Description: We provide a fiscal analysis of the proposed MOU with the nine bargaining units represented by Service Employees International Union (SEIU) Local 1000. We believe that the Department of Personnel Administration's (DPA) estimate of costs resulting from the MOU in 2006-07 is reasonable, but that the estimate for 2007-08 is likely too high by around $65 million due to a high estimate of inflation and not accounting for health care savings. We estimate that the total compensation costs (including benefits) for rank-and-file employees represented by SEIU would rise to over $5.5 billion in 2006-07 under the proposed MOU for a cost increase of almost 7 percent. In 2007-08, we estimate that costs would increase to $5.7 billion, or more than 3 percent above 2006-07.