Unions control fate of tax bills


POSTED: Friday, May 08, 2009

If fortunate enough not to be laid off, workers throughout Hawaii have accepted frozen or reduced wages as a result of the national recession's effect on businesses. Legislators agreed to raise taxes to help state employees avoid that plight and are likely in today's extension of the session to override Gov. Linda Lingle's vetoes of the measures. Residents have every reason to be angry.

The veto overrides will be the latest in a series of power plays by the state employee unions since the end of the administration of former Gov. Ben Cayetano, who had been forced to cut funding of programs for the poor and disadvantaged because of steep pay raises.

Binding arbitration was initiated to avoid strikes by state workers following a debilitating employee walkout in 1979. The white-collar Hawaii Government Employees Association and the blue-collar United Public Workers union artfully used it to ask for twice the amount of pay raises they wanted and to receive half of what they asked.

In 2001, Cayetano persuaded the Legislature to enact reforms to replace binding arbitration, which had resulted in 15 percent pay raises over the previous four years. But as soon as Cayetano left office, Democrats reinstated binding arbitration of public-employee union contracts in a 2003 special session of the Legislature.

As a result, arbitrators gave state employees wage increases totaling 8 percent over the first two years of the Lingle administration and raises ranging from 16.5 percent to 29.6 percent in the past four years.

Arbitrators are required to use several factors, including “;the financial ability of the employer to meet these costs.”; If the Lingle vetoes are overridden as expected, the tax increases approved by this legislative session could bring in revenue for pay raises that state employees have come to expect.

Lingle threatened earlier this year to lay off up to 4,000 of the state's 49,000 employees if necessary, but now reportedly plans instead to impose 37.5 days of furlough — days off without pay — over the next two fiscal years. The unions, including the Hawaii State Teachers Association and the University of Hawaii faculty union, can be expected to challenge her authority to do so.

Legislators set a poor example in this year's session by accepting most of the 36 percent pay raise they had arranged for themselves through a constitutional amendment that voters unwittingly approved in 2006. Pay raises to state employees made possible by the tax increases are evidence of the extent to which the Legislature is owned by their unions.