By Kevin Dayton
Advertiser Capitol Bureau Chief
If Hawai‘i public workers are to receive raises this year, it will come at the expense of Gov. Ben Cayetano’s plans to pump more state money into everything from drug treatment for inmates to new computers for state offices.
Cayetano has proposed a lavish $1.1 billion in new spending over the next two years. But legislators intend to chop deeply into those initiatives to make room in the state budget for public worker raises.
So if you are rooting for any of Cayetano’s new spending initiatives in areas other than education, Rep. Joe Souki advises: "Don’t hold your breath."
As a rule of thumb, House Finance Chairman Dwight Takamine instructed the chairs of other committees to try to cut 80 percent of Cayetano’s new spending initiatives for each department. That would amount to about $900 million of the $1.1 billion in new spending proposed by Cayetano for the next two years.
Takamine, D-1st (Hamakua, N. Kohala), said he is being cautious, and cuts that deep actually may not be necessary. He was quick to add that the 80 percent rule almost certainly would not apply to critical areas such as education.
Legislators promised they would increase education spending, and the Felix consent decree is requiring hundreds of millions of dollars in additional spending for court-ordered mental health services for school children.
But Cayetano’s plans for a surge in spending on social services and other programs may be in serious trouble.
Souki, D-8th (Waiehu, Ma‘alaea, Napili), who was Finance Committee chairman from 1987 to 1992, said the governor’s generous budget and the cuts legislators are planning to make to it are traditional in years when the state bargains with the public worker unions.
Cayetano tucked discretionary money away in "pockets" in the budget, and that money can be used for raises, said Souki. He noted that governors have used that subterfuge for decades to set aside money without letting the unions know how much they are willing to spend on raises.
"I think the governor had no intention of all that money being spent," Souki said. "He knew that the Legislature, if they were going to give raises, which more than likely they will in the end, that these projects are new projects, they are not continuing projects, they need not be funded now."
Estimates for how much the raises would cost vary. If the unions accepted the Cayetano administration’s proposals, state officials estimate the raises would cost about $200 million over two years.
But if the administration accepted the union proposals, state officials say the raises would cost $580 million over the same period.
Unions, governor far apart
The state is negotiating a new contract with the Hawai‘i State Teachers Association, which represents 12,000 public school teachers; and the University of Hawai‘i Professional Assembly, which represents about 3,100 university and community college faculty members.
The teachers union is seeking a 22 percent increase over four years. Teacher salaries currently range from $29,000 to about $58,000. The state’s latest offer is about 11 percent.
The UH Professional Assembly is seeking a 14.9 percent increase over four years. UH faculty members earn between $30,000 and $147,000 a year. The state has said it is willing to give UH faculty 4 percent this year and next year for merit raises.
The state already has reached agreements with the United Public Workers, which represents about 11,300 nurses, prison guards and blue-collar workers. The two-year agreement calls for an 11 percent pay increase in exchange for reductions in vacation and sick leave for new hires.
The Hawai‘i Government Employees Association won an arbitration award for a four-year contract that gives its 23,000 employees raises ranging from 9 percent to 17 percent, but Cayetano contends that decision is invalid. The HGEA wants the state to pay the arbitrated raises, but Cayetano wants the union to begin new negotiations with the state. Takamine said he is carving up the Cayetano budget to prepare not only for the union settlements but also for the state Council on Revenues’ March projections.
Revenue outlook uncertain
The council — a panel of economists — predicts how much the state will collect in taxes each year. It is predicting tax collections will grow by 6 percent this year and 5 percent in each of the next two years. If those projections are scaled back because of the faltering Mainland economy, lawmakers would have trim spending in the two-year budget they are now drafting.
Takamine said he also is concerned about rising expectations of the state departments that are seeking money, and of the general public. "We don’t want to mislead," he said. "That’s why we’re sort of taking this cautious approach."
Senate President Robert Bunda said he agrees with Takamine’s approach, adding: "The governor’s budget surely can be pared down, I think."
"As long as it’s something workable so you can do the teachers’ (raises) and you can do some of these (other) raises, that’s a good approach," said Bunda, D-22nd (Wahiawa, Waialua, Sunset Beach). "We can’t just go like Christmas and not consider the revenue picture or consider the economic climate at all."
Cayetano frustrated
Cayetano already has expressed some frustration with legislators’ preoccupation with the union negotiations.
Not only are lawmakers planning to cut the administration budget, but some have suggested the state might want to halt the 1998 income tax cuts if that is what it takes to pay the raises and balance the budget.
"What bothers me about this session is that there’s a trend where collective bargaining is dominating the Legislature," Cayetano said. "All issues seem to be second to collective bargaining, and I hope that does not continue because there are so many more equally important things that we need to attend to."
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