PROVIDENCE –– Thousands of rank-and-file union members will vote next week on a four-year contract that would increase their health-care costs, provide no pay increases in the first year, and boost co-pays for emergency-room care and specialists.

The tentative agreement announced this week with Council 94, American Federation of State, County and Municipal Employees is aimed at resolving a three-month standoff that jeopardized roughly $10 million in savings needed to balance the state budget.

But the governor’s office has refused to say whether the new agreement produces the necessary savings. And the “memorandum of settlement” obtained by The Journal yesterday suggests that the deal contains concessions that could further endanger the state’s already-precarious fiscal situation.

“We’re not going to talk about [the agreement] until they have a chance to vote,” Carcieri spokeswoman Amy Kempe said yesterday, adding that discussing financial impacts may “compromise the integrity of the process.”

The 22 local unions that make up Council 94 will begin voting on the deal as early as Tuesday, according to Council 94 executive director Dennis Grilli. His members soundly rejected a similar deal in July.

“It’s tweaked a little bit,” Grilli said of the latest proposal. “Although it’s not the greatest package, we think it’s a package that will secure the future for our members.”

Indeed, the governor and organized labor agreed to the tentative agreement just before court-ordered arbitration was to begin. Given the state’s weakening economic situation, the arbitrator could have decided to force a new contract on Council 94 that was worse than the deal its members already rejected, according to Council 94 president Michael Downey.

“I’d rather have a contract by us deciding it,” said Downey, who was a vocal opponent of the previous agreement. “I’ll be voting for it.”

The new settlement creates a “wellness incentive” that could reduce employee medical co-share payments by up to $500 for those who agree to “preventative and wellness behaviors” such as quitting smoking and seeing a primary care physician.

While the original deal would have delayed the incentive until next year, employees could qualify immediately under the new plan.

“That’s stuff we should do anyway,” Downey said. “That $500 helps a lot.”

The cost of the incentive for the current fiscal year depends on the number of employees who take advantage of the program.

Council 94 represents around 4,000 state workers. But thousands of others who belong to other unions — many of which approved the original contract — would probably qualify for the wellness incentive as well, because of a “parity clause” in their contracts that ensures they get equal deals.

“We have parity on economic issues. Anything that would affect them economically could be presented to our members,” said Lucie Burdick, president of Local 580, the social workers union, which approved the original contract. “We would request parity of the state.”

Council 94’s new agreement — like the original proposal — would provide no pay increases in the first year, but include raises of 2.5 percent, 3 percent and 3 percent in the subsequent years.

Employee health-care contributions would also be assessed as a percentage of health-care premiums, something that Downey, among others, had strongly opposed in recent months. The new deal, however, relieves some burden on lower-paid employees by requiring they pay a lower percentage of their premiums (individuals making less than $45,000 would pay 12 percent in the first year; those who make more than $90,000 would pay 25 percent).

The agreement also allows Council 94 to pursue a lawsuit against the Carcieri administration which alleges that recent changes in the retiree health-care benefits are unconstitutional. The case has recently been moved to federal court, according to Downey.

Another provision would create a “Council 94/State joint labor and management Study Group to work cooperatively to identify and recommend areas of potential savings in state government, including but not limited to the use of contracted services.” The group would have six members: three representing the state and three representing Council 94.

speoples@projo.com