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Thursday, April 20, 2000

State of Hawaii

State has until
July 2001 to
fund raises

HGEA's executive director
says an improving economy
makes the raise affordable

Thousands rally at Capitol

By Harold Morse


The state and counties will have to come up with money to fund 15 percent pay raises for white-collar workers -- but not for now.

That's because the raises do not take effect until the last two years of a four-year contract awarded by an arbitration panel.

Russell Okata, executive director of the HGEA, said that because there are no raises in the first two years of the contract, the current Legislature does not have to appropriate money for the raises.

Okata said the union is prepared to seek the money from next year's Legislature, which would deal with the state budget for the final two years of the contract period.

But Gov. Ben Cayetano said the state will not be able to pay the raises.

"We cannot afford the proposed raises that I have received today from the arbitration panel," the governor said. "With step increases, they amount to an overall 15 percent increase in wages. Based on the panel's ruling of a four-year contract, the final year would result in the state facing a deficit of more than $200 million."

Okata called Cayetano's prediction "economic hocus-pocus."

The across-the-board pay raises to 24,008 HGEA members are a 4 percent pay hike effective July 2, 2001, and a subsequent 5 percent raise effective July 1, 2002. Eligible employees will get step movements during calendar years 2001 and 2002 -- which, combined with the hikes, will boost the package to a 15 percent increase.

The contract is retroactive to July 1, 1999.

Okata said the state's excess tax revenues just for this fiscal year would be enough to fund the pay package.

What's more, "there's every promise the economy will improve dramatically" over the next several years, boosting government coffers even more, Okata said.

"We are, of course, very encouraged that state Tax Director Ray Kamikawa recently reported tax revenues increased by 3.1 percent through the first nine months of the fiscal year," Okata said. "The difference is $125 million more than the Council on Revenue forecast. Kamikawa himself said it indicates continued growth in Hawaii's economy."

Cayetano also called for government modernization.

"We must reform our civil service system," he said. "This includes introducing merit principles, injecting a more entrepreneurial approach, addressing the state's dramatically escalating employer health benefits, giving individual entities the flexibility to tailor a system that meets their very different needs, and other items cited in our government modernization package."

HGEA has seven bargaining units statewide with membership of 855 blue-collar supervisors; 12,436 white-collar nonsupervisors; 594 white-collar supervisors; 731 educational officers; 1,320 University of Hawaii administrative, professional and technical employees; 1,187 registered nurses; and 6,885 professional and scientific employees.

Star-Bulletin reporter Rob Perez contributed to this report.

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