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Tuesday, April 22, 2014         

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Lawmakers might meet in summer

The upcoming revenue forecast will dictate whether a special session is necessary

By Derrick Depledge and B.J. Reyes

POSTED:


The state House and Senate adjourned yesterday after understated floor sessions to complete work on a handful of bills, but several lawmakers hinted they might have to return this summer for unfinished business.

The House gave final approval to a bill that would reduce benefits for future public workers and make other structural changes to the state Employees' Retirement System, which is projecting a $7.1 billion unfunded liability. The bill, which now goes to Gov. Neil Abercrombie, could be one of the most important of the 60-day session if it contains retirement costs over the next generation.

The House also voted to extend 5 percent pay cuts for lawmakers, the governor, the lieutenant governor, department directors and judges that were scheduled to expire in June. The pay cuts would be extended through December 2013, but lawmakers acknowledged that there are potential legal flaws in the bill that need to be fixed.

Abercrombie could call lawmakers into special session, or House and Senate leaders could decide to ask lawmakers to come back on their own, if the Council on Revenues significantly reduces the revenue forecast later this month and puts the budget out of balance.

House Speaker Calvin Say (D, St. Louis Heights-Wilhelmina Rise-Palolo Valley) said that if lawmakers do return, they could also take up several bills that failed to make a procedural deadline for negotiations last Friday, including legislation to pay legal claims against the state, cover state security costs for the Asia-Pacific Economic Cooperation conference this fall and allow the University of Hawaii medical school to use tobacco settlement money to fund operations.

"It could be a combination of all," Say told reporters of the reasons for a potential special session.

Other lawmakers want the House and Senate to use a special session or the interim before the next session in January to consider tax credits for digital media and film productions and a Waikiki casino to help grow the state's economy.

Abercrombie — who signed a bill into law yesterday giving homeowners more protection in mortgage foreclosures, one of the more significant bills this session — said the Council on Revenues forecast could help determine whether a special session is necessary.

The governor said he would ask lawmakers to move bills such as the ones to cover legal claims and APEC security if there is a special session. In particular, he called the death of the APEC bill unacceptable, given the regional importance of the conference and Hawaii-born President Barack Obama's involvement.

"As a former legislator, I am well aware that you can find yourself lost in process and trapped by inside baseball and lineup cards in the manager's dugout," he said of the tactical maneuvering between the House and Senate that led to the collapse of conference talks last Friday. "But the public not only has no interest in that, but has a perfectly legitimate complaint if that becomes the focus of the game.

"The game is to be played on the field, and scores are maintained on it. They are not interested in the lineup or the dugout or locker room clashes."

House and Senate leaders chose to forgo much of the fanfare of the session's finale as many lawmakers, drained by the effort to close a massive $1.3 billion projected budget deficit, were ready for the session to end.

The Senate finished its floor session around noon, and senators walked across the chamber level at the state Capitol to the House, hoping to sing "Hawaii Aloha" together. But the House, as often is the case, was not finished, so senators went back to their chamber and sang the song themselves.

The House would later close with a moment of silence for soldiers serving the United States around the world.

Senate Majority Leader Brickwood Galuteria (D, Downtown-Waikiki) described the Senate's approach to conference with the House last week as a "sea change" because senators enforced an early deadline last Friday that is often waived as talks go right up until midnight.

He said the Senate held firm even though it meant sacrificing some legislation wanted by most lawmakers and the governor.

Galuteria credited Senate President Shan Tsutsui (D, Wailuku-Kahului), in his first year as Senate leader, with giving senators the opportunity to unify.

Say has taken responsibility for the death of the bills, explaining that he thought the Senate would extend the deadline, as is customary.

Tsutsui appeared to choke up as he thanked fellow senators for their commitment. He said Senate leaders were trying to change the culture at the Legislature with their strategy in conference talks.

"I think in order to provide greater transparency, openness, accessibility for the public, it's probably better for us to do more of that type of decision making during the allotted time schedule as opposed to waiving rules and making decisions late at night," he said.

Over in the House, lawmakers did not expend a word over the retirement system bill, which could save $440 million over five years. The reduced benefits would apply to public workers hired starting in July 2012 and could help stabilize the retirement system over 30 years.

But lawmakers had a lively debate over extending the pay cuts, an issue that has vexed lawmakers since the salary commission awarded them 36 percent pay raises that inconveniently took effect in January 2009 during the recession. Lawmakers imposed the 5 percent pay cuts in July 2009 in response to public disappointment with the raises.

The Judiciary, in a letter to Say on Wednesday, asked the House not to pass the bill because of state constitutional concerns, including whether the salary decrease will apply equally to all salaried officers. The Judiciary said the bill would have a disproportionate impact on judges, who would lose out on significant salary increases.

Rep. K. Mark Takai (D, Newtown-Pearl City) said he was embarrassed lawmakers were left to vote for a bill many believe is constitutionally flawed.

"I don't like being put in these types of positions," he said, adding that he would urge the governor to veto the bill so lawmakers would have to come back in an override session to make corrections.

House Majority Leader Blake Oshiro (D, Halawa-Aiea) recognizes the legal questions but said lawmakers had little choice but to act on the draft in front of them since the session was about to adjourn. A better version of the bill was among the casualties of Friday's conference talks, so the House agreed to the Senate draft rather than pass nothing and let the pay cuts end as scheduled in June.

Oshiro said lawmakers would have time to fix the bill before the pay cuts would expire in December 2013 and create the legal standing for a lawsuit.

House Minority Leader Gene Ward (R, Kalama Valley-Hawaii Kai) said lawmakers' handling of the issue so late was symptomatic of the many ways they did not hear public concerns this session. "We are compelled, without any equivocation, to pass this pay cut," he said.

Abercrombie told reporters he believes lawmakers and executive and judicial branch officials should take a 5 percent pay cut, the same his administration negotiated with the Hawaii Government Employees Association, the state's largest public-sector union.

"We're asking everybody to do that. That was the standard that I put out. … Now some people wanted more," the governor said. "I understand that, but you have to try and work something that can be dealt with."

Rep. Angus McKelvey (D, Olowalu-Kapalua) told the House that he fears the Council on Revenues might lower the forecast, and is disappointed lawmakers did not agree to the film tax credits to help with economic growth.

McKelvey said he would ask Abercrombie to consider supporting the film tax credits if the governor requests a special session.

Sen. Malama Solomon (D, Hilo-Honokaa) told senators that a stand-alone casino in Waikiki would be a source of new revenue for the state.

Solomon was behind a last-minute push for a casino option in conference last week, but the House rejected her draft proposal.

"Having a casino, of course, will not be a panacea," she said. "It won't solve all our problems, but it will certainly go a long way toward creating a better tax base and it will revitalize Waikiki. It is the better way for us to go.

"So during the interim I'm hoping that all my colleagues will give these thoughts some consideration, and when we do return maybe we could see the light at the end of the tunnel."






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