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Pay raises Gov. Ben Cayetano is warning of "massive layoffs" if the state Senate proceeds with a plan to give public unions the nearly $500 million in pay raises they are seeking.
would lead to
‘massive layoffs,’
gov says
Cayetano says the choice is
between funding public
programs or pay raisesBy Richard Borreca
Star-BulletinSenate Democratic leaders, meanwhile, are starting to draw battle lines between either gambling or an excise tax increase to fund pay raises, the federally mandated education increases under the Felix decision and the new spending called for by Cayetano.
Senate Ways and Means Chairman Brian Taniguchi is trying to avoid the decision and is still going through the state budget looking to make cuts.
"Before we give in to either gambling or a tax increase, we need to exhaust all else -- we have to search for all the small ways to get (extra savings)," Taniguchi said yesterday.
Cayetano, while still lobbying for his program including scholarships for graduating high school seniors, more computers in public schools, an aquarium and medical school at Kakaako and continued cuts to the state income tax, told the legislature not to arrange the budget only to pay for union pay raises.
"Just trying to turn over every stone to find money for pay raises is not going to do it," he said. "In fact, it is going to be counterproductive."
Cayetano said the Senate is just delaying negotiations by even considering giving the public unions all they want. "It will give them a reason to believe they can ride this out," he said.
And if the Senate does pass a budget that contains the union's raises, Cayetano warned of firings. "If that kind of a budget comes down, you are going to see massive layoffs," he said.
"The choice will be, you wipe out programs from drug rehabilitation, for drug treatment, for domestic violence help, for people who are poor or needy -- or you lay people off.
"I can tell you where I am going," Cayetano said.
Two Senate committee chairmen -- David Matsuura, health and human services chairman, and Robert Nakata, labor chairman -- are calling for a tax increase.
Matsuura suggests raising the excise tax from 4 to 4.5 percent and dropping the tax on food, medical services and rent. Calling Hawaii's economy a "tourist economy," Matsuura (D-Hilo) said by raising the excise tax on goods and services that tourists consume, but offering credits for local food and rent, "local people will benefit."
Matsuura worries that the only alternative is to legalize gambling and then extract a tax. But, he says, if any form of gambling is approved, it will open up gambling by Indian tribes, which he figures would lead to unregulated casinos in Hawaii.
Also suggesting a tax increase is Nakata (D, Kahaluu), who says an increase would allow the state to restore years of cuts to social services, expand the quality of public schools and give public workers a pay raise.
"The pressure is intense this year," Nakata said. "I see a real need for increases to human services and also for the economy to be pulled up."
Nakata wants to use tax increases to pay for tax breaks to high-tech firms to bolster the state's economy.
Tax increases don't sit well with Sen. Sam Slom (R, Hawaii Kai), who said the state should develop a list of what it can afford to pay for and not approve so many projects.
"There can be no justification or benefit by raising taxes," he said. "Raising taxes would be another sign that we are not serious about turning the economy around.
"We have to learn to say 'No' and put things in the proper perspective," Slom said.
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