The state Department of Human Services has called off a plan to close all the state's welfare eligibility offices and lay off 228 public employees.

A law passed by the Legislature last week stopped the state from moving forward with the proposal to close the state's 31 welfare locations and replace them with two new processing centers in Honolulu and Hilo, said Human Services Director Lillian Koller.

Republican Gov. Linda Lingle vetoed the law, but the Democrat-controlled Legislature's override prevented welfare office closures on the neighbor islands and required public hearings before they could be consolidated on Oahu.

The plan was intended to save the state about $8 million, but lawmakers opposed to the idea said it would have reduced access to food stamps, cash assistance and medical benefits.

The law's requirement for public hearings, rule making and union consultation effectively killed the proposal, Koller said.

“;It's a very sad thing that we lost this opportunity, that we were just flat-out stopped by the Legislature from doing what's really best for our consumers,”; Koller said.

Nearly everyone in the community was opposed to the welfare consolidation idea, said House Human Services Chairman John Mizuno. About 7,100 employees and welfare recipients signed a petition opposing Koller, he added.

The homeless, disabled and needy often don't have access to a phone or computer, which would have been needed to contact the new welfare processing centers, Mizuno said.

“;Overwhelmingly, the people have spoken. This would have had a substantially adverse impact on services,”; said Mizuno (D, Kalihi). “;We're not against being more efficient and cutting costs, but the way they did this was ill-advised. We're ecstatic to hear it's over.”;

Lingle said the call centers would have improved customer service by hastening delivery of benefits to those who need them. The plan would have helped ease backlogs and delays in food stamp processing, she said.

“;They could get their benefits quicker than previously, and yet the Legislature instead caved into the special interests of the public employee labor union instead of doing what was best for the community,”; Lingle said yesterday.

Mizuno countered that the Lingle administration was out of touch with the sentiment he heard during public meetings on Oahu, Maui, the Big Island and Kauai.

The bill is SB 2650.