Lawmakers fund pay raises
By Gordon Y.K. Pang
Advertiser Capitol Bureau
Key state lawmakers yesterday rejected Gov. Linda Lingle's call to cut back on arbitrated pay raises for thousands of state white-collar workers and instead advanced to the House and Senate a $3.6 billion budget package that includes money for the salary hikes.
The final vote on the budget is Thursday, and lawmakers are expected to approve it.
House and Senate conferees say they've put aside $75 million to cover the raises through the two-year fiscal cycle, and included increases not only for the arbitration pay raise for the Hawai'i Government Employees Association, but also similar boosts for the Hawai'i State Teachers Association and the United Public Workers still negotiating a contract with the state.
The package also provides money for the University of Hawai'i Professional Assembly for the first two years, about $10.7 million, of a six-year contract.
How much to give state workers has been a defining issue between Republican Lingle and the Democratic-controlled Legislature this session and the major bone of contention in the budget debate.
Administration officials say the state can't afford increases as proposed by the arbitrators and want to give lower raises to HGEA, HSTA and UPW workers that would cost only $59 million through next year. Last week's arbitration award only applied to 23,000 state and county HGEA workers, but both sides believe the HSTA and UPW raises will likely come in at about the same amount.
The arbitration award calls for HGEA workers to get 4 percent raises beginning Jan. 1. It also calls for "step" movements, a tiered pay system based on seniority, that would move the raises for most employees closer to between 5 and 9 percent.
The administration wants the state to go back to the bargaining table with its last offer that called for a 1.5 percent across the board pay raise coupled with step movements that would have upped pay for most employees by a total of 4 percent.
Administration officials say the state can handle next year's raises without much difficulty but are worried about the consequences of handing the same raises to all three unions and compounding it over the next several years. State Deputy Budget Director Stanley Shiraki said the higher raises would cost the state an average $100 million a year while the administration's plan would average a more manageable $60 million a year. Democrats insist the state is obligated to fund the arbitrated raises.
Lingle yesterday submitted a plan for funding the lower scale of raises. The administration called for $30 million in raids of state special fund balances, $30 million in cuts to programs and services and realizing about $5 million in new revenues from refinancing loans and more aggressive tax collections.
Among the proposals made by the administration was to use $4 million in federal education aid to help pay for the salaries.
But state schools Superintendent Pat Hamamoto said the $4 million is critical for Department of Education programs, noting that the Lingle administration had taken $7 million from the same program earlier this year. Hamamoto also questioned whether it was proper to use federal aid in such a manner.
Another proposed cut to education by the administration would have converted the adult education program to a self-sufficient entity, a move that would have saved the state $2.8 million this coming year and $5.7 million annually after that.
The administrative cuts also called for paring some of the money the governor had originally proposed, such as $3 million from a $5 million invasive species program and $2.5 million from an initial $5 million in QUEST monies, which help the needy get health care. The cuts also called for $730,515 from the State Foundation of Culture and the Arts budget.
The package approved by the lawmakers last night included a larger, $55 million grab from special funds and $9 million in deletions of nearly 300 vacant but funded positions.
The conference committee also eliminated the Compliance Resolution Fund, which financed the Department of Commerce and Consumer Affairs through the revenues generated by DCCA's different functions such as regulating cable television, insurance and banking. Transferring those funds to the state general fund gave it a one-time boost of about $30 million.
Additionally, the legislative version calls for reductions in two health programs: $2.3 million from the Child and Adolescent Mental Health Division and $2.1 million for purchase of services contracts for the Healthy Start Program. It also takes out $1.2 million in general funds for unemployment compensation claims.
Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com.
