The money will help save hundreds of thousands of teaching jobs at risk of state and local budget cuts, a department news release said.

“Hawaii can now utilize these funds to save jobs and lay the groundwork for a generation of education reform,” U.S. Secretary of Education Arne Duncan said.

To date, Hawaii has received $40 million in education stimulus funds, officials said.

To receive the funds announced today, state officials promised to “collect, publish, analyze and act on basic information regarding the quality of classroom teachers, annual student improvements, college readiness, the effectiveness of state standards and assessments, progress on removing charter caps and interventions in turning around underperforming schools,” according to the Department of Education.

State officials also must report the number of jobs saved through American Recovery and Reinvestment Act of 2009 funding, the amount of state and local tax increases averted, and how funds are used.

The U.S. Department of Education has approved $129 million in federal stimulus funds for Hawaii schools, it was announced today.

The money will help save hundreds of thousands of teaching jobs at risk of state and local budget cuts, a department news release said.

“Hawaii can now utilize these funds to save jobs and lay the groundwork for a generation of education reform,” U.S. Secretary of Education Arne Duncan said.

To date, Hawaii has received $40 million in education stimulus funds, officials said.

To receive the funds announced today, state officials promised to “collect, publish, analyze and act on basic information regarding the quality of classroom teachers, annual student improvements, college readiness, the effectiveness of state standards and assessments, progress on removing charter caps and interventions in turning around underperforming schools,” according to the Department of Education.

State officials also must report the number of jobs saved through American Recovery and Reinvestment Act of 2009 funding, the amount of state and local tax increases averted, and how funds are used.

Hawaii state workers rally at Capitol to protest furloughs


More photos currently located at www.putkeikifirst.org.
See video and Advertiser photo gallery here>>

July 1, 2009
Hawaii state workers rally at Capitol to protest furloughs
By Derrick DePledge
Advertiser Government Writer

State workers flooded the Capitol yesterday afternoon for a rally protesting Gov. Linda Lingle's furlough plans, accusing the governor of trying to wipe out the state's budget deficit at their expense.

Dressed in union T-shirts and waving signs at rush-hour drivers, they described furloughs as unfair and claimed the governor is scapegoating them.

Union leaders said state workers are willing to make sacrifices in the context of collective bargaining negotiations but are fighting back at Lingle because she is acting unilaterally.

"We know that our state economy is in tough shape," said Randy Perreira, the executive director of the Hawai'i Government Employees Association, the state's largest public-sector union. "We understand that, and in a fair way, we are all willing to make some kind of sacrifice. And we are prepared to make that sacrifice, and we will do so in a fair way.

"But in achieving that sacrifice, we are not going to let people stay above the law and trample on the Constitution."

A Circuit Court judge will hear requests tomorrow by union leaders to halt furloughs while the court considers union arguments that the governor's plan is unconstitutional and should be subject to collective bargaining. Lingle has said she believes she has implied authority under state labor law to order furloughs, and has warned of mass layoffs if she is stopped in court.

Lingle has said three furlough days a month for two years, starting this month, would save the state $688 million and would close an estimated $730 million budget deficit through June 2011.

Union contracts expired yesterday. The HGEA signed an agreement with the Lingle administration in February on a timetable for binding arbitration that may not produce a resolution until December. The United Public Workers public safety units can also pursue binding arbitration.

Other units at UPW, the Hawai'i State Teachers Association and the University of Hawai'i Professional Assembly have the option of striking.

"All options that are available to us as a union must be in preparation," Dayton Nakanelua, UPW's state director, told the rally. "All of those options."

J.N. Musto, UHPA's executive director, was the only union leader at the rally to specifically urge the state Legislature to return in special session to address the budget deficit. Union leaders have suggested that lawmakers consider using money from the state's hurricane relief fund and rainy-day fund and a temporary increase in the general excise tax to help with the deficit.

"We need the Legislature today — the Democrats are majority in both houses — to stand up and return and take the next step in this battle," Musto said. "We need them to come back into session."

MIXED FEELINGS

State House and Senate leaders have said they are not inclined to return in special session unless called back by Lingle.

State Senate President Colleen Hanabusa, D-21st (Nanakuli, Makaha), said she has not heard interest from colleagues for a special session. If lawmakers did return and passed an increase in the general excise tax, she said, it would likely be vetoed by Lingle. Hanabusa said she doubts there would be the two-thirds' votes for an override.

"That's a lot of blood to be shed for probably nothing," Hanabusa said.

Unless Lingle calls them back, lawmakers say, they will likely wait until next session, in January, to balance a two-year budget that has a significant gap because of lower-than-expected revenue projections.

State House and Senate Republicans acknowledged yesterday that Lingle did not have to order furloughs or layoffs starting this month — because the deficit is projected over the next two years — but that they believe the governor is making the responsible choice by acting now rather than waiting until the financial hole deepens.

"I've talked to public workers, and everyone is scared," said state Sen. Sam Slom, R-8th (Kahala, Hawai'i Kai). "Nobody knows what to do. It's disappointing that their union leaders have chosen to continue their attacks on the governor and not talk to their members about what can be done. It doesn't seem to me that they're looking for a resolution. They seem to be relying on the courts and public opinion. Yet if you talk to the public employees themselves, scared as they are they'll tell you that getting furloughed is better than getting laid off."

Several state workers said yesterday that they do not feel appreciated by the Lingle administration and are being unfairly portrayed as selfish for opposing the governor's furlough plans. The furloughs are equivalent to a roughly 14 percent reduction in pay.

Hardships cited

Janelle Naone, a social worker who lives in Kane'ohe, said the loss of pay because of furloughs may lead her to cancel her home phone line and basic cable and reduce other spending.

"We're standing together in unity. I know a lot of co-workers who don't like the public misperception of us; it makes us feel unappreciated," she said. "Linda Lingle has been negotiating through the media, and that's unfair."

"Everybody knows the economy is not good, and we can't keep everything status quo, but this has to be done fairly. We just want a fair process."

Vern Lentz, who works in the city's payroll department and lives in Salt Lake, said furloughs and layoffs should be the subjects of labor talks. "It's not that we as government workers are not willing to make concessions, but they're dumping 90 percent on us," he said.

"I hope that we would not have the furloughs or layoffs without going to the bargaining table. If we do that and this is still the result, then so be it. But (Lingle) has to at least negotiate in good faith.

"I don't think this (rally) is going to change her mind, but it will get the attention of others who are thinking about running for governor."

See video currently located here>>

State unions rally to fight furloughs
Posted: Jun 30, 2009 10:38 PM Updated: Jun 30, 2009 11:00 PM

HONOLULU (KHNL) - It was a monster rally for rights as thousands of Hawaii union employees invaded the state capitol Tuesday evening to fight Governor Linda Lingle's furlough plan, which amounts to 72 unpaid days off the next two years

The atmosphere was electric, but also among the crowd was a feeling of urgency, as together thousands plead with the governor to pick something besides furloughs to make up the state's $688 million shortfall.

It's not just a few employees. It's an invasion of four Hawaii unions. The Hawaii Government Employees Association, Hawaii State Teachers Association, United Public Workers, and The University of Hawaii Public Assembly.

There are teachers.

"I'd like her to explore more options," said Castle High School Teacher Dee Walsh.

And generations of public employees like Kagawa/Gimas. First.

"Lay off of us, she can get money elsewhere, not on the backs of the working people," said Retired State Employee Fran Kagawa.

Second.

"My wife is really scared, what she did is refinance our home," said State Employee Harry Gima.

And third.

"If our teachers get laid off, then we're not going to have as good of an education," said State Employee's Son Kobi Gima.

Together with thousands, they're all concerned. Unions say if the governor takes away the $688 million needed for the shortfall from them, the entire state will suffer.

"The General Excise tax will go down, state income tax revenue will go down," said HSTA President Roger Takabayashi.

Republicans say the state is strapped and raising the General Excise Tax would cost each household an extra $1,500. They argue furloughs are the answer.

"The job market is so tight right now, what we want to do is keep people employed, we think it's the best thing," said House Republican Leader Rep. Lynn Finnegan.

"That message is being echoed in every state that has a republican governor. Every economist in Honolulu has said some cuts will have to take place but the furlough plan the governor has would cause even more damage," said HGEA Executive Director Randy Perreira.

Unions have a court date Thursday, July 2nd, but their contracts expire Tuesday night June 30th.

Still, union leaders say workers will show up July 1st to do their job in good faith and they expect to be paid despite no agreement.

2,000 Gather At Capitol For Union Rally
Unions Say Lingle's Furlough Plan Is Unfair, Illegal
KITV4.com Article here>>
POSTED: 4:14 pm HST June 30, 2009
UPDATED: 4:36 pm HST June 30, 2009

HONOLULU -- More than 2,000 members from public worker unions arrived for a rally Tuesday at the state Capitol.

The unions gathered to protest Gov. Linda Lingle's plan to furlough state workers three days a month.

The unions have been printing up signs and said the theme for the rally at the Capitol and another one on the Big Island is "fairness and equity."

The furloughs are scheduled to begin July 1, with the first furlough on Monday.

The Hawaii Government Employees Association, Hawaii State Teachers Association and United Public Workers have all filed legal challenges to the governor's proposed three-day a month work furlough.

A hearing is scheduled for Thursday on the challenge by the HSTA and UPW.

More than 16,000 state workers would be affected and will basically get about a 14 percent pay cut.

Lingle said she has the right to furlough workers and says its necessary to close the majority of a $700 million budget deficit.

The unions say the furloughs have to be negotiated.

View Images: Hawaii Union Rally at the State Capitol here>>    (access to images subject to change)

AT THE NEA RA:
Hawaii's Ah Quon McElrath Honored
By Star-Bulletin Staff and News Services POSTED: 01:30 a.m. HST, Jun 27, 2009

National union to honor McElrath

A national teacher's union plans to honor the late Hawaii activist Ah Quon McElrath with a human and civil rights award named after labor rights leader Cesar Chavez.

The National Education Association will posthumously present the award Thursday at its annual meeting in San Diego.

McElrath spent most of her career as a social worker for the International Longshoremen's and Warehouse Union.

The Honolulu-born daughter of Chinese immigrants pushed the state Legislature to increase unemployment benefits for workers and improve workers compensation and disability insurance.

She also secured federal funds to build homes for low-income workers.

McElrath died on Dec. 11, just a few days before her 93rd birthday.

Schools' hands tied over budget
Honolulu Advertiser Posted on: Sunday, June 28, 2009
By Loren Moreno
Advertiser Education Writer
Honolulu Advertiser Story here>>

Uncertainty over the state public schools budget — and inaction by the state Board of Education on $226.8 million in cuts for the upcoming school year — has school principals saying they are unable to fully prepare for doors to open about four weeks from now.

Twice in as many weeks, board members have postponed any decision on where to cut their budget, opting instead to wait for more clarity from the governor and courts on what reductions will be required.

Meanwhile, the clock is ticking, with teachers and administrators scheduled to return to school on July 28 and students returning two days later.

The inaction on the part of the Board of Education has drawn criticism from lawmakers and educators.

Board members should make a decision with the information available to them so schools can prepare, said Rep. Roy Takumi, the chairman of the state House Education Committee.

"No other department is taking a wait-and-see attitude," Takumi said. "The perception is they (board members) are paralyzed and unable to make hard calls. I don't know how fair a shot that is, but that's the perception."

The effects of budget uncertainty is being felt on the school level.

Several principals said they are holding off on hiring dozens of part-time teaching assistants and other school workers, such as librarians or English Language Learner tutors. They're also being conservative — almost frugal — in the purchasing of teaching materials, textbooks and supplies, they say.

"The teachers are hired, but those part-time people are on hold," said Catherine Payne, principal of Farrington High School. "I don't know how we will manage without them, particularly in ELL."

Part-time workers are in a holding pattern right now, Payne said, until she has a better idea of how budget cuts will affect the school. These workers run after-school tutoring programs in math, work with students who are learning English as a second language and provide support to special education students, she said.

Meanwhile, Payne says, she hasn't prepared any of her purchasing for the upcoming year, which she usually does during the summer break. Rather, in anticipation that the state Board of Education will cut school budgets, she said she's put "several hundred thousand" dollars into a reserve.

"In case they cut, it'll just be unbudgeted. I was expecting, even when we started working on our budget, that there would be cuts. I don't know if I've put enough" into reserve, she said.

Meeting canceled

Board of Education members have cited a number of reasons for postponing a decision on the budget cuts, including the ongoing discussions with labor unions — and pending legal challenges — about Gov. Linda Lingle's plan to furlough state workers.

Last week, the board canceled a special meeting scheduled for Wednesday, putting off a decision on the public education budget until after a Thursday court hearing on union challenges to the furloughs.

"A lot of this depends on what the court decides," said Garrett Toguchi, chairman of the state Board of Eduction.

"If they say we have no authority (to do furloughs), that changes everything. If they say we do, then we can proceed on what (Superintendent Patricia Hamamoto) has been planning on," Toguchi said.

Two weeks ago, budget officials from the state Department of Education presented board members with a proposal to address $227 million in budget cuts through potential furloughs of teachers and staff, a 5 percent across-the-board cut to school-level programs and a reduction in part-time workers.

To prevent a complete state of paralysis in the public school system, board members voted June 12 to send school administrators half of the money they had been expecting for next year while they take more time to figure out where to cut the rest from the DOE's budget.

However, that just means the remainder of a school's budget will have to be adjusted once the board decides on cuts.

In the DOE's budget proposal is $120 million in labor savings, including cuts to part-time workers. And officials are also proposing some $16 million in cuts to classroom materials and supplies.

Schools are likely to receive at least $35 less per student next year under the budget reduction plan proposed to the board. That's because DOE budget officials are suggesting slicing the so-called Weighted Student Formula, the department's method of allocating money to schools, by some $8 million.

Donna Lum, the principal of Jarrett Middle School, said she's being "extremely conservative" in planning for the school year, knowing her budget will be restricted once board members make a decision.

"We know we have to be very frugal, thoughtful and wise in our purchases for next year," Lum said.

Lum said the school has already reduced its staffing by cutting one counselor and the school's librarian. She anticipates more reductions, likely in part-time teaching positions.

"This situation is so tenuous, and it does cause anxiety in terms of not knowing. If we had some kind of definite decision, or conclusion, as to exactly what it is that we're going to work with, we can make a little bit firmer of a decision," Lum said.

Reasons for delay

Board members have given a number of reasons for stalling their decision on school budget cuts. Last week, members said they were worried that the governor had not yet signed the state's budget. Members are also concerned about Lingle's plan to release money incrementally on a quarterly basis — rather than in an annual lump sum — because the state's financial situation is in a constant state of change.

However, their inaction also appears to be partly due to their hope that they can avoid the cuts. Last week, Toguchi said the board sent a letter to state Senate President Colleen Hanabusa and House Speaker Calvin Say urging them to convene a special session of the Legislature to consider use of the Hurricane Relief Fund or an increase in the general excise tax to plug the state budget deficit, subsequently sparing education from drastic cuts

Then, Janis Akuna, the chairwoman of the board's Budget and Fiscal Accountability Committee, sent letters to the editors of the state's newspapers, urging use of the estimated $180 million in the Hurricane Relief Fund.

"There are two sides to (the board's delay). Yes, it is a political statement. ... But most of it is that we don't know what the real budget is," said Akuna, the former chairwoman of the Hurricane Relief Fund from 1993 to 2001.

"Are we supposed to actually make a decision based on probability?" she asked.

Urged to proceed

It's unclear whether lawmakers are willing to tap into the Hurricane Relief Fund, but Rep. Takumi said the board should not wait to see if state lawmakers come back for a special session.

"The board should proceed with the assumption that there will be no increase in the general excise tax or raiding of the Hurricane Relief Fund or the Rainy Day Fund," Takumi said.

Lingle ordered many state workers to take three unpaid furlough days per month for the next two years to help close the budget deficit. She can't directly order Department of Education employees to take furloughs because they are administered by the board, so she has told them to make budget cuts equal to what the furloughs would save. The plan goes into effect on Wednesday, but on Thursday state employee unions will be in court asking for an injunction against Lingle's furlough plan.

BOE chairman Toguchi says he's waiting to see what the court does. The board is likely to convene to make a budget decision following resolution on the legal front, he said. The next time the full board is scheduled to meet is July 16.

The Hawaii State Teachers Association and two other labor unions filed complaints against the Lingle plan in Circuit Court earlier this month. The union asked the court for an injunction stopping Lingle from imposing spending restrictions equivalent to furloughs at the state Department of Education, or roughly $127 million a year for the next two years.

If the entire $127 million restriction were taken in furloughs, that would mean 12-month employees would need to be cut by 36 days and 10-month employees would need to be furloughed for 30 days.

Roger Takabayashi, president of the HSTA, said the questions of furloughs has tied the board's hands.

"We're waiting on a court to decide the legality (of furloughs) and that will determine what the DOE does," he said.

Reach Loren Moreno at lmoreno@honoluluadvertiser.com.

BUDGET REDUCTION PLAN

For more than two weeks, the state Board of Education has deferred on Superintendent Patricia Hamamoto's budget reduction proposal. Her plan covers a $226.8 million budget shortfall for the DOE for next year. The DOE is also anticipating about $241.7 million in cuts for the 2010-11 school year.

BOE members have delayed a decision over cuts, including:
$120 million: Labor cuts, including furloughs and reducing part-time workers
$16 million: Reduction of supplies and equipment
$53 million: Federal stimulus funds used to offset cuts
$40 million: Previously approved cuts that would affect 240 full-time positions and dozens of programs
$10 million: Federal Impact Aid to reimburse state for educating military-dependent students
Source: state Department of Education

Talks between Hawaii's four public worker unions and the state are stalled.

After Tuesday's four-hour bargaining session arranged by federal mediator Ken Kawamoto, the two sides have been on call, with no meetings scheduled.

Union officials say Gov. Linda Lingle will not accept conditions put to her at the June 23 meeting and the unions will not meet without some assurances that the state will accept their demands.

According to J.N. Musto, executive director of the University of Hawaii Professional Assembly, the four unions told Marie Laderta, state human resources director, that talks could not proceed until the governor agreed to use extra state money and consider raising taxes before cutting state worker pay through furloughs.

"The negotiations are nowhere. They are not proceeding anywhere. The governor is adamantly opposed to looking at any revenue enhancements," Musto said.

Specifically, the unions want Lingle to use the $180 million in the Hurricane Relief Fund and the $45 million in the state rainy day fund and then explore raising the general excise tax before cutting public worker salaries, Musto said

"We are insisting that unless you come into the process agreeing that the entire package is going to be considered ... you don't move forward," Musto said.

But Laderta said "that has been rejected" by the state administration.

A union source close to the negotiations confirmed that Laderta was told to tell Lingle that "there is an expectation that all revenue sources would be used before putting people out of work."

Laderta did not return calls asking for comment.

Roger Takabayashi, the Hawaii State Teachers Association executive director, wouldn't comment on the status of the talks, but did say "it would be a good gesture" for Lingle to say she would use the special funds before furloughing workers for 72 days over two years.

Lingle has ordered state workers to be furloughed starting Wednesday. This means workers' pay checks will be cut by 13.8 percent to save $688 million over the next two years.

The unions argue that both special-funds money and a state general excise tax increase should be enacted first, and then if there is still a budget shortfall, they would agree to furloughs.

The recently concluded state Legislature balanced the budget by raising the hotel room tax, cutting programs and taking nearly $100 million out of special funds, including $20 million from the Hawaii Tobacco Settlement Fund, $20 million from the Housing Revolving Fund and $16 million from the Wireless Enhanced 911 Fund.

Democratic head urges use of hurricane relief fund instead of cutting public education
Honolulu Advertiser Article here>>
Derrick DePledge: The Notebook
Get a behind-the-scenes look at government and politics.

The fray
June 26th, 2009 by Derrick DePledge

The Democratic Party of Hawai’i has mostly stayed off the field while Gov. Linda Lingle, state House and Senate leaders, and public-sector labor unions have clashed over the state budget deficit.

But Brian Schatz, the party’s chairman, told Democrats in an e-mail Thursday that they should urge the governor to tap the state’s hurricane relief fund instead of cutting public education.

Union leaders have suggested that the hurricane relief fund, the state’s rainy day fund, and an increase to the state’s general-excise tax could be alternatives to the governor’s furlough plans.

Interestingly, Schatz urged Democrats to contact the governor, not House and Senate leaders, who have the power to return in special session if they wanted to address the budget deficit sooner than next session. House and Senate leaders have said they have no plans to come back unless they are called by the governor.

“I think all options have to be on the table and both the Legislature and the governor have a lot of thinking to do,” Schatz told us.

From his e-mail:

During this unprecedented fiscal crisis, I'm glad that there are some clear thinkers in leadership positions.

One of those leaders is Janice Akuna, who used to be Chair of the Hawaii Hurricane Relief Fund and now serves as a member of the Board of Education. She feels strongly that we ought to use the money remaining in the Hurricane Fund to prevent disastrous cuts in education.

In the below piece, published in today's Star Bulletin, she points out that the fund contains more than $180 million, was closed in 2001, and serves no purpose anymore. In fact, she points out, in the case of a hurricane, the fund wouldn't even be usable, homeowners would be covered by their insurance, and FEMA would also be able to help.

We think it's time to seriously consider using these monies to prevent catastrophic cuts in the classroom.

If you agree, please let the Governor know that you think this would be a better alternative than cutting public education.

Headline updates for: June 25, 2009
Honolulu star-Bulletin Story here>>

Governor signs order authorizing furloughs
By Associated Press POSTED: 01:30 a.m. HST, Jun 25, 2009

Taking the first official step of her weeks-long promise, Gov. Linda Lingle signed yesterday an executive order to force tens of thousands of state employees to take three unpaid days off each month, starting in July.

The governor's furlough plan, which is in the early stages of being challenged in court by three of four state employee unions, could impact 15,600 state workers who are under her direct control.

The executive order does not affect the 32,000 employees at the semi-independent Department of Education, University of Hawaii and Hawaii Health Systems Corp.

But Lingle has promised to cut appropriations to those agencies starting July 1 in hopes they will furlough their workers as well.

"This is not something we want to do, but something we have to do to balance the state budget and address the unprecedented fiscal emergency we are in," Lingle said in a statement.

The state faces a $729 million budget shortfall during the next two fiscal years as the recession continues to ravage tax and fee revenues. The three-day-a-month furloughs, which amounts to a wage cut of about 14 percent, will save the state about $688 million over the same period, the governor has estimated.

There were no immediate comments from the employee unions -- the Hawaii Government Employees Association, the Hawaii State Teachers Association, United Public Workers and the University of Hawaii Professional Assembly.

But they have previously contended that furloughs would unfairly impact their members, particularly because workers will have to shoulder large increases in health benefit costs starting next month.

Three of the unions -- HGEA, HSTA and UPW -- have filed lawsuits and motions for an injunction in court to block the furloughs, contending the governor does not have the authority to unilaterally force workers to take unpaid days off.

A hearing on the motions is set for July 2. The first furlough day is July 6, according to schedules Lingle's office issued last week.

The Board of Education has canceled its July 1 special meeting to discuss cuts because the hearing is the next day.

The University of Hawaii Professional Assembly, which represents professors, has filed an administrative grievance with the university.

Taking the first official step of her weeks-long promise, Gov. Linda Lingle signed yesterday an executive order to force tens of thousands of state employees to take three unpaid days off each month, starting in July.

The governor's furlough plan, which is in the early stages of being challenged in court by three of four state employee unions, could impact 15,600 state workers who are under her direct control.

The executive order does not affect the 32,000 employees at the semi-independent Department of Education, University of Hawaii and Hawaii Health Systems Corp.

But Lingle has promised to cut appropriations to those agencies starting July 1 in hopes they will furlough their workers as well.

"This is not something we want to do, but something we have to do to balance the state budget and address the unprecedented fiscal emergency we are in," Lingle said in a statement.

The state faces a $729 million budget shortfall during the next two fiscal years as the recession continues to ravage tax and fee revenues. The three-day-a-month furloughs, which amounts to a wage cut of about 14 percent, will save the state about $688 million over the same period, the governor has estimated.

There were no immediate comments from the employee unions -- the Hawaii Government Employees Association, the Hawaii State Teachers Association, United Public Workers and the University of Hawaii Professional Assembly.

But they have previously contended that furloughs would unfairly impact their members, particularly because workers will have to shoulder large increases in health benefit costs starting next month.

Three of the unions -- HGEA, HSTA and UPW -- have filed lawsuits and motions for an injunction in court to block the furloughs, contending the governor does not have the authority to unilaterally force workers to take unpaid days off.

A hearing on the motions is set for July 2. The first furlough day is July 6, according to schedules Lingle's office issued last week.

The Board of Education has canceled its July 1 special meeting to discuss cuts because the hearing is the next day.

The University of Hawaii Professional Assembly, which represents professors, has filed an administrative grievance with the university.

The United Public Workers yesterday filed a complaint against Gov. Linda Lingle and Honolulu Mayor Mufi Hannemann with the Hawai'i Labor Relations Board, seeking to prevent them from talking publicly about potential layoffs and contract negotiations.

Lingle has warned that if her furlough plans are blocked by union legal challenges, she would resort to layoffs of 2,500 state workers under her control. Hannemann and other county mayors issued a statement last week saying that they would make a contract offer to county workers separate from the governor's offer to state workers — the first time mayors would submit separate packages from the state.

The UPW's complaint also names Marie Laderta, the director of the state Department of Human Resources Development.

The UPW, which represents blue-collar government workers, argues in its complaint that the obligation to bargain in good faith requires that the parties not negotiate in public. The union said it believes the governor, the state labor negotiator and the mayor should not make public statements about contract talks or issue news media releases on the content of negotiations without mutual consent. The union also argues that the state or county should not threaten layoffs.

The Hawai'i Labor Relations Board typically holds a pre-hearing settlement conference and a hearing before issuing a decision.

Laderta said she had not yet seen the complaint and could not comment. The mayor's office also did not immediately comment.

Lingle yesterday signed an executive order imposing furloughs on state workers of three days a month for two years, starting in July. The governor said she hopes to save $688 million through furloughs and equivalent spending cuts to help close a $730 million budget deficit through June 2011.

"This is not something we want to do, but something we have to do to balance the state budget and address the unprecedented fiscal emergency we are in due to the projected $2.7 billion revenue shortfall," Lingle said in a statement.

"I appreciate the understanding of the state employees who will be affected by the furlough and admire the cooperation they have demonstrated in helping to ensure that state services will continue to be provided when the furlough plan begins on July 1."

The Hawai'i Government Employees Association, meanwhile, has joined the UPW and the Hawai'i State Teachers Association in seeking a court injunction against Lingle's furlough plans.

Legal motions filed by the HGEA also seek a court ruling that Lingle's backup plan of laying off thousands of state workers would violate state law and collective bargaining agreements.

The HGEA motions will be argued in a Thursday hearing before Circuit Judge Karl Sakamoto. The hearing will also address temporary restraining order motions filed earlier by the UPW and the HSTA against the furlough plans.

The HGEA motions assert that Lingle does not have the legal authority to unilaterally order furloughs and, even if she did, procedures for implementing the furloughs are subject to negotiation with the union.

Furlough-related questions subject to negotiation, the union said, should include:

* Which employees may be furloughed;

* Necessary advance notice of furloughs;

* Re-calculation of benefits, including vacation and sick leave, because of furloughs;

* Use of earned vacation to obtain compensation on furlough days;

* Whether work units furlough everyone on the same day or spread them out;

* Which work days would be scheduled for furloughs.

Similarly, HGEA attorney James E.T. Koshiba argued, if the governor resorts to mass layoffs instead of furloughs, she still must follow established procedures including a "requirement that the employer provide 90 days advance notice of any layoffs."

Unions take their case to the public
Honolulu Star-Bulletin Story here>>

Members are handing out cards that note their role as consumers
By Richard Borreca
POSTED: 01:30 a.m. HST, Jun 24, 2009

The state's four public worker unions are starting a low-key public relations campaign to win support while they fight Gov. Linda Lingle's call for 36-day-a-year furloughs.

The unions have launched a person-to-person campaign with union members giving merchants a business card explaining that their purchases are possible because of their state paychecks. The implication is that if the paycheck is cut, spending will drop and merchants will be hurt.

The idea is in line with recent statements by University of Hawaii economists Carl Bonham and Byron Ganges, who predicted that the furloughs, which translate into a 13.8 percent pay cut, will reduce spending in the state by $500 million.

"We are doing our part to support Hawaii's economy," the cards read. "Thank you for supporting us in return!"

So far, union leaders and members say the response has been positive.

"I think it is a very effective way to get the point across," said J.N. Musto, University of Hawaii Professional Assembly executive director. "It takes merchants by surprise and it is very noticeable."

Musto said all four unions are participating.

Randy Perreira, executive director of the Hawaii Government Employees Association, said the union will have to work to sell the campaign.

"We know the stereotype of government employees is not a favorable one," Perreira said.

Out of their many encounters with the government, people tend to remember "the one time they were treated rudely by a government employee," he said. "And given the fact that public employees are paid with tax dollars, it is an uphill fight."

Union members handing out the cards report success.

"I tell them that all public workers want to remind members of the community that public workers are a large part of the community," Snow said.

As a teacher for 16 years Snow takes home about $2,800 a month, but calculates that the furlough pay cuts and increased cost of medical insurance will cut $900 from that.

"That is huge. It strains my ability to pay rent, buy gas. I would have to ask if I can afford to go to the gym. I certainly won't be going to Genki Sushi anymore," he said.

On the Big Island, Toni Reynolds, who has taught elementary school there for six years, says she is handing out the cards and hoping they will make an impact.

"My husband is a contractor and he has been unemployed since December," said Reynolds, who taught in California for 20 years before moving here. "I am very scared, and that's why I'm prompted to action."

She has dropped off the cards while shopping and at places like Starbucks, Reynolds said. "They are very sympathetic and they know where I am coming from. The 14 percent cut is severe. It is enough to make people lose their homes."

Note: Cards were handed out at RAs, to most summer school locations, and are available at the HSTA and HGEA offices.

Hearing over furloughs set for July 2, one day after order goes into effect
Updated at 3:54 p.m., Tuesday, June 23, 2009
Advertiser Staff

State and union lawyers met behind closed doors this morning with a Circuit Court judge to discuss the status of legal challenges to Governor Linda Lingle's plans for furloughs or layoffs of thousands of state workers.

Attorney General Mark Bennett said after the meeting that a hearing is set for July 2 on a union motion for a restraining order blocking the governor's furlough plans.

Lingle has said she plans to furlough most executive branch employees three days a month beginning July 1.

If legal challenges to her authority to order furloughs are upheld, Lingle has warned that she will will lay off thousands of workers in order to make up for budget shortfalls.

Herbert Takahashi, lawyer for the Hawaii State Teachers Association and the United Public Workers, said after the meeting with Circuit Judge Karl Sakamoto that his office submitted a motion late yesterday for a temporary restraining order blocking the furloughs.

Bennett said he believes the governor's furlough or layoff plans are legal and that challenges to them should first be heard by the Hawaii Labor Relations Board before either side can seek intervention by the courts.

June 23 Headline News: BOE postpones budget vote / Furloughs challenged / Unions meet with federal mediator

Honolulu Advertiser Story here>>
Posted on: Tuesday, June 23, 2009
BOE vote on $226M cut postponed again Members of the board say they want governor to sign state budget bill first
By Loren Moreno
Advertiser Education Writer

Faced with the largest cuts ever to Hawaii's public schools, state Board of Education members yesterday again delayed a decision on a budget reduction plan, this time saying they are concerned the state's fiscal situation may change between now and the time the governor signs the budget bill in July.

"The governor still hasn't signed the state budget bill. Because of that, any decisions that we take today may have to be altered," board Chairman Garrett Toguchi said at yesterday's meeting of the board's Budget and Fiscal Accountability Committee.

State Budget Director Georgina Kawamura, however, told the board members that Gov. Linda Lingle intends to sign the budget bill by July 1 and suggested they use the information that is available to them now to work out their budget plans.

"Again, we are proceeding ... as if we have a budget in place. We're working with each department as far as what their allotments will be and to make sure they are operating July 1," Kawamura said.

Also yesterday, Toguchi said the board sent a letter to state Senate President Colleen Hanabusa and House Speaker Calvin Say urging them to convene a special session of the Legislature to consider use of the hurricane relief fund or an increase in the general excise tax to plug the state budget deficit.

Before the board is a proposal to cut $226 million from next year's $1.8 billion public education budget through a variety of means: a 5 percent across-the-board cut in school-level programs, a reduction in part-time workers and potential furloughs of teachers and other school employees.

For the second time in two weeks, the board postponed a vote, saying it does not have enough information to make a decision. The board will reconvene in a special meeting on July 1.

Board members told Kawamura they are concerned the governor has yet to sign the state budget .

"Schools are going to be opening at the ending of July and they need money. ... We need to have this thing rolling along so that our schools can do what they need to do," board member Maggie Cox said.

Kawamura assured members that Lingle's signing of the state budget should not be a concern.

QUARTERLY INSTALLMENTS

Toguchi also said board members are concerned about a July 19 memo from Lingle that alerted all state departments that she will be releasing money incrementally on a quarterly basis — rather than in an annual lump sum — because the state's financial situation is in a constant state of change.

"We typically get an annual allotment from (the state). And that allows us to determine what parts of our budget we need to restrict and what parts can be allowed to be spent," Toguchi said.

Toguchi said the board will seek a waiver to the quarterly allotments, because schools can't operate not knowing how much money they will have from quarter to quarter.

"It's going to make us cash-short before the end of the first quarter, potentially having to close schools for about five or six days," he said.

But, given the state's budget situation, Kawamura told board members it's unclear whether the waiver will be granted.

"We're in a very difficult position to give you an annual allotment," she said.

FURLOUGHS A FACTOR

State officials are in discussions with labor unions, including the Hawai'i State Teachers Association, about furloughs, another reason board members said they could not make a decision on the budget yesterday.

The HSTA was among two other labor unions to file complaints in Circuit Court last week. The union asked the court for an injunction stopping Lingle from imposing spending restrictions equivalent to furloughs at the state Department of Education, or roughly $127 million a year for the next two years.

Because the issue is in negotiations, Toguchi said he was unwilling to discuss exactly how many days could potentially be cut from the school year because of furloughs.

To cover the entire $127 million restriction, Toguchi said 12-month employees would need to be furloughed for 36 days or 10-month employees would need to be furloughed for 30 days.

"It's something we want to avoid as much as possible. Our main goal is to preserve as many school instruction days as much as possible," he said.

Honolulu Advertiser Story here>>
Posteded on: Tuesday, June 23, 2009
HGEA challenges unilateral layoffs

The Hawai'i Government Employees Association went to court yesterday, seeking to stop Gov. Linda Lingle from unilaterally imposing new layoff procedures if her furlough plans are blocked by legal challenges.

In an amended complaint against the governor's furlough plans, the public-sector union contends layoff procedures are subject to collective bargaining negotiations. The union also alleges that the terms of the existing contract should remain in effect after the contract expires at the end of the month because of an agreement between the union and the state on a negotiating timetable that extends to December.

Lingle has said she could lay off as many as 2,500 state workers under her control if her furlough plans are blocked by legal challenges. The governor wants to furlough state workers three days a month for two years starting in July.

Lingle has clear authority under state labor law to order layoffs, but the union argues that layoff procedures are subject to negotiation. The unions have also argued in their complaints that furloughs and furlough procedures should be negotiated.

Labor negotiators for the Lingle administration and union leaders met yesterday with a federal mediator for contract talks. The Lingle administration has proposed saving $688 million through furloughs as part of an effort to close a $730 million budget gap through June 2011.

Marie Laderta, the director of the state Department of Human Resources Development, said the federal mediator has helped. "I think the mediator has been helpful and has brought us a little closer together," she said.

Roger Takabayashi, the president of the Hawai'i State Teachers Association, said other options besides labor savings should be on the table. He said the governor could use money, for example, from the state's hurricane relief fund and the state's rainy day fund.

"When you consider the drastic measures of the three-day-a-month furlough and you have cash sitting in a bank account or sitting in an account and doing nothing really, and you're jeopardizing the economy of the state, that's not right," Takabayashi said.

Union leaders, worried they are losing the public-relations battle with Lingle, are launching an outreach and media campaign. Unions are asking members to hand out thousands of cards at places where they eat, shop and socialize statewide to remind the public of their economic impact.

The four public-sector unions — HGEA, HSTA, United Public Workers, and the University of Hawai'i Professional Assembly — are planning a unity rally on June 30 at the state Capitol.

THE PERCEPTION BATTLE

HGEA executives have also told members they may use paid advertising because they do not believe their message has been fully covered by the news media. Some union members have complained that the union has not been effective at countering Lingle's proposals, fueling a public perception that state workers are refusing to sacrifice to help with the budget deficit.

Union leaders have said they are willing to make concessions at the bargaining table. But they have argued that Lingle's furlough plans — which are equivalent to a 13.8 percent pay cut — combined with a projected 23.7 percent increase in healthcare premiums are too much for state workers to shoulder.

The unions have asked the Circuit Court in Honolulu for preliminary and permanent injunctions preventing Lingle from imposing furloughs. The unions have also asked for declaratory judgments that the governor cannot unilaterally impose furloughs.

The HGEA yesterday asked for an injunction and a declaratory judgement on layoff procedures.

The state attorney general, meanwhile, has asked the court to consolidate the complaints before a single judge. The HGEA, the HSTA and the UPW initially filed complaints. The UPW has since dropped its complaint and joined with the HSTA.

According to The Associated Press, the attorney general has argued that the unions are trying to find sympathetic judges by filing separate complaints.

Reach Derrick DePledge at ddpledge@honoluluadvertiser.com.

Honolulu Star-Bulletin Story here>>
STATE BUDGET CRUNCH Mediator has unions, management bargaining
By Richard Borreca
POSTED: 01:30 a.m. HST, Jun 23, 2009

With the help of federal mediator Ken Kawamoto, the four public employee unions and the state and counties bargained for four hours yesterday, but no agreements were reached.

State and Unions Meet Again to Solve Budget Crisis

Both the unions and management said more talks were planned this week.

While the talked were going on, the Hawaii Government Employees Association filed a motion in state court asking for an injunction to stop Gov. Linda Lingle from furloughing workers for three days a month.

Lingle is warning that 2,500 state workers will be laid off if she is unable to start furloughs next month.

Yesterday's bargaining session did not show anything positive except the fact that both sides were still talking.

"The mere fact that we are still here and willing to meet again is worth noting," said Randy Perreira, HGEA executive director.

But his University of Hawaii Professional Assembly counterpart, J.N. Musto, said there was no movement at yesterday's sessions.

"Personally, I don't have any reason for more optimism or pessimism. The fundamentals haven't changed," Musto said after the meeting.

The meetings were hosted by the Hawaii State Teachers Association at its Red Hill headquarters. Roger Takabayashi, HSTA president, remained critical of Lingle, saying the state will not budge.

"The governor seems adamant on only one single plan -- the furlough plan," said Takabayashi. "She is not looking at taking the money from the Hurricane Relief Fund or the Rainy Day Fund or reviewing the budget ... to see if that could be tweaked."

Marie Laderta, state human resources director, who has been leading the talks for the state, said bargaining was helped by the federal mediator.

The unions and the employers have not yet held face-to-face meetings.

Kawamoto listens to proposals from both sides, then moves between the groups.

"Thanks to the federal mediator, we have been able to get our message and proposals across," Laderta said. "The federal mediator is an integral part of the process at this junction. There was a lot of mistrust and we are a lot closer then when we started."

The fourth union leader at the talks, Dayton Nakanelua of the United Public Workers, declined to comment.

Because of the state's budget shortfall, Lingle has said that starting July 1, state workers would have their pay cut by 13.8 percent and would be furloughed three days a month for the next two years.

Lingle cannot put workers attached to the Department of Education and the University of Hawaii on furloughs, but the governor said she would cut those departments' budgets to reflect a similar savings.

Schools consider slicing 13 days from class schedule
The chair of the Board of Education says he hopes to avoid layoffs
By Craig Gima
POSTED: 01:30 a.m. HST, Jun 19, 2009
Honolulu Star Bulletin Story here>>

The public school year could be reduced by about 13 days or more to deal with a $278 million budget restriction imposed by Gov. Linda Lingle, Board of Education Chairman Garrett Toguchi said last night.

Toguchi, reacting to the governor's announcement on her furlough plans yesterday, said the board believes the cut can be accomplished without layoffs, but public school employees would have to agree to furloughs.

The board chairman continued to urge the governor and the Legislature to pass a general excise tax increase to reduce the impact on schools and to use the Hurricane Relief Fund and Rainy Day Fund to support public education.

But preparing for a "worst-case scenario," Toguchi said the board and the Department of Education are negotiating with the teachers union and Hawaii Government Employees Association about taking days off without pay.

"Services to children can never be replaced," said Hawaii State Teachers Association President Roger Takabayashi. "The days lost now can never be made up in the future."

Takabayashi said the union is also concerned about the impact of furloughs on teachers, noting that in many families both parents work for the department.

"It's so devastating. I just cannot imagine that we cannot find another alternative (to furloughs)," he said.

Toguchi said the board is hoping that they can minimize effects on the school year by including holidays and other days off in the furloughs.

But, Toguchi said, "Even if you look at all the holidays, there aren't enough of those days (to avoid reducing the school year)."

The Department of Education Web site lists 180 instructional days for students and 190 days for teachers for the upcoming school year.

At the University of Hawaii, President David McClain told the Board of Regents earlier this month that he will reduce administrative salaries by a yet-to-be determined amount to deal with $108 million in additional budget cuts through the next two years.

McClain said the university is waiting to see what happens with lawsuits filed by the unions before deciding if UH will implement furloughs.

He said the university is also continuing to look at other ways to reduce expenses and to negotiate with union workers.

Governor's furlough plan

In response to Governor Lingle’s remarks, HSTA President Roger Takabayashi said:

The governor should be saying, “How do we work together within the existing framework of collective bargaining to come up with solutions.”

The governor should not present the options before us as furloughs or layoffs. That’s a false choice. There are other things, including emergency funds and temporary pay cuts and tax increases, or a combination of several different solutions. This is not a time to limit our options.

Lingle furlough plan will close state offices three Fridays a month

Advertiser Staff

Gov. Linda Lingle said today that many state offices will carry out her furlough plans by closing on three Fridays a month.

State departments plan to stagger furloughs and take other steps to minimize the disruption to state services.

Lingle, speaking at a news conference at the state Capitol, said three furlough days a month for the next two years would save the state $688 million.

"It's not something I want to do," Lingle said. "It's something I have to do."

The governor said the labor savings amount to about 25 percent of the state's spending reduction due to a $2.7 billion decline in revenue because of the recession.

Lingle said that if her furlough plans are blocked in court by public-sector labor unions, she would have to resort to layoffs and state program cuts. She said about 2,500 state workers under her direct jurisdiction could face layoffs, while state departments governed by independent boards would face spending cuts.

The governor had said previously that the state would need to layoff 10,000 state workers to save the same amount of money as her furlough plans.

Governor to addresses furloughs, Thursday, June 18, 2009
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Schools, Parents Worry About Budget Cuts
Lingle Suggest Volunteers To Help Education System
POSTED: 4:51 pm HST June 17, 2009
UPDATED: 5:02 pm HST June 17, 2009

KAPOLEI, Hawaii -- Gov. Linda Lingle's plan to cut millions from Hawaii's public schools has parents and teachers worried.

The governor is unable to impose furloughs on public schoolteachers because the schools are independent of the executive branch. However, Lingle said she will withhold an equivalent amount of money from the schools to help make up the savings she needs to balance the budget.

The details are not known yet, but Hawaii's public schools are going to be slammed with budget cuts.

When you count the furlough equivalent and other cuts the Legislature made, schools over the next two years will be facing cuts of close to $500 million.

Kapolei Middle School's 1,500 students gathered Wednesday to celebrate the school's 10th anniversary.

Michelena Awana is a single parent with two children at Kapolei.

"I am very concerned. I want to know what I can do as a parent, a citizen, a member of the community. We are in tough times," Awana said.

Kapolei Middle School will begin to feel the upcoming budget cuts immediately because it is a year-round school.

Both teachers and parents say the worst part is waiting to see which parts of the school's budget will have to be cut.

After the Board of Education meets Monday, more will be known about public education budget cuts.

The governor said there is a way for schools to cope: volunteerism.

"I think there are a lot of people who are retired, who would come into the schools if asked and lend some assistance. That won't make it exactly the way it was but these are challenging times," Lingle said.

Kapolei Middle School Principal Annette Nishika said that with 98 percent of her budget needed for personnel and basic needs there is little left.

"If we have to cut we are really going to have to search we are down to bare bones already," Nishika said.

Teacher Peggy Pavao was stoic.

"We will make due with what we have that's all we can do. That's what teachers have done for years," Pavao said.

Some parents KITV spoke with said they know now they are going to have to be helping their child more with their schoolwork.

HAWAII CONGRESSIONAL DELEGATION TROUBLED BY GOVERNOR’S FURLOUGH PLAN

Wednesday, June 17, 2009

Washington, D.C. – The entire Hawaii Congressional delegation sent a letter to Governor Linda Lingle today urging her to reconsider her plan to furlough all state workers. They noted that a number of state employees are funded entirely by the federal government, and that furloughing these particular workers will negatively affect the programs they serve while saving the state no money. Funds left unused due to the furlough cannot be used for any other purpose and will be directed by the federal government to another state or territory.

The letter is copied below:

June 17, 2009

The Honorable Linda Lingle
Governor of Hawaii
Executive Chambers, State Capitol
Honolulu, Hawaii 96813

Dear Governor Lingle:

While we understand the gravity of the state’s economic situation, your plan to furlough all state employees for three days per month for two years, which will reduce social services just when many Hawaii residents will need them most, is troubling. In particular, we are concerned about the furlough of the 36 employees of and 16 medical consultants under contract to the Disability Determination Branch (DDB) of the State of Hawaii Department of Human Services. These state employees are 100 percent funded by the Social Security Administration (SSA) and are critical to ensuring that pending claims for Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) are processed in a timely and appropriate manner.

We are informed that the three-day furlough of DDB employees will result in: a loss to Hawaii of SSA funding totaling $79,500 per month ($1.9 million over two years); delays of $46,200 in benefit payments to new claimants per month; and delays in the processing of 123 new disability cases per month (2,952 over two years). We are also informed that in the current fiscal year the number of pending SSDI and SSI claims submitted by Hawaii residents is 15.8 percent higher so far this year compared to the total number of pending claims in the whole of the preceding fiscal year.

Any delay in processing valid SSDI claims will not only adversely impact the individuals concerned but also the State of Hawaii’s budget because Medicaid and other state-funded programs must fill the gaps in coverage that SSDI and SSI would otherwise have filled.

We are informed that SSA funds that are used to pay DDB employees to process SSDI and SSI claims cannot be used for any other purpose. Accordingly, any funds left unused due to a furlough of DDB employees will be effectively reclaimed by SSA and directed to another political jurisdiction within Social Security’s San Francisco Region (Arizona, California, Nevada, Guam, American Samoa and the Commonwealth of the Northern Mariana Islands).

We understand there are other state employees who are 100 percent funded by the federal government. Furloughing these employees will encumber the programs they serve while saving the state no money.

For all of the reasons cited, we urge you to reconsider your decision regarding the furlough of state employees, particularly as it applies to the state’s DDB employees.

Hawaii state worker furloughs being challenged in court
Posted on: Wednesday, June 17, 2009

Hawaii state worker furloughs being challenged in court
If they prevail in court, governor says, layoffs will be her only alternative

By Derrick DePledge
Advertiser Government Writer

Three public-sector labor unions filed legal challenges yesterday against Gov. Linda Lingle's plans to furlough state workers, while the governor said she has instructed state department directors to draft layoff options as an alternative if furloughs are blocked in court. Advertisement

The unions — the Hawai'i Government Employees Association, the Hawai'i State Teachers Association and the United Public Workers — filed separate complaints in Circuit Court in Honolulu arguing that furloughs should be the subject of collective bargaining negotiations between unions and the state.

The unions asked the court for an injunction stopping the governor from imposing furloughs in July or spending restrictions equivalent to furloughs at the state Department of Education.

Lingle has ordered state workers to take three furlough days a month for the next two years — about a 13.8 percent pay cut — to reduce $688 million in state spending and help close a budget deficit.

The HGEA, the state's largest public-sector union, contends the governor cannot unilaterally impose furloughs and circumvent the collective bargaining process. The HSTA and the UPW claim the governor's furlough plans are unconstitutional violations of the right to organize for collective bargaining and the separation of powers with the state Legislature, which has the authority to appropriate state money.

Union contracts expire at the end of the month.

"We have always been committed to a fair process, the need for all parties to negotiate in good faith, and we have been willing to do our part to work together to explore workable solutions for our community in the current economic climate," Roger Takabayashi, the HSTA's president, said in a statement. "It is unfortunate that we are forced to take this action."

Furloughs 'unfair'

Randy Perreira, the HGEA's executive director, accused the governor of ignoring the collective bargaining process. "Her imposed furloughs are unfair and unconstitutional, and we were forced to take legal action to prevent implementation, and the harm it would do to government employees and their families," he said in a statement.

"Now that we have challenged her unilateral furlough plan, we anticipate that the governor would next threaten the employees with layoffs. It's unfortunate that she has chosen this path instead of negotiating with us."

Lingle has said the state would need to lay off as many as 10,000 state workers to achieve the same $688 million in savings as furloughs. The governor has portrayed union leaders, particularly Perreira, as in denial about the state's financial crisis and unwilling to sacrifice.

Lingle said yesterday that the state has asked a federal mediator to help make progress in labor negotiations.

While Lingle's authority to impose furloughs is unclear, she has the power under state labor law to order layoffs. She said department directors have been asked to draw up layoff plans.

"If the unions are successful at blocking the furloughs, we will have to go to some mass layoffs and some shutdown of programs," Lingle said. Mayors act jointly

County mayors, acting as the Hawai'i Council of Mayors, submitted a proposal to the governor on Monday for county workers that does not include furloughs, layoffs or pay cuts.

In a statement, the four mayors said it would be the first time the counties and the state would submit separate packages under one umbrella to the unions. The Lingle administration has been in negotiations with unions for months over new contracts, but the governor has not made a formal offer because she has not been able to get an endorsement from a county mayor. Under state labor law, the governor needs at least one mayor to back a formal offer, a safeguard that prevents the state from acting unilaterally.

"We have balanced budgets for next year," said Ken Nakamatsu, the director of human resources for the city and county of Honolulu.

Nakamatsu said the county budgets do not include furloughs, layoffs or pay cuts but "we're reserving the option to then negotiate with the unions any appropriate actions" for the second year of the contracts. 'different issues'

The mayors' stance could undermine Lingle's argument that furloughs are necessary starting in July. Some union leaders and state lawmakers believe the governor could impose spending restrictions over the next several months, bargain with the unions over new contracts, and work collaboratively with lawmakers next session on amending the two-year budget to close a deficit she says is $730 million.

"While we have areas of agreement with the governor, it is important that during this round of negotiations we handle certain issues differently from the state," Big Island Mayor Billy Kenoi said in a statement.

"We appreciate the governor's willingness to be flexible and to work collaboratively with the counties as we navigate the economic challenges that confront all of us."

Lingle said the mayors' position is consistent with her thinking historically that counties should be negotiating more on their own. The governor said separate proposals make sense this year because the state — which relies primarily on general excise and individual income taxes — and the counties — which depend more on property taxes — are facing different financial challenges.

The governor said the counties will likely experience more of a revenue decline next year because of a lag in the recession's impact on property taxes. "They have different issues. They have different revenue streams, so it makes a lot of sense," she said. second thoughts

Legal observers, after an initial look at the legal challenges yesterday afternoon, believe the courts will likely decide the complaints based on the collective bargaining argument rather than the separation of powers claim.

The state attorney general's office told state lawmakers in February that it was unclear whether Lingle had the authority to order furloughs without negotiating with unions but found that furlough procedures should be negotiated. In May, the state attorney general's office amended its position and argued that furloughs and furlough procedures are not subject to mandatory negotiations with unions.

The unions claim that furloughs reduce state workers' hours and wages and should be subject to collective bargaining. The HGEA also argues that existing contract terms cannot be changed by the state when the contracts expire because negotiations are ongoing as part of a timetable signed by the HGEA and the state in February.

The HGEA contends that even if the court finds that furloughs are not subject to negotiations, furlough procedures should be part of labor talks. The governor said most department directors turned in their furlough plans over the weekend, and her administration will announce the details soon.

Lingle said it will likely take longer to provide details on how furloughs will be implemented at state prisons, the Hawai'i State Hospital and the Hawai'i Youth Correctional Facility. The state has been working with the federal government to improve conditions at these facilities, and the governor said the state does not want the furlough process to sidetrack progress.

Michael Nauyokas, a labor attorney and mediator, described the legal issues involved as "very muddy."

"I just think that the governor put the unions in a position where they had to do this," he said. "They need to sit down and work it out. Instead of solving the problem, we're escalating it."

Staff writers Gordon Y.K. Pang and Jim Dooley contributed to this report. Reach Derrick DePledge at ddpledge@honoluluadvertiser.com.
Honolulu Advertiser Story here >>

Gov. Linda Lingle told state workers yesterday to expect massive layoffs as early as July 1 if they don't accept furloughs. But the public worker unions went to Circuit Court to fight the threatened furloughs.

"If the unions are successful in blocking the furloughs, we will have to go to mass layoffs and shut down programs," Lingle said yesterday in an informal news conference.

Lingle is expected to meet today with the union leaders, county mayors and the federal negotiator to head off layoffs.

The unions -- the Hawaii Government Employees Association, United Public Workers and Hawaii State Teachers Association -- filed separate lawsuits against Lingle yesterday.

They contend furloughs had not been negotiated and that the governor cannot unilaterally implement them.

Lingle said department heads have been directed to prepare plans to lay off workers if she is unable to carry out the furloughs for the 14,500 employees under her control.

Lingle has said she will have to fire up to 10,000 workers if the unions do not accept the plan to balance the state budget by having employees take three days off a month without pay for two years.

Union contracts expire at the end of the month, and Lingle said once that happens, she will be free to implement new working conditions, including furloughs or dismissals.

"All layoff provisions, from our perspective, go away with the contract. We will be able to lay off people immediately. We will give them notice and that will be it," Lingle said.

The action is needed to help trim $688 million from the state's new two-year budget. Tax projections show the state is not collecting enough money to continue with its existing $4.4 billion-a-year budget.

"We cannot start the fiscal year (July 1) without having in place a plan to realize the savings we have contemplated, because by law I am required to oversee a balanced budget," Lingle explained. "If I can't implement furloughs, we won't have a balanced budget."

But the unions argued that Lingle has not negotiated with them and yesterday they filed suit to stop the furloughs.

"Her imposed furloughs are unfair and unconstitutional," Randy Perreira, Hawaii Government Employees Association executive director, said yesterday.

Each contract is slightly different. For instance, the University of Hawaii Professional Assembly's contract says that if no settlement is reached when the contract expires, the contract continues to be in force while both sides continue talking.

Lingle said she is planning today to meet with a federal mediator, county mayors and union leaders.

"We have asked the federal mediator to help us. We will be having a meeting tomorrow afternoon between the counties, the unions and ourselves," Lingle said.

Hawaii's four county mayors agreed yesterday to enter the union negotiations, but with a proposal separate from the state's offer. Lingle said she welcomed the move because the counties have issues and revenue sources different from the state's.

She added that while the state and counties are bargaining together, the salaries for state and county workers represented by the same unions would be different.

In past negotiations, the union workers had received the same pay raises.

EDITORIAL: Tight furlough times call for creativity
POSTED: 01:30 a.m. HST, Jun 16, 2009

Budget reductions needed in public education are not as simple as the furloughs that Gov. Linda Lingle prescribed for the state's executive departments, but solutions must be found in classrooms to achieve what the governor described as their equivalent. The problem will be compounded by any delays in determining the formula for limiting the pain in achieving a constitutionally-required balanced budget.

Officials at the University of Hawaii are sounding the alarm about the possibility of applying Lingle's three-days-a-month furlough to UH employees. They warn that such a system could threaten the existence of programs that are estimated to bring in $400 million a year in external funds.

The state "shouldn't furlough technicians and all the people paid out of federal grants," said Gary Ostrander, UH vice president for research and graduate education. He told the Star-Bulletin's Helen Altonn that some functions, such as checking animal traps or treating children with cancer, cannot be stopped for three days in a month. No one is proposing such a stoppage, only that cutbacks be the equivalent of savings from furloughs.

The state Board of Education is considering a 5 percent cut in nonlabor costs, but that would amount to only $16 million of the nearly $260 million that would be comparable to the three-day monthly furloughs. Board Chairman Garrett Toguchi wants to "shake the tree, get some money" to help pay the cost.

Lingle is asking for federal stimulus funds amounting to $111 million for public schools, more than $46 million for the UH system and $35 million for charter schools and science and math education, but that would not be enough to achieve solvency.

Toguchi suggests emptying the $100 million state hurricane emergency fund and possibly raising the general excise tax by half a percentage point. Hawaii already is one of the most heavily-taxed states in the country and legislators overrode several vetoes by Lingle of tax increases this year, including a hike in income taxes paid by the wealthy.

Budgetary conditions have deteriorated for nearly every state during the fiscal year that ends this month. The problem is expected to extend for at least the next two years, since state fiscal recoveries historically lag behind comebacks from national recessions.

"Revenues have come in below even the most pessimistic forecasts," says Scott D. Pattison, executive director of the National Association of State Budget Officers. "Plunging revenues have caused the unraveling of state budget plans, continuing to force states to make painful decisions."

Eighteen states are in the stages of implementing furloughs, most of them one day or less per month; Hawaii's furlough is the nation's most severe. California has implemented a two-days-a-month furlough, but the tarnished Golden State also has laid off 27,0000 teachers and may let go an additional 25,000, together constituting 15 percent of the state's public school teachers.

BOE members delay vote on budget plan
Teachers say students' learning will suffer by reducing school programs, furloughing staff

By Loren Moreno
Advertiser Education Writer Posted on: Saturday, June 13, 2009
 
See Advertiser Photo Gallery currently here>>

Education officials are proposing furloughs of teachers and staff, a 5 percent across-the-board cut in school-level programs and a reduction of part-time workers as part of a plan to address a $226 million budget cut imposed by the state Legislature and Gov. Linda Lingle.

As part of tangled accounting of how education officials plan to deal with the most drastic budget cuts to public schools ever, about $120 million would come in furloughs and other labor cuts.

Education officials are currently in discussions with labor unions — including the Hawaii State Teachers Association — regarding furloughs, but Superintendent Pat Hamamoto has said cutting up to six school days from the school calendar might be necessary.

Teachers showed up en masse at yesterday's board meeting — filling the gallery and spilling out into the hallway — to voice objection to any budget reduction that includes cutting school days.

"If this board goes along with any plan that includes furloughs, expect decreased gains in our schools for the next two years. Expect that many of your highly qualified teachers will leave the state," said James Urbaniak, a science teacher at 'Ilima Intermediate School.

"Expect that your students will not receive the necessary instruction to prepare them for the Hawai'i State Assessment. ... Expect students to learn that Hawai'i really does not value education and our schools."

State Board of Education members yesterday delayed an immediate decision on the convoluted budget reduction proposal, which also includes $40 million in previously approved cuts. They are likely to continue analyzing the plan at a budget committee meeting on June 22. $468M shortfall

With $226 million in budget cuts expected next year and another $241 million expected in 2011, education officials say the DOE will need to cut a total of $468 million over the next two years.

Not all of the budget reductions will be offset through cuts.

Yesterday, Lingle and Hamamoto both signed the state's application for State Fiscal Stabilization Funds, federal stimulus money earmarked for education.

Hamamoto told board members that the application is expected to bring in some $111 million for Hawai'i's public schools, part of the DOE's plan to offset budget reductions.

Board members voted to send school administrators half of the money they had been expecting for next year while they take more time to figure out where to cut the rest from the DOE's budget.

"There's a lot of purchasing and planning schools need to do before opening in July. We're not looking at a lot of time," said Garrett Toguchi, the board chairman.

"If we don't signal to principals how much money they will be getting, there will be a lot of anxiety — a state of paralysis — without knowing how much money they have," Toguchi said.

However, schools are likely to receive at least $35 less per student next year under the budget reduction plan proposed to the board. That's because DOE budget officials are suggesting slicing the so-called Weighted Student Formula, the department's method of allocating money to schools, by some $8 million.

About $1 billion currently gets distributed among the schools under the spending formula.

While the cut may not sound like a lot, Ruth Silberstein, principal of Palolo Elementary, said yesterday that means she'd have to eliminate at least one teaching assistant.

"It's so important, especially when you have a large class," Silberstein said.

Silberstein also told board members she's opposed to cutting school days because it will mean her already academically challenged school will slip further behind.

"I ask you to preserve their instructional days. ... Increased achievement is a result of focused teaching, mainly standards teaching," Silberstein said.

"We have added to (instruction), much rigor, intensity and depth. And the days needed for students to get hold of these standards and master them are so important."

Education officials are proposing cutting all school programs by 5 percent. That includes athletics, Hawaiian language immersion, Hawaiian studies, special education, speech pathologists, school health aides, the A-Plus after-school program and many others.

Board member Donna Ikeda, who has been fiercely opposed to cutting school-level funding, questioned the proposed cuts.

"I am wondering if you are making wise decisions," Ikeda said. "By taking a little here and a little there, aren't you rendering some program ineffective?"

In a show of opposition to the governor's furlough plan, the board voted unanimously yesterday to urge the governor to consider other sources of funding to fill the budget shortfall, including an increase in the general excise tax and use of special funds, including the Hurricane Relief Fund.

The room full of teachers erupted into applause at the suggestion.

"I have been teaching in Hawai'i's public schools for 16 years and never in all these years have I witnessed as potentially devastating attack on public education as Gov. Lingle's current demands to slash the DOE budget and force furloughs," said Andrew Snow, a science teacher at Mililani High School.

Snow suggested that the governor and state Legislature consider a "modest increase" in the state's general excise tax.

After hearing testimony from teachers and others on the need to maintain current services, the state Board of Education deferred a vote on proposed budget cuts of nearly $260 million for the next school year.

The board decided instead to ask Gov. Linda Lingle and state legislators to find new revenues for public schools.

Board Chairman Garrett Toguchi said he would like the governor and legislators to look at using the $100 million reserve in the state's hurricane emergency fund and possibly raising the general excise tax temporarily by half a percentage point.

"We want to make an effort to see if we can shake the tree, get some money. At the same time we realize we cannot wait too long," he said.

Meanwhile, the board passed a measure authorizing the state Department of Education to use a portion of its budget to open the schools for the next school year, which starts next month.

Toguchi said the decision on how to deal with a projected budget deficit might not be decided by the board until August and that the board has not received a formal notice from the state Department of Budget and Finance.

Some board members said they felt they had not received enough details to determine the impact of proposed cuts.

"We're talking numbers but not looking at the human side of it," board member Donna Ikeda said.

Along Punchbowl Street near the building housing state education administrators, scores of teachers held signs saying, "Teachers 4 Fairness" and "Don't Risk Hawaii's Future."

Inside, teachers testified they were already stretched financially and warned that further cuts would lead to good teachers leaving the state.

"If we shortchange our kids, they are less likely to meet their promise," said Andrew Snow, a teacher at Mililani High School.

Louise Cayetano, a teacher at Fern School Elementary in Kalihi, said she uses her own money to help some students buy slippers and T-shirts and pay for excursions.

She said students sit on broken chairs in classrooms and do not have enough social-studies books.

"Funding is important in all these areas," she said.

The proposed budget cuts would keep salaried positions but require a 5 percent cut in nonlabor costs amounting to $16 million.

They would also cut $120.3 million by reducing hours for casual hires and substitute and part-time teachers, and include furloughs.

The department gave no specific numbers about the possible cuts in teaching hours, pending closed-door negotiations with the Hawaii State Teachers Association.

Roger Takabayashi, HSTA president, said he supports the board members' idea of looking for other funds.

"I think it's a good move," said Takabayashi, whose union represents more than 13,000 teachers.

"Nobody wants to lose instruction days for children."

http://www.starbulletin.com/news/20090613_BOE_postpones_vote_on_cuts.html

Teachers Protest Against Budget Restrictions
Reported by: Olena Rubin
Last Update: 6/12 10:17 pm

The Superintendent of Schools revealed Friday which programs are on the chopping block to compensate for massive budget cuts.

Facing three days a month furloughs, or their budget equivalent, the Board of Education tackled how to cut another 271 million dollars over the next two years on top of cuts that have already been made.

Public school teachers were emotional and visibly upset by Governor Lingle's proposal for furloughs and more budget cuts.

"I want to ask Governor Lingle did you ask our students if their willing to give up this instructional time,” Holomua Elementary teacher Mitzie Higa said.

The Superintendent says to make up for the shortfall…more than 120 million dollars in furloughs, salary savings, and reductions in casual hires will be necessary.

"I have been here sixteen years, but if my pay is slashed as threatened there is a good chance I will leave the Hawaii I love,” Mililani High School teacher Andrew Snow said.

Issues like low teacher retention, difficulty with teacher recruitment and the possibility of larger class sizes are prompting outrage.

“She seems to be taking it out on us preferentially because we did not endorse her in her run for governor,” Snow said.

The Board of Education heard and reviewed public testimony in person and in writing from a hundred teachers who are opposed to the cuts.

"I am wondering if you are making wise decisions, I mean I realize that you are doing this from a budget stand point but certainly programs and what the programs entail should be more important than just the budget itself,” Board of Education member Donna Ikeda said.

Programs hit the hardest are Hawaiian studies, special education, athletics and after school programs.

“Training, professional training will be hit big time? Yes. That's not smart,” Ikeda said.

Board members and those who testified feel the Governor should exhaust all options before cutting from education offering up suggestions of their own.

“To look at using additional monies from the special funds, rainy day funds and the hurricane funds…which I understand the hurricane funds has a hundred million available at this point and time,” Special Education Advisory Council chair Ivalee Sinclair said.

The board referred the Superintendent’s budget recommendation to their budget committee, but they plan to urge the Governor to use other means to fill the budget gap.

KHON2.com News Teachers Protest Against Budget Restrictions>>

Advertiser Editorial: Merit Pay
June 12, 2009
OPINION
Honolulu Advertiser

Merit pay experiment worth a closer look

What's a fair way to measure a teacher's worth? That's the biggest problem with implementing a merit pay system for teachers. It's not the why — we all want to reward teachers who do a great job — but the how.

So it's intriguing to see Kamehameha Schools tackle the issue, with a high-profile experiment called Ka Pi'ina. As described by Advertiser reporter Loren Moreno on Monday, Ka Pi'ina would establish a program that would buck the traditional seniority-based pay scale in favor of one that rewards professional ambition and performance. The goal: helping students learn more by helping their teachers become better educators.

There are good reasons to hope for Ka Pi'ina's success.

Giving younger, energetic teachers a reason to stick with the profession — and not abandon it for more lucrative pastures — can help raise student performance and ease chronic teacher shortages.

It could also raise the quality of teachers overall; financial incentives would encourage more teachers to seek professional enrichment and make additional efforts to raise student performance. And those dedicated teachers who do it well now — quietly, without compensation — certainly deserve more.

Now more than ever, the need is there. In this competitive global economy, students need a quality education that takes them beyond a basic high school diploma. It will take more and better-qualified teachers at all levels to meet this demand.

Of course, the devil is in the details. Teachers unions, including the Hawai'i State Teachers Association, question whether any merit-pay system can be applied equitably.

"We can't simply base a merit pay system on student performance or test scores," says HSTA president Roger Takabayashi. Fair enough. Unlike private schools, public school teachers must work with students of all levels of ability.

But the bottom line must be improving the quality of a student's education. Merit pay offers a way to do that. Developing a smart system for Hawai'i's public school teachers must be a top priority for the HSTA and the state.

The Advertiser welcomes letters in good taste on any topic. All letters must be submitted with the writer's true name, address and telephone number, which we will use only for verification purposes. Letters are limited to one per writer per month and limited to about 200 words. We cannot accept submissions using the online form from anyone under age 13 in accordance with the federal Children's Online Privacy Protection Act.
Where to submit a letter to the editor: letters@honoluluadvertiser.com

Honolulu Advertiser Merit pay Opinion

In Your Voice | READ REACTIONS TO THIS STORY

Captn_Jack wrote:
Anyone that believes Merit Pay has any merit - is a fool !!! I have studied performance evaluations of individual workers and they - the worker - do not control anything - so they are rewarded or not rewarded by bosses that like them or do not like them. Here is the secret - that would cost you millions of dollars to obtain by a Management Consultant : An individual worker (Teacher) only controls their own effort - and only they know how much effort they are putting in to the work !!! Everything else is controlled by the system in which they work. KAM will have a lot of unhappy Teachers when some are rewarded by that system and some are not - eventhough they are all competent Teachers !!! It the Honolulu Advertiser is serious about a quality education for Hawaii's Students - they need to find the best courses and teaching system that has fantastic results - elsewhere and put it inplace - here in Hawaii. Do Dr. Deming's RED BEAD experiment - it is out on video - then see !!
06/12/2009 2:44:54 a.m.

Unions prepare to fight Hawaii government worker furloughs
"Right now, I think for the four of us (union leaders), the consensus is that this governor is not looking to be reasonable. She's exacting a price out of the unionized workforce and there will be economic hell to pay."
Randy Perreira | executive director of the Hawai'i Government Employees Association
Posted June 7, 2009
Unions prepare to fight Hawaii government worker furloughs

By DERRICK DePLEDGE
Advertiser Government Writer

Government employees' labor unions are experiencing the most daunting challenge in a decade as they try to shield state workers from wage cuts and higher healthcare premiums in the midst of a recession.

Union leaders will likely decide this week whether to file a lawsuit or petition the Hawai'i Labor Relations Board over Gov. Linda Lingle's plans to furlough state workers three days a month for the next two years. The furloughs, which start in July, are equivalent to a 13.8 percent annual pay cut for state workers and would save the state $688 million to help with a budget deficit.

Union leaders have also asked trustees of the Employer-Union Health Benefits Trust Fund to consider alternative healthcare plans that would provide fewer benefits at lower cost. The EUTF, unable to reach agreement on how to contain healthcare expenses, has imposed interim rates for July and August that will cost state workers about 23.7 percent more in premiums.

With the highest state unemployment figures in three decades and a stream of layoffs and business closures in the private sector, union leaders also have a public- relations problem. The public's perception of state government is generally negative, which spills over on both administrators and rank-and-file workers, making it harder to argue that state workers are doing such a good job that they should be spared from sacrifice.

The fact that the two-year budget approved by the state Legislature includes both spending cuts and tax increases also makes it more difficult for union leaders to call for additional tax hikes — such as an increase in the general-excise tax — without first agreeing to concessions.

Lingle has said it would be irresponsible for her not to look for labor savings when labor accounts for about 70 percent of state spending, and state workers have enjoyed pay raises of between 16 percent and 29 percent over the past several years. The governor said the alternative is massive layoffs.

But union leaders, and some majority Democrats, believe the Republican governor's furlough plans are hasty and simplistic. Since the governor is delaying payment of $130 million in bills to get through the fiscal year this month, there is no immediate budget crisis that compels the governor to resort to furloughs in July.

The governor could negotiate furloughs with labor in collective bargaining and a revised budget with lawmakers over the next several months to try to close a projected $730 million deficit.

Randy Perreira, the executive director of the Hawai'i Government Employees Association, said Lingle has ruled out revenue-generating options such as tax increases or use of the state's hurricane relief fund and that she has refused to acknowledge that state workers will be paying higher healthcare premiums.

"The woman is out to create economic calamity," he said.

"This is much different, because in past years, where we've had disagreements and hiccups, as you characterize it, in that labor relations arena, at some point, cooler heads prevail and the parties come together and figure a way through.

"Right now, I think for the four of us (union leaders), the consensus is that this governor is not looking to be reasonable. She's exacting a price out of the unionized workforce and there will be economic hell to pay."

Perreira said union leaders are willing to make concessions beyond higher healthcare premiums. "But I'll be very blunt," he said. "We're not going to consider a plan that takes where there's a $720 million shortfall where the employees make up $688 million of that, because at that point we're going to see bankrupted families."

Roger Takabayashi, the president of the Hawai'i State Teachers Association, said furloughs and spending restrictions will damage teachers' ability to get through the recession or reach into their own pockets, as many do, to help students in their classrooms.

"To hurt the caregivers, you'll be hurting the whole system."

Marie Laderta, the director of the state Department of Human Resources Development, rejected suggestions from union leaders that the Lingle administration has not been negotiating in good faith. "On the contrary," she said. "On the contrary."

Laderta also disputed union claims that labor talks have been unproductive. "I would really take that statement to task, only because their view of unproductive may be because they are not getting the results that they want from the bargaining. It does not mean we have not been bargaining in good faith."

Not since Gov. Ben Cayetano ordered layoffs to control a budget deficit in the mid-1990s, the 2001 teachers' strike, and a 2003 veto override that restored binding arbitration for the HGEA have public-sector unions been put on the defensive.

Contracts expire at the end of the month, which could trigger binding arbitration for the HGEA and the United Public Workers' public safety branch and strike deliberations for the Hawai'i State Teachers Association and the University of Hawai'i Professional Assembly.

Several scenarios are possible, however. The HGEA and the Lingle administration have agreed to a timetable where the deadline for final offers is not until August and arbitration could run through December.

The Lingle administration and union leaders have been in talks for months, but the state has yet to make any formal offers. Under state labor law, the administration needs at least one of the county mayors to sign off on proposals to the HGEA and UPW, and a state Department of Education official and a University of Hawai'i official to endorse proposals to the HSTA and UHPA.

Lingle's decision to impose furloughs unilaterally, rather than through negotiations, will influence contract talks. If the governor's furlough plans are challenged in court or through the labor relations board, the case could take weeks or months to resolve.

If Lingle is unable to save money from furloughs, she could be moved to make additional spending restrictions or consider layoffs to cut costs. Lingle already has to use spending restrictions, instead of furloughs, at the DOE and UH because the departments are governed by independent boards.

Union leaders believe they may have a strong legal case because of conflicting guidance from the state attorney general's office about whether the governor has the authority to order furloughs without negotiating. The attorney general's office in February said the issue was unclear but then amended its advice in May to say that the governor does not need to negotiate.

Other observers note a 1999 ruling by the 9th U.S. Circuit Court of Appeals that a "pay lag" law backed by Cayetano and the state Legislature should have been subject to collective bargaining. UHPA had sued over the 1997 law, which rolled over salary payments to state workers to the next fiscal year to save the state $51 million.

Union leaders believe furloughs are pay cuts that should be subject to negotiations.

Deputy attorney general James Halvorson said state labor law gives the administration discretion to relieve workers of duties because of a lack of work or other legitimate reason, determine how work methods are conducted, and take action during emergencies.

Lingle has described the budget deficit as a "fiscal emergency," which is a rhetorical description, not a legal declaration of emergency, such as after a hurricane.

"Some of this is unknown territory," Halvorson said. "I've lived in Hawai'i for 20 years. I don't remember our budget situation ever being this bad. I've been dealing in the employment law field and with the interest arbitration stuff for nearly 14 years, and I've never seen this kind of situation where we're talking about such incredibly big numbers in terms of budget deficit.

"And I think everybody recognizes that. So the way we did things before is not a very good predictor of how we're going to end up doing it now, because it's just so different."

Perreira described the governor's warnings that the alternative to furloughs could be layoffs of up to 10,000 state workers as "scare tactics."

"It is clearly intended to rile up the public and scare them into believing that, 'Hey, catastrophic things are going to happen unless I get my way,' " he said.

State House and Senate leaders have said the state's hurricane relief fund and rainy day fund may be needed for the budget deficit, and a general excise tax increase may also be on the table if the revenue picture continues to worsen.

Perreira and Takabayashi believe lawmakers should move to a GET increase soon, but House and Senate leaders have said they are not inclined to return in special session unless called back by Lingle.

"We elect people to make decisions for the best of our community. They all have a responsibility, whether they live up to it or not, to make decisions to benefit that community," Perreira said, arguing that the two-year budget is now insufficient to cover the deficit. "Or, at times like this, tough decisions that are made in the best interest of all."

Perreira also said comparisons between private-sector workers and state workers are misleading. He said the private sector is market driven, based on the sale of goods and services, while government is more service-oriented, and the demand for government services does not diminish in a recession, it may increase.

He said he doubts, for example, that if state revenues were down but the hotel business was booming that hotel workers would be asked to take a pay cut "to share the pain just because the state's budget is in bad shape."

State Rep. Karl Rhoads, D-28th (Kaka'ako, Iwilei), the chairman of the House Labor Committee, said he anticipated state workers would take a "significant hit" during the recession.

ECONOMIC OPINION: Unfair burden on state workers equals dire straits that will trickle down
ISLAND COMMENTARY: WHICH CUTS ARE DEEPEST?
Unfair burden on state workers equals dire straits that will trickle down

By Lawrence W. Boyd POSTED: 01:30 a.m. HST, Jun 07, 2009

A strand of thought in the governor's proposed furloughs is that public-sector employees should "share the pain" of private-sector workers. To be fair to those who hold this position let's say it is a "fairness" argument. What would a fair amount of pain be?

Overall projected declines in personal income, net of inflation, are projected to be 3, 4, maybe 5 percent for the private sector during this recession. This actually fits into a common perspective of those who make this argument. They tend to think of "pain" as being unemployment. This decline comes primarily from unemployment. So by this metric "fair" furloughs would be 3, 4, maybe 5 percent of current income. Not 14 percent. Manifestly not fair.

Consider a second argument. It might not be fair, but it is necessary. The shortfall is 4.4 percent of the budget. The proposed furlough concentrates all of it on employees; a 4.4 percent shortfall becomes a 14 percent wage cut.

Concentrating these cuts on employees multiplies the impact and spreads the pain.

A dramatic restriction of income and thus consumption will reduce economic growth by 1 percent and reduce tax revenues by a further 1 percent. So necessity actually works the other way. This doesn't solve a shortfall but adds to it. Specifically it adds another $50 million drop in tax revenue.

A 4.4 percent restriction across the entire budget would hurt the public, and public employees, but not that much. Consider what effects a 4 percent restriction on high-tech tax credits, or tourism advertising, would have? Indeed if done thoughtfully it would not have nearly the magnitude of impact this sort of cut will. And the governor would feel far less pain as well. Few doubt she can restrict funds legally in this case.

A word should be said about state worker raises. Some have pointed out that wage raises have been "between 16 and 29 percent over the past four years" and that public employees can afford a wage cut.

Local inflation has been approximately 19 percent over the past four years. Some have fallen behind inflation while those who made 29 percent increased their purchasing power by ten percent. But the 29 percent raise went to a very small number and even that is deceptive.

The 29 percent raise went to 3,500 University of Hawaii faculty -- 8 percent of the work force. The remaining 92 percent did not even keep up with inflation. This is further complicated by the fact that this was a six-year contract. During the initial two years, raises were below the inflation rate over a longer period they netted 2 to 4 percent above inflation. (Private sector income net of inflation grew during this period.)

Public employees also will have an additional $250 a month being taken out of their paychecks for insurance premium co-pays. This means for a $50,000-a-year employee an additional $3,000 will be taken out of his or her check. So the 14 percent cut becomes a 20 percent cut.

Twenty percent is an interesting number; it approaches the rate of decline in income during the Great Depression. And I doubt anyone could call that "fair." Because surpluses exist these cuts will reduce economic growth by about 1 percent and tax revenue by about $50 million. This is a plan that is neither fair nor wise. It doesn't share the pain, it spreads it.

School officials search for ways to cut costs without furloughs
See below: how to submit testimony for the June 12 BOE meeting on the budget.

By Gary T. Kubota
POSTED: 01:30 a.m. HST, Jun 05, 2009

State Schools Superintendent Patricia Hamamoto is looking at cost-saving measures, including larger class sizes, hiring freezes, internal spending restrictions, contract cancellations and employee furloughs to offset $440 million in budget cuts through the next two years.

Hamamoto said yesterday the Department of Education is examining all options and their effects.

"You may get the dollar value, but what are the consequences?" she said. "How will it play out at the school?"

Hamamoto hopes to present proposals within two weeks to the Board of Education. Board members are scheduled to meet next Friday to discuss the cuts.

About $166 million of the cuts results from two years of $40 million in general fund reductions Gov. Linda Lingle ordered and two years of $43 million in cuts imposed by the state Legislature.

The remaining $274 million is the amount the governor figures would be the equivalent of savings from furloughs she has ordered at other state agencies. Lingle is trying to save $688 million through two fiscal years by furloughing workers, but she has no jurisdiction over 21,000 education employees.

The cuts to the department translate to a 13.8 percent reduction in payroll, effective July 1.

Hamamoto told the schools in a letter Tuesday that the department's revised budget would be based on preserving learning time for students; meeting all state, federal and board policies; ensuring the safety and welfare of students and employees; and focusing on programs and curriculum that support literacy.

Some education board members have indicated they want to look at other alternatives first before considering putting education workers on furlough.

Board member Herbert Watanabe said he is inclined to support cuts in vacation time, and paid days providing professional development for teachers.

Member Kim Coco Iwamoto said cuts might also be made in paid days allowing teachers to prepare for classes.

Iwamoto said she believes more revenues should be raised taxing luxury items for the rich, rather than cutting into the income of working people.

"I personally don't support eating into the incomes of working-class people," she said.

Chairman Garrett Toguchi said while most of the anticipated federal economic stimulus money has been included in the state budget, he expects there will additional federal funds.

"It's not going to solve the 14 percent, but some of it will add to it," Toguchi said.

State House Education Chairman Roy Takumi (D, Pearl City-Pacific Palisades) said $212 million in stimulus funds were used in the budget.

Board of Education Chairman Garrett Toguchi issued the following statement today regarding Gov. Linda Lingle’s economic plan to address the state's budget shortfall:

“Governor Lingle’s plan to balance the state budget has dramatically increased the amount of funds that will be taken away from our public schools.

“The Board of Education will have to consider all options to cut costs while preserving instructional days to offer our students the quality education they deserve. Everything is on the table, including expansion of online learning courses, larger classrooms and a review of consultant contracts to aid struggling schools.

“Already anticipating steeper education cuts, the school board last month created an ad hoc committee to study ways to streamline Department of Education operations in an effort to save money and improve student achievement. A preliminary report is expected sometime this month.

“In the meantime, I urge Governor Lingle to apply for federal stimulus funds for education so that the Education Department can begin planning for reforms. Also, I strongly recommend the administration and the state legislature to consider raising the general excise tax to bring in additional revenue and help spare Hawaii’s public schools from additional budget cuts.”

THE NEW YORK TIMES
May 4, 2009
OP-ED COLUMNIST
Falling Wage Syndrome
By PAUL KRUGMAN

Wages are falling all across America.

Some of the wage cuts, like the givebacks by Chrysler workers, are the price of federal aid. Others, like the tentative agreement on a salary cut here at The Times, are the result of discussions between employers and their union employees. Still others reflect the brute fact of a weak labor market: workers don’t dare protest when their wages are cut, because they don’t think they can find other jobs.

Whatever the specifics, however, falling wages are a symptom of a sick economy. And they’re a symptom that can make the economy even sicker. First things first: anecdotes about falling wages are proliferating, but how broad is the phenomenon? The answer is, very.

It’s true that many workers are still getting pay increases. But there are enough pay cuts out there that, according to the Bureau of Labor Statistics, the average cost of employing workers in the private sector rose only two-tenths of a percent in the first quarter of this year — the lowest increase on record. Since the job market is still getting worse, it wouldn’t be at all surprising if overall wages started falling later this year.

But why is that a bad thing? After all, many workers are accepting pay cuts in order to save jobs. What’s wrong with that? The answer lies in one of those paradoxes that plague our economy right now. We’re suffering from the paradox of thrift: saving is a virtue, but when everyone tries to sharply increase saving at the same time, the effect is a depressed economy. We’re suffering from the paradox of deleveraging: reducing debt and cleaning up balance sheets is good, but when everyone tries to sell off assets and pay down debt at the same time, the result is a financial crisis.

And soon we may be facing the paradox of wages: workers at any one company can help save their jobs by accepting lower wages, but when employers across the economy cut wages at the same time, the result is higher unemployment.

Here’s how the paradox works. Suppose that workers at the XYZ Corporation accept a pay cut. That lets XYZ management cut prices, making its products more competitive. Sales rise, and more workers can keep their jobs. So you might think that wage cuts raise employment — which they do at the level of the individual employer.

But if everyone takes a pay cut, nobody gains a competitive advantage. So there’s no benefit to the economy from lower wages. Meanwhile, the fall in wages can worsen the economy’s problems on other fronts.

In particular, falling wages, and hence falling incomes, worsen the problem of excessive debt: your monthly mortgage payments don’t go down with your paycheck. America came into this crisis with household debt as a percentage of income at its highest level since the 1930s. Families are trying to work that debt down by saving more than they have in a decade — but as wages fall, they’re chasing a moving target. And the rising burden of debt will put downward pressure on consumer spending, keeping the economy depressed.

Things get even worse if businesses and consumers expect wages to fall further in the future. John Maynard Keynes put it clearly, more than 70 years ago: “The effect of an expectation that wages are going to sag by, say, 2 percent in the coming year will be roughly equivalent to the effect of a rise of 2 percent in the amount of interest payable for the same period.” And a rise in the effective interest rate is the last thing this economy needs.

Concern about falling wages isn’t just theory. Japan — where private-sector wages fell an average of more than 1 percent a year from 1997 to 2003 — is an object lesson in how wage deflation can contribute to economic stagnation. So what should we conclude from the growing evidence of sagging wages in America? Mainly that stabilizing the economy isn’t enough: we need a real recovery.

There has been a lot of talk lately about green shoots and all that, and there are indeed indications that the economic plunge that began last fall may be leveling off. The National Bureau of Economic Research might even declare the recession over later this year.

But the unemployment rate is almost certainly still rising. And all signs point to a terrible job market for many months if not years to come — which is a recipe for continuing wage cuts, which will in turn keep the economy weak.

To break that vicious circle, we basically need more: more stimulus, more decisive action on the banks, more job creation. Credit where credit is due: President Obama and his economic advisers seem to have steered the economy away from the abyss. But the risk that America will turn into Japan — that we’ll face years of deflation and stagnation — seems, if anything, to be rising.

To Save Money, States Turn to Furloughs
(Re-posted June 5, 2009)
The New York Times
April 24, 2009

To Save Money, States Turn to Furloughs
By KATHARINE Q. SEELYE

Licenses for same-sex marriages were supposed to be issued in Iowa starting this Friday. But because of a crimped state budget, court employees will be on mandatory furlough that day and the courts will be closed. Gay couples cannot start filing for their licenses until Monday.

As they try to cope with gaping budget deficits, at least 15 states from every region — like Georgia in the South; Arizona, California and Washington in the West; and Massachusetts, New Hampshire and New York in the Northeast — are in various stages of considering or carrying out furloughs.

“This may very well be the most widespread use, or consideration of use, at least since the emergence of the post-World War II economic boom,” Robert Bruno, professor of labor relations at the University of Illinois, Chicago, said of furloughs.

But furloughs can be a problem for states in a way they may not be for a private company where demand for a product has dropped. Government services remain in even greater demand in a weak economy. Furloughs often mean fewer workers handling a larger load. For instance, there are already signs of disability claims piling up in seven states.

“The word ‘furlough’ sounds nice and fluffy, like, ‘This isn’t painful, we aren’t doing layoffs,’ ” said Hetty Rosenstein, director of the largest state-worker union in New Jersey. There, an appeals court last week upheld a plan to make state workers take two furlough days by June 30, the end of the fiscal year, and 12 more in the next fiscal year.

“But,” Ms. Rosenstein added, “furloughs are fundamentally a cut in pay. And furloughs are a cut in service. If you don’t have people working, the work isn’t going to magically get done.”

Private companies, too, are increasingly turning to furloughs as they try to ride out the recession. A Watson Wyatt survey released this week found that 17 percent of 141 companies surveyed had imposed furloughs in April, up from 11 percent in February.

Furloughs of public employees can affect critical services like police and fire protection, prison guard duty and hospital care. Unions in Minnesota say that proposed furloughs there would have cost more than they would have saved, due in part to lost services.

For the most part, it is too soon to judge the impact of furloughs on the delivery of public services. But there are early signs of a ripple effect. One stark example is at the Social Security Administration, a program paid for by the federal government but administered by state workers. Officials said this month that in seven states, 2,700 of those workers had been furloughed, further delaying the processing of tens of thousands of disability claims, which already take an average of 488 days to resolve.

Services in several California counties were already curbed because of layoffs before the state instituted furloughs for the first time in its history in February, when it ordered 90 percent of its 238,000 employees to take off two days of unpaid leave per month.

Now, for example, at the Orange County Social Services Agency, Herman Martinez, an eligibility specialist and president of the local unit of the American Federation of State, County and Municipal Employees, said the agency could not keep up with applications for public assistance, which have only grown in the economic downturn. “It’s a whole can of worms for us to try to service the most needy and vulnerable clients,” Mr. Martinez said.

In Iowa, furloughs have delayed the start of same-sex marriages by only one business day but they have also reduced the time that the public has access to the courts. All courts are closed every other Friday through June, which means clerks are falling behind in their caseloads. To help them make up for lost time, their offices are closed to the public early on Tuesdays and Thursdays.

“That gives them an opportunity to catch up with paperwork,” said Steve Davis, a spokesman for the state’s Supreme Court, “but it further limits access of the public to the court.”

Furloughs allow companies and agencies to keep valued employees, are easier and faster to start than layoffs and are not as demoralizing, analysts say. Workers often accept them because they are presented as the only alternative to layoffs, and in some cases, they have no choice.

In New Jersey, the state worker unions are angry that they did not have the chance to negotiate the state’s cost-savings package, which was imposed unilaterally, as it was in California. In New York, Gov. David A. Paterson has said that if the state employee unions do not agree to concessions, he will lay off about 9,000 of the state’s 200,000 workers.

“Conditions have gotten so hard that employees who would have been less inclined to accept furloughs have a sense that there’s a permanent economic restructuring going on, something deeper and more lasting, and that means employees have fewer options,” said Mr. Bruno, the labor relations professor. “The power has shifted to the employer, and employees are more desperate.”

While employees often worry that furloughs will not actually prevent layoffs, some have been able to negotiate better job security. State union leaders in Connecticut have tentatively agreed to unpaid furloughs as part of a package that would guarantee no layoffs for two years.

Utah has found an alternative to furloughs, one already used by many city and county governments. Utah’s state workers have been on a mandatory four-day workweek since August in a program started as a way to try to reduce energy costs. Salaries have not been cut because offices are open an hour earlier and close an hour later.

“We’re just repacking how we do the 40 hours,” said Jeff Herring, Utah’s executive director of human resources. But Mr. Herring said the move had reduced costs in many ways: overtime payments and absenteeism are down, for example, and online services have been expanded, which has cut the waiting time at places like the Division of Motor Vehicles. Employee morale is up, internal surveys say, but the energy savings have not been as great as anticipated.

President Obama’s economic stimulus package could eventually relieve some of the pressure on state budgets. But for now, states are relying more on furloughs, though their long-term value is still being assessed.

“Furloughs can save you money and help you avoid layoffs, at least initially,” said Alan Ehrenhalt, editor of Governing magazine. “But employees do lose income, services are disrupted, and it turns out you can’t really close all the things on Friday you thought you could. “So the savings aren’t as great. And you’re not solving any long-term problem.”

Planning falls short in budget crisis
Posted on: Thursday, June 4, 2009
Reality more than bites. Sometimes it mauls.
Advertisement

The economy did turn fairly quickly, but it didn't happen overnight, and it wasn't without warning.

Gov. Linda Lingle's press conference this week ordering state employee furloughs and slashing programs made it seem like the budget crisis is an emergency that just came up. It isn't.

A little more than a year ago, Lingle gave a speech at the Hawaii Economic Association annual conference that basically brushed off any doom and gloom and blamed the news media for making everything sound so bad. She assured the audience that nothing like the crisis on the Mainland was going to hurt us here.

"The latest forecast from the University of Hawai'i Economic Research Organization predicts that our state will not slip into a recession," Lingle said in April 2008.

She talked about California cutting education funding and raising taxes and said, "Because our state government will continue to be disciplined in its spending, Hawai'i's business and citizens should not suffer similar economic hardships."

The happy talk is over. Reality can no longer be denied. On Monday, Lingle gave a grim forecast of the state's next two years, calling for state worker furloughs and cuts to medical coverage for the poor.

Though the announcement was pegged on the most recent forecast by the state Council on Revenues, it's not like things turned on a dime. Instead of spending the past year talking about the wonders of robotics and the "Recreational Renaissance," she should have been laying the foundation for dealing with the hard times to come.

But if Lingle was in denial, she wasn't alone there in that happy place. The Legislature didn't treat the financial crisis with much urgency and came up with few workable ideas for survival. The Hawaii Government Employees Association is enraged at the suggestion that government workers might actually be affected by the fact that the state is hopelessly in the hole.

Leadership is about seeing the road ahead and preparing for the worst. The state budget crisis wasn't a tornado that touched down in the middle of blue skies; it was a slow-moving hurricane that was on the radar and heading our way by the end of 2007. Now that we're in it, we have to do the best we can, but we should have been better prepared.

Reach Lee Cataluna at lcataluna@honoluluadvertiser.com

Furloughs set off trash talk
Lingle blasts Hanabusa and a union leader who let fly with harsh words
By Richard Borreca
POSTED: 01:30 a.m. HST, Jun 04, 2009

Disputes over state worker furloughs were no closer to being resolved yesterday as the major players took public swipes at each other.

Gov. Linda Lingle, in an informal meeting with reporters yesterday morning, defended her bargaining with the unions, adding that the state is within its rights to order furloughs without public worker approval.

On Monday, Lingle announced three-day-a-month furloughs for all state employees for the next two years to save $688 million.

Union leaders and Senate President Colleen Hanabusa have said Lingle has not come up with a formal offer to the unions and instead is balancing the latest budget shortfall of $730 million by cutting state workers hours, which translates into a 13.8 percent pay cut.

Lingle blasted Hanabusa and Hawaii Government Employees Association Executive Director Randy Perreira, saying: "Hanabusa doesn't know what she is talking about," and Perreira is playing a semantics game by saying the state has not bargained.

"Sen. Hanabusa really doesn't know what she is talking about in this case, because she has not been involved," Lingle said.

In reaction, Perreira said it is Lingle who is misleading the public.

"It is the governor who has been lying to the press. She has been lying to the Legislature about how close to an agreement she is with other unions," Perreira said. "Now she is fooling herself into thinking that people agree with her."

Hanabusa also discounted Lingle's bargaining.

"Everything we have heard has given us the indication that the governor has not negotiated in good faith," Hanabusa said.

Yesterday, Lingle said she is able to furlough state workers without union approval because there is no state law about furloughing state workers.

The governor can lay off workers if there is not enough work or money for them, Lingle says, so it follows that if you can lay off, you can also furlough.

"We don't believe that this is negotiable," Lingle said. "It is not within the contracts. It is something I have an implied right to do."

[Preview] Cayetano Reacts To State Worker Furloughs
Go to http://www.starbulletin.com/news/hawaiinews/20090604_furloughs_set_off_trash_talk.html">

Former Governor Ben Cayetano reacts to Governor Lingle’s proposals to help the state budget deficit.

[ Watch ] Note: Link may be live for a set period of time.
In partnership with KITV.com http://www.kitv.com/video/19652637/index.html

Lingle also insisted she has negotiated with the unions, saying that she has held individual meetings with all four of the state union leaders, and met with the University of Hawaii and Board of Education officials, but has been stymied by the unions.

"They wanted to wait," she said. "They thought they could get the Legislature to raise taxes. There was a reluctance on their part to come in.

"It is not that there was no proposal on our part. I have been talking to the unions since last September," Lingle said, adding that Perreira's dismissal of her claims to be bargaining are "disingenuous."

In response, Perreira said Lingle has made three offers and all included at least 16 furlough days a year. Now, Lingle is set to impose furloughs of 36 days a year under her Monday plan.

"Our members are keenly aware of the situation and they know how bad our state's economy and budget is, but we are not in a position to make the kind of concessions the governor wants that will bankrupt our families," Perreira said.

Disputes over state worker furloughs were no closer to being resolved yesterday as the major players took public swipes at each other.

Gov. Linda Lingle, in an informal meeting with reporters yesterday morning, defended her bargaining with the unions, adding that the state is within its rights to order furloughs without public worker approval.

On Monday, Lingle announced three-day-a-month furloughs for all state employees for the next two years to save $688 million.

Union leaders and Senate President Colleen Hana-busa have said Lingle has not come up with a formal offer to the unions and instead is balancing the latest budget shortfall of $730 million by cutting state workers hours, which translates into a 13.8 percent pay cut.

Lingle blasted Hanabusa and Hawaii Government Employees Association Executive Director Randy Perreira, saying: "Hanabusa doesn't know what she is talking about," and Perreira is playing a semantics game by saying the state has not bargained.

"Sen. Hanabusa really doesn't know what she is talking about in this case, because she has not been involved," Lingle said.

In reaction, Perreira said it is Lingle who is misleading the public.

"It is the governor who has been lying to the press. She has been lying to the Legislature about how close to an agreement she is with other unions," Perreira said. "Now she is fooling herself into thinking that people agree with her."

Hanabusa also discounted Lingle's bargaining.

"Everything we have heard has given us the indication that the governor has not negotiated in good faith," Hanabusa said.

Yesterday, Lingle said she is able to furlough state workers without union approval because there is no state law about furloughing state workers.

The governor can lay off workers if there is not enough work or money for them, Lingle says, so it follows that if you can lay off, you can also furlough.

"We don't believe that this is negotiable," Lingle said. "It is not within the contracts. It is something I have an implied right to do."

Lingle also insisted she has negotiated with the unions, saying that she has held individual meetings with all four of the state union leaders, and met with the University of Hawaii and Board of Education officials, but has been stymied by the unions.

"They wanted to wait," she said. "They thought they could get the Legislature to raise taxes. There was a reluctance on their part to come in.

"It is not that there was no proposal on our part. I have been talking to the unions since last September," Lingle said, adding that Perreira's dismissal of her claims to be bargaining are "disingenuous."

In response, Perreira said Lingle has made three offers and all included at least 16 furlough days a year. Now, Lingle is set to impose furloughs of 36 days a year under her Monday plan.

"Our members are keenly aware of the situation and they know how bad our state's economy and budget is, but we are not in a position to make the kind of concessions the governor wants that will bankrupt our families," Perreira said.

HONOLULU -- Gov. Linda Lingle's plan to furlough public workers is a good approach, former Gov. Ben Cayetano told KITV on Wednesday

Cayetano had to face his own $730 million deficit in the mid-90s. Cayetano said Lingle criticized the cost savings he made then, but now she is doing some of the same things herself, such as shifting payments of bills to the next fiscal year.

"I think she has learned some lessons," Cayetano said.

Lingle said the state faces a $730 million shortfall by June 30, 2011.

Cayetano said Lingle's plan to furlough public workers three days a month is a definite option.

"State workers should be glad that they have a job, and it is better to keep as many people on the state payroll even though you cut back their hours because they will have medical coverage health insurance, which is important for the family," he said.

However, Cayetano said he thinks the governor could make other budget cuts before imposing furloughs. He said she should take money from the state's hurricane relief fund that has millions of dollars.

Lingle could also save at least $60 million a year by doing away with the Hawaii Tourism Authority, Cayetano said. The former governor created the agency, but he said it is not effective.

Cayetano said he would also take money from the rail transit fund.

If those cuts did not save enough money, furloughs would then be worth looking at seriously, he said.

Previous Stories:

* June 2, 2009: Sen. Worries Furloughs Will Affect Public Safety
* June 2, 2009: Public Braces For State Furlough Impact
* June 2, 2009: DOE Reacts To Budget Cuts
* June 1, 2009: Lingle's Plans 3-Day Furloughs For State Workers

State furloughs preferable to layoffs
STAR-BULLETIN post date 06/03/09 01:30 AM
EDITORIAL
State furloughs preferable to layoffs

More than a dozen states are in various stages of forcing their employees to take furloughs — workdays off without pay — to achieve state constitutionally-required balanced budgets. Gov. Linda Lingle's requirement that Hawaii's state employees take three days off each month over the next two fiscal years will be the most severe and will be unquestionably painful — but it still is preferable to layoffs.

Several states have required their employees to take up to two days off each month to cope with budget shortfalls, according to the National Conference of State Legislatures. However, some of those, including California, have combined furloughs with layoffs, which is a drastic action that Hawaii should avoid unless forced by legal challenges to do so.

Furloughs also have been used in the private sector to avoid bankruptcy. A Watson Wyatt survey in April found that 17 percent of 141 companies surveyed had imposed furloughs in that month, up from 11 percent in February. Twenty percent of the 518 businesses surveyed in April by Hewitt Associates had implemented involuntary furloughs.

Lingle's decision will directly affect the 14,500 state employees under her direct supervision. In addition, she said she will subtract the equivalent of furloughs in dollars distributed to the Judiciary, the University of Hawaii and the Department of Education. If the Lingle formula is applied, the nearly 32,000 employees in those branches of the state government would face three furlough days monthly.

House Speaker Calvin Say and Senate President Colleen Hanabusa, a lawyer, question whether Lingle has the authority to initiate furloughs. Hawaii's book of laws does not mention furloughs, and Deputy Attorney General James Halvorson advised Say in February that a lawsuit would be "probable" by one or more of the public-employee unions challenging any decision by Lingle to impose furloughs.

That may seem encouraging to the union members. It should not. The word "layoff" does appear in a statute that clearly empowers the governor to "release employees due to lack of work, lack of funds or other legitimate reasons," and, as Halvorson noted, "without having to negotiate such a decision."

If layoffs instead of furloughs were to be ordered throughout state government, as many as 10,000 of the employees would lose their jobs in order for the budget to balance, Lingle said. Although the furloughs will result in severe wage cuts, pay increases that ranged from 16 percent to 29 percent in the past four years should enable many to meet their financial needs.

In the case of either furloughs or layoffs, both state employees and those whom they serve will struggle. During hard economic times, government services grow in demand, which means that fewer state workers will handle a larger load.

Although the unions want more tax increases to avert furloughs, legislative leaders appear less than eager to call a special session to do so, however beholden they have been to the unions. The issue will be whether the unions can orchestrate tax increases in the next regular session in 2010, despite the damage they would cause to the state's economy.

THE BUDGET NIGHTMARE
Unprecedented furloughs raise doubts about legality
By Richard Borreca
Star-Bulletin
POSTED: 01:30 a.m. HST, Jun 03, 2009

Labor attorneys and public officials are questioning whether Gov. Linda Lingle has the authority to furlough state employees without first negotiating the cuts with their unions.

Senate President Colleen Hanabusa, a labor lawyer, called the furlough plan a "negotiation ploy" on Lingle's part to extract compromises from the four public employees unions that are deadlocked with Lingle over a new contract.

Hanabusa (D, Nanakuli-Makua) said Lingle "is not on solid legal ground" with her plan to furlough state workers for three days a month for two years.

In a televised address Monday, Lingle said the government was in a "fiscal emergency" and had to cut $730 million by July 2011 to balance the budget.

To do that, Lingle is calling for workers to take furloughs that will result in a pay cut of 13.8 percent.

When House Speaker Calvin Say (D, St. Louis-Wilhelmina Rise-Palolo Valley) asked earlier this year whether Lingle had the power to furlough state workers without union negotiation, the attorney general's office said on Feb. 17 that the governor would have to negotiate the terms of the furlough.

But then on Friday, Deputy Attorney General James Halvorson amended his opinion, saying, "We conclude that furlough procedures are not subject to any type of mandatory negotiations."

In his Feb. 17 opinion, Halvorson said state law indicated that both consultation, then negotiation with the union must be done before any furloughs.

And the state attorney warned in his first letter that "if a furlough is implemented, it is probable such action will be challenged by one or more of the unions."

"The outcome in litigating the issues is not certain," Halvorson said.

Hanabusa said she thinks the state will lose a case if the unions challenge.

Private attorney Michael Nauyokas, a labor lawyer and arbitrator, said there is no case law to fall back on regarding furloughs of state workers in Hawaii, because it has never happened.

"This is a very problematic area. There are a lot of questions that are not answered. At best it is gray and kind of murky," Nauyokas said.

Former state Attorney General Mike Lilly also predicted that Lingle's plan for furloughs will be challenged and "wind up in court."

Asked whether the governor has the power to unilaterally furlough state workers, Lilly said, "I don't know."

Lingle cannot take any action until the labor contracts expire on June 30, Hanabusa and Nauyokas said. After that, the unions will not have a union contract, but it is not clear that they would be protected from furloughs.

"The AG is providing a reading that says the statute is untested. I think it is not the sure thing he is making it out to be," Nauyokas said.

Hanabusa said that while she thinks state workers and the public employee unions are willing to discuss furloughs or wage givebacks, Lingle has not bargained with the unions, and until she can give them a complete offer, the unions have not held negotiations.

Lingle is unable to formally offer the unions a new labor deal because neither the four county mayors nor the Board of Education have agreed to join in bargaining talks as required by state law.

Lingle's office did not respond to a request for comment.

Meanwhile yesterday, University of Hawaii President David McClain estimated Lingle's plan would cost UH $50 million in each of the next two years.

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