Gov. Josh Green is asking lawmakers to earmark nearly $100 million this year for additional pandemic hazard pay for public employees, marking the third consecutive year the administration has asked for large sums to settle pandemic hazard claims by the public worker unions.

The Legislature already appropriated nearly $459 million in 2024 and almost $145 million more last year for hazard pay, which was required during the pandemic under the state contracts with the Hawaiʻi Government Employees Association and the United Public Workers union.

The latest funding would be used for additional pandemic pay for members of the UPW, which has battled state government in arbitration hearings and in court for years to try to enforce the hazard pay provisions in its contracts.

Meanwhile, the Hawaiʻi State Teachers Association is also lobbying lawmakers for pandemic hazard pay for about 13,000 teachers. The teachers union is suggesting the state close a tax “loophole” that benefits car rental companies as a way to finance the extra teacher payments.

None of the hazard pay previously approved by the Legislature went to teachers because the HSTA contract did not have a hazard pay provision when Covid-19 hit. But HSTA President Osa Tui, Jr. told Civil Beat that teachers deserve to be compensated for the risks they took.

Teachers worked in the same classrooms under exactly the same conditions as educational assistants who are represented by HGEA, “and those people got $20,000 and our members got zero,” Tui said. “Our teachers put their lives on the line during this time.

“It just rubs the wrong way that we then get sidelined on this issue.”

The union estimates hazard pay for teachers would cost the state another $200 million, and HSTA is proposing the state structure payouts to teachers over four years to make the plan more manageable.

A Challenging Budget Year

All of this is playing out in a year when the state is bracing for anticipated cuts in federal funding to critical programs such as Medicaid and food aid for low-income families.

Green plans to make up that loss in federal funding with state funding, which has put pressure on the state budget. To manage that budget crunch, Green is proposing to delay a series of state income tax cuts that are scheduled to take effect over the next five years.

Even with those fiscal challenges, the Green administration said in written testimony this month it supports hazard pay for teachers, noting the extra excise tax on car rental companies would mostly be paid by tourists and not locals.

According to the administration’s testimony, “The Office of the Governor supports the concept of leveraging these revenues to provide additional financial support for teachers and recognizes the value of establishing a stable funding stream linked to this tax adjustment.”

The UPW, however, opposed the teachers’ proposal in House Bill 1937 at hearings on Feb. 10 and on Thursday. UPW State Director Kalani Werner told Civil Beat his union has no problem with awarding hazard pay to teachers, but “our language in the contract has to be honored.”

Thousands of UPW members, including corrections officers and Department of Education employees, have been waiting years for payouts required under the union contract, he said. If the state is going to pay the teachers, he asked, what about the janitors UPW represents who worked with them?

“It’s not that we’re against the teachers, we stand totally in solidarity with Brother Osa and all the sisters and brothers at HSTA, the teachers statewide who are greatly underpaid and in shortage like crazy,” he said, “but what we are pursuing is to uphold the collective bargaining rights.”

A Long Wait For Payday

Werner said the UPW members at DOE and other state departments were promised they would finally get their hazard pay last year, and only learned near the end of the year that would not happen.

The workers who still haven’t received the full amounts they are owed include employees at the state departments of Transportation including the airports, Corrections and Rehabilitation, Land and Natural Resources and other state departments.

Arbitrator John Mukai ruled last April that all UPW members working for the state Department of Public Safety during the pandemic qualified for the “most severe” 25% hazard pay for their work from March 5, 2020 to March 25, 2022. That department was later renamed the Department of Corrections and Rehabilitation, and includes the state prison system.

The state paid corrections workers hazard pay for their base hours, Werner said, but did not include the premium for overtime. They also haven’t been paid 10% interest that Mukai awarded because of the long delays.

Apart from the correctional system, Mukai also awarded more modest hazard pay of 15% of wages and overtime to UPW members in Units 1 and 10 who worked for other state departments during the pandemic.

The state appealed Mukai’s decision, Werner said, and then lost that appeal in court late last year.

The Department of Education, meanwhile, reached a separate agreement with UPW for 15% hazard pay for its blue-collar DOE workers, but never disbursed it last year as the department had promised, Werner said.

Werner said the state acknowledged the risks of the pandemic and reached hazard pay settlements to a large portion of state employees. Yet when it came to UPW, “you still chose to fight,” he said. “That’s the frustrating part.”

Seth Colby, acting state budget director, told lawmakers the administration plans to spend $98.9 for hazard pay this year, and the Green administration introduced House Bill 2271 and Senate Bill 3090 to cover the cost for Units 1 and 10. Both bills are moving through the Legislature.

Teacher Hazard Pay

The separate push by HSTA for hazard pay this year revolves around a proposal to boost the state excise tax charged to rental car companies when they purchase vehicles.

Currently, the rental car companies pay the wholesale state excise tax of 0.5% to the state when they purchase a vehicle, while most other buyers pay the retail rate of 4.5%.

The union expects that boosting the tax to the retail rate for rental car companies such as Hertz and Enterprise Rent-A-Car Corporation will raise about $80 million a year, and HSTA wants to use that extra money to finance hazard pay for the 13,000 teachers who got none.

“It’s just a matter of fairness,” said Tui, president of HSTA, “in recognizing the extraordinary efforts that teachers went through during this very trying and difficult time.”

Once the eligible teachers receive hazard pay of $20,000 each, the state will get the benefit of the extra revenue, according to the union.

Representatives of the rental car companies opposed the HSTA plan in hearings on Feb. 10 and on Thursday, pointing out the rental companies already pay the full excise tax each time they rent out a car, as well as an extra $7.50-per-day surcharge imposed by the state. Other fees are imposed on cars that are rented at state airports.

The Transportation and House Education committees both approved the measure over their objections, and the bill now goes to the House Finance Committee for further consideration.

Civil Beat’s education reporting is supported by a grant from Chamberlin Family Philanthropy.