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The Honolulu Advertiser
Posted on: Tuesday, June 2, 2009

Labor talks must yield reasonable savings

There's no painless way for Hawai'i to dig itself out of a hole this deep, and that unavoidable pain was etched on the face of the state's chief executive.

Gov. Linda Lingle, who yesterday released her plan for closing yet another budgetary gap caused by shrinking revenues, was faced with a tough decision, and she made it.

When there is the need to trim another $730 million from the operating budget, and 70 percent of the outlay is labor costs, anyone can do the math. The state's 46,000 public employees are going to have to make a significant sacrifice.

Lingle's plan — to achieve that reduction by putting each worker on furloughs for three days each month — will be hard on everyone, but especially so for those at the lower end of the pay scale. That equates to about seven weeks' pay in a year, and the furloughs would extend over two years.

Not many of us can manage the loss of that much income.

And if the public workers take too great a hit, everyone suffers: With less of their spending flowing into the economy, other businesses are at risk through the trickle-down effect.

Every avenue for lessening the pain should be explored.

It's imperative that the governor and the public employee unions negotiate a way to achieve something close to the target savings of $688 million over the biennium. The aim should be a plan that does the least damage to the spending power of employees' families.

One avenue unions should consider is offering a reduction in benefits in exchange for fewer furlough days. For many families, that would be the lesser of evils in these hard times.

Another $42 million is set to be trimmed from free healthcare benefits for low-income adults. The state needs to take care to preserve at least basic coverage to minimize the impact on a healthcare system already overburdened with unreimbursed expenses.

But the principal solution will have to accrue from labor talks. While there are signs the recession is easing, economic recovery, and fatter state coffers, lie off in the murky future.

This crisis, the governor said repeatedly, is unprecedented. Finding a way to the other side will take an equally uncommon level of cooperation across the negotiating table.