Unions react coolly
to pay-freeze plan
Conferees at work on budget agreementBy Mike Yuen
Public workers unions have reacted with sarcasm and hesitancy to Gov. Ben Cayetano's proposal that the salaries of all government employees be frozen for the next two fiscal years as the state and counties continue to battle tough economic times.
"We'll be grateful for a two-year pay freeze if that's all we get," John Radcliffe, associate executive director of the University of Hawaii Professional Assembly, said jokingly.
Randy Kusaka, a spokesman for the Hawaii Government Employees Association, the state's largest public-workers union, said it would be premature to respond to Cayetano's initiative because details have yet to come HGEA's way.
But Kusaka added, "Our mandate is to get our retroactive pay raises that were already negotiated. That should be honored. We know the state and the counties are facing a difficult economic situation. So we appreciate any effort to get our pay raises funded."
Cayetano says his plan aims to do that.
Gary Rodrigues, state director of the blue-collar United Public Workers, whose membership includes prison guards and trash collectors, declined to comment.
Labor pacts with HGEA, UPW, UHPA and the Hawaii State Teachers Association expire on June 30. In the current round of negotiations, the Cayetano administration is insisting that the state can't afford any pay raises.
The City and County of Honolulu, meanwhile, is in arbitration with the State of Hawaii Organization of Police Officers.
Cayetano is proposing that the $9 billion state Employees' Retirement System be raided to help the counties and to speed up the state's repairs of schools. He conditioned the bailout plan on the public-workers unions agreeing to pay freezes for two years.
Earlier this month, the four leading public-workers unions opposed an initiative by House Speaker Calvin Say (D, Palolo) - now abandoned - that would have imposed a four-year salary freeze on state workers' salaries.
Cayetano stressed that what he is proposing is not a take-away from retirees.
"Whatever the retirees have been promised, they will be paid by the state," he said.
Cayetano wants to take about 3 percent off of the pension fund's investment earnings of 13.7 percent in 1997 and of 15.6 percent in 1998. That would free about $85 million for the counties in the next two fiscal years - $58 million for Honolulu, nearly $11 million each for the Big Island and Maui and $5.5 million for Kauai.
The state would get about $191 million for the fiscal biennium, although Cayetano insisted the plan was aimed at helping the counties more than the state.
"I think what has to be made very clear here is that the City and County of Honolulu is in very dire financial straits," Cayetano said.
"If we don't do this and it is not accepted, there is no way the City and County of Honolulu is going to be able to fund the retroactive pay raises that are owed all these government workers.
"Under the law, if one county is not able to fund it, all the contracts are off the table," the governor added.
Senate President Norman Mizuguchi (D, Aiea) and Say said they're open to Cayetano's proposal.
However, Mizuguchi emphasized that the counties also need to reduce their expenses, as the state has been trying to do.
Republican lawmakers harshly criticized Cayetano's plan.
"I think it's a shame that we have to tell the employees that we're going to be paying them with their own money," said Senate Minority Leader Whitney Anderson of Kailua.
House Republicans said Cayetano is proposing a quick fix that "postpones action to restructure and resize state government to match the size of the economy that supports it."
The infusion the state would get is just about what it needs to pay for state workers' retroactive pay raises, they added.
Conferees at workBy Bruce Dunford
on ironing out budget
House and Senate conferees sat down across a long table at the state Capitol last night to begin the annual marathon of hammering out differences on the state's $12 billion, two-year state budget.
"We're going to try to rein in the growth of government and come up with a product we can both be proud of," said Sen. Andy Levin (D, Kau-South Kona), co-chairman of the Senate Ways and Means Committee.
Conferees began the tedious task of going item-by-item, page-by-page through thick volumes of budget worksheets to identify areas of difference that will be resolved in the days to come.
They need to complete the task several days ahead of the Legislature's scheduled May 4 adjournment.
Despite public hand-wringing and lamenting by lawmakers over the state's slow economy and the state of the state's finances, all versions of the budget - the administration's, the House's and the Senate's - call for spending substantially more money next year than is being spent this year.
Hawaii Revised Statutes