with some of those unions are imminent.
He wouldn't say what the cost to the state would be if all the unions agreed to similar contracts.