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The Honolulu Advertiser
Posted on: Monday, July 6, 2009

Focus must shift to forging fair settlement

Gov. Linda Lingle and the unions have had their day in court. Now they all should make sure they don't spend anymore time there.

The governor's staff reports that the admininistration is weighing the options remaining since Thursday's decision by Circuit Court Judge Karl Sakamoto. The judge ruled that the state Constitution ensures the rights to collective bargaining for public-worker unions, and that furloughs need to be arranged through that process. This upended Lingle's plan to impose three furlough days a month on more than 2,000 public employees, starting July 1.

Administration officials said they would resume negotiations as soon as the unions offer a formal proposal. That needs to happen quickly. A settlement that accrues savings from labor, by far the state's largest expense, needs to be the focus, not more courtroom appeals.

How substantial these savings need to be is unclear, but the right figure would most likely fall somewhere below the estimated 14 percent cut the furloughs would have exacted.

Conversely, the 5 percent pay-cut solution suggested by Senate President Colleen Hanabusa would likely leave a budgetary gap that would have to be bridged by boosts in revenue: excise-tax increases and raids of the state's hurricane fund and other special-fund caches.

Tax revenues are unlikely to rebound in the near future. But with people already struggling to make ends meet in a weak economy, cutting costs rather than increasing taxes — particularly a general tax that has such a wide-ranging effect — is the preferred option.

Lingle's other proposed solution, layoffs, should be an option only of last resort.

The emphasis now should be on looking for spending cuts that won't hobble the delivery of essential state services. Furloughs are an imperfect fix but should remain part of the formula, in combination with changes to the benefits package to reduce the strain on family cash flow.

Judge Sakamoto said that the budget shortfall doesn't constitute an emergency — "This is not an act of war, this is not an act of natural disaster" — in denying the governor's attempts to invoke emergency powers and impose furloughs unilaterally.

Nonetheless, the budget woes are a call to action — for a collaborative push by both sides to achieve a sensible truce. It's something that's been lacking up to this point, and something that's needed now.