In the first breakthrough of a labor stalemate, the Lingle administration and the Hawai'i State Teachers Association announced a tentative agreement yesterday on a two-year contract that includes furloughs to help close the state's budget deficit.

Public-school teachers who work 10-month schedules — the vast majority of the more than 13,000 union teachers — would take 17 furlough days a year while teachers who work year-round would take 21 furlough days a year. The furloughs amount to a 7.9 percent annual pay cut.

Furloughs would start on Oct. 23 and would likely fall on Fridays, so schools would be closed and some parents would have to find child care or adjust their work schedules so they can supervise their children.

The union has set a ratification vote on the contract proposal for Tuesday.

Wil Okabe, the HSTA's president, acknowledged that furloughs would be a hardship on many teachers, students and families. But he said it was his sense that teachers prefer furloughs to layoffs.

"Hawai'i's teachers are facing a very difficult contract. But we wanted to avoid layoffs, which we believe would be even more disruptive to the schools and possibly cause lasting damage to the system," Okabe said at a news conference at the state Department of Education.

"We realize that the furloughs will have an impact on our schools, our children and their families. But there are many parties involved in this decision, and each party has its own constraints and needs. We believe that the agreement we have reached is the one that has the least harmful impact given the circumstances that we are facing due to the current budgetary situation."

State schools superintendent Pat Hamamoto said furloughs would impact student learning but said educators would try to minimize the disruption. She suggested parents of elementary school students, for example, read to their children on furlough days to help make up for the loss of classroom instruction. She said the state would reach out to child care providers to help give parents some options once the furlough calendar is finalized.

"It will impact student learning. I mean, there's no way that we can say that it will not," Hamamoto said.

SMALLER PAY CUT

The tentative agreement with the teachers' union on furloughs is substantially less than the three furlough days a month — or 14 percent pay cut — that Gov. Linda Lingle had wanted to reduce labor costs.

Okabe said the agreement could have an influence on contract talks between the state and the Hawai'i Government Employees Association and United Public Workers. The state is in binding arbitration with the HGEA and the UPW's public safety unit.

The University of Hawai'i has made a final offer to the University of Hawai'i Professional Assembly that includes a 5 percent salary reduction. The union has set an authorization vote for early October.

Lingle has estimated an $884 million budget deficit through June 2011 and has sought labor savings to help close the gap.

"This has not been a normal or easy process given the unprecedented economic and fiscal challenges, and there are things that none of us necessarily wanted to do, but that we had to do in order to address the growing budget shortfall, and live within our means," Lingle said in a statement.

"We greatly value our teachers and respect the work they do every day to teach our children. I appreciate the patience they have demonstrated throughout this process.

"It is important now that we all move forward so that our teachers can focus on their students to ensure they get the best possible education."

The state Board of Education has adopted $227 million in budget cuts, including $117 million from potential labor savings pending contract negotiations.

The Lingle administration and the state Department of Education were unable to say yesterday exactly how much the new contract would save the state.

RIPPLE EFFECT

The contract proposal does not include layoffs for licensed, tenured teachers. The proposal allows drug testing for teachers when there is reasonable suspicion. (The existing contract includes a random drug testing provision, but the union has challenged the legality of random testing in court.)

The state and the teachers' union are also negotiating over potential changes to health care coverage that may increase the amount teachers have to pay in premiums.

Under the new contract, furlough days would be more concentrated this fiscal year because the contract would take effect in October, three months after the fiscal year started in July.

The furloughs would likely ripple through the economy, not only leaving teachers with lower paychecks, but forcing some parents to pay more for child care or juggle work hours because their children will not be in school.

Hamamoto said the state looked at scheduling furlough days on holidays or teacher planning days. Some teachers also suggested taking furlough days in a block at the end or before the start of the school year, so teachers could get other jobs or go to school to enhance their credentials.

But Hamamoto said that the state could not retroactively take back holidays and that teachers have to work a certain number of days a month to qualify for benefits.

"What we have done over the past months is to take a look at all the possible options, and what we have come up with — we believe, as Mr. Okabe said — is the best option given what we have to work with," Hamamoto said.