Four state-employee bargaining units representing 23,000 workers have reached tentative agreements with the Schwarzenegger administration on new labor contracts. The pacts, which must be approved by the unions' rank-and-file members and the Legislature, reflect the state's harsh economic environment.

The unions made it clear that they were not pleased with the agreements, but said the state's fiscal condition required workers to tighten their belts. Gov. Schwarzenegger said the agreements reflected an element of pension reform.

"I applaud the unions for stepping up and taking these first first steps in helping reform our state's out of balance pensions...," the governor said in a written statement. He added that pension rules enacted 11 years ago had driven up the costs of pensions to unsustainable levels.

The proposed agreements include increasing the retirement age for new hires, boosting the workers' contribution to PERS and using three-year top-pay formula instead of one year to calculate pension levels. All the changes - and others - had been sought by Gov. Schwarzenegger as part of his pension-reform efforts to help balance the red-ink state budget.

They contain roughly a 5 percent pay cut and approximately a 5 percent increase in the worker's contribution to the state pension program, said Terry McHale, a lobbyist who represents the firfefighters and the Highway Patrol officers.

The four bargaining units are CDF Firefighters Local 2881, the California Association of Highway Patrolmen (CAHP); the American Federation of State, County and Municipal Employees (AFSCME) Bargaining Unit 19 representing the health and social services professionals; and the California Association of Psychiatric Technicians (CAPT.

The four bargaining groups are expected to submit the agreements to their membership for ratification.

The unions' representatives said in a joint statement that they were not happy with the proposed pacts.

"It is certainly not a great day when the issue we are bragging about is that our members will avoid being paid minimum wage if the state budget is not implemented in a timely manner," said CDF Firefighters President, Bob Wolf. "We are pleased to put this behind us as we begin fire season."

For the first time in their history, the CDF Firefighters union, 6,500 members who make up the frontline of CAL FIRE, agreed to a new contract that includes provisions which they characterize as a step backwards for employees, he noted.