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StarBulletin.com

Budget showdown demands sane deal


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POSTED: Thursday, April 16, 2009

Democratic legislators and Republican Gov. Linda Lingle are on a collision course in fashioning taxes and pay cuts that comply with the constitutional requirement of a balanced budget. They should make an extra effort to find common ground to avoid Draconian solutions during a deep recession.

The Senate has given tentative approval to increase the hotel room tax while cutting pay to themselves, the governor and lieutenant governor, departmental directors and deputy directors, and members of the Legislature by 5 percent. Legislators accepted pay raises of 36 percent set by a commission controlled by legislative leadership on the first of this year, so a 5 percent step back would be trivial.

Lingle has opposed tax increases and prefers reduction of wages and benefits to layoffs or furloughs for state employees — taking a day a month off without pay, for example. Lingle has threatened to lay off up to 4,000 of the state's 49,000 employees if necessary.

If past behavior prevails, the decision of imposing pay cuts on employees will be decided in arbitration. Unions have routinely asked for twice the pay raises that they realistically sought, and that strategy has worked for them to gain the intended wage increases from arbiters, ranging from 16.5 percent to 29.6 percent in the past four years.

Lawmakers are looking to an increase in the hotel room tax because it would fall on tourists rather than residents, but that could put a struggling travel industry into a deeper ditch. Legislators are “;trying to eliminate the hurt for our residents,”; explained Senate President Colleen Hanabusa, but a further decrease in tourism is sure to cause layoffs of locals.