Massachusetts, unions agree to cost cuts

BOSTON (Reuters) - Massachusetts reached agreements with leaders of four major public sector unions on cost-cutting measures aimed at saving the state millions of dollars and preventing hundreds of layoffs, officials said on Friday.

Secretary of Administration and Finance Jay Gonzalez said leaders representing about 30,000 workers, or three-quarters of the state's unionized workforce, agreed to concessions in their contracts that include furlough days and delayed pay raises.

The agreement will be sent to union members for a vote.

The unions include the American Federation of State, County and Municipal Employees, the Service Employees International Union, locals 509 and 888, and the National Association of Government Employees.

Gonzalez said that the union leaders agreed to as many as nine furlough days for workers, depending on their salary.

He said they also agreed to no pay raise this year and only a 1 percent pay raise next year instead of a 1 percent increase this year and a 3 percent increase next year.

The delayed raises could save as much as $90 million if remaining public sector unions also agree to the concessions.

"I think it's a real testament to the unions in responding to the governor's call to share the sacrifice to try to save jobs and preserve programs and services," Gonzalez said.

Last month, Massachusetts Governor Deval Patrick called on unions to agree to contract concessions in order to help the state close a $600 million mid-year budget gap.

Patrick, at the time, said he would lay off as many as 2,000 public workers in order to achieve $35 million in savings if agreements couldn't be reached. He also announced a spending cut of $352 million to close the gap.

(Reporting by Kevin McNicholas; Additional reporting by Tom Ryan in New York; Editing by James Dalgleish)