Wage case worries state budget chief
By Gordon Y.K. Pang
Advertiser Capitol Bureau
Budget Director Georgina Kawamura warned lawmakers yesterday that a state arbitration panel's decision next week on government worker pay raises could have dire consequences on state services.
On Tuesday, the panel is slated to issue a binding decision on pay raises for about 23,000 active public workers who belong to six of the seven units of the Hawai'i Government Employees Association.
Kawamura said the Lingle administration is bracing for the impact. State agencies, at Kawamura's request, have submitted their recommendations for cuts to be made in the event their discretionary funding must be reduced by 1 percent, 3 percent and 5 percent, respectively.
The administration is not considering tax hikes, fee increases or other revenue generators to pay for the raises, she said.
Kawamura and state Chief Negotiator Ted Hong, however, refused to tell lawmakers how high the raises would have to be before cuts at each level, or any cuts, would occur.
The state has offered a two-year contract with no raise this year and a 1 percent increase next year. The HGEA has called for 4 percent increases in the first and second years, and also "step movements" to boost employees to their next pay tier.
Giving a presentation similar to one she made before the arbitration panel, Kawamura told lawmakers that the state's position on the HGEA raises would inflate the general fund budget by $6.3 million annually beginning in fiscal 2004-05, which starts July 1. She described such an increase as "manageable."
The union's position, however, would add $31.1 million in fiscal 2004-05 and $67.4 million from next year on, she said.
Whatever the decision will be Tuesday, Kawamura said, it will "set the tone" in contract talks with the University of Hawai'i Professional Assembly, the Hawai'i State Teachers Association and the United Public Workers Unit 1, all of which have been in settlement talks with the state or are about to enter such negotiations.
Her big fear, she said, is if the arbitration panel's decision on HGEA wages sides with the union and the same pay increases are extended to the other three units. That would cost the state $42.1 million more this year and $96.4 million annually beginning July 1.
"This is what I lose sleep about every night because — imagine if we're faced with this impact," Kawamura told lawmakers.
The state would need to make serious decisions on what areas to cut, she said.
Of the state's $3.9 billion annual general fund budget, $3.2 billion consists of nondiscretionary costs such as debt service, fringe benefits, public welfare, higher- and lower-education instructional services, and programs designed to meet federal mandates such as the Felix consent decree and No Child Left Behind Act.
That leaves $677 million in discretionary funds statewide, Kawamura said, and even a 5 percent cut would give the state about $35 million. If all four bargaining units got 4 percent raises in each of the two years of a two-year contract, she said, "we'd need way more than $35 million if we're at the high end of that range."
Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or at 525-8070.
