Tuesday, January 26, 1999

State of the State

Hawaii State Seal

Public workers
hesitant on civil
service cutoff

Unions embrace the idea
of reform, but hold back on
repeal in June 2000

Full text of the governor's address

By Craig Gima


Public worker unions say they are willing to talk with Gov. Ben Cayetano's administration about reforming civil service laws, but a battle is looming over a "drop dead" provision that would repeal all civil service laws on June 30, 2000.

In his State of the State message yesterday, Cayetano proposed an overhaul of the islands' 60-year-old civil service laws that govern hiring, job classifications, promotion, firing and most aspects of state and county employment. The civil service laws predate collective bargaining and in some instances duplicate some negotiated work rules.

"I think the unions and the majority of state workers themselves recognize the system is so cumbersome," Cayetano said at a news conference after his address. "It really discourages excellence."

Cayetano recalled an experience when he was lieutenant governor and a light bulb went out.

He called a janitor, who said he couldn't change it because the job required an electrician.

"I said: 'Gimme the bulb. I'll change it myself.' "

Gary Rodrigues, state director of the United Public Workers, said his union already has been negotiating with the state to broaden job descriptions and give workers more flexibility in their jobs.

"I think it's a good idea. We need it. We have already started civil service reform," he said.

But Rodrigues opposes Cayetano's proposal to repeal all civil service laws on June 30, 2000.

"We need to kind of light a fire and set a deadline and the whole idea is to create a sense of urgency to get the reforms done," Cayetano said.

House Speaker Calvin Say (D, Palolo) and Majority Leader Ed Case (D, Manoa) say they believe the governor's proposals will pass the House.

"The House has been pushing this area, civil service reform, for a number of years now," Case said.

Cayetano said he sees an opportunity this year to begin reforms.

"I think that the environment is appropriate. Two, maybe three years ago, you wouldn't have legislators who would even consider it," he said.

However, key senators have come out against the proposal to end civil service next year.

"I think we need to look at civil service, but the drop dead may be a little too drastic," said Sen. Bob Nakata (D, Kaneohe), chairman of the Senate Labor and Environment Committee.

Nakata added that a long debate over the 'drop dead' provision may distract the Senate from passing other important legislation.

Cayetano's point man for civil service reform is former Senate Majority Co-Leader Mike McCartney, who is now the director of the state Department of Human Services.

Under Cayetano's proposal, McCartney, who once worked for the Hawaii State Teachers Association, would talk with unions and others affected by civil service to try and put together specific proposals to be passed by next year's Legislature.

McCartney said it is "critical" to pass the bill ending civil service by June 30, 2000, because it would mean doing nothing is not an option.

"Right now I would say it (passing the "drop dead" provision) is going to be a challenging experience. But I think only with the risk will significant change come. Without the risk you won't have significant change," he said.

Besides personnel classifications, McCartney said he wants to talk to public worker unions about hiring and grievance procedures and whether counties and state should have different civil service laws.

"If we don't change it, somebody else will. Another administration will," he said.

"We need to demonstrate that the Democratic party and the unions can bring about change from within."

State of the State

Hawaii State Seal

Giving power to the
public schools

Full text of the governor's address

By Pat Omandam


Gov. Ben Cayetano's plan to empower each public school would mean new roles and relationships between the state Department of Education and the public worker unions, says State Schools Superintendent Paul LeMahieu.

All are legitimate issues that should be discussed, he said.

"I think what the governor has done is thrown down the gauntlet and said, 'Either negotiate some new kinds of terms or perhaps contemplate setting the collective-bargaining arrangements aside,' " LeMahieu said.

"I think it is a call to arms to say how can we develop some new roles, some new relationships, give some folks some freedom in the area of selection, recruitment, in hiring, (and) evaluation, while perhaps still affording the basic protections," he said.

In his State of the State address yesterday, Cayetano said skills of critical thinking are taught best in an environment of academic freedom. To reach this goal, he proposed a pilot project that allows schools to:

bullet Negotiate their collective-bargaining contracts or not to have a contract.

bullet Be free of the state procurement code, and to control and create their own curriculum.

bullet Engage in lump sum budgeting without interference from the Department or the Board of Education.

bullet Select their principals and faculty without constraints from existing contracts.

Cayetano said a committee made up of faculty, parents and community leaders would run the schools. He chose Kapolei High School and Kapolei Middle School as the test sites for the project because they haven't been built but have been funded. The middle school will open this summer, the high school in the next few years.

Later yesterday, Cayetano stressed he would not give the Kapolei schools more money just because they are part of the pilot project. To do so would be unfair to the other schools, he said.

Still, the governor's "New Century Schools" project was news to Hawaii State Teachers Association President Karen Ginoza, who didn't learn of the initiatives until the governor's speech yesterday.

Although Ginoza praised Cayetano for some good educational ideas, she questioned whether schools should have authority to eliminate collective-bargaining agreements that are important to teachers and the quality of instruction.

And Ginoza questioned privately operated alternative schools for students expelled from the school system. Instead, Ginoza believes an on-campus facility is needed where teachers can give these students an immediate "time out" to consider their behavior. This is especially helpful in the early grades, she said.

"By the time you kick kids out of high schools, it's too late," Ginoza said. "They're going to end up in jail."

House Education Chairman Ken Ito (D, Kaneohe) said he'll review the package with his committee before he makes any recommendations.

State of the State

Hawaii State Seal

Cayetano looking to
ease excise tax

Full text of the governor's address

By Mike Yuen


While Republicans generally lauded Democratic Gov. Ben Cayetano for proposing tax breaks for businesses and pushing for additional income tax cuts, they criticized his State of the State address for not attacking inequities associated with the general excise tax.

But after Cayetano's speech yesterday, Tax Director Ray Kamikawa revealed that his boss is quietly exploring ways to ease the 4 percent excise tax. Cayetano is even wondering if it should be eliminated and replaced.

Cayetano said Kamikawa wants to address one of the most criticized elements of the excise tax: its pyramiding in which all stages of production and service are slapped with the tax. That makes the overall effect of the tax equivalent to a 12 percent sales tax, said Lowell Kalapa, president of the Tax Foundation of Hawaii.

"The governor would like to proceed in that area a little more deliberately," Kamikawa said. "He is asking for participation in a new task force to identify whether we should be moving to a sales tax or if we should stick with the general excise tax. He's also exploring what kind of pyramiding relief is appropriate."

As he did last year, Cayetano is proposing an excise-tax exemption for exported services to give isle professionals the opportunity to compete on the global level.

House Minority Leader Barbara Marumoto (R, Waialae Iki) said tax relief would be felt more widely if the excise tax were exempted from food, medical services and residential rents.

Cayetano has been cautious in offering exemptions to the excise tax since an estimated 20 percent to 30 percent of that revenue comes from tourists.

Cayetano conceded that he still needs "to sell" his proposal to further cut personal income taxes to lawmakers, who are concerned that the cost of the move -- $200 million to $250 million -- would mean drastic program reductions.

Senate President Norman Mizuguchi (D, Aiea) and House Speaker Calvin Say (D, Palolo) said it was lawmakers' hesitancy that caused Cayetano to use his speech to unveil a revamped proposal: There could be gradual cuts of the personal income tax that would be triggered only if state revenue reached a certain level.

Cayetano also announced that next year Hawaii will be hosting the annual international meeting of the Pacific Basin Economic Council, made up of 1,100 worldwide business organizations including Toyota, Sony and Motorola. The state is under consideration to be the permanent host for the council's annual gathering.

Shortly after Cayetano's announcement, the World Trade Organization, the globe's preeminent trade group, revealed that it would be meeting this year in Seattle. Cayetano had pushed Honolulu, which was a finalist, as was San Diego.

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