The state budget forecast released Thursday is not as grim as had been expected, and state employees want at least some of the credit. This week, the largest state workers' union voted to accept a renegotiated contract, in which they are passing up pay raises in order to keep their jobs and help shrink the deficit.

Tim Welch, director of public affairs for the Washington Federation of State Employees, says the mood at the bargaining table was somber, but most members understand the need for the concessions.

"There have been some layoffs; there have been many notices of layoffs, but already, we were able to mitigate some things. With a contract, many employees are getting other positions and other options, so they do not have to lose their job, which is the value of a contract and the value of a union."

The two-year contract begins July 1 and covers about 30,000 state employees. Some state agencies are already operating differently because of the cutbacks, adds Welch, with more changes to come.

"We're going to see higher workloads for state employees, and that's unfortunate, even though they're going to be keeping their jobs. But, we are seeing some agencies reducing the ranks of management, trying to protect frontline workers who provide services to the public."

Back in March, the state predicted layoffs of as many as 4,500 workers, but the union now believes about half of those jobs will be spared as a result of the new contract.