Ige tries to get unions to OK hospital bill

Lawmakers again deferred action Monday on a bill to assist public workers who will lose their state jobs when three Maui County hospitals are turned over to Kaiser Permanente.

The transfer of the hospitals would be the largest privatization project in state history, but the effort has been stalled by a lawsuit filed by the United Public Workers union.

The lawsuit alleges the privatization pursuit violates state contracts with the unions that last until June 30, 2017. The 9th U.S. Circuit Court of Appeals in May issued an injunction in the lawsuit that temporarily halted the privatization effort.

Gov. David Ige spent much of the past weekend negotiating with the union in an effort to settle the lawsuit, but will still need lawmakers to appropriate money to fund any agreement that is reached.

“This is a complex transaction,” Ige told reporters Monday. “This is probably the most complex transaction in the history of the state. This is the first time we’ve done it, it impacts about 1,500 employees, and so we are working through all of those details trying to ensure that we can move forward.”

The House and Senate will to return to the state Capitol on Wednesday to consider possible amendments to Senate Bill 2077, which would offer retirement bonuses and severance pay to the hospital workers in an effort to address concerns of UPW and the Hawaii Government Employees Association.

Ige vetoed that measure last week, saying it was too expensive and could jeopardize the tax-exempt status of the Employees’ Retirement System. Ige estimated SB 2077 could cost the state more than $60 million.

Since then lawmakers have met twice in a “veto override” session to try to salvage the bill.

House Majority Leader Scott Saiki (D, Downtown- Kakaako-McCully) met with reporters Monday to describe the latest proposed draft of SB 2077, which would offer two options to the public workers. One option would allow workers to remain as state employees until June 30, 2017, and then be “leased back” to Kaiser and continue to staff the hospitals.

The other option would provide severance payments of up to 4 percent of the annual salaries of hospital workers up to a maximum of 10 years to encourage them to leave their state jobs before 2017. Lawmakers tentatively plan to set aside $25 million to fund the package, but Saiki said there is no retirement bonus in the bill’s latest draft.

He said the public worker unions have not yet agreed to the proposal.

Sen. Donna Mercado Kim told her colleagues that the Senate should adjourn and wait for the governor to call them back into session when a final agreement is reached with the unions. In the meantime, she said, the special session is wasting taxpayer money.

“These are costs that we are putting on the backs of taxpayers, and we have no clue, no clue as to what it is we need to do at this point and it is making us look ridiculous,” said Kim (D, Kalihi Valley-Moanalua- Halawa).

The costs of lawmakers convening in special session once last week and twice this week will be about $12,600, according to Brian Takeshita, chief clerk for the House of Representatives. That includes the $175 per diem given to neighbor island lawmakers, which is expected to cover housing and meals.

The Legislature last year authorized the privatization of Maui Memorial Medical Center, Kula Hospital &Clinic and Lanai Community Hospital, and the state reached an agreement in January to have Kaiser Permanente operate the three facilities.

Ige has predicted the deal will save the state $260 million in hospital subsidies over the next decade, and other state-run hospitals are also considering privatization.

Many of the Maui hospital staffers are expected to continue working at the facilities for Kaiser, but they will no longer be state workers. The public worker unions represent about 1,400 employees at the Maui hospitals and have strongly opposed the hospital privatization effort.

Kaiser was to take control of the hospitals July 1 but could not because of the injunction put in place by the 9th Circuit Court of Appeals in connection with the UPW lawsuit.