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Senate, House at odds on worker benefits

A House panel approves a rewrite of a Senate bill

By Anita Hofschneider

Associated Press


<br />CTY - Governor Neil Abercrombie, left, and director of finance Kalbert Young speak during a news conference on Tuesday, December 4, 2012 at the State Capitol in downtown Honolulu.  Following the formal close of last month's $866.9 million sale of State of Hawaii General Obligation Bonds, Governor Abercrombie, Kalbert Young, and regarding the state's financial foundation and vitality, particularly in the context of the so-called national "fiscal cliff."  (Jamm Aquino/The Honolulu Star-Advertiser).<br />

The House Labor Committee passed a bill Friday that strays from the Senate's approach to managing state funds needed to cover employee and retiree benefits in the future.

The committee replaced the contents of a Senate bill with two House bills involving the unfunded liabilities.

The bill approved creates a task force to study the issue and an entity called a captive insurance company to manage the benefits.

The Senate voted earlier to establish a separate trust fund for employee benefits and give each government agency its own account.

Hawaii Finance Director Kalbert Young said after Friday's hearing that he doesn't see a captive insurance company, which helps organizations manage risk, as a real solution to the problem.

"I don't think the state can escape funding its unfunded liabilities," Young said. "Although a captive insurance program may be a way to address future growth in the liability, we would have to still do some research on how to address current liabilities."

He has previously testified to the House Finance Committee that he is not sure whether placing the management of state funds under a captive insurance company will save the state any money.

But Young also testified Friday that he's not sure whether the Senate's idea to establish a new trust fund is something the state can afford.

Young says he plans to talk to lawmakers about restoring some of the components of the Senate bill.

He says he is particularly intrigued by the Senate's suggestion of a funding schedule to reduce the liability in six years, a provision the House removed.

Legislators in both chambers have said there is a critical need to resolve the multibillion-dollar cost of employee and retiree benefits and that they are working to find the best solution.

The House Committee on Finance will hear the proposal next.

The House last week passed a budget proposal dedicating at least $100 million a year to unfunded liabilities through the next two years.

But Gov. Neil Abercrombie has said the state would need to commit at least $500 million a year for 30 years.

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fstop wrote:
Ignoring the unfunded liability issue is the State's way of "printing money" used by the Feds...except the Chinese will never bail us out.
on March 18,2013 | 03:03AM
st1d wrote:
is the task force funded or unfunded? if funded, how much"
on March 18,2013 | 05:21AM
soundofreason wrote:
Are they skirting the current accounts so they can steal from the NEW ones? By department? LEAVE it alone and STOP spending. THAT'S the plan. The ONLY plan needed.
on March 18,2013 | 07:27AM
cabot17 wrote:
An Employee Trust Fund already exists. They just need to fund it properly.
on March 18,2013 | 08:11AM
hawaiinui wrote:
See what "robbing from Peter to pay Paul" ends up doing? Now the full on efforts to save the (sometimes) exorbitant retirements asked (and gotten) from the unions years ago. Now how do we pay the bill? Are we to relay on those career politicians in the Legislature that have much to gain when this is all said and done?
on March 18,2013 | 09:15AM
serious wrote:
They will do the political thing---kick the can down the road until the situation becomes critical mass and declare bankruptcy just like Detroit and Chicago--also union-D states. Get a meeting with the unions and the politicians--simply stated, YOU voted us in so we could give you the benefits and be reelected and now WE can't do it---let's work it out--something of something is better than nothing of nothing.
on March 18,2013 | 11:48AM
Denominator wrote:
Just like employees in many bankrupt companies, our retired government employees will probably get shafted in the end. Their benefits will be reduced and they won't get what they think they are going to get. Politicians lie to get votes and they keep on lying after they're elected!
on March 18,2013 | 12:16PM
78R8R wrote:
Should take a look at the health premiums that the EUTF has negotiated with HMSA and Kaiser. Ridiculous that the State pays hundreds more than Kaiser offers as their best plan if joined as an individual purchasing your own coverage. EUTF is probably the largest group within Kaiser and they should be able to negotiate a much more competitive rate. EUTF is a joke.
on March 18,2013 | 11:00PM
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