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The Honolulu Advertiser
Posted on: Wednesday, April 15, 2009

VOLCANIC ASH
Lingle, lawmakers need to compromise

By David Shapiro

As the 2009 Legislature nears its end, it's getting time for Gov. Linda Lingle and lawmakers to end their standoff on how to balance the budget.

The dispute seems to be boiling down mostly to the $279 million Lingle wants to save over the next two years by cutting the wages and benefits of state employees.

The Republican governor insists public workers must make economic sacrifices the same as those in the private sector, and that general tax increases to spare public employees would drive the economy deeper into the tank.

Democratic legislators don't want to put so heavy a burden on public workers, their most important political supporters, and have kept alive options to raise income, excise and hotel room taxes, which Lingle says she'll veto.

We have a magic word for resolving stalemates like this: compromise.

There's plenty of room for it if everybody is willing to give a little to spread the sacrifices equitably, and we don't need to have a prolonged budget crisis like California unless somebody provokes one.

Democrats, with their super-majority in the Legislature, can pass any budget they want over Lingle's veto, but the governor has substantial discretion in administering the budget that's passed. They have to make a deal to avoid chaos.

Do the Democrats really want to bear the full onus of imposing large tax increases on residents who are already being pinched in their own jobs all so public workers don't have to be pinched at all?

Does Lingle really want to force the full burden on public workers and face the possibility of having to lay off thousands of state employees to reduce payroll if they refuse to accept voluntary cuts in pay and benefits? Do public employee unions really want to play "chicken" and expose their members to the risk of massive layoffs by refusing to accept the same sacrifices as workers in the private sector?

It would be a shame to push the issue to any of these extremes when there's room to achieve agreement by splitting some of the differences.

Legislators need to make clear to the public unions that they can't be spared from cuts and urge them to reach accord with the administration.

Lingle needs to back off her hard line on tax increases; there may be carefully targeted ways to raise revenues and lessen the sting on public workers without sinking the economy.

Lingle and the unions need to explore ways to reduce payroll costs without flat-out pay cuts and layoffs.

Some state employees have hinted they might look more favorably on short-term furloughs such as a day off a month without pay so their lost wages would at least be compensated with the day off.

Another way to reduce the pressure would be to tap some of the $184 million in the Hurricane Relief Fund.

The fund was established to provide hurricane insurance to homeowners when private insurers left the Hawai'i market after Iniki, but the private insurers long ago resumed writing Hawai'i policies.

The fund has outlived its original purpose. There's no reason it can't be used to weather this economic storm and reduce the the need for higher taxes, pay cuts and slashing services for the needy.

Lingle has dropped her previous opposition to tapping the hurricane fund, but prefers to hold it in reserve in case the deficit widens when the Council on Revenues revises its estimates in May.

She may have to give ground on that or taxes.

David Shapiro, a veteran Hawai'i journalist, can be reached by e-mail at dave@volcanicash.net. His columns are archived at www.volcanicash.net. Read his daily blog at blogs.honoluluadvertiser.com.