For the first time since his administration floated the unwise idea of 20-percent pay cuts for state employees, including educators, Gov. David Ige appears to be considering a federal low-interest loan program suggested by the Hawaii State Teachers Association (HSTA) and other unions to avoid those reductions.
Asked at news conference late Wednesday for an update on potential pay cuts because of the pandemic, Ige said, “Any pay cuts is the last resort we want, too. We are exploring a couple of different things.”
“The (U.S.) Treasury has granted a municipal loan program that they will extend credit to the state so we can borrow. Now, that's a loan which means that we have to pay it back. And so, certainly, there is significant impact on that," Ige said.
Last week, the HSTA and the Hawaii Government Employees Association (HGEA) recommended that the state seek funds from the federal municipal loan program instead of reducing workers’ salaries by up to 20 percent.
Ige said, “We also hear, and repeatedly so, from our congressional delegation that the next CARES Act or the next stimulus bill that will be passed by the Congress will include relief for the states.”
U.S. House Speaker Nancy Pelosi (D, Calif.) said at her weekly news conference Thursday that state and local governments are seeking $1 trillion in aid in the next coronavirus bill, money that would help avoid sweeping cuts to jobs and services that could prolong the economic downturn. Senate Majority Leader Mitch McConnell (R, Kentucky), who was widely criticized for coming out against aid for state and cities, said Thursday he's open to approving such financial aid.
Ige said the hundreds of millions of dollars in COVID-19 relief funds already provided by the federal government to the state of Hawaii currently have prohibitions on using them "as a replacement of revenue or to fund any existing programs, so, you know, we continue to look for flexibility from the federal government and we continue to advocate.”
The American Federation of State, County and Municipal Employees (AFSCME), the parent union of HGEA, has said the federal government is expected to provide such flexibility to states and municipalities, but no official announcement has been made yet.
Ige also said, “I am on a weekly call with the nation's governors and our number one priority from all of the governors (50 states and four territories) is for federal aid to be allowed to be used as revenue replacement and allowed to be used to fill our budget gaps because that's the number one issue that governors all across the state and the country have.”
With potential pay cuts looming, the HSTA on April 29 sent a letter to State Schools Superintendent Christina Kishimoto and State Board of Education Chair Catherine Payne, demanding negotiations about the state’s proposal to cut Bargaining Unit 05 employees' salaries.
The letter said on April 14, HSTA Executive Director Wilbert Holck attended a meeting with other public sector union leaders and members of Ige’s administration. At that meeting, union leaders were informed that the state would be looking to implement pay cuts of 20 percent as early as May 1, 2020. Union leaders were also informed that Department of Human Resources Development (DHRD) Director Ryker Wada would be following up regarding negotiating these cuts. On Thursday, April 16, Wada called Holck to inform him that the proposed implementation date of the 20 percent cuts has been pushed back from May to June.
Successful Hawaii developer and well-known business leader Stanford Carr spoke out Wednesday against state worker pay cuts floated earlier this month by the Ige administration.
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