Resolving minimum wage tops lawmakers’ priority list

Low-income workers in Hawaii, who missed out when the Legislature could not agree to a minimum-wage increase last year, may fare better this year.

State House and Senate leaders preparing to open a new 60-day session on Wednesday say a minimum-wage increase is probable.

President Barack Obama and Democrats in Congress have made a hike to the federal minimum wage part of the party’s focus on income inequality in an election-year contrast with Republicans. In Hawaii, where Democrats are in complete control, it is more about unfinished business.

Negotiations to raise the $7.25-an-hour minimum wage to $9 or more buckled last year over how much to expand the 25-cent tip credit, the amount businesses can pay below the minimum wage to waiters, valets and other workers whose income is supplemented by tips.

The failure to reach an agreement was a black eye for Gov. Neil Abercrombie and many Democrats, since the state’s minimum wage has not been increased since 2007 and state lawmakers and other government workers have received sizable pay raises.

"We’ve been a liberal state and have a reputation of being a pro-labor state," said House Speaker Joseph Souki (D, Waihee-Waiehu-Wailuku). "I think then we should act like that and be a little bit more bold on that area."

Last year, House negotiators had recommended expanding the tip credit to 35 cents an hour, while the Senate had sought to bring it to $2, which was unacceptable to labor interests.

Senate President Donna Mercado Kim (D, Kalihi Valley-Moanalua-Halawa) says a compromise is possible.

"I think cooler heads have met — and prevailed — and I’m very hopeful," she said.

Senate Minority Leader Sam Slom (R, Diamond Head-Kahala-Hawaii Kai) and other Republicans — and possibly some conservative Demo­crats — will argue against an increase or, if it looks inevitable, call for a significantly higher tip credit. Slom said the minimum wage is an entry-level training wage.

"It continues to be our position that this further harms our business climate and actually destroys jobs, rather than creates opportunities," he said.

With the state posting a record $844 million budget surplus after last fiscal year, lack of money is not the issue it has been during the past several sessions. Still, lawmakers do not appear ready to let the money flow. The recession scarred House and Senate leaders so badly that many are cautious about even modest new spending.

Abercrombie’s $12.2 billion supplemental budget draft — a 2.4 percent increase — and $2.6 billion state construction outlay — a massive 218.9 percent increase — might face the hatchet, not the scalpel.

"We’ve had a lot of history where surpluses disappear quite rapidly," Souki said. "And usually after the surplus disappears, we have kind of a minor recession, where we have to make a lot of financial adjustments."

Kim is equally skeptical.

"The governor says we’re flush with extra money," she said. "I tend to be more conservative about wanting to go ahead and spend everything that we get."

Emotionally drained from the special session on gay marriage late last year, many lawmakers have no real appetite for political drama on issues such as gambling, physician-assisted suicide or legalizing marijuana, especially in an election year. Privately, many would also like to avoid internal leadership fights until after the elections, when both the House and Senate will likely make leadership changes.

"I think steady Freddy is the deal — that’s the tone — because we saw an incredible exercise in democracy," Senate Majority Leader Brickwood Galuteria (D, Kakaako-McCully-Waikiki) said of the gay-marriage debate. "But it was intense, right?"

VOTERS IN NOVEMBER will decide whether to approve a constitutional amendment that would allow state money to be spent on private preschool, which is essential to Abercrombie’s early childhood education plan to eventually offer preschool to all of the state’s 17,200 4-year-olds.

With junior kindergarten ending next school year, the state is scrambling to provide short-term preschool options. Lawmakers approved $6 million last year to expand Preschool Open Doors, a child care program, to cover about 900 children, and the governor wants an additional $2.5 million in subsides for parents.

The governor also wants $4.5 million to provide free preschool for 640 children in low-income families at 30 public schools, including rural schools where preschool choices are limited.

But the House, in particular, has reservations about any expansion.

"We do want to wait for the (constitutional amendment)," House Majority Leader Scott Saiki (D, Downtown-Kakaako-McCully) said. "It’s premature to create a new program."

While some lawmakers praise Abercrombie for taking concrete steps on preschool, an issue that has drifted for more than a decade, Saiki and others maintain the governor and his advisers have not provided enough detail or adequately consulted with lawmakers. He said the governor’s free preschool proposal, for example, was "sprung on us" last week.

Now that Kauai County and Hawaii County have approved restrictions on genetically modified organisms, lawmakers will be under pressure by anti-GMO activists and the biotechnology industry to take some state action. Kauai passed a GMO and pesticide regulation law, which is being challenged by biotech companies in federal court, while Hawaii County passed a law restricting new GMO crops.

Lawmakers are expected to debate GMO labeling, which passed the House but stalled in the Senate; greater disclosure on pesticide use; and whether the state should pre-empt the counties from regulating GMOs.

Saiki said committees with jurisdiction over GMOs would have early leeway, with House leaders evaluating what direction — if any — to take at the midpoint of the session. The Senate has been considered a firewall against GMO regulation, but Kim said she is open to GMO labeling if questions about label content, which products are covered, and enforcement can be answered.

"People want to know. I want to let them know," she said. "But how do you go about doing that?"

For the first time in several years, the House and Senate will promote a joint majority package of legislation. The themes will be the environment and seniors.

House and Senate lawmakers will also shine their oversight lamp on spending and management at the University of Hawaii, management and safety at the Hawaii State Hospital, and the rollout of the Hawai‘i Health Connector, the new health insurance marketplace under the federal Affordable Care Act.

House Minority Leader Aaron Ling Johanson (R, Fort Shafter-Moanalua Gardens-Aliamanu) said Republicans would explore pegging state income tax rates to the consumer price index, which could help taxpayers absorb the state’s high cost of living.

House Republicans may seek revisions to the state’s curriculum approval process, an interest that grew from, but is not limited to, concern about the Pono Choices sex education pilot at middle schools. Given the governor’s focus on preschool, Republicans also want a discussion on whether kindergarten should be mandatory.

House Republicans may urge the state to adopt elements of the federal Religious Freedom Restoration Act, an issue that arose during the gay-marriage debate.

"We’re really focused on coming up with some realistic solutions that are practical and pragmatic but are going to make a difference in people’s lives," Johanson said.

Slom, the only Republican in the Senate, wants restrictions on the use of unmanned aerial vehicles, or drones, for surveillance on residents. The Federal Aviation Administration has said that Hawaii could be a drone-testing site, triggering some privacy fears from civil-liberties advocates.

Both Johanson and Slom said they would call for a constitutional amendment to establish initiative, referendum and recall, an issue that may have appeal among Republicans and Democrats. While conservatives might want to force public votes on topics such as gay marriage, liberals might want votes on GMO labeling or legalizing marijuana.

"I think, at its core, it’s trying to empower people," Johanson said.

Slom, who has proposed initiative, referendum and recall in the past, said many of the people who came to the state Capitol to oppose gay marriage left feeling frustrated and powerless.

"I’m trying to harness the energy of those people that came down here, many of whom were not even registered to vote, many of whom had never been to the Capitol before," he said.