The state House and Senate agreed Monday to meet later this week to amend legislation designed to give financial help to unionized workers at two hospitals on Maui and one on Lanai.

Those hospitals are awaiting privatization in a deal approved by the Legislature in 2015.

A procedural vote is expected Wednesday. A final vote on the amended version of Senate Bill 2077 could come Friday. Gov. David Ige vetoed the original measure last week, prompting lawmakers to call the special session.

Based on how things have gone so far, nothing is certain. The political maneuverings are taking place in a special session outside of the Legislature’s usual January-to-May meeting time.

House Majority Leader Scott Saiki on the floor before session begins. 18 july 2016
House Majority Leader Scott Saiki on the floor before the second day of a special session began Monday. Cory Lum/Civil Beat

Meanwhile, many lawmakers have less than four weeks before they face a primary vote. Most of them are not directly involved in amending the legislation, which is being handled by the leadership in both chambers.

There is also the labor factor at play: Public employee unions are especially powerful in Hawaii, by far one of the most unionized and Democratic Party-controlled states.

Hawaii Health Systems Corp.’s three Maui Region hospitals — Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital — are being privatized.

“We have no clue — no clue — what we need to do at this point and it’s making us look ridiculous.” — Sen. Donna Mercado Kim

But this is also a power struggle between the executive and legislative branches.

“We have no clue — no clue — what we need to do at this point and it’s making us look ridiculous,” Sen. Donna Mercado Kim said on the floor, before casting her vote against a resolution to extend the special session by adding another recess day Tuesday.

The House passed the resolution unanimously. The Senate voted 16-3 in favor of it.

Along with Kim, Laura Thielen and Sam Slom, the chamber’s lone Republican, voted no. Suzanne Chun Oakland, Donovan Dela Cruz, Will Espero, Les Ihara, Lorraine Inouye, Brian Taniguchi and Glenn Wakai voted “aye, with reservation.”

Governor David Ige presser3. 18 july 2016
Gov. David Ige told reporters Monday that negotiations between the state and the United Public Workers are progressing. Cory Lum/Civil Beat

Lawmakers are working on an amendment to Senate Bill 2077 that would allow up to $25 million in severance payments to the workers who are at risk of losing their jobs once the state-controlled hospitals transition to private control under Kaiser Permanente.

But the amended bill would not provide special retirement benefits that were in the version lawmakers unanimously passed in May.

House Majority Leader Scott Saiki said Monday, during a break in the floor session, that a compromise bill was necessary to help the workers. United Public Workers contracts are still in effect until June 2017, and the state has been negotiating with the union to settle the matter. 

“We realize that the transfer of the hospital to a private entity is a significant move for the workers, and we are trying to mitigate that by providing some sort of relief to them,” said Saiki.

‘A Neutral Pathway’

Saiki described the bill as “a neutral pathway” that allows the state to honor its existing union contracts, but also to provide a severance benefit for those who wish to leave the state system.

UPW sued the state over the privatization, leading to the negotiations. The U.S. 9th Circuit Court of Appeals on Friday gave the state and union until July 29 to continue their negotiations “with the goal of reaching a settlement.”

The court added, “The parties believe that they can arrive at a settlement through their current efforts.”

House Legislature before gaveling at the Capitol. 18 july 2016
Lawmakers interact before Monday’s sesssion began. They are expected to convene again Wednesday and Friday. Cory Lum/Civil Beat

Should a settlement be reached, Saiki said, legislation would not be necessary. But until that happens, the House and Senate will work on crafting an amended version of the bill.

Aside from Slom, Thielen and Kim, no one in the Senate or House spoke up during the floor deliberations Monday.

Some Senators Grumble

Kim said the negotiations are between union members and the governor and that the Legislature should stay out of it.

Lawmakers should adjourn and the governor should call them back into session when he’s got a deal worked out, Thielen said.

“All of us voted for this bill during session because we wanted to help the workers,” Slom said. “But the taxpayers have been hurt … and we have one labor union that seems to be holding us hostage.”

Slom said part of his frustration has been the difficulty of accessing information. He said he asked his staff to track down figures more precisely detailing the anticipated costs of the bill, but they came up empty-handed after being told, at first, that the numbers were confidential.

Meanwhile, the state’s biggest union, the Hawaii Government Employees Association, has threatened to file its own lawsuit against the state if a deal can’t be worked out. Of the 1,400 to 1,500 unionized employees, about 900 of them belong to HGEA.

Governor David Ige presser entrance. 18 july 2016
Gov. David Ige and his chief of staff, Mike McCartney, enter the room for a press conference about the Maui bill and negotiations with the union, Monday. Cory Lum/Civil Beat

The battle over SB 2077 has pitted the Ige administration against House and Senate leadership and the unions. 

Ige said the bill he vetoed was too generous to the workers, could harm the tax-exempt status of the state Employees’ Retirement System, would cost the state as much as $60 million and deepen Hawaii’s $8.77 billion unfunded liability.

‘Complex Transaction’

The governor said he has not had time to review the Legislature’s proposed amendments, but added, “I think all of us really want to ensure that we can move forward to provide the best health care on Maui.”

Ige described the privatization as perhaps the “most complex transaction in the history of the state. This is the first time we’ve done it. It impacts 1,500 employees. So we are working through all of those details.”

“I think all of us really want to ensure that we can move forward to provide the best health care on Maui.” — Gov. David Ige

Ige could veto an amended bill, which could clear the Legislature as soon as Friday, or sign it and let it become law. He has 10 days to decide. If the bill is killed, however, it likely would not be revived.

For now, however, he expressed optimism in striking an agreement with UPW, explaining that talks had been held throughout the past weekend.

Asked about criticism from HGEA boss Randy Perreira, who essentially accused the administration of incompetence on the labor issue, Ige said he had nothing to say, except this: “I know Randy and I know he’s doing his job to represent his employees. I respect that.”

The governor said he understood how stressful the process has been on the workers, who he praised for their service.

Perreira did not have any comment, as of 5 p.m. Monday, on the latest developments regarding the Maui hospital workers.

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