The Hawaii State Teachers Association alleges that Gov. Neil Abercrombie and state lawmakers impinged on the constitutional right to collective bargaining by inserting 5 percent labor savings for all public workers into the state budget.

In May, when the Legislature approved the two-year budget, and in June, when Abercrombie signed it into law, the Hawaii Government Employees Association, the state’s largest public workers union, had reached a new contract for most units that included a 5 percent pay cut and an equal split on health insurance premiums.

The teachers union and the United Public Workers, however, were still in contract talks, while the HGEA nurses unit had rejected an offer and had moved to arbitration.

In a complaint filed Friday with the Hawaii Labor Relations Board, the teachers union alleges that Abercrombie proposed and state lawmakers accepted a statewide governmental policy that reduced the salaries of all public workers by 5 percent and established the equal split on health-care premiums.

"We’re bargaining, but now you set an amount, so you’re already saying that’s the offer," Wil Okabe, the president of the teachers union, said of the state budget.

The state Supreme Court has ruled that lawmakers have broad discretion to set the parameters of collective bargaining, but cannot intrude on the right of public workers to negotiate core subjects such as wages protected by the state Constitution.

The teachers union has asked the Hawaii Labor Relations Board to invalidate any statute or legislation that undermines collective bargaining rights, which, if the board agrees, could have ramifications for the budget.

This portion of the teachers’ legal challenge — while less dramatic than the question of whether the state can unilaterally impose a contract after an impasse — speaks to a conflict in the budget process. The governor and lawmakers need to account for labor costs, the major component of state spending, without interfering with the right of public employee unions to negotiate those costs.

Donalyn Dela Cruz, a spokeswoman for Abercrombie, said the governor was transparent about the need for labor savings to help balance the budget but also negotiated with the unions in good faith.

The state House and Senate leaders who drafted the budget said they do not believe they interfered with collective bargaining.

"If we did not reflect labor savings, then we would have had to significantly cut services," said state Sen. David Ige (D, Aiea-Pearl City), the chairman of the Ways and Means Committee.

State Rep. Marcus Oshiro (D, Wahiawa), the chairman of the House Finance Committee, said the governor and union leaders have the sole responsibility for collective bargaining.

"In no way did we restrict or narrow the final decision in collective bargaining," he said, adding that the 5 percent labor savings and equal split on health insurance premiums were assumptions based on HGEA’s contract, not a mandate on other unions.

Abercrombie informed lawmakers in January that he would seek 5 percent labor savings in contract talks with unions — about $88 million a year, or the equivalent of one furlough day a month.

Kalbert Young, the state’s budget director, cautioned reporters not to describe the 5 percent labor savings as a hard target, since it was subject to collective bargaining.

The House version of the budget, however, contained no labor savings. Oshiro and other House leaders said at the time they wanted to avoid even the perception that they were interfering with collective bargaining by setting a figure.

The Senate draft of the budget included about 8 percent to 10 percent in labor savings — double Abercrombie’s request — by presuming that the two furlough days a month that had been negotiated under former Gov. Linda Lingle would remain in the budget.

But Ige said the chances for 10 percent labor savings were unlikely after the HGEA reached a tentative agreement in early April with a 5 percent salary reduction. HGEA’s contract also included a "most favored nation" clause that allowed the union to match any gains won by the other unions.

House and Senate budget negotiators believed Abercrombie would likely get similar deals with the teachers union and UPW, so the final draft of the budget included 5 percent savings.

"Once HGEA had settled on 5 percent, at that point, we had conceded that that was all the governor would get," Ige said. "What we wanted to do was have the budget reflect what was the likely outcome."

According to the HSTA’s complaint, Neil Dietz, the state’s chief labor negotiator, warned the teachers union in late April that if they did not agree to a 5 percent pay cut and an equal split on premiums that lawmakers would turn to 10 percent in labor savings.

State Schools Superintendent Kathryn Matayoshi, according to the complaint, warned that a 10 percent cut at the state Department of Education would result in program elimination and teacher layoffs.

The teachers union suggests that the state used the threat of 10 percent labor savings and the budget deadline at the Legislature as leverage. According to the complaint, HSTA negotiators tentatively agreed and signed off on the main contract terms in late April — the day before House and Senate negotiators reached agreement on the final budget draft — but the deal unraveled because of other issues during the next two months.