Members of the state's second largest union are set to vote on a proposed contract that would save 3,500 state jobs. The PEF executive board voted last month to support a new, tentative four-year contract deal which was then sent to the rank and file union members to decide. If this plan is rejected, it could have a bigger impact on governor cuomo's efforts to negotiate with other, smaller unions. Capital Tonight's Nick Reisman has a preview.

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NEW YORK STATE -- Leaders of the state's second largest union and officials in the Cuomo administration hope history won't repeat itself on Thursday. That's when the results of the re-negotiated contract for the Public Employees Federation will be announced and the fate of 3,496 jobs will be known.

“As I said all along, it is up to PEF, it was up to leadership, now it is up to the membership, but it is up to PEF. I feel good about the effort that we made and we'll see what happens I guess on Thursday,” Governor Andrew Cuomo said.

The union soundly voted down a five year contract in September that included wage freezes and furloughs. Instead of pulling the trigger on the largest mass layoffs since his father was governor, Cuomo re-negotiated a deal that is four years instead of five and allows employees to put vacation time toward health-insurance costs.

“I feel confident that we did everything we could get PEF to a successful outcome and I feel good about the effort,” Cuomo said.

But economist Frank Mauro of the Fiscal Policy Institute, a liberal, union-backed think tank based in Albany, says the governor offered a false choice between a tough contract or mass layoffs.

“The agreement, albeit probably the best the unions could have negotiated with the Cuomo administration, but both of choices voting for the salary freezes and the furlough days are paid back later, but that takes money out of the economy in the short run and the layoffs, both of those hurt the economy,” Mauro said.

The concessions from public workers need to hit $450 million in order to keep the 2011-12 state budget in balance. Labor groups have pushed for keeping a surcharge on those earning 200,000 and more, but the governor has said taxes in New York remain too high.

Mauro said, “I think what the governor is missing is spending cuts like these hurt the economy more than tax increases.”

In the wake of the first contract's failure, PEF's leadership was criticized by the Cuomo administration for failing to communicate to its members. This time around, PEF launched a campaign urging members to vote yes. The union is expected to announce the results of the vote at its Latham headquarters at 2:30.