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By Dan Wiessner

NEW YORK (Reuters) - New York Gov. Andrew Cuomo on Wednesday announced the layoffs of 3,500 state workers after members of one of the state's largest public unions rejected a tentative contract agreement.

In a vote tallied on Tuesday, rank-and-file members of the Public Employees Federation (PEF) overwhelmingly rejected a deal between Cuomo and union leadership that included three years of wage freezes, higher health insurance contributions and furloughs.

All of the 3,500 layoffs apply to PEF members and cut across more than 40 state agencies.

The agencies that were hit the hardest include the Transportation, Corrections and Tax and Finance departments, as well as the Office of Mental Health and the Office for People with Developmental Disabilities, all of which will experience more than 300 layoffs.

In a statement on Tuesday, Cuomo urged PEF to hold another vote and asked members to reconsider the rejection, but PEF President Ken Brynien said the union wanted to go back to the bargaining table.

"Our members did not cause the fiscal situation in the state and should not bear an undue burden in fixing it," Brynien said.

Earlier this year, Cuomo won passage of an austere state budget that closed a $10 billion deficit, in part by threatening up to 9,800 layoffs. The state's largest public union, the Civil Service Employees Association, accepted a contract with Cuomo that was nearly identical to the PEF deal.

Cuomo has also proposed less-generous pension benefits for new hires, which he has said will be one of his top priorities next year. But unlike his counterparts in states such as New Jersey and Wisconsin, Cuomo has not moved to curb unions' collective-bargaining rights.

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