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Lingle wants to cut state workers' pay


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POSTED: Thursday, March 26, 2009

As questions and criticism mount about her financial plan, Gov. Linda Lingle is pressing ahead with a call to cut state workers' pay as a major way to balance the state budget.


;[Preview]    Governor Wants Salary, Benefits Cut
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To balance the state budget Governor Lingle wants state workers to take a cut in salary, leave and health benefits. 3/25/09

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Lingle held a news conference yesterday to explain her plan and urge the state Legislature and public worker unions to adopt it before the state Council on Revenues meets on May 28, when it could lower tax revenue projections again.

“;Here you have the governor who languored in giving us a budget after the January drop in revenues, who languored in giving us details of the March budget, and now she doesn't want to delay the budget ... and wants us to balance the budget in two weeks,”; said Sen. Donna Mercado Kim, chairwoman of the Ways and Means Committee. “;It is very irresponsible.”;

Lingle said her plan would trim labor costs by $278 million for the next two fiscal years. Although she has no specific proposal to offer yet, Lingle said she wants the pay cuts to last for the next two fiscal years, and then workers' pay would return to its 2009 level.

The $278 million in cuts would also include a reduction in medical insurance benefits or increased payments by workers for insurance.

The pay and benefit cuts would have to be negotiated with the unions, which were informed yesterday that Lingle wanted reductions. If Lingle is successful in getting the concessions, the lower labor costs could be plugged into the budget now being discussed by the Legislature.

All of that is a complicated balancing act that Randy Perreira, Hawaii Government Employees Association executive director, said might not be needed.

Perreira said the budget is so far in the red that Lingle “;cannot cut her way back to prosperity.”;

Instead of cutting the budget, Perreira says Lingle should think of ways to raise revenues by collecting more money in taxes.

“;I think she is irresponsible by not trying all alternatives. I think she is ignoring a significant component, which is to generate more income,”; Perreira said.

Before Lingle's news conference, representatives of 40 social service and mental health groups rallied outside her office to complain about proposed budget cuts.

Cuts to the state's mental health and general welfare budgets are taking options away from the sick and ill, said Alex Santiago, leader of a group of social service agencies.

In response, Lingle told reporters that because of the budget reductions, the state has nearly $2 billion less to spend over the next two years, so it is natural there will be budget cuts.

“;We're spending $174 million more for mental health than we were four years ago,”; Lingle said.