SECOND OF TWO PARTS

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When Democratic Gov. David Ige runs for re-election in 2018, his political fate may depend on how successful he is at appeasing some key interest groups over the next two years, and how much progress he can make in addressing issues such as homelessness that have emerged as top-tier voter concerns.

Much of the political buzz at the state Capitol in recent months has revolved around who might challenge Ige, who plans to seek a second term.

Colin Moore, director of the Public Policy Center at the University of Hawaii at Manoa, said the widespread speculation about Ige’s potential Democratic opponents suggests people perceive him as “weak, or at least politically vulnerable.”

“That’s sort of interesting because it’s not as if there has been any sort of catastrophe on his watch,” Moore said. “For a governor who is serving at a time when the state is prosperous, and there has really been no major error or fight with some important constituency yet, I think maybe people are responding to the sense that the administration seems a little directionless.”

So far, representatives of key special interest groups such as Hawaii’s environmental movement and the state’s public worker unions say Ige’s record has been mixed.

Marti Townsend, director of the Hawaii Chapter of the Sierra Club, praised Ige’s efforts to preserve 665 acres at Turtle Bay as well as his opposition to the NextEra purchase, but said the governor’s positions on other environmental issues such as the legal and political dispute over restoring East Maui stream flows have been disappointing.

Ige also shocked some environmentalists early in his administration when he nominated Carleton Ching to serve as his new chairman of the Board of Land and Natural Resources. Ching was vice president of community and government relations for Castle & Cooke Hawaii, one of the largest developers in the state.

Townsend said the appointment “showed a certain amount of tone-deafness,” and Ige later withdrew it after environmental groups objected. Instead, Ige nominated Suzanne Case, who was director of The Nature Conservancy in Hawaii, to serve as BLNR chairwoman.

Some are unhappy with Ige’s handling of environmental issues thus far, “and so he will have some work to do to win over some environmentalists, and he has two years to do that,” Townsend said.

“I don’t think you can really say that it’s all roses. There have definitely been challenges and issues,” Townsend said. “I will say that he is open to hearing community concerns, and takes our concerns seriously. Whether he always votes with us is another matter, but at least we know we can get a fair shake with him.”

Unions disappointed

A key issue for the Sierra Club in the years ahead will be the state’s role in preventing 18 massive fuel storage tanks under Red Hill from leaking into the county water supply, Townsend said. That will require more funding for the state Department of Health and leadership from Ige. “Gov. Ige’s going to have to prioritize that because we can’t rely on the federal government to do it for us,” she said.

Randy Perreira, executive director of the Hawaii Government Employees Association, said he and his organization have a good relationship with Ige, but his members are disappointed with the administration. HGEA is the state’s largest labor union with more than 29,400 active members statewide, and its members are influential in the state Democratic Party.

Perreira and others say Ige made progress in repairing damage caused by state budget cuts and layoffs, some of which date back to former Gov. Linda Lingle’s term in office. For example, the dengue fever and Zika scares early in Ige’s tenure made it clear that staffing and funding areas such as vector control are essential, not optional.

But Perreira described Ige’s decision to privatize three state-run hospitals in Maui County as “a huge failure.” The plan to turn those hospitals over to Kaiser Permanente to operate is the largest privatization effort in state history.

HGEA and the United Public Workers union have about 1,400 members at the Maui County hospitals, and the unions fought the privatization initiative in court and at the state Legislature. Ige says the Maui privatization will save the state $260 million over the next decade, but union opposition has stalled the changeover until next year.

“It was terribly mishandled, and it created nothing but anxiety I think for the community over … the gaps in health care that resulted from this botched transition,” Perreira said.

The privatization issue also exposed a surprising rift between Ige and members of the Legislature last year when lawmakers passed a bill to provide severance payments or retirement bonuses for the Maui County hospital employees whose jobs will be privatized.

Ige vetoed the measure, and lawmakers took the extremely rare step of overriding Ige’s veto. That vote marked only the second time since statehood that the Hawaii Legislature overrode the veto of a Democratic governor.

The confusion surrounding that veto override underscored a larger unhappiness with Ige among some lawmakers. While the Legislature met to consider the veto override, Ige was bargaining with HGEA to try to reach an agreement on the issue, and lawmakers felt they were left in the dark about those negotiations.

Ige served in the state House and Senate for nearly three decades, and some lawmakers had expected clear communication and close collaboration with his administration.

“I don’t get a sense that that is clearly working out,” said Blake Oshiro, a former state lawmaker who served as deputy chief of staff under former Gov. Neil Abercrombie. Oshiro now works as a lobbyist.

‘Zero-raise’ proposal

It is also galling to some that Ige is proposing no raises for the public worker unions when the state had a record $1 billion budget surplus last year, and projects a cash surplus of more than $726 million this year.

The administration has proposed no raises for the next two years for HGEA, the Hawaii Fire Fighters Association and the University of Hawaii Professional Assembly, and Perreira described Ige’s zero-raise proposals as “ridiculous.”

“Going forward, I think he should be most concerned about that and how the people that work for him are going to react to that,” Perreira said.

Ige offered assurances that his administration is looking at providing “fair compensation” to public workers.

“We are trying to look at what’s fair for employees, and at the same time looking at making investments in those areas that we think are most important,” the governor said. For Ige, an important aspect of the negotiations is that there are hidden costs when government awards raises to workers.

A 1 percent increase in pay for employees in all of the 14 public worker bargaining units would cost the state about $76 million a year, he said, but those raises would also add $100 million to the unfunded liability in the public pension fund because pensions are linked to pay. The pension fund already has an unfunded liability of more than $8.7 billion.

Homelessness crisis

Like any governor, some intractable problems were thrust upon Ige. Hawaii’s homelessness disaster is a good example.

Polls show that homelessness is among the top concerns of Hawaii voters, and public frustration with homelessness represents a potentially serious political liability for people in power, starting with Ige. The issue is complex, but that is difficult to explain to voters who are dismayed by a growing number of people sleeping on the streets.

Ige says there is too much attention paid to the “point-in-time” homeless counts, which show the population living on the streets continues to grow.

“We take the point-in-time and we compare it to the previous year and it’s increased by 1 percent, and everybody thinks nothing’s happening,” Ige said. He cited successes such as the clearing of most of the homeless campers in Kakaako parks.

“The reality is in the last 12 months we’ve touched more than 5,000 people, either placing them into permanent housing, or … we’ve helped 3,000 stay out of becoming homeless, helping them get through a rough patch, and keep them in their housing situation rather than let them fall into homelessness,” he said.

Ige also says his administration has leveraged $180 million in private activity bonds to develop 2,600 affordable rental units that have been approved statewide. “We need to be able to talk about that,” he said. “We would like to see those kinds of numbers published all the time so people can see it is a constant struggle.”

When Ige announced his proposed new two-year budget in December, he highlighted his request for $20.9 million a year to deal with homelessness in the next two fiscal years. That is an increase from the $12 million that state lawmakers provided in 2016 to help cope with homelessness. “This budget seeks to continue the work that we started until we can end homelessness,” Ige told reporters.