We provide a fiscal analysis of the proposed MOU with Bargaining Unit 7, which includes certain state public safety personnel. The administration's estimates of costs are reasonable, but we forecast a lower inflation rate than DPA assumes in estimating costs of 2007-08 pay increases. In some agencies, costs to substantially reduce currently high vacancy rates could exceed DPA's estimates. Under the proposed MOU, we estimate that total compensation costs (including benefits) for Unit 7 rank and file would total about $515 million (up 11 percent from the prior fiscal year) in 2006-07 and $540 million (up 5 percent) in 2007-08. About 55 percent of the increased costs over the term of the agreement result from the proposed MOU. The remainder results from additional hiring authorized by the Legislature in the budget or state health contributions required under the current MOU.