The tentative labor agreement between the state and the Hawaii Government Employees Association would end Furlough Fridays by allowing 28,000 employees to take paid extra days off of their choosing. The agreement, yet to be ratified by the union or accepted by county mayors, conforms with the 5 percent pay cut that Gov. Neil Abercrombie has talked about since taking office and submitting his budget — but the trade-off is worrisome.
The HGEA, to its credit, has taken a rare step in agreeing to — minus labor-management animosity — the 5 percent cut and to a 50-50 split on health benefit contributions in the two-year tentative contract. Abercrombie praised HGEA for "making a sacrifice to help all people of Hawaii."
For taxpayers, however, the pay cut actually would be a raise over current levels, due to the replacement of the current Furlough Fridays, which are the equivalent of an 8 percent to 10 percent pay cut. For actual time on the job, the 5 percent cut would be much less.
Further, state employees now enjoy 21 days of vacation and 13 holidays, plus, on even years, election day off. The tentative HGEA agreement would give employees an additional six hours a month of paid time — essentially nine more days of vacation a year. While the state boasts to prospective employees in a pamphlet that 21 days vacation is "a rate that other employers find tough to match," a whopping 30 days — six weeks — would be off the charts.
"This is a deceptive sleight of hand to claim this deal saves money," Rep. Cynthia Thielen of Kailua rightly pointed out. "Taxpayers are being misled when in fact they will be paying for government workers to stay home."
Indeed, Abercrombie failed to mention the additional paid vacation days when he announced the HGEA deal Wednesday. That’s a huge omission — one that might make the scheme more palatable to union members, but certainly not with put-upon taxpayers. Where the governor needed to be upfront with the public, he was not.
As part of his plan to meet a $1.3 billion deficit over the next two fiscal years, Abercrombie said the deal would save the state $65 million in fiscal 2012 and $59 million the following year. If ratified by union members, at least one mayor must agree to the contract for it to take effect in state and county governments. The mayors have yet to do the math — and Honolulu Mayor Peter Carlisle, for one, honed in on the additional paid vacation time, which he opposes.
"I need to find out in writing the truth and the whole truth about the provisions of the tentative agreement" to determine the financial effect on the city," Carlisle said — as well he and the other mayors should.
To be sure, HGEA workers’ take-home pay would be reduced by having to pay half of the contribution for health benefits. The state now pay 60 percent of that but the union, which represents mainly white-collar employees, had agreed in December to increase their share.
But anyone concerned about taxpayers’ ability to pay for the size of government should worry that this deal creates a new baseline for future contract negotiations that is heavy on paid time off. For the employer — the state, county and taxpayers —this time off is as much a component of labor costs as is workers’ weekly wages.
On the surface, the public would stand to benefit from the additional vacation days to replace Furlough Fridays, when state and city offices have been shut down. However, if a staff reduced in number by those on vacation is unable to do the job, those doing the work might put in for overtime, increasing the cost to taxpayers. If overtime is not required, questions should arise about whether the state has been overstaffed in normal times.
Mayors and legislators working on the state budget must look closely at the tentative agreement, do the math and determine whether it really reduces city and state budgets without backfiring. If not, the negotiators need to return to the table.