In the latest wrinkle in the long-running saga of proposed public worker furloughs, Gov. David Ige said Wednesday it won’t be necessary to impose twice-per-month furloughs on state workers on July 1 after all.
But Ige also said he still needs to achieve some “labor savings” to reduce state government operating costs and offset some of the sharp decline in state tax collections caused by the coronavirus pandemic.
In an interview with Civil Beat, Ige declined to say exactly how he will achieve those employee savings, but said his new proposal will be built into a revised state financial plan that will be presented to state lawmakers shortly.
Ige said as recently as the end of December that the administration would impose furloughs on members of most union bargaining units that would equate to pay cuts of about 9% in order to save about $300 million a year. Not surprisingly, the public worker unions strongly opposed that idea.
But Ige said Wednesday the situation has evolved, making it possible to pull back from that plan.
“We have been able to reduce the labor savings needed in those proposals, so we don’t need the two days a month that we were asking for earlier,” he said.
But he added that “we will need to see labor savings. We are in the process of negotiating contracts with all of the collective bargaining units, and we will continue to do that. The financial plan does require labor savings in order to balance.”
Ige first proposed a more aggressive plan for state worker furloughs last April as the pandemic shut down the Hawaii tourism industry, and the state’s unemployment rate spiked at nearly 24%.
However, the governor repeatedly delayed actually imposing the furloughs, which would amount to public worker pay cuts for tens of thousands of people in the state workforce.
Instead, Ige took stopgap steps such as borrowing $750 million to help cover the operating costs for state government this year. At one point the administration indicated it planned to use the savings from the public worker furloughs to repay that loan.
Since then, the state Council on Revenues has increased its projections for state tax collections for this year and the years ahead, and former President Trump signed a pandemic relief bill that provided significant increases in federal funding for both the state Department of Education and the Department of Health.
“The increase in the revenue forecast allows us to not need tax increases in order to balance,” Ige said.
Introducing the soda tax proposal was a policy decision to try to reduce sugar consumption, he said. Consumption of sugary drinks contributes to obesity and the chronic diseases that often accompany it.
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