Teachers strike
threatens planned
state tax cuts

Some legislators favor canceling
the planned round of tax cuts to
help fund pay raises

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By Richard Borreca
Star-Bulletin

The issue is money and both Gov. Ben Cayetano and the Legislature agree there isn't enough to afford the pay raises that teachers and University of Hawaii faculty are requesting.

But Cayetano and lawmakers are divided on how to get more and who should pay.

In the last week there have been increased calls for canceling a planned round of state income tax cuts and even suggestions that the excise tax be raised from 4 percent to 5 percent.

And today the Senate holds a hearing on the issue of legalized gambling, with a portion of the proceeds going to the state.

Senate President Robert Bunda flatly rejected the suggestion by the Hawaii State Teachers Association to float their pay raises with a tax increase, but said he would not rule out halting the planned tax cut.

"A tax increase is permanent and so we have to look at other ways to balance the budget," he said.

Cayetano, however, just this week asked the legislature to give him permission to furlough state workers rather than lay them off, in order to balance the budget. The proposal involves possibly closing some state offices one day a week to save on employee salaries.

"The furlough authority would help us ease the budget cuts I know I am going to have to make," he said. "I am trying to find a way to ease the pain and not cost people their jobs."

But, Cayetano said, the latest wage offer to the teachers would cost the state more than $93 million more than the state had in its planned budget.

That means, Cayetano said, that the state will have to cut programs, trim services and reduce the number of state workers to pay for the offered raises.

At the same time, the increased offer to the teachers means the state will not be able to afford as much for the University of Hawaii faculty and the Hawaii Government Employees Association, the governor said.

Cayetano said last night the state has made a new offer to HGEA, but the white-collar union is insisting on the settlement of nearly 15 percent that it won in arbitration last year.

Cayetano is also rejecting the calls for a tax increase, saying new worries with the national economy and international troubles in Asia would make it risky.

"I think we need to be very careful about the kinds of things we do that would discourage investment," he said.

But for legislators, the question is still of how the budget will be balanced. "The question is how do we prioritize," said Bunda, (D-North Shore).

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