Some 410 turnpike toll workers set to lose their jobs in 2016 will get raises worth $24 million to sweeten their departure, under an agreement reached Friday night between their union and the state.
The toll workers, who will lose their jobs when the state moves to all-electronic tolling, will receive a 3 percent raise, retroactive to 2013, followed by raises of 2.5 percent this year and 2 percent next year. The agreement caps two years of intense negotiations between union leaders and Patrick administration officials.
It will also allow the workers to retire with higher pensions, adding $11 million in costs to the state’s pension system, officials said.
The pay sweeteners were needed, state officials said, to persuade the toll collectors’ union to agree to the elimination of the jobs. The raises also will help preserve labor peace as the deadline to cut the jobs approaches.
A number of other turnpike workers, including grass cutters, janitors and tow truck drivers, will get the same pay increase at a cost of $4 million, but they will not lose their jobs.
The toll workers do not all earn the same salary.
About 300 of them who were employed by the Massachusetts Turnpike Authority prior to its elimination in 2009 currently earn $55,000 on average. The remaining 110, who were hired after the authority was abolished in a cost-saving move, earn just under $40,000 on average, officials said.
All will receive the same percentage increases.
Richard A. Davey, the state secretary of transportation, said the cost of the raises will be more than offset by the $50 million in savings the state will realize when it moves to electronic tolling.
“What we’ve essentially done is increase their pay over the next two years in exchange for having no toll collectors left on the payroll,” Davey said in an interview just before he and union officials signed the contract on Friday night. “There isn’t a private-sector company on the planet that wouldn’t take this deal.”
The contract must still be ratified by the toll collectors, said Robert Cullinane, secretary-treasurer of Teamsters Local 127, which represents the workers. But Cullinane expressed confidence that his members would embrace the deal, which he called “very fair to both sides.”
Cullinane pointed out that the contract requires the state to provide job training for younger toll workers to help them find new employment after they lose their jobs. “I think, on the whole, most of them will be happy,” Cullinane said.
He also raised the specter of the state not meeting its June 2016 deadline to move to automated tolling, calling that “an approximate date.”
Michael J. Widmer, president of the Massachusetts Taxpayers Foundation, a business-backed budget watchdog group, called the deal “a classic trade-off,” that helps the state move toward a more efficient tolling system.
Widmer said he does not fault state officials for awarding raises that he said are on par with the rate of inflation. Most other state workers received a 3 percent pay increase last July.
Nevertheless, Widmer said, the deal reflects how late Massachusetts has been to embrace automated tolling, which is common in New Jersey, Florida, and other states.
“It’s just another example of Massachusetts being slower than many states to introduce these kinds of efficiencies,” Widmer said. “So it’s probably a necessary price, but this should have been done years ago, so we didn’t have to pay the price.”
Electronic tolling allows drivers with E-Z Passes to have their fares automatically deducted from their accounts, while those without transponders have bills sent to the address associated with their license plates.
The negotiations were sensitive, in part, because of a simmering divide between veteran toll collectors who had been employed by the Turnpike Authority before it was abolished and new toll workers hired after 2009.
The former Turnpike Authority workers had agreed back in 2009 to forgo pay increases until the new workers — who earn about $15,000 less on average — reached pay parity with them.
But Davey said it did not make sense to continue to move toward pay parity for the two groups when all of them will lose their jobs in 2016. He said the 2009 contract that the toll workers signed allows the state to give them pay increases if a new contract is reached, as it was Friday night.