Your March 13 article “State Revenue Forecast Drops By $250 Million” comes at a good time for the Legislature to come up with innovative ways to address our unfunded liability crisis and help balance the budget.

House Bill 887 and House Bill 888 are two measures I introduced that can help address the budget shortfall and also save hundreds of millions of taxpayer dollars each year. The state currently faces an $11 billion Health Unfunded Liability (HUL) and $12 billion Pension Unfunded Liability (PUL). Combined, the state and counties need to pre-fund $500 million for the HUL and $300 million for the PUL for a total of $800 million each year over the next 30 years. Pre-funding means making yearly contributions into a worker’s health and pension plan now so that there are enough funds for benefit payments later.

Under HB 887, pre-funding the HUL is capped at $2 billion and once that amount is reached, the state and city will no longer be required to pre-fund. Capping the amount at $2 billion has the same effect as freeing up $500 million per year for the next 30 years. Of that amount, $300 million will be diverted to pre-fund the Employee Retirement System for 30 years and beyond.

Capitol building silhouette Hawaii Capitol. 11 jan 2017

The remaining $200 million can be used yearly by the state and counties to balance this year’s budget, pay for state and county road repairs and improvements, or to fund collective bargaining agreements, education, affordable housing, homelessness problem, kupuna care and other needs.

We can also request the state and city to nix the proposed state gas tax and county fee increases for vehicle weight, property tax, vehicle registration, trash collection services and bus fares. These increases will overburden taxpayers, especially those who are a paycheck away from being homeless.

HB 888 calls for a feasibility study of providing health benefits to state and county employees using a self-insured model. A total of 46 out of 50 states now self-insure and/or self-fund at least one of their employee health care plans. Of these 46 states, 20 of them self-fund all of their health plan offerings.

Should the results of the study prove to be positive and we decide to self-insure, the $2 billion that was capped can be used as a reserve for our self-funded insurance. To my knowledge, no health insurance carrier in Hawaii has a health insurance plan with $2 billion in reserve. A self-insured employee health insurance plan would guarantee healthcare benefits to all public workers without the need to pre-fund. Under this set-up, we stand a better chance of success.

HB 887 and HB 888 passed third reading in the House and have been transmitted to the Senate for review. Both bills will address our unfunded liability crisis without having to increase the state general excise and county property taxes, lay off employees, cut back benefits or increase employee contributions. HB 887 and HB 888 are innovative, money-saving solutions that avoid overburdening taxpayers and therefore deserve consideration by both chambers.

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