About 20 percent of the increase in next year’s state budget is tied to the cost of putting people back to work on furlough days.

As part of the $11 billion operating budget lawmakers approved for the 2012 fiscal year, $251 million will fund increased labor costs when twice-a-month furloughs end June 30. The overall budget for the fiscal year that begins July 1 is $800 million bigger than this year’s base budget.

That $251 million includes two increased costs stemming from furlough days: salaries and pensions. However, the state expects to achieve $88 million in labor savings in contract negotiations, which would mean a net increase from restoring furloughs of $163 million.

Because furloughs were unpaid work days, they resulted in about a 10 percent pay cut for affected employees. Restoring that pay will also increase the amount of retirement benefits the state owes employees because contributions are calculated as a percentage of payroll.

If the $251 million gross increase were spread evenly across all state employees, restoring furloughs would come out to about $5,600 for every employee next year. If the labor concessions are achieved, the furloughs will cost about $3,600.

In order to tally up how much restoring furloughs will cost taxpayers, Civil Beat went through all 596 pages of the budget worksheets for House Bill 200, the state budget. Neither the Senate nor House had the numbers readily available.

Among the 20 state departments, the cost in fiscal 2012 to restore furloughs ranges from as little as $107,008 in the lieutenant governor’s office to $92.2 million at the Department of Education.

The Department of Budget and Finance has the second-highest cost to restore furloughs, at $48.8 million next year. But because the department administers employee benefits, Budget Director Kalbert Young said most of that money will cover increased pension contributions for all state employees.

A total of $46.4 million of the Budget and Finance department’s furlough restoration costs is for retirement contributions. About half of that is for Department of Education employees, $4.6 million for University of Hawaii employees, and the rest for all other state employees.

Gov. Neil Abercrombie came into office vowing to eliminate furloughs. The House agreed to his proposal, while the Senate wanted the governor to come up with the same savings the state had achieved through furloughs while at the same time agreeing to restore the work days.

In the end, lawmakers agreed to increase the budget to partially cover the cost of restoring the work days. At the same time, in an effort to offset some of the cost, lawmakers built in assumed labor savings of $88.2 million, equal to a 5 percent pay cut for all unionized employees.

The $88.2 million total represents the potential labor savings if all unionized employees agree to the 5 percent pay cut most members of the Hawaii Government Employees Association ratified in April for the two upcoming fiscal years.

Cost to Restore Furlough Savings By Department

Department Employees Restore Furloughs
Agriculture 285 $952,994
Accounting & General Services 675 $3.6 million
Attorney General 619 $3.69 million
DBEDT 148 $1.8 million
Budget & Finance 339 $48.8 million
Commerce & Consumer Affairs 391 $2.2 million
Defense 238 $1.1 million
Education 20,475 $92.2 million
Governor’s Office 27 $300,458
Hawaiian Home Lands 200 $894,980
Human Services 2,149 $10.9 million
Human Resources 92 $643,661
Health 5,431 $29.3 million
Labor & Industrial Relations 640 $3.2 million
Land & Natural Resources 740 $3.78 million
Lt. Governor’s Office 8 $107,008
Public Safety 2,549 $9.03 million
Taxation 373 $1.75 million
Transportation 2,154 $8.6 million
University of Hawaii 7,215 $27.9 million
Total 44,747 $251,020,8111

Furlough Restoration Versus Overall Budget

Department FY2012 Budget Furlough Savings
as % of Total Budget
Agriculture $43.4 million 2.2%
Accounting & General Services $152.8 million 2.4%
Attorney General $75.7 million 4.9%
DBEDT $247.4 million 0.7%
Budget & Finance $1.66 billion 2.9%
Commerce & Consumer Affairs $50.4 million 4.4%
Defense $120.9 million 0.9%
Education $1.89 billion 4.9%
Governor’s Office $3.3 million 9.1%
Hawaiian Home Lands $185.5 million 0.5%
Human Services $2.3 billion 0.5%
Human Resources $20 million 3.2%
Health $1.5 billion 1.9%
Labor & Industrial Relations $753 million 0.4%
Land & Natural Resources $108.3 million 3.5%
Lt. Governor’s Office $1.04 million 10.2%
Public Safety $238.6 million 3.8%
Taxation $23.4 million 7.5%
Transportation $712.3 million 1.2%
University of Hawaii $902.3 million 3.1%

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