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The state has rejected the Hawaii State Teachers Association’s demand for bigger pay raises and more control over the development of a new evaluation system.

“While we were pleased that HSTA finally presented a proposal, we were surprised and disappointed by its contents,” Board of Education member Jim Williams said in a statement Friday.

“The HSTA’s proposal is not financially viable or prudent,” said Williams, who serves on the state negotiating team. “By their actions — delays providing a proposal, declining to make negotiations meetings a priority, making unrealistic financial demands and seeking to delay implementation of the new Educator Effectiveness System — HSTA leaders do not appear to be moving urgently toward reaching an agreement.”

The teachers union’s contract offer to the state last week included 4 percent annual raises for teachers for the next four years and restoring the 5 percent pay cuts they unwillingly took in July 2011. It also included better healthcare benefits and delaying until 2014 the implementation of a new teacher evaluation system that’s being piloted in 81 schools this year.

Gov. Neil Abercrombie’s proposed budget for the next two years includes restoration of the 5 percent pay cuts, although it will be up to the Legislature this session whether to approve it.

The state in December offered the union 2 percent raises on top of that, but HSTA turned it down.

HSTA President Wil Okabe said the union deserves a better deal in light of United Public Workers getting 3.2 percent raises through arbitration last month. He also pointed at police, fire, nurses, University of Hawaii professors and adult corrections officers who had zero cuts.

“We appreciate HSTA’s proposal but it is fiscally unrealistic,” Schools Superintendent Kathryn Matayoshi said in a Hawaii Department of Education . “It’s obvious there is more work to do to reach a resolution.”

The state says its December offer — 2 percent raises for the next two years — would have cost $49.2 million. And restoring the 5 percent pay cuts for the 13,000 HSTA members is expected to cost $178.8 million over four years.

The state estimates HSTA’s proposed salary increases to cost $912.3 million over four years. When the other additional benefits the union wants are factored in, the state tallies it at $1.05 billion over four years.

HSTA’s negotiations team is analyzing the numbers the state released to see if the calculations are inflated or fair, Okabe said.

“For example, the state is inappropriately including the cost to repay the 5 percent that teachers have sacrificed, and that is not a raise,” he said. “Simply put, teachers surely must be worth more than 2 percent.”

Okabe said HSTA is “disheartened” by the state’s comments.

“Our experience has been that when the state bargains in the media, we find ourselves farther apart,” he said. “We will be at bargaining impasse beginning Feb. 1, so we believe these negotiations will be long and difficult.”

The state and HSTA resumed negotiations earlier this week when the state negotiating team provided its detailed response to HSTA. The team consists of representatives from the Board of Education, Matayoshi and the state Office of Collective Bargaining.

Talks are expected to resume Wednesday.

Teachers have worked without a contract since July 2011 when the state implemented its “last, best, final offer” after negotiations fell apart. The LBFO included 5 percent pay cuts and higher medical premiums.

Meantime, a is pushing state lawmakers to approve a 1 percent hike in the general excise tax to fund the pay increases, better benefits and supplies.

The group has organized and at schools statewide, citing studies that show Hawaii pays its public school teachers less than any other state in the country when cost of living is factored in. Teachers say the proposal would generate roughly $500 million.

The union doesn’t support the tax hike.

Here’s the state’s cost overview of HSTA’s proposal:

Read HSTA’s response to the state rejecting the offer by clicking .