Even though the process of laying off PEF state workers is now underway, the state's second largest union still hopes to be able to come to a contract deal with the Cuomo administration. Our Lori Chung has the latest.

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ALBANY, N.Y. -- Even though the governor has urged them to reconsider, the Public Employees Federation's union leaders say no revote.

"Seventy percent of our members voted and voted it down. We don't see the advantage to it. It costs us over $100,000 to have another vote," said PEF Secretary/Treasurer Arlea Igoe.

This week, members rejected the five-year labor agreement that called for a three-year wage freeze, higher health care premiums and furloughs among other givebacks. All, leaders say, are major sticking points and too much to bear at once. Now, as Governor Cuomo promised, the layoffs process has begun with pink slips in the mail, even though union leaders are urging him to hold off.

"We have asked in the meantime that the layoffs be held in obeyance," Igoe said.

The results of the vote making the atmosphere around here pretty tense. Just about everyone we spoke with is worried about what's going to happen next.

"I think in these economic times, that our contract was the best we could hope for," one person said.

"I work for the state health department and people need services and they may not be able to get them as quickly as they might have in the past," said another person.

Some agencies that will be hit the hardest? Mental health stands to lose 643 workers. Corrections stands to lose 446 and 361 from transportation. All told, nearly 3,500 workers are set to receive pink slips.

"I don't think there's any doubt that there will be some impact."

Bob Ward of the Rockefeller Institute say the proposed layoffs would be the most expansive in modern history.

"Whether it's the Department of Environment Conservation make some priorities on what engineers are working on, we'll have to see how that works out," Ward said.

All the more reason union leaders want renegotiated terms and they also say if Cuomo refuses, the union may file an improper practice charge. A grievance, in other words, against him for failing to bargain in good faith.