Bette Tatum, state director of the National Federation of Independent Business, hailed tax breaks and the austere budget the Senate approved yesterday. But she said that from a pro-business perspective, the Senate has fallen short of the House on labor-related bills.
Tatum pointed to how the House and Senate are addressing the clouded issue of state and county governments' contracting out a wide array of services to private firms.
The House is advancing a bill that clarifies that government can privatize government services so long as civil service jobs are not affected.
Rep. Ed Case (D, Manoa) said some functions must remain with civil servants, but others could be done better and more efficiently through privatization. The possibility of competition also "can be a tremendous motivator to the preservation of a first-class civil service," he said.
The Senate had considered a labor-initiated measure that would have established a government contract review panel, which critics said would have paralyzed the procurement process. But it has advanced a bill calling for a yearlong moratorium on the courts halting public contracts while government and unions try to resolve their dispute over outsourcing. The state attorney general's office called the moratorium pointless.
The Senate budget plan provides about $180 million for collective-bargaining units that have settled and makes $541 million cuts in a number of areas over the next two years from what the administration has proposed. Some funding was stipulated as first-year-only.
House Speaker Joe Souki was skeptical. "At this point we strongly disagree, but I need to add a caveat to that. I haven't seen their worksheets yet so I need to kind of withhold," he said.
"But not to fund the second year and to fund only the first year, there's a lot of smoke there, so there's a potential that there's some major problems with the budget because you're looking only at the first year."
Souki wouldn't rule out an extended session to negotiate a budget agreement.
The deepest cuts in the Senate budget are in welfare. The Senate proposal has prompted a backlash by welfare advocates. Even the executive director of the Commission on the Status on Women, Ina Percival, has appealed to supporters to lobby lawmakers so the commission doesn't lose its $30,000-a-year administrative assistant, Percival's lone remaining staffer.
Sen. Lehua Fernandes Salling, co-chairwoman of the Ways and Means Committee, said yesterday the panel took a "logical, cut-and-
dried approach to social services reductions. The cuts were made based on actual caseloads, not projections."
The Senate's proposed $11.4 billion operating and $1.7 billion public works budgets call for eliminating 49 administrative and public relations employees but restoring 234 Department of Transportation jobs. It takes advantage of the department's independent funding sources to add $2 million a year for it to create jobs for the unemployed.
The Senate budget also allows for $550 million in public works projects over two years - $450 million less than Cayetano's plan to stimulate the economy. Fernandes Salling (D, Kauai) said the state's recently lowered bond rating weighed heavily in the decision, but claimed careful selection of the projects authorized would have "the same economic impact" as Cayetano's proposal.
The Senate also passed tax breaks aimed at stimulating the economy and privatizing the convention center.
The 12-member House GOP delegation failed in its attempt to get two bills amended on the floor. One change would have restored $8 million to the state's general assistance program in each year of the upcoming biennium. The Republicans said there were a variety of ways the money could be found, such as eliminating some state public-relations positions for a savings of $3 million. Benefits could then be boosted for some 6,000 single disabled people in the program, they said.
House Finance Chairman Calvin Say (D, Palolo Valley-Kaimuki) called the attempt honorable, but said Republicans should have followed the budgetary process, noting that four of them serve on his committee. He said the matter will be addressed in conference committee and that everyone in the House is equally concerned.
The other amendment would have allowed state tax deductions for long-term care givers, which the Republicans said is being instituted on the federal level this year. Rep. Nathan Suzuki (D, Salt Lake) said the Finance Committee removed it because the state Tax Department estimated it would reduce tax revenues by $12 million.
He indicated attempts will be made to include the deduction in conference committee.
The House passed a measure abolishing joint and several liability. House Judiciary Chairman Terrance Tom (D, Kahaluu-Kaneohe) said small businesses have been crying for years for such a change since they often are the "deep pockets" in lawsuits and have to pay for all damages when they are only partially liable. The Senate Judiciary Committee held a similar measure Friday after the attorney general's office said it could adversely affect the state's suits against the tobacco industry.