The state House gave preliminary approval Tuesday to a bill to defer pay raises for lawmakers, judges and top administration officials after members of the public objected to raises for public officials during the pandemic.

The state Salary Commission in 2019 recommended a schedule of raises for the officials and the next pay hikes will automatically take effect on July 1 of this year and Jan. 1, 2022, unless the Legislature postpones the raises.

Pay increases for elected officials are often controversial, but the debate over the state minimum wage this year has added to the furor.

A bill to boost the state minimum wage from $10.10 to $12 an hour stalled in the state House this year, and lawmakers have been harshly criticized for rejecting the wage hike even as they are poised to accept pay increases for themselves.

House Speaker Scott Saiki said he initiated discussions about a year ago with representatives of the Judiciary, the Senate and the Ige administration about the scheduled raises, but the various players never reached a consensus on how to handle the issue.

That prompted Saiki to offer a floor amendment to Senate Bill 1350 on Tuesday that would defer all scheduled raises until Jan. 1, 2023, including pay hikes for Ige, Lt. Gov. Josh Green, the judges and members of the Cabinet.

House members gather on the floor with plastic barriers between members on opening day of the 2021 legislature.
House members gather on the floor with plastic barriers between them on opening day of the 2021 session. The House is scheduled to vote Thursday on a proposal to defer scheduled pay raises for lawmakers and top administration officials, but it is unclear if the Senate will agree. Cory Lum/Civil Beat/2021

Saiki’s amendment replaces the original contents of the bill — a maneuver known as “gut-and-replace” — and was unanimously adopted on Tuesday. It is scheduled for a final House vote on  Thursday, but Saiki said there is no guarantee that the Senate will approve the measure.

“We’ll just move this on Thursday and see what happens,” he said.

Senate President Ron Kouchi said in a written response to questions he was unaware Saiki planned to advance the floor amendment, but “I will look at it.”

However, in a statement the governor said he fully supports the pay deferral.

“I informed my Cabinet months ago that I would not be taking the salary increase recommended by the Commission on Salaries, and I asked my cabinet to do the same,” said Ige. “As public servants, it is our duty to do our part to help the state rebuild the economy, while keeping the health and safety of our community our top priority.”

Larger Issues

The floor action came ahead of a Thursday deadline to advance bills.

In remarks to Civil Beat after the floor session, Saiki said his view is that “the timing is not the best right now for these salary increases, and the majority caucus felt that we still need to do more work on the economy, and on jobs.”

“Hawaii still has the highest unemployment rate in the nation, (and) we’re seeing more cancellations of commercial leases. I mean, the indicators are not entirely positive, and we just felt that the timing was not right for these salary increases,” Saiki said.

Saiki acknowledged that the minimum wage issue “was a part of it. But the larger issue was the overall economic health of our state, and our state budget.”

The Salary Commission originally proposed that an initial raise of 10% for all lawmakers take effect several months ago, on Jan. 1. However, as tourism collapsed in the pandemic and unemployment soared last year, lawmakers passed House Bill 117 to defer that raise until July 1.

The commission also recommended a second raise of 2.5%, which is scheduled to take effect Jan. 1, 2022, if lawmakers take no action.

The two pending raises would boost lawmakers’ pay from $62,604 now to $70,584 effective Jan. 1. Pay for the House speaker and Senate president would increase from $70,104 today to $79,044 on Jan. 1.

Representative Gene Ward speaks during house floor session. April 8, 2021
Representative Gene Ward speaks during House floor session on April 8. Cory Lum/Civil Beat/2021

Republican state Rep. Gene Ward said he and Saiki discussed the issue about a week ago, and Ward made it clear he planned to introduce a floor amendment himself to try to defer the raises for a year.

Ward said Saiki replied that he needed some time to try to work out a consensus with the administration and the Judiciary. Ward distributed copies of his proposed floor amendment on Tuesday but withdrew his proposal when the House voted to approve Saiki’s amendment.

Delaying the raises is the fiscally responsible thing to do when the state is in a pandemic, Ward said.

“When the state is in debt, it is going to be in debt for the next few years, you don’t want political leaders to take a raise, it’s plain and simple,” he said.

He said that is particularly true when the minimum wage bill has stalled, low-wage earners are hurting “and we’re not doing anything for them.”

Ward said he has “taken a lot of flak from my colleagues, but it’s the right thing to do.”

More Medical Pot Locations

In other legislative news Tuesday, Hawaii’s eight medical marijuana dispensaries may be able to open more retail locations under a proposal that cleared the Senate on Tuesday.

Right now, Hawaii’s eight licensed dispensaries are able to open two retail locations each as well as two production facilities where the pakalolo grows.

House Bill 477 would allow the dispensaries to open more retail and production locations. While the Legislature has yet to settle on a final number, the local medical pot industry has advocated for at least five locations per licensee.

“We are requesting a reasonable increase in our footprint to be able to provide clean, tested, safe, regulated (and taxed) cannabis medicine,” the Hawaii Cannabis Industry Association said in written testimony to lawmakers.

The industry association is also looking forward to a provision that would allow the dispensaries to provide marijuana to each other, so long as the weed would not be transported between islands.

Critics of House Bill 477 worry that it will reduce competition in Hawaii’s medical marijuana market. Anthony Quintano/Civil Beat

But Sen. Joy San Buenaventura and other medical marijuana advocates worry that the bill could help the licensees tighten control of the medical pot market.

“(HB 477) is continuing the monopolization of the eight dispensary licenses instead of increasing competition by increasing the dispensary licenses,” she said. “We are moving in the wrong direction.”

The state Department of Health has said that expanding the number of allowable retail locations may not be necessary because only four licensees have opened both their retail locations. In 2020, about 36% of registered patients purchased their pot from a licensed dispensary, according to DOH.

The bill would also require that medical marijuana cardholders only purchase weed from those licensed retail locations as of Dec. 31. The worry is that could squeeze out smaller growers and limit access for some patients.

“If cannabis patients don’t have the money to buy into the system, then the whole dispensary system is useless to them,” Brian Murphy, director of Patients Without Time, wrote in testimony to lawmakers.

Sens. Sharon Moriwaki and Laura Acasio cast the only “no” votes on HB 477.

Proposal Would Axe Tobacco Fund

Meanwhile, the Senate also voted to move along a measure that has caused an uproar among local health organizations.

House Bill 1296 would divert millions of dollars from a fund set aside for tobacco treatment programs. The state has deposited some revenues gained from a decades-old tobacco settlement agreement with tobacco companies into that fund.

The DOH estimates that Hawaii has received about $1 billion worth of those payments from tobacco companies in the last two decades. Of that, more than $100 million has gone to the tobacco trust fund and almost all of it has been spent on prevention programs.

Lawmakers are now proposing axing the trust fund by 2025.

The state has used the fund to contract out services for tobacco prevention. The DOH has warned that cutting the trust fund may cause a drop in services.

Sen. Donovan Dela Cruz, chairman of the Senate Ways and Means Committee, said during floor discussions Tuesday that the Senate has set aside $7.3 million to continue those prevention programs. He also said that capturing the tobacco settlement money is necessary to balance the state budget in the coming years.

The state could expect to get about $50 million from the balance of the fund by 2025, according to Dela Cruz.

He said his committee “worked diligently to ensure all revenue enhancers do not affect working families in the state of Hawaii during these uncertain times.”

Sen. Karl Rhoads opposed HB 1296 and urged his colleagues to do the same. He took aim at tobacco executives in his remarks.

“These are ruthless people who apparently care only for the profits they are making from other people’s misery and death,” Rhoads said. “Hawaii has the fifth-lowest adult smoking rate in the country. Let’s not back track on that solid record.”

Rhoads along with Sens. Laura Acasio, Roz Baker and Brian Taniguchi voted “no” on the measure. San Buenaventura and Sens. Kurt Fevella, Sharon Moriwaki, Gil Riviere, Bennett Misalucha, Les Ihara and Stanley Chang voted “with reservations.”

The Legislature is scheduled to conclude its 2021 session April 29.

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