New York union rejects Governor's offer

NEW YORK (Reuters) - The rank-and-file members of a New York law enforcement union have overwhelmingly rejected a deal that Governor Andrew Cuomo hoped would serve as a model for negotiations with larger unions to achieve cost savings.

Cuomo, a Democrat and first-year New York state governor riding a wave of popularity, has threatened 9,800 layoffs if public unions don't concede $450 million in savings from wages and benefits.

The vote represents the first major setback for Cuomo's ambitious agenda, which includes an austere budget that closed a $10 billion deficit without raising taxes and campaigns for same-sex marriage, ethics reform and a cap on annual property tax increases.

The law enforcement union, Council 82, rejected the proposed deal late Tuesday by a 674 to 245 vote after union leaders accepted Cuomo's offer last month. Cuomo had said the deal was a template for talks with the state's two largest unions, the Civil Service Employees Association and Public Employees Federation.

The offer Council 82 shot down included a three-year wage freeze, higher health care contributions, and six years worth of retroactive raises.

Unlike Republican and Democratic governors who are trying to curb collective bargaining rights, Cuomo has so far relied on the threat of layoffs as leverage in talks with unions.

On Wednesday, Cuomo framed the Council 82 vote as a rebuke of union leadership, and not of his administration.

"We go back to the drawing board," he told reporters, adding "people all over the state have to make sacrifices."

Council 82 Executive Director Jim Lyman said the union had reached the accord with Cuomo because of the state's dire fiscal circumstances.

"Given the uncertainty of the economy and the governor's clear intentions to control the state's labor costs one way or another, we felt that this was, under the circumstances, the best possible agreement," Lyman said in a statement.

One analyst said the Council 82 vote will neither harm nor help Cuomo, as taxpayers feeling the pinch of the recession are unlikely to side with state workers looking for raises.

"The public thinks the governor is being fair with the unions," Siena pollster Steve Greenberg said.

But one union official said the governor's offers have been wholly unfair because the administration is seeking to inflict long-term pain to plug short-term budget gaps.