Hawaii’s lowest-paid workers could soon get a raise after state House and Senate negotiators agreed Friday to gradually increase the minimum wage to $10.10 an hour by January 2018.
The bill would also expand a tip credit to 75 cents, but businesses would not be able to deduct the tip credit unless workers earn at least $7 an hour above the minimum wage, up from 50 cents.
Social-service and labor advocates have been frustrated that the state’s $7.25-an-hour minimum wage has not been raised since 2007. The tip credit is 25 cents. The gradual increases to the minimum wage would start in January.
The state Department of Labor and Industrial Relations has estimated that about 2.2 percent of the state’s labor force earned the minimum wage or less in 2012.
President Barack Obama has called for an increase in the federal minimum wage to $10.10 an hour, so the bill — if approved as expected next week — also represents a symbolic political victory for Hawaii Democrats.
"It’s worth the conference process to elevate the status of the working poor," said Sen. Clayton Hee (D, Heeia-Laie-Waialua), who had forced the debate on the minimum wage into conference negotiations in the hopes of getting to $10.10.
Rushing to meet a Friday deadline to have bills ready for final votes next week before session adjourns, lawmakers found a creative approach to finance a deal among the state, the city, a private land trust and Turtle Bay Resort to preserve 665 acres on the North Shore from future development.
Under the bill, the state would restructure debt from the Hawai‘i Convention Center and use about $3 million from the interest savings to underwrite debt service on $40 million in revenue bonds to acquire a conservation easement from Turtle Bay. The city and the private land trust would pick up the remainder of the $48.5 million for the easement.
House negotiators, who were ready to delay action on Turtle Bay until next session, insisted that the conservation easement include provisions for greater public access to the Turtle Bay land.
"We want to ensure that anywhere there is a conservation easement, the public should have full access to those areas," said Rep. Sylvia Luke (D, Punchbowl-Pauoa-Nuuanu).
Sen. David Ige (D, Pearl Harbor-Pearl City-Aiea), who came up with the financing idea, said it is important to preserve land near Kawela Bay and Kahuku Point.
Gov. Neil Abercrombie applauded the agreement. "This land preservation deal with Turtle Bay Resort is a long-awaited victory for the people of Hawaii, especially the North Shore community," the governor said in a statement.
Lawmakers also agreed to provide counties with an additional $10 million a year for two years in hotel room tax revenue. County mayors had wanted lawmakers to lift the annual $93 million cap in hotel room tax revenue that goes to counties, but lawmakers were concerned about the impact on the state budget.
Unlike most years, House and Senate leaders strictly enforced an early evening deadline on conference committee negotiations, leading to a chaotic scene that came to an abrupt close when House Speaker Joseph Souki (D, Waihee-Waiehu-Wailuku) waved his arms and shouted "everything’s over."
On Friday morning lawmakers reached agreement on the state budget, which would reduce Abercrombie’s spending request in light of the state’s downgraded revenue forecast.
Lawmakers agreed to spend $12.1 billion in fiscal year 2015, down from the $12.3 billion Abercrombie had requested. The general-fund portion of the budget — where the governor and lawmakers have the most discretion — would be $6.1 billion, down from the $6.3 billion the governor had sought.
Negotiators also made adjustments to the budget for this fiscal year, which ends in June. The revision would account for $11.7 billion in spending, down from the $11.8 billion in Abercrombie’s request.
Late Thursday night negotiators settled on a state construction outlay that had been the sticking point in budget talks. The construction budget would authorize $2.8 billion in spending next fiscal year. The blueprint calls for $2.2 billion in spending for this fiscal year. The totals track with what Abercrombie had requested, but lawmakers struggled to convert many of the governor’s cash requests for construction spending to bond money given the state’s revenue downgrade.
The construction budget includes $28 million over two years for the allied health and administration building at the University of Hawaii at West Oahu.
The University of Hawaii at Hilo’s pharmacy college, which was shut out last year at the last minute, would receive $33 million.
A separate construction budget for the state Judiciary contains $35 million for a new Judiciary complex in Kona.
Lawmakers also agreed to $10 million in grants-in-aid to nonprofits.
Luke, the lead House negotiator on the budget, said talk of the state’s record $844 million surplus at the end of last fiscal year left the wrong impression that the state was sitting on a huge amount of money. Although Abercrombie, Luke and Ige, the lead Senate negotiator on the budget, did caution against aggressive new spending after the surplus was announced, the public expectation was high.
When the state Council on Revenues downgraded the state’s revenue forecast in January and again, more significantly, in March, Abercrombie’s budget request was knocked out of balance, and lawmakers had to curtail new spending even more than they had expected.
Luke mentioned, awkwardly, that Ige is challenging Abercrombie in the Democratic primary for governor. She said Ige could have used the budget for political leverage against the Abercrombie administration. "He has never used any of the budget items for political reasons," Luke said, praising Ige for his patience.
Ige said, "Clearly, I think we did a good job of trying to balance the interest of the communities against the availability of funds. I do think that it’s a budget that we can all be proud of."
Negotiators signed off on a bill by Sen. Donovan Dela Cruz (D, Wahiawa-Whitmore-Mililani Mauka) that would explore the potential of exchanging state land with Castle & Cooke for some of the 20,000 acres of Dole Food Co. land between Wahiawa and the North Shore that could be preserved for agriculture.
Lawmakers also agreed on a bill that would allow for voter registration at absentee polling places starting in the 2016 elections and late voter registration on Election Day beginning in the 2018 elections. Rep. Kaniela Ing (D, South Maui) believes the changes could improve the state’s voter turnout.
"There’s lots of reasons why people don’t vote, but an arbitrary registration deadline shouldn’t be one of them," Ing said.
