Union deals spark budget shuffle
By Robbie Dingeman
Advertiser Staff Writer
The city expects to pay $5.2 million this year and $11 million next year to cover raises awarded to members of the Hawai'i Government Employees Association in arbitration.
That's the estimate from city Budget Director Mary Patricia Waterhouse and city Human Resources Director Ken Nakamatsu.
Hannemann
Mayor Mufi Hannemann had already set aside about $23 million in this year's budget to pay for "modest pay raises" expected for public workers. But the question is whether it will be enough to cover raises for government workers in different unions as their contracts are settled — and if not, where the money will come from.
County officials across the state say that they will find money for the raises because they must, although it will be more difficult for some than others.
After Friday's announcement, the city knows the price for pay raises for two of four public worker unions: the Hawaii Fire Fighters Association and the HGEA, the state's largest union. Still to come are decisions for the police officers and the United Public Workers.
The estimated cost of raises for the firefighters is $3.2 million in the first year of the agreement, Waterhouse said. The cost of the second year is a little more than $7 million, for a total two-year cost of about $10 million, Nakamatsu said.
City Council Chairman Donovan Dela Cruz said the council will work with the Hannemann administration to determine the best way to pay for the raises in a tight budget year.
Dela Cruz said the raises are needed to help keep city government working for taxpayers. Hiring freezes and years of budget-cutting have left fewer employees working harder, he said.
"When you look at some of our departments, the turnover has been high," Dela Cruz said. "We want to make sure we have people in the city who can meet the demands of the public."
City Council Budget Chairwoman Ann Kobayashi said the cost of the pay raises may delay some of the property tax relief she had hoped to provide in the upcoming fiscal year, which begins in July.
Amid skyrocketing property values, Kobayashi said she would still like to give some help to those who need it most, such as retired folks on fixed incomes, but she's not sure how much relief the city can afford and still maintain core services.
"The budget we got was such a bare-bones budget," Kobayashi said. "It hasn't been an easy budget to cut."
Big Island Mayor Harry Kim said his administration set aside money for raises, and the pay increases for about 794 county HGEA workers won't cause a financial hardship for the county.
"Fiscally, we'll be fine," Kim said. "I'd be happier if it was lower, but I'm sure the union would have been happier if it was higher."
Kim said the wage increase alone will cost the county about $4.5 million over the next two years. The pay increases will trigger additional costs in fringe benefits such as pensions, pushing the total cost to the county to about $5.2 million over two years, he said.
It is easier for the county to absorb that cost now than it would have been in years past. Rising Big Island property values are expected to boost property tax collections by about 16 percent in the coming year despite three new tax relief measures that will reduce property taxes for homeowners.
Despite the cost of the decision, Kim said he favors binding arbitration as a way of settling contract disputes between public workers and their state and county employers. Kim said he does not believe public workers should be allowed to strike because public employee strikes are too disruptive.
Kim, who was directly involved in presenting the county's case to the arbitration panel this year, said the state and counties need to do a better job of making their arguments at arbitration.
He also said it might be wise to alter the makeup of the arbitration panel, which consists of an employer representative, a union representative and an arbitrator. Kim suggested the law might be changed to include a public representative or taxpayer representative on that panel.
Maui Mayor Alan Arakawa said the county budgeted more than the 1.5 percent the Lingle administration had proposed, and set aside money in departmental budgets and contingency funds to cover "reasonable" pay raises. Arakawa declined to say how much the county put aside.
"We're fairly comfortable, between what we budgeted and what we have in reserve, that it will be sufficient" to cover pay raises, Arakawa said.
Maui County officials were unable to provide information yesterday on the cost of the 5 percent pay raises. The county has about 2,200 employees.
On Kaua'i, "We do have enough money to cover HGEA's arbitration award," said county spokeswoman Mary Daubert.
Kaua'i County Finance Director Mike Tresler said the county did not budget a specific amount for the HGEA contract, but knew it was coming and kept contingency funds available for it.
"We're working out right now how we're going to pay for it. The state still hasn't given us the final details so that we can run our own numbers. So we don't know yet exactly what it's going to cost us.
"But we'll pay for it. We have to," Tresler said.
Staff writers Kevin Dayton, Christie Wilson and Jan TenBruggencate contributed to this report.
