Furlough fight brews
POSTED: Tuesday, June 02, 2009
Public worker unions contend that Gov. Linda Lingle cannot furlough state workers without union agreement, indicating they are willing to try to block the governor's plan.
Lingle announced yesterday that starting in July, 14,500 state workers will have to take three days off a month without pay for the next two years. That translates into a 13.8 percent pay cut.
Lingle, in a televised address, said she needs to take the drastic action to balance the budget and make up an expected $730 million shortfall between now and July 2011.
The state is also trimming Medicaid expenses by 4.2 percent, or $42 million, and delaying for a month $130 million in payments to the state health and retirement funds.
In all, the state will have lost almost $3 billion in expected money from 2008 to 2011 because tax collections have come in far below predictions.
The latest blow to the state's budget came last week when the Council on Revenues lowered the revenue projections to 9 percent less than what was collected last year.
To balance the budget, Lingle called for $688 million in furloughs or pay cuts.
To state workers the cuts will be a serious blow.
Randy Perreira, Hawaii Government Employees Association executive director, said state workers are already looking at a 26 percent increase in health insurance costs and now will see their pay cut 13.8 percent.
"People are calling and asking how are they going to make it. These additional cuts will be a back-breaker for too many families. It would be economic ruin for too many," Perreira said.
Though Lingle cannot force furloughs on the 21,000 Department of Education workers, 7,400 university system employees and 3,500 health system workers, she is cutting the budgets of those departments and also urging furlough for them.
The Hawaii State Teachers Association protested the pending pay cuts.
"We do not expect public schools to emerge from this economic crisis unscathed," said Roger Takabayashi, HSTA president. "We believe the governor's proposed solutions will inflict unnecessary damage to Hawaii's schools and, more importantly, to the children they serve." The cuts "will also prolong the state's frail economic condition," he said.
Democratic leaders in the Legislature said they doubt Lingle has the legal power to impose furloughs without getting union agreement.
"She is opening the state up to injunctive actions by the unions," said Senate President Colleen Hanabusa. And House Speaker Calvin Say called the plan "vulnerable."
But in a news conference after her 30-minute speech, Lingle insisted she has "implicit power" to control employees' working conditions.
"I would hope the unions would work with us," she said.
Lingle quoted from the state's collective bargaining law, noting, "The employer has the right and obligation to determine the method, means and personnel (by which) the employer's operations are to be conducted."
The issue is further complicated because Lingle has been attempting to negotiate new contracts with the four public employee unions but has been unable to give them a formal proposal because she cannot get the needed agreement from the county mayors and the Board of Education to make a formal offer. So she has been limited to informally discussing wage proposals with the unions, without much success.
Lawmakers looked at Lingle's call for furloughs to start in three weeks as another round of union negotiations. Lingle, however, cited a "fiscal emergency."
The governor's proposal to furlough state workers will be presented the Office of Hawaiian Affairs board, said its administrator, Clyde Namuo.
However, Namuo said OHA "isn't in the same situation as the state."
Although the Legislature reduced funding to OHA by 20 percent and its investments have fallen off, OHA was able to balance its $38 million budget by reducing expenses and not filling 15 vacant positions, Namuo added.
To head off staff cuts, Namuo will ask its staff of 150 to work an extra day without pay whenever OHA has special projects to complete.
Namuo noted that unlike the state where staff expenses take up nearly 70 percent of its budget, staff costs for OHA amount to only 30 percent.
Star-Bulletin reporter Gregg K. Kakesako contributed to this report.
Governor looks to make up $730M budget shortfall
A quick look at Gov. Linda Lingle's plans to handle a $730 million budget shortfall largely by furloughing 14,500 state workers:
» What: Workers will be furloughed three days a month. This means their pay will be 13.8 percent less, starting July. Lingle cannot furlough schoolteachers, university professors and state hospital workers, so she is cutting the budget of those departments by the same amount and urging that they also be furloughed.
» Why: The Council on Revenues lowered its tax collection prediction, meaning the state would be short $730 million by July 2011. Lingle rejected any more tax increases and said no yesterday to calls to legalize gambling, so the only thing left to cut is state salaries.
» Who is getting cut: State employees, from the governor on down, aside from the exceptions mentioned above. Lingle said it does not matter if the employee is paid with federal money, special funds or general funds.
» Can the state do this? Lingle says she can act without union agreement, but the unions disagree. So do Democrats in the Legislature. The Hawaii Government Employees Association says it is willing to go to court to try to stop the furloughs.