The University of Hawai'i and the faculty's labor union are expected to return to the bargaining table Wednesday after union members voted overwhelmingly yesterday to reject a contract offer that included a 5 percent pay cut.

Gov. Linda Lingle said the university could also impose the contract, which was the university's best and final offer, on the faculty.

"The university will have the right to implement their last best offer and that will set up a situation where they (the union members) will have to decide if they want to strike or accept that last best offer," Lingle said.

If the university attempts to impose a contract, the union would have several options, including blocking it through legal challenges or going on strike, said J.N. Musto, executive director of the faculty union.

The University of Hawai'i Professional Assembly, which represents some 3,000 faculty members, voted 86.2 percent to reject the contract offer, which also mandated a payroll lag of one check per year and a $2,400 increase in health care premiums.

Union officials recommended that members reject the offer.

That resounding objection, union officials said, is a message that lawmakers and the governor should make funding public education — K-12 schools, community colleges and universities — a priority.

"We do not believe, and we don't believe the evidence demonstrates, that our faculty are overpaid. Nor are they underworked. So why would you agree to a reduction in salary?" Musto said at a news conference yesterday.

He said that state officials should raise revenue through a modest increase in the excise tax, or cut the level of state programs offered instead of cutting back on public worker funding.

"You cannot expect that the unwillingness of the public to support, through their tax dollars, public programs like universities and high schools and elementary schools, should then be bore on the backs of those who work diligently and hard in those endeavors," Musto said.

UH President M.R.C. Greenwood, in a statement, said she was disappointed by the faculty's rejection of what she believed to be a "fair and reasonable" offer.

"The university is now considering its options for resolving this dispute. Budget reductions of $76 million have already been imposed on the university, and the UHPA vote does not change that fact," Greenwood said.

"The university believes that the most balanced approach to managing these reductions is through a combination of salary savings from pay reductions, payroll lags, vacancies and retirements, tuition revenues, and increased efficiencies and other cost saving measures."

Lingle said the union's vote does not change the state's financial situation.

"I can say with every month that passes, the problem grows and grows because no savings have been realized for that month. That's why we have been pushing to get these contracts resolved so we can start as a state to realize those savings moving forward. Without being able to close the deficit at the university, the university is going to face some very difficult decisions," Lingle said.

Musto said UHPA has made numerous recommendations on addressing the budget shortfall, including salary reductions through deferrals and loans to UH.

The union also said it had proposed putting a hiring freeze on additional administrators, limiting new faculty appointments to only essential vacancies and more efficiently managing university resources.

"This is not to say that we are unwilling to find ways to meet the interest of both parties," Musto said.

Musto noted that the university faculty brings in to the state some $450 million in grants and research.

"That's $150 million more into the state than is expended on their total salaries. It's in that context that you have to take a look at what the state is asking of the faculty," he said.

Last year, UHPA members got an 11 percent pay increase under their contract, which expired June 30. UHPA members have seen their pay increase by a total of 31 percent under that six-year agreement.

That contract is still in effect because of an "evergreen clause." That same clause legally prevents the university from imposing a contract on faculty, union officials said yesterday.

The faculty contract vote comes weeks after the university's executives took pay cuts ranging from 6 percent to 10 percent.

Last month, members of another government union, the Hawaii State Teachers Association, approved a new contract that furloughs teachers for 17 days this school year, equal to a 7.9 percent pay cut.