Analysis
Legislature adjourns after reform-minded session

By Kevin Dayton
Advertiser Capitol Bureau

Hawai'i lawmakers adjourned today after a session challenging tradition that was driven by an electorate growing more conservative and impatient with a lack of change.

In just one year, Hawai'i's Legislature went from rejecting the privatization of government services and various proposals to overhaul the health fund — areas near and dear to the hearts of public employee unions — to embracing these same issues and making the unions furious.

Gov. Ben Cayetano, long a candidate who drew labor support but who alienated unions by championing the civil service changes, signed the privatization and health fund measures into law today.

What happened between last year and this year had to do with the political and financial landscape.

The political landscape was the 2000 election — and the loss of several Democratic seats to Republicans.

Those who survived came to believe that their ability to stay in office meant demonstrating independence from special-interest groups, including the public worker unions.

House Speaker Calvin Say, D-18th (Palolo, St. Louis, Kaimuki), said the Legislature approved the privatization and public employees health fund measures because lawmakers sensed a "signal out there that there was discontent."

"I think the major catalyst for these two issues that we're talking about is last year's election — the Democratic caucus lost seven members," he said.

United Public Workers State Director Gary Rodrigues argued that "the Democrats panicked, and they lost sight of everything."

"I think the biggest problem is the Democrats want to be Republicans. They are hiding under the guise of being Democrats," said Rodrigues, who expects the union to work against lawmakers who voted for the bills.

The financial landscape was the state budget, in particular the teacher and university faculty strikes that underscored Hawai'i's financial problems.

The stalling ends

After years of stalling, lawmakers on Tuesday approved what they saw as cost-cutting measures to authorize virtually unrestricted privatization of government services, and to require the public worker unions to bargain with the state and counties to determine how much government will contribute for employee health benefits.

Currently public worker health benefits are set by law, and the state and counties must pay whatever premiums are necessary to provide those benefits. The cost of that system has skyrocketed, and by one estimate the state health insurance premiums for active and retired workers will top $1 billion a year by 2013.

Sen. Colleen Hanabusa, D-21st (Barbers Point, Makaha), said key lawmakers who are also longtime labor supporters grasped that whether the unions liked it or not, something had to be done to control the cost of the health fund.

Hanabusa, who represents unions in her law practice, was one example. Others were House Finance Chairman Dwight Taka-

mine, D-1st (Hamakua, N. Kohala), and Senate Ways and Means Chairman Brian Taniguchi, D-11th (McCully, Mo'ili'ili, Manoa), who were both responsible for writing the budget.

"You look at the numbers, and you can't run away from that," Hanabusa said. "They know those numbers, they know what it's costing, and they know there may be these savings."

Younger lawmakers

Some believe that the new generation of lawmakers elected in recent years aren't terribly dependent on the public worker unions for support.

Say said union influence isn't as important in the House and Senate district races as it is in statewide races. Senators and House members generally walk their districts and meet their constituents, and tend to have more personal relationships with their supporters that aren't likely to be affected by union endorsements.

Union political clout was also called into question last year when the public worker unions promised openly to work against Reps. Ed Case, D-23rd (Manoa), and Nathan Suzuki, D-31st (Salt Lake, Moanalua), who advocated changes in the health fund and other areas that the unions opposed.

Case easily won re-election, and Suzuki was unopposed, making the public worker threats seem hollow.

Despite the election turmoil, lawmakers such as Senate Labor Chairman Bob Nakata, D-23rd (Kane'ohe, Kahuku), said at the outset of this session year they did not expect measures such as privatization to pass.

Cayetano said the measures were motivated by lawmakers' struggle to find money in the state budget for raises for tens of thousands of public workers and for teachers and professors who went on a prolonged strike.

Lawmakers actually voted to raise taxes as one option for paying for the raises, with both the House and Senate voting for separate tax increase proposals this year.

The tax bills died and lawmakers were able to avoid that pain, but the next round of public employee negotiations is scheduled to begin later this year. House and Senate members knew they might not be so lucky next time.

The obvious alternative was to override the wishes of the public worker unions and make some changes to cut costs. The health fund was a prime target — one estimate is the state will save $65 million in the first year after the system is overhauled — and privatization has been touted for years as a money-saving measure.

Fewer distractions

The strike also preoccupied union lobbyists and drew attention away from lawmakers at a critical time, giving them a chance to work out the bugs in the bills with fewer distractions, according to some lawmakers.

Cayetano has said it also helped that former Senate President Norman Mizuguchi retired last year. Mizuguchi was close to both the Hawai'i Government Employees Association and United Public Workers union leadership, and Cayetano blamed Mizuguchi for killing many of the governor's "government reform" measures.

For all of the union outcry now, lawmakers seem skeptical that the public worker unions will abandon the Democrats. Senate President Robert Bunda, D-22nd (Wahiawa, Waialua, Sunset Beach), wondered aloud this week if it would help the unions to embrace the Republican Party, which has a long history of advocating reductions in state government.

Cayetano for his part, said he believes all will eventually be forgiven.

"I would say the Legislature demonstrated its support for the unions by approving a $300 million pay raise, and I think it's one of the largest I can recall in the time that I've been in politics."

"I know they're upset, but there's some very strong labor people who felt that this has to be done, and they did it."