Lingle says state can't pay for raises awarded HGEA
By Gordon Y.K. Pang
Advertiser Capitol Bureau
Gov. Linda Lingle yesterday urged state lawmakers to reject raises awarded by an arbitration panel to 23,000 members of the Hawai'i Government Employees Association.
Lingle said the state cannot afford to pay for the increases and that the arbitration panel made mistakes in reaching its decision on the state's ability to do so.
Lingle, a Republican, met with leaders in the Democratic-controlled House and Senate in the morning, and then shopped her plan to several media outlets in the afternoon.
"It's not a fairness issue," Lingle told The Advertiser editorial board. "It's an affordability issue for the taxpayers and the state."
Lawmakers who met with Lingle gave strong indications that they likely won't heed her request.
House Speaker Calvin Say, D-20th (St. Louis Heights, Palolo, Wilhelmina Rise), said the talk was cordial and that he will convey Lingle's message to the Democratic majority. Personally speaking, he said, "in a binding arbitration, the employer should pay what is arbitrated."
Senate President Robert Bunda offered similar comments. "How can we go back? We honor what came out of the process as approved by law," he said.
Randy Perreira, HGEA deputy director, said that Lingle is violating collective bargaining law by suggesting to legislators that they reject an agreement reached by binding arbitration. "Certainly we believe the matter is out of the governor's hands," Perreira said.
"Her obligation is to provide the cost of the award to the Legislature for action."
He suggested that the union could take Lingle's remarks against the raises to the state Labor Relations Board. And at least some HGEA union members yesterday weren't happy about Lingle's remarks.
But Lingle said the arbitration panel incorrectly believes that $972 million in "unrestricted funds" can be used to help pay the raises when there are limitations on how such money is spent.
"It is not fiscally or legally possible to use this money for these wage settlements," she said. "It's against the law. You can't do it. "
The governor said the state would need to find an average of $100 million annually over the next three years if lawmakers agree to the arbitrated HGEA raises, and if those same raises were applied to the 13,200-member Hawai'i State Teachers Association and 8,300 members of the United Public Workers. The total would include the cost of raises recently given to the University of Hawai'i Professional Assembly, she said.
The arbitrator's decision gave employees an across-the-board pay hike of 5 percent beginning Jan. 1 and "step movements" — advances up pay grades based on years of service — that could boost their total increase to as much as 9 percent.
The governor said she will urge that lawmakers and the unions instead consider the state's final position on HGEA raises, a plan that would cost the state what she deems a more manageable $60 million in each of the next three years if applied to the HGEA, HSTA and UPW.
Lingle said that plan gives HGEA employees 1.5 percent raises beginning July 1, and step movements that would increase members raises to as much as 4 percent.
State budget officials on Monday will give lawmakers a new, six-year financial plan detailing what changes will need to be made to find $60 million in the state's $3.6 billion general fund annually, Lingle said. But if lawmakers agree to the HGEA contract, they will be on their own to find the additional $40 million that may be needed, she said.
It makes sense to apply the HGEA raises to HSTA and UPW employees, Lingle said, because HSTA officials have stated that the HGEA raises are a starting point for its employees and she anticipates UPW will do the same.
Lingle said to pay for the $60 million more in raises for the upcoming year, she will need to make program cuts of about $30 million, take about $30 million from special funds and collect about $5 million in "revenue enhancements" such as debt refinancing and "an aggressive new program for tax collections." She stressed, however, that "there will be no tax proposals in our plan."
The Lingle plan would spare the Department of Taxation, the University of Hawai'i, the Department of Defense and the Hawai'i State Library System from cuts. Lingle said she will propose two small cuts from the Department of Education budget, including $658,000 from a vacancies account in the DOE's central office.
Other cuts have yet to be determined, but will be made by Monday, she said. The department cuts won't be across the board on discretionary, nonessential spending as has been the practice in recent budget reductions.
The $30 million Lingle is proposing be taken from special funds would be less than the $55 million raid from 25 special funds that both houses of the Legislature appear ready to approve to help balance the budget. Lingle said the Legislature is making some bad choices with some of the raids, including cutting money from the highway fund, for which the federal government provides an 80-20 match.
Senate Ways and Means Chairman Brian Taniguchi, D-10th (Manoa, McCully), said the Lingle administration is obligated to find the money for the arbitrated raises if they are approved by the Legislature. He rejected Lingle's suggestion that lawmakers would need to find a portion of the money themselves.
"It's final and binding arbitration," he said. "She went into it knowing she was bound by it."
Taniguchi said that Lingle spoke only in generalities during her talk with lawmakers yesterday.
State workers at the Kalanimoku Building at Punchbowl and South Beretania streets weren't pleased with Lingle's comments. "We work hard," said Kathy Dela Cruz, a Bureau of Conveyances employee. "I don't see why we can't get our raises."
Dela Cruz noted that salary commissions have recommended significant raises for Lingle's department heads and for state judges. Such salaries will take effect unless the Legislature votes to reject them.
"I work 10 hours a day," said Dela Cruz's co-worker, Kaiulani Lambert. "We're understaffed big time."
Traci Fujita who works for the Department of Accounting and General Services, said the arbitrated raises aren't as large as they might appear because the 5 percent across-the-board raise doesn't kick in until the last six months of the contract.
"To give that much over to her staff, and not even fund 5 percent over six months?" Fujita said. "I don't know how you could feel good about that."
Advertiser staff writer Karen Blakeman contributed to this report. Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or at 525-8070.
