Hawaii's stripped-down budget proposal doesn't cut public employee wages or benefits, which means higher taxes might have to pay the state's bills.

Negotiations with several of Hawaii's public labor unions haven't made much progress, so state lawmakers are writing a budget that maintains existing pay for the state's 49,000 union workers.

Republican Gov. Linda Lingle is seeking $278 million in labor savings, but the Democrat-run Legislature believes removing that money from the budget would take away the unions' collective-bargaining rights. Labor costs make up about 70 percent of the state's general fund budget.

“;We are well aware that the state of the economy in Hawaii is not doing too well,”; said Roger Takabayashi, president of the Hawaii State Teachers Association. “;Public education is a gateway for children to excel or exceed. You're messing with the children's future by touching public education.”;

Talks with the unions usually conclude by the end of the legislative session in May so lawmakers know how much money to allocate for labor. This year, negotiations will continue well after the Legislature adjourns May 7.

The teachers union, which represents more than 13,000 public school teachers, proposed keeping wages at existing levels, Takabayashi said. The Lingle administration never made a counteroffer, he said.

“;This is not, as some have suggested, an effort to balance the budget 'on the backs' of state workers,”; wrote Marie Laderta, the Lingle administration's lead negotiator, in response to questions about the negotiations. “;Rather, it is a matter of shared sacrifice in this time of unprecedented economic and fiscal difficulties.”;

The Lingle administration is striving to avoid a reduction of the state's work force, said Laderta, director of the Department of Human Resources Development. Lingle has said she will seek wage and benefit concessions regardless of how the budget turns out.

Without proposed tax increases worth $90 million by raising the hotel room tax and $96 million by increasing income taxes on individuals earning more than $150,000, it's more likely public workers will be laid off. Then in late May, the Council on Revenues may issue another grim economic forecast, further shrinking the state's budget.

“;The governor has put herself in a box by saying she won't accept tax increases and she won't accept layoffs,”; said House Labor Committee Chairman Karl Rhoads (D, Kakaako-Downtown). “;Eventually we'll get some combination of layoffs and furloughs that will make up the bulk of it, and there will be some tax hikes as well.”;

Republicans argue public employees haven't suffered any layoffs at all, while many workers in the private sector are losing their jobs. Hawaii's unemployment rate jumped to 7.1 percent last month, the highest mark in more than 30 years.

“;It's really the taxpayers that are picking up the freight for everybody,”; said Sen. Sam Slom (R, Diamond Head-Hawaii Kai), in a speech to the Senate. “;The point is that I think we have for too long created this special class of public workers.”;

Democrats say Lingle's budget proposal is unrealistic and unclear.

House Speaker Calvin Say said he's waiting for the governor to explain where she came up with the $278 million figure that she claims is needed in labor savings.

“;I really don't know where the pulse of the administration is. ... It falls on the Legislature to do the dirty work,”; said Say (D, St. Louis Heights-Wilhelmina Rise).