State budget full of intrigue — and political strategies

Gov. Neil Abercrombie heads into the most critical time of this legislative session with the big question unresolved: How much will public worker pay raises cost?

The teachers and Abercrombie appear to have solved the first part of that question by preparing a contract that includes two 3.2 percent pay increases and other incentives worth an estimated $320 million over the life of the four-year contract.

The contract is still up for ratification and because teachers already rejected one contract proposal, it should not be assumed that it will be approved.

If it is, the big-ticket item will then be the Hawaii Government Employees Association, with its more than 40,000 members.

While negotiations are ongoing, the Legislature is readying the state’s $11.9 billion budget for fiscal 2014 and $12.1 billion 2015 fiscal year budget.

Pay raises for everyone and the gubernatorial wish list, plus the legislative adds, will not all fit on the same spread sheet.

The highlight of Abercrombie’s 2013 State of the State speech was a plea for a statewide preschool program. It was one of his biggest campaign promises and would go a long way to showing voters a solid accomplishment in next year’s election.

The Senate offered up a total of $26.5 million for all of Abercrombie’s early childhood education plans, while the more financially cautious House budget said it wanted to see more planning before funding it.

The planning is a concern because running the entire early education scheme is a good but expensive idea that is estimated to cost maybe $100 million a year when fully operational.

That is the funny thing about good ideas in the governor’s early speech: They quickly ramp up to big bucks. For instance, the initial proposal to convene a task force to study what to do about the announced closing of the Tesoro refinery is now in the state budget as a $355,000 expense.

That, of course, is just walking-around money compared to the state’s running pension and health care tab, now estimated to be a bill adding up to $20 billion. Abercrombie and the Legislature are thinking about putting money down on the installment plan to pay it off, but even the estimated $200 million a year will change the budget plans.

All this is without the collective bargaining settlements. And yes, that ticking sound you hear is a time bomb.

If union talks with the state are not wrapped up by early May when the Legislature folds its tents, they come back next year. The budget will then grow and grow as employee costs rise.

This is where it could get complicated. Next year is an election year. Abercrombie will be up for re-election. He has not proven to be a popular politician and has few allies in the Legislature and may have significant opposition in the Democratic primary if he is challenged by U.S. Rep. Colleen Hanabusa.

But, Abercrombie may also have to ask for tax increases next year to balance a budget because of spending this year. Or, he could cut the budget this year and delete many of the programs he hoped to use in next year’s campaign.

Either way, it makes this year’s budget both an interesting problem and a political risk.

—————
Richard Borreca writes on politics on Sundays, Tuesdays and Fridays. Reach him at rborreca@staradvertiser.com.