ALBANY -- New York's largest public employee union approved a new contract late Monday night that calls for steep worker concessions.

The Civil Service Employees Association, which has about 66,000 members, accepted an offer from the Cuomo administration that calls for pay freezes for the next three years, furloughs and bigger contributions to health insurance costs.

"These are not ordinary times and CSEA worked hard to reach an agreement that we believed would be in everyone's best interest," said union president Danny Donohue.

Gov. Andrew M. Cuomo said "this is a big, big win -- a win for the union and a win for the people of the state."

Plenty rode on the outcome, including the potential for thousands of layoffs if the proposal was voted down or more than $1.6 billion in reduced workforce costs if approved.

The vote was also widely seen as a harbinger for Cuomo's efforts to get other unions to accept givebacks while dealing with a looming budget deficit.

Cuomo and CSEA leaders this year agreed on a five-year contract that freezes pay for the first three years, then allows 2 percent cost-of-living increases the final two. Workers also have to take five unpaid furlough days in 2011 and four in 2012. Workers' contributions to health insurance costs also rise.

But the deal will avoid layoffs.

Cuomo earlier this year enacted a state budget, along with legislators, that calls for either 9,800 layoffs or $450 million in union concessions.

Given a hard choice, CSEA leaders embraced the contract offer. And they were hoping rank-and-file members would agree.

"No one is overjoyed, but I think there's a realization," CSEA spokesman Steven Madarasz told reporters early Monday.

The state's second largest public employee union, the Public Employees Federation, is weighing a similar contract.

Leaders of PEF, which represents mostly white-collar workers, endorsed the contract last month. The union is expected to tally the votes of rank-and-file members in September.

The Cuomo administration says his plans will reduce workforce costs by $1.6 billion over the life of the contracts.

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