Senate OKs draft budget

By Lynda Arakawa and Ronna Bolante
Advertiser Capitol Bureau

The state Senate unanimously approved a $7 billion draft budget yesterday that includes pay raises for public school teachers and university faculty members, disregarding Gov. Ben Cayetano's long-standing argument that the state cannot afford such increases.

"By not making any room in his budget for collective bargaining agreements, the governor essentially dared the Legislature to find the money to fund essential services and pay raises, especially for teachers," said Senate Ways and Means Committee Chairman Brian Taniguchi. "I'm happy to report to you that we have met the governor's challenge to prove we can balance our budget.

"We are providing new funding for new initiatives and mandated costs. We've continued funding for existing programs and, last but not least, we made room for public worker pay raises."

But Taniguchi, D-11th (McCully, Mo'ili'ili, Manoa), quickly added that the Senate's draft budget is not intended to derail the governor's negotiating power.

"I am not in any way trying to undermine the governor's ability to negotiate by my actions," he said. "I'm merely doing the responsible thing and anticipating costs for negotiated settlements for both HSTA and UHPA. That's it. No games, no one-upmanship."

While Taniguchi said the budget still provides funding for essential areas including education, social welfare and public safety, Cayetano — through his press secretary, Kim Murakawa — yesterday said: "The Senate budget tries to accommodate the pay raises at the expense of social programs such as drug treatment and it includes one-time savings, which will not be available to pay for the raises in subsequent years. It is a politically correct budget which cannot be sustained."

The Senate's proposed budget includes $250 million for teacher and university faculty raises over the next two years. It also sets aside money for raises won in arbitration by members of the Hawaii Government Employees Association and negotiated raises for United Public Workers members.

The House also moved ahead with plans to give raises to public employees, including teachers, college faculty and the UPW.

House members also approved a bill to provide $153 million over the next two years from the state general treasury for arbitrated raises awarded to about 23,000 members of the HGEA.

Cayetano has promised to veto the HGEA raises if lawmakers appropriate money to pay them, but yesterday's vote suggests that lawmakers could muster the two-thirds vote needed to override a veto.

Only four House members voted against the HGEA raises, with large majorities of both Republicans and Democrats voting in favor of them.

Senate Republicans, however, complained that state government needs "systemic reform," that lawmakers must make changes to the budget process and that the Legislature has not done anything meaningful to turn around the economy.

The draft budget was among dozens of bills advanced by the House and Senate yesterday. The bills now go back to their originating houses to prepare for final negotiations in House-Senate conference committees.

Bills approved by the House and Senate include measures that would allow the state to furlough workers; require tour wholesalers to pay a tax for each hotel room they sell; prohibit minors under 18 from riding in the bed of trucks; set a 15 mph speed limit on roads near schools; and place a refundable deposit on recyclable beverage containers.

The House passed the furlough bill by a 29-20 vote. Under the bill, the furloughs — reductions in work hours to save the state money — would have to be voluntary. House Republicans opposed the bill, and Rep. Ed Case, D-23rd (Manoa), criticized the measure.

"Frankly, I can't see a worker voluntarily leaving, so it's a meaningless bill," Case said.

Several senators objected to the bill that would impose a $7.25-a-day tax on tour package wholesalers for each hotel room they sell — a bill that Taniguchi said would help pay for the teachers' raises. The bill passed, 17-8.

Sen. Carol Fukunaga D-12th (Makiki, Ala Moana, Tantalus) said the damage the measure would cause to Hawai'i's tourism industry would overshadow the initial revenues from the tax.

Senate Tourism and Intergovernmental Affairs Chairwoman Donna Mercado Kim, D-15th (Kalihi Valley, 'Aiea), said the bill would close a loophole that allows wholesalers to avoid paying the state's hotel room tax. Kim has estimated the loophole has cost the state up to $45 million a year.

In the House, lawmakers also approved bills that include $79 million in emergency appropriations to provide services to special needs public school children with mental disabilities.

Among other developments yesterday:

• The House voted 36-13 to approve a bill that would require the courts to give nonviolent, first-time drug offenders probation and treatment instead of prison terms.

House Minority Leader Galen Fox, R-21st (Waikiki, Ala Wai) called the bill "naive" and said it would take away judges' discretion to imprison offenders who fall under this category.

But supporter Rep. Cynthia Thielen, R-49th (Kailua, Kane'ohe Bay Drive) said: "Our substance-abuse treatment needs are definitely not being met. We need to be treating those who need help rather than tossing them in jail."

• The House approved 39-12 a hate crimes bill that would establish extended prison terms for crimes where offenders select their victims based on sexual orientation, race, religion, age, disability or gender.

• House members also approved a bill to provide a food income tax credit of up to $70 to the poorest Hawai'i taxpayers to help offset the cost of the state's 4 percent excise tax on food. The credit would only be available to families who make less than $30,000 a year.

The same bill, SB 751, would also provide a small state earned income tax credit to benefit the working poor, and would increase the standard income tax deductions to provide a small tax break for all Hawai'i taxpayers.

• The Senate narrowly passed a bill, 13-11, establishing 15 mph speed limits in construction areas and on roads within 1,000 feet of schools.

• The Senate voted 16-9 for a bill that would require children younger than 8 years old and less than 80 pounds to be in a child passenger restraint system, require children ages 8 to 15 to wear seat belts, and prohibit minors under 18 years old from riding in the bed of a truck.

• The Senate unanimously approved a bill that would rename the University of Hawai'i Rainbow Stadium after head baseball coach Les Murakami, who has led the program for 30 years. This season was supposed to be the last for Murakami, who is recovering from a stroke he suffered in November. The bill would give the Board of Regents the right to reject the designated name.

Advertiser Capitol Bureau Chief Kevin Dayton contributed to this report.