Gov. Linda Lingle, in a significant concession, said yesterday that the state should tap its "rainy day" fund and teachers should agree to give up planning and collaboration days to end teacher furloughs.

The governor proposed eliminating 27 furlough days between January and June 2011 by using the rainy day fund and converting planning days to classroom time, the first specific outline to end teacher furloughs that have been criticized nationally as too punitive on students. The seven furlough days that started in October and are scheduled through the end of the year would remain.

Lingle had said she did not favor using special funds such as the hurricane relief fund or the rainy day fund to reduce teacher furloughs and, like state House and Senate leaders, had cast the issue as part of the larger debate on a $1 billion budget deficit through June 2011. The governor had also said she did not believe a special session was necessary, but she is now urging lawmakers to consider a special session to use the rainy day fund.

Lingle, who has second-guessed her decision to sign off on teacher furloughs, said her viewpoint changed on the rainy day fund as she watched the furlough debate unfold from afar during her two-week trip to China.

"It's raining on the kids now," the governor told reporters at the state Capitol. "It's a perfect time for the rainy day fund to be used."

Tapping the rainy day fund requires two-thirds' votes by the House and Senate, either in special session or in the next regular session, which starts in January. Converting teacher planning and other noninstructional days to classroom instruction time requires reopening contract talks with the Hawaii State Teachers Association.

Individual schools, however, have already obtained waivers from the state Board of Education to use planning days to reduce the number of furloughs this school year.

Teachers and the state agreed to a two-year contract in September that calls for 17 furlough days a year for teachers on 10-month schedules and 21 furlough days a year for teachers on 12-month schedules. The furloughs amount to a 7.9 percent pay cut.

The furloughs reduced the number of instructional days from 180 to 163, the lowest in the nation, causing outrage among many parents and a rebuke from U.S. Secretary of Education Arne Duncan.

Eliminating teacher furloughs starting in January would reduce the teacher pay cut to about 5.5 percent, and Lingle conceded that it would treat teachers differently from the state's other union workers who have agreed to furloughs to help close the budget deficit.

"If people are committed to finding a compromise, consensus solution, this is it," the governor said. "It is possible. Both components of this plan are possible. It's up to the parties to agree to them."

UNION HEAD PLEASED

The teachers union had been reluctant to return to the negotiating table on furloughs, despite calls from Lingle, Lt. Gov. James "Duke" Aiona and House leaders, until the state showed it was willing to put up new money.

Wil Okabe, the HSTA president, said yesterday he was pleased the governor called for using the rainy day fund.

"If there ever was a rainy day for Hawai'i's public education system, this is it," he said in a statement. "We believe the governor's proposal represents the kind of viable option we said would be necessary for us to return to the negotiating table."

Under Lingle's proposal, teachers on 10-month schedules would have to agree to convert 15 planning and collaboration days and other noninstructional days to classroom time. A comparable adjustment would be made for teachers on 12-month schedules.

The state would use about $50 million from the rainy day fund to reduce 12 furlough days, canceling 27 of the 34 furlough days for most classroom teachers.

The proposal would drain most of the $60 million left in the rainy day fund, which is built from the state's share of a settlement with the tobacco industry over the health-related costs of smoking and is only supposed to be used in emergencies.

It is unclear to what extent the Hawaii Government Employees Association — which represents school principals and education officers and has a contract that includes furloughs — or the United Public Workers, which represents school custodians and is still in contract talks, will have to be involved.

Lingle's plan came together quickly over the weekend after she returned from a trade trip to China on Friday. Lingle and her staff spoke privately with union, education and legislative leaders on Saturday and yesterday. The governor said state Sen. Brian Taniguchi, D-10th (Mänoa, McCully), the chairman of a special Senate committee on teacher furloughs, made a compelling case for a special session.

LINGLE MOTIVATED

Sources familiar with the conversation said Taniguchi stressed it would be easier to tap the rainy day fund in special session, which would be guided by the Senate president and House speaker, than in regular session, when the Senate Ways and Means Committee and House Finance Committee would likely be besieged by competing requests for the money.

Other sources said Lingle was driven by the desire to deal with teacher furloughs quickly so the state can focus on issues such as the economy and energy independence.

If a special session is called, consensus on a bill would likely be reached beforehand between Lingle and House and Senate leaders with little time for amendments or public debate. The governor suggested that the bill would authorize the use of the rainy day fund with a proviso that teachers agree to give up the planning days.

State Senate President Colleen Hanabusa, D-21st (Nänäkuli, Mäkaha), had discouraged talk of a special session unless the governor was on board and there was a specific plan. Hanabusa appointed the special committee on teacher furloughs in October after a majority of senators signed a petition calling for a special session to use the hurricane relief fund to reduce furlough days.

Hanabusa said yesterday that she wants to hear consensus from educators and the teachers union on Lingle's proposal but is open to a special session.

"She was always the missing element in doing anything because we could never guarantee that the money would go to where we want it to go to unless she was on board," she said of the governor.

Hanabusa also predicted that social-service providers and others who asked lawmakers to use the rainy day fund last session to help the poor may be disappointed, especially because further budget cuts to social programs are likely because of the deficit.

"I feel very sorry for those who looked upon the rainy day fund as their safety net," she said. "Now you are going to see the tug."

House leaders have been much more dismissive of a special session and the use of special funds to reduce teacher furlough days, although 23 lawmakers have signed a petition for a special session.

House Majority Leader Blake Oshiro, D-33rd ('Aiea, Hälawa Valley, 'Aiea Heights), said the House would be open to a special session if it appeared educators, the teachers union, the governor and lawmakers had consensus. Depending on the timing, however, he said it may make more sense to fast-track a bill next session rather than come back early.

"If they're willing to come up with some kind of consensus agreement, then I think at that point we're definitely open to going back in," Oshiro said.

STATE CATCHES FLAK

Teacher furloughs have been characterized by some locally and nationally as a boondoggle, often without noting that furloughs were the product of a collective bargaining agreement crafted by educators as an alternative to teacher pay cuts or mass teacher layoffs.

Duncan, the U.S. education secretary, has said teacher furloughs moved Hawai'i in the "wrong direction" and could jeopardize the state from qualifying for federal Race to the Top grants. The U.S. Department of Education has also criticized states, like Hawai'i, that have used federal education stimulus money while reducing state spending on education.

Lingle, a Republican, yesterday called Duncan's criticism "blatantly political" and urged the secretary to stay out of local affairs.

"I was very surprised by his remarks," she said. "I thought they were blatantly political. I think everyone else involved in the process has really had the kids' best interest in mind here."

Many educators and parents praised Lingle's plan as a compromise after two months of finger-pointing.

"I'm very happy that the governor is showing that education is a top priority in our state," said Garrett Toguchi, the chairman of the Board of Education, who has called for a special session to use the hurricane relief fund or rainy day fund. "I think it helps to recognize the importance of our teachers in our schools, and I hope we will be able to come to an agreement with the unions which will be beneficial to all, especially our students."

State Sen. Will Espero, D-20th ('Ewa Beach, Waipahu), the vice chairman of the special Senate committee on teacher furloughs, had gathered the signatures for a special session.

"Collectively, we were able to get the attention of the governor. All stakeholders were engaged for certain," he said. "It's very encouraging that the governor has been listening, even though she has been far, far away."

Jennifer Moy, whose son attends kindergarten at Kähala Elementary School, was among the parents with the group Education Matters who organized a rally at the state Capitol opposing teacher furloughs.

Asked whether parents made a difference, Moy said: "I'd like to think so. I think parents having a collective voice can make a big difference for public education in Hawai'i."