Robert A. Walsh Jr., center, executive director of the National Education Association of Rhode Island, and George Nee, right, secretary treasurer of the AFL-CIO, reportedly negotiated the contract proposal, along with Dennis Grilli, executive director of Council 94.

Journal file / Connie Grosch

PROVIDENCE — After an initial thumbs-down vote and sharp dissent within its ranks, the leadership of the largest state employees union voted yesterday to send a wage-and-benefit proposal to state workers for a vote.

The agreement would offer no wage increase in the first year of the proposed four-year pact; 2.5-percent, 3-percent and 3-percent wage increases in future years, and for many state workers an increase in the amount they will be required to pay for their health insurance, according to a “memorandum of settlement” obtained by The Providence Journal.

Union workers who now pay 2.5 percent of their salaries for health-care coverage would be required under the proposal, depending on how much they make, to pay between 8 percent and 25 percent of the cost of their health-insurance premiums.

The proposal also calls for the equivalent of a one-day pay reduction during the new fiscal year that begins in two weeks.

In exchange, the Carcieri administration would rescind the notices it sent union leaders earlier this year of a potential second round of layoffs of so-called “B-list” employees.

The agreement came to light, amid dissension within the union ranks, on the day after the Democrat-controlled General Assembly approved a new state budget that relies heavily on Republican Governor Carcieri’s pledge to cut personnel expenses over the next year by a mostly unspecified $90 million.

The administration rebuffed repeated requests for details of the proposed settlement with Council 94 of the American Federation of State, County & Municipal Employees. Even after the six-page document came to light yesterday, Carcieri spokesman Jeff Neal refused to comment on how much — if anything — the administration believes the proposed agreement will save the state during the year that begins July 1.

But Carcieri issued a statement that said, in part: “I’m very pleased to announce that we have reached a tentative agreement with union leadership on new contracts for almost all state employee unions.”

“While it won’t achieve the full $60 million in savings we had hoped for, this tentative deal includes some unprecedented reforms for Rhode Island taxpayers,” he said. Asked to elaborate on the potential savings and “reforms,” Neal said: “We are not providing any more comment on this issue today.”

The agreement was reportedly negotiated by Council 94 executive director Dennis Grilli, AFL-CIO secretary treasurer George Nee and Robert Walsh, executive director of the National Education Association of Rhode Island.

The decision to send the proposal to the membership of Council 94 was made over the objections of union president J. Michael Downey, who led the opposition on Thursday when it was first presented to — and unanimously rejected by — the presidents of Council 94’s member locals.

In an interview yesterday, Downey said he told his colleagues he was unavailable yesterday because his brother was being honored at a party celebrating his retirement from the Coast Guard after more than three decades. The decision to send the proposal to the membership for a vote was made at a second meeting of the union presidents held yesterday in Downey’s absence, and called without his approval.

AN UPSET DOWNEY said the union negotiators “tried “to paint a picture of doom and gloom” in an effort to convince the union leaders this was “the best we will ever get.” But Downey said he did not believe that, and was particularly upset at the bid to increase employee contributions to their health insurance. With the percentages inching up each year, he said those at the lowest end of the state pay scale will be paying the same amount as those who make $90,000. He said that goes against his philosophy of what unions should fight for.

“For one thing, it is an insult to the membership, where people would be losing money,” echoed Sal Lombardi, president of Local 2884, which represents about 200 employees in 17 state agencies.

Aside from the increases, Lombardi objected to a provision in the six-page agreement that essentially ratifies the higher retiree health-care payments called for by the budget-repair bill passed by lawmakers earlier this session. While the Oct. 1, 2008, imposition of the higher share of the premiums was aimed at spurring a flood of retirements that the new state budget is counting on to reduce the state workforce, Lombardi said the memorandum effectively removes it from contract negotiations, and insulates it from challenge by the union.

“All that there about ‘saving jobs and this is the best we are going to do,’ ” Lombardi said he disputes that — and is sure his membership will agree — that it is debatable because “we know we have good proposals that would save money and they [the governor’s negotiators] haven’t heard them.”

When interviewed at the State House yesterday, Grilli and Walsh had no immediate comment; Nee was unavailable for comment.

In his statement, Carcieri said: “At a time when our state is facing significant fiscal challenges, difficult budget decisions have had to be made. This agreement by union leadership is an important part of the overall plan.”

THE IMPACT of the health-insurance premium changes may vary by employee, depending on how much they make and whether they are signed up for individual or family coverage.

At last count, there were 7,445 state employees putting a percentage of pay toward their health insurance, including the members of Council 94 and most other state unions. They pay 2.5 percent of their base pay, plus .5 percent of any other pay, such as longevity and overtime, they receive. Another 6,676 largely nonunion workers pay a percentage of the premiums for their health insurance, in amounts that currently range from 8 percent to 15 percent of the premiums for the health, dental and vision coverage.

There have been no increases in three years in the share paid by those within the union ranks paying a portion of their salaries, while the required percentage-of-premium has crept up each year.

The proposal headed for union ratification votes would move all employees to a percentage-of-premium plan where employees would be required to pay anywhere from 12 percent to 25 percent of the premiums for individual coverage, 8 percent to 25 percent for family coverage starting Aug. 8.

The employee shares would increase each year after that, until every employee making less than $95,481 would be paying 20 percent of the premium cost, and those above, 25 percent for single coverage or between 15 percent and 25 percent for family coverage.

The impact will vary for different employees, depending on how much they make and whether they sign up for individual or family coverage.

In his statement, Carcieri said “no additional details of the agreements will be made public until after the union members have voted.”

“In the coming weeks, I hope to be able to announce the details of a ratified agreement,” Carcieri concluded. “At that time, I will also outline my plan to bridge the difference between the amount of savings we were originally seeking and the amount we achieved in the new contracts.”

kgregg@projo.com