The Legislature on Friday approved millions of dollars worth of pay raises for thousands of Hawaii’s government workers along with a spending plan that seeks to get Hawaii through the next year.

Senate Bill 785 contains the collective bargaining agreements for eight units representing thousands of workers, but comes with a price tag of $150 million of state taxes, which have taken a massive hit this year.

Separately, lawmakers also approved a new budget bill, Senate Bill 126, which easily cleared both chambers of the Legislature by unanimous vote just five days before the start of the next fiscal year. 

On Friday however, it was SB 785 that drew the most criticism.

Senate President Ron Kouchi adjust his mask before the start of the floor session at the Captiol during COVID-19 era. June 26, 2020
The Legislature passed a new spending plan as well as millions of dollars worth of pay increases for public workers. Cory Lum/Civil Beat/2020

Lawmakers, speaking from the House and Senate floors on Friday, worried about the perception of passing pay raises at a time when more than 100,000 people are unemployed. Others worried that Gov. David Ige will still seek furloughs or pay cuts to help balance the state’s budget.

“The path we are on is unsustainable,” said Sen. Jarrett Keohokalole, who voted no on SB 785. “I cannot support this bill because it makes it harder for us to make the already difficult decisions before us, and it will make it harder to make the terrible decisions that are coming.”

SB 785 cleared the Senate in a 21 to 3 vote. Keohokalole was joined by Sens. Laura Thielen and Gil Riviere in voting no. Sens. Russell Ruderman, Kurt Fevella, Sharon Moriwaki, Roz Baker and Donna Kim voted yes with reservations, meaning they had issues with the bill but still decided it should pass.

The bill also cleared the House 51 to 4, with Republican Reps. Bob McDermott, Gene Ward, Val Okimoto and Cynthia Thielen voting no.

The bill includes $60 million worth of retroactive pay raises for 2020 and another $90 million for pay raises in 2021. Those pay raises previously stalled when the Legislature first recessed in March due to the coronavirus.

There’s several issues surrounding the votes on the pay raises.

For one, it’s an election season, and many incumbent lawmakers also have union endorsements.

House Speaker Scott Saiki previously said that lawmakers had to make a decision on the funding agreements this session, and to vote down the measures would mean some public employees would be on a different pay schedule than others.

The pay raises were bargained for months before the pandemic hit and the economy collapsed, and several lawmakers who cast no votes pointed to the food lines stretching out of Aloha Stadium. 

A volunteer loads a box of groceries into the trunk of a car at the big food distribution event held at Aloha Stadium in Honolulu, HI, Wednesday, May 6, 2020. The city of Honolulu, Hawaii Foodbank, and Hawaii Community Foundation collaborated to put on the event providing food for approximately 4,000 Oahu households. (Ronen Zilberman photo Civil Beat)
Several lawmakers who disagreed with the proposals brought up Hawaii’s unemployment rate and the number of people needing food assistance. Ronen Zilberman/Civil Beat/2020

Ruderman, who supported the measure, also said the Legislature should follow through with plans to raise the minimum wage to $13 an hour by 2024. 

“All workers deserve for us to keep our promise, not just some,” Ruderman said, lamenting that leadership won’t bring the minimum wage bill to a vote. “That’s a travesty of democracy.”

Other lawmakers felt it necessary to pass the pay raises.

“Our hands are bound,” Rep. Angus McKelvey said.

Sen. Donna Kim said the pay raises should be deferred for one year, similar to deferred pay increases for lawmakers, judges and top officials in the administration that the Legislature passed in May.

“After all, Mr. President, aren’t we in this together?” Kim asked Senate President Ron Kouchi. “Or is this just a hollow statement.”

Even the legislators who disagreed with the bill acknowledged that many of the workers who would get pay raises perform essential services in government. They include lifeguards, public nurses and certain science staff at the Department of Health, who have been working to keep the coronavirus in check.

House Finance Chair Sylvia Luke said that the raises were already included in the budget plans. Luke also said that Ige is continuing to discuss furloughs and pay cuts. The public workers unions vehemently rejected a previous proposal from Ige to impose 20% cuts across the board.

The Hawaii Government Employees Association, the state’s largest public workers union which also represents many of the workers who would receive pay raises, declined to comment on the bill passing.

The bills now go to Gov. David Ige for his consideration. Ige has until mid-September to sign or veto any bills lawmakers pass this session.

A New Budget

Both the House and Senate voted unanimously to pass a new spending plan Friday that is aimed at keeping the state’s finances balanced, at least for the next year.

Senate Bill 126, the budget bill, lays out how about $800 million in federal relief funds should be spent. SB 126 would also allow the state to tap into the Hawaii Hurricane Relief Fund, now estimated at $183 million, to help balance the budget.

The new budget would also cut about $6 million in retirement benefits in 2021, as well as another $11 million in payments for health premiums.

To balance the budget, the bill would also drain the rainy day fund, right now estimated at $1 billion. Critics have warned that could mean Hawaii is vulnerable in the years ahead.

The new budget keeps over $200 million worth of cuts made to vacant positions and lapsed funds that lawmakers passed in May; however, the new plan comes with some additional budget additions.

Joint Finance WAM budget meeting Chair Rep Sylvia Luke WAM Chair Sen Donovan Delacruz.
The Legislature’s money committee chairs quickly agreed on a new budget earlier this week. Cory Lum/Civil Beat

Lawmakers gave the state $7 million for homeless sweeps, at a time residents who have been hard hit by the economic downturn could be on the brink of homelessness.

They’ve also included subsidies of $21.6 million for the Hawaii Health Systems Corp. and $19 million for the Maui Memorial Hospital. 

The Hawaii Public Housing Authority is also expected to receive $750,000 for rental housing. 

The Department of Land and Natural Resources parks division will also get some help from the general fund totaling $5.7 million for fiscal year 2021. Luke previously said that the division has had no revenue from entrance fees and couldn’t sustain itself.

The Department of Business Economic Development and Tourism, which doesn’t yet have a plan to address the short term economic crisis, would get $15 million to fund recovery efforts. The Department of Agriculture would also get $2 million for job creation.

The Legislature will reconvene again in January to pass a budget for 2022 through 2023. For the next biennium, the state could have a deficit of about $2.5 billion.

The Legislature is expected to pass dozens of bills including some to increase accountability over police before adjourning the 2020 session July 10.

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