Gov. Linda Lingle wants to save $278 million over the next two years by cutting the wages and benefits of state workers. But the adjustments depend on negotiations with labor unions, and state lawmakers are increasingly worried the talks will not be completed by the time the session ends in early May.

Lingle has proposed using federal stimulus money meant for education to close a $90 million deficit for the fiscal year that ends in June and would rely heavily on wage and benefit cuts to fill a $165 million gap and create a surplus over the following two-year budget cycle.

State House and Senate leaders are reluctant to use Lingle's assumptions about the wage and benefit cuts in the state budget because they are not assured and they will likely have to make firm decisions on the budget by the end of April.

The Lingle administration wants to finish collective bargaining with labor unions before the session ends, but if negotiations stall, the talks could extend up until the time the contracts expire at the end of June.

'WE CANNOT BE GUESSING'

The Hawaii Government Employees Association and the United Public Workers' public safety branch could also take the negotiations to binding arbitration. Meanwhile other parts of the UPW, the Hawaii State Teachers Association and the University of Hawaii Professional Assembly have the right to strike.

"The timing, for us, is so critical. We cannot be guessing in terms of putting this budget together," state Senate Vice President Russell Kokubun, D-2nd (S. Hilo, Puna, Ka'u), told state budget director Georgina Kawamura at a Senate Ways and Means Committee hearing on Friday.

Lingle and Kawamura have said that while the administration's goal is to avoid layoffs and furloughs, the state's 49,000 union workers have to share in the sacrifice to close the budget shortfall. Labor costs are about 70 percent of the state's general fund spending.

The Lingle administration has not detailed how it would achieve the $278 million in reduced labor costs, but the governor and budget director have said that wage cuts would likely be on a sliding scale — with the highest paid workers taking the largest cuts — and that the cuts would be temporary, so workers would go back to their base pay from this year after the two-year budget cycle ends.

State Sen. Donna Mercado Kim, D-14th (Halawa, Moanalua, Kamehameha Heights), the chairwoman of the Senate Ways and Means Committee, asked Kawamura whether it was reasonable for lawmakers to count on reduced labor costs when the administration has only made the proposals over the past week.

Kawamura said the state has never faced such a large drop in revenues in such a short period, which has forced the administration to make three updates to its initial budget proposal.

"I know you all are stressed. We are, too," she told senators. "But we have to get this and we're trying our best and we're sending you the best estimates we have right now.

"If you don't concur with the estimates, then you have to come up with your own."

Union leaders have been sharing with their members some of what they describe as the state's offers over the past few days.

The HGEA has told its members that the Lingle administration wants to impose pay cuts ranging from about 4.5 percent to 22 percent, cut vacation and sick leave from 21 days a year to 12 days a year and either reduce medical benefits or ask workers to cover a greater share of premiums.

PROPOSED CUTS DETAILED

UHPA, in an update for faculty posted on its Web site, claims that the administration wants the health insurance coverage provided through the Employer Union Health Benefits Trust Fund reduced to shift more of the costs of co-payments to workers in the Hawaii Medical Service Association's health plan.

UHPA also said the Lingle administration has indicated the state would not make any additional contributions to offset expected premium increases in the EUTF for HMSA, which could jump by as much as 30 percent in July.

UHPA said the administration also wants to end state contributions for dental and vision insurance and EUTF life insurance.

Both HGEA and UHPA have told their members that county mayors are not proposing similar labor cuts to help balance county budgets.

Randy Perreira, the executive director of HGEA, said lawmakers are right not to rely on the Lingle administration's assumptions on reduced labor costs for the budget. He said the budget shortfall should not be closed mostly on the backs of labor.

Perreira also said he doubts rank-and-file workers would react kindly to wage and benefit cuts when the executive branch and lawmakers have recently received pay increases.

"It seems kind of hypocritical to me that they're proposing this after they have taken the money and run," he said.

LAYOFFS A POSSIBILITY

But as the state's economy continues to struggle, with thousands of private-sector workers losing their jobs or experiencing pay and benefit cuts, public-workers unions may have a difficult time arguing that state workers should be spared.

The state House draft of the budget, for example, includes layoffs for 374 state workers.

State Senate Minority Leader Fred Hemmings, R-25th (Kailua, Waimanalo, Hawai'i Kai), said he is pleading with public labor unions to work with the administration and lawmakers to help reduce the budget shortfall.

"In the private sector over the past six months, thousands of jobs have been lost, and it's rampant throughout the nation," he said. "No public employee has been laid off or lost their job, so they must count their blessings."

State Rep. Karl Rhoads, D-28th (Kaka'ako, Iwilei), the chairman of the House Labor Committee, said it is quite possible that labor talks may not be done before the end of session.

"That's exactly why I've said all along that I thought the governor was being extremely optimistic about not having to lay anybody off," he said. "To not lay anybody off, that means that all of the unions and the administration have to agree on what the cuts are going to be before the end of session."