Budget surplus is rare chance to accomplish needed goals

It’s as if the state hit the jackpot: After closing the fiscal year on June 30, the state has an estimated $1 billion cash surplus — the largest in recent memory.

Although that surely has piqued the interest of those vying for a piece of that $1 billion pie — including public worker unions — prudent steps must be taken to ensure the surplus is spent wisely and for the greater public good.

This is a rare opportunity for the state to make actual headway on a number of longstanding problems.

With $1 billion in its back pocket, the state can’t claim destitution as it goes to the bargaining table to negotiate pay raises for public worker unions, whose contracts expire June 30.

But bargaining units need to recognize there are pressing needs beyond lining their members’ pockets.

What the state can — and must — do is fund reasonable pay raises and use that as leverage toward creating efficiencies in the public workforce via changes in obsolete work rules or other contract provisions.

For instance, the state is in a prime position to tackle the ongoing abuse of sick leave, especially prevalent among corrections officers at prisons and jails. Tightening union-contract requirements — a doctor’s note when returning from a sick day, for example — makes sense, especially when an alarming number of sick days — namely on Super Bowl Sundays — results in overtime paid to employees covering for “sick” coworkers.

The leverage enabled by extra funds also could encourage greater cooperation from the Hawaii Government Employees Association (HGEA) as it battles the state over privatization of the Maui hospitals.

HGEA successfully pushed for a new law that would provide severance pay or retirement bonuses to state workers whose jobs are being privatized — but a judge imposed a temporary restraining order that bars state officials from implementing the law.

The extra cash could be incentive for HGEA to forge a workable agreement with the state that might eliminate the need to evoke the new law, which the Hawaii Employees’ Retirement System says could threaten its federal tax-exempt status.

Despite the $1 billion surplus on paper, Wes Machida, director of the state Department of Budget and Finance, cautioned that some of the largesse is already committed elsewhere: $200 million to be tucked away as cash reserves in the state’s “rainy day” or emergency budget reserve fund, and $81 million to prepay future retirement health benefits for public workers.

Amassing the large cash cushion was achieved by restricting state departments’ spending even as tax collections exceeded the official projections — and the Ige administration’s fiscally responsible approach seems to have paid off.

Figuring out the best uses for the surplus will be no small task. Pay raises aside, the state must revisit a few high-priority projects:

>> Return to the front burner some Department of Transportation “Capacity Program” construction that had been deferred due to lack of funding.

Among them, enlarging Highway 130 on Hawaii island between Pahoa and Keaau; eastbound widening of H-1 Freeway from Waiawa to Halawa; and the $66 million Kahekili Highway widening from Haiku Road to Kamehameha Highway. These would have high impact for easing traffic while increasing road safety.

>> Whittle down the $500 million in deferred maintenance within the University of Hawaii (UH) system, especially at its flagship Manoa campus where aging facilities are deteriorating.

Deferred maintenance at the state’s public university system has been woefully underfunded each legislative session, and it’s time for UH to receive a substantial boost for upkeep at its campuses.

>> Invest in education.

Hampered by a severe teacher shortage, the state Department of Education needs to make inroads in filling hundreds of vacant teaching positions. The shortage is due partly to lagging teacher salaries not in line with the high cost of living in Hawaii. If higher teacher salary increases are provided, the Hawaii State Teachers Association will have to be more agreeable when it comes to comprehensive annual teacher evaluations, among other contractual issues.

>> While it may seem wonky, the state’s outdated information technology (IT) systems would benefit from increased funding.

Think of it as an investment toward a better-functioning state government, which for decades has relied on archaic systems to churn out payroll and complete other important tasks.

IT infrastructure, as well as job descriptions in union contracts, have to be brought into the 21st century.

Hawaii taxpayers need assurances their hard-earned dollars that fueled the hefty $1 billion surplus won’t be blown mainly on pay raises for state workers, with scant investment to fix problems.

The Ige administration — and the unions — must focus on the most impactful projects across the state that will enrich our society with more bang for our one billion bucks.