House and Senate negotiators gave tentative approval Tuesday afternoon to a bill that includes more than $70 million for raises for public workers, a step that could turn out to be politically perilous during a pandemic in which thousands of private-sector workers have lost their jobs.
It also may be extremely difficult to actually fund the raises, given that the state now faces a $2.3 billion budget shortfall because of the steep drop-off in tax collections as the state economy shut down during the COVID-19 crisis.
House Labor and Public Employment Committee Chairman Aaron Ling Johanson described the proposed new draft of Senate Bill 785 during the hearing, saying it includes funding for negotiated or arbitrated raises for units of the Hawaii Government Employees Association that Gov. David Ige submitted to the Legislature before the impact of COVID-19 hit.
House Finance Committee Chairwoman Sylvia Luke confirmed in a written statement that the raises for nearly 29,000 HGEA members for this fiscal year and the new fiscal year that begins July 1 total about $60 million.
The new draft of SB 785 was not available for public review by press time Tuesday, but Johanson said it also includes $10.94 million in raises for members of the University of Hawaii Professional Assembly that were submitted to lawmakers by the Ige administration last month.
Senate President Ron Kouchi said he would not be available to discuss the measure until today, and House Speaker Scott Saiki declined comment. Johanson also did not respond to a request for comment after the hearing.
HGEA Executive Director Randy Perreira said in a written statement that “the legislation before the state Legislature will complete the bargaining cycle for employees whose contracts were supposed to have taken effect nearly a year ago on July 1, 2019.”
“These agreements were negotiated or arbitrated many months ago, and affect employees like nurses, health care workers, epidemiologists, social workers, lifeguards, school cafeteria managers and educational assistants in our classrooms,” Perreira said. “The agreements to be acted upon will effectuate contracts for many of our frontline public workers who have continued to provide vital services to our community during the pandemic.”
“The wages these workers receive are immediately reinvested in our community, as public employees meet their financial obligations and continue to patronize our local small businesses to keep them afloat in this difficult economy,” he said in his statement.
The Ige administration has repeatedly refused to disclose the percentage of pay increases awarded to the members of each bargaining unit until the raises are funded through appropriations by the state Legislature and the City or County Councils of each island.
However, sources say the raises for HGEA members are generally in line with the 2%- to 2.5%-per year increases that were awarded to other public-sector unions in recent years. Those other unions, including the United Public Workers and the Hawaii State Teachers Association, are also receiving raises this year and next because money to fund those contracts was appropriated in 2019 for both this fiscal year and next year.
Some lawmakers say privately that even in the context of a pandemic, they are uncomfortable giving raises to the members of some public-sector unions but not others.
Certainly, the public-worker unions are politically powerful in Hawaii, but it may still be risky for lawmakers to approve public- worker raises in an election year at a time when hundreds of thousands of private-sector workers have lost their jobs and are drawing unemployment.
SB 785 now goes to the full House and Senate for further consideration and floor voting, a process that will put every lawmaker officially on record as either supporting or opposing the raises. The House and Senate conference committees voted unanimously in favor of the bill Tuesday after Johanson described its contents.
Former House Speaker Calvin Say said the House Democratic caucus was not briefed on the plan to give out public-worker raises during the pandemic, and said he isn’t sure whether he will support the measure because “I haven’t seen what the total cost was and how they’re going to find the resources at this point in time.”
“I’ll be open to whatever this leadership decides, but they’d better be able to defend their members,” said Say (D, Palolo-St. Louis Heights-Kaimuki).
House Minority Leader Gene Ward (R, Kalama Valley-Queen’s Gate-Hawaii Kai) said he was not told about SB 785, either.
“I have seen nothing in writing, but my understanding is that all pay raises were to be negotiated but not go into effect until the COVID-19 pandemic lifted, or the $2-$3 billion state budget deficit was resolved,” Ward said in a written statement. “Presently we have a government run economy and our private sector is running on 3 cylinders.”
In fact, Ige in mid-April told public-worker union leaders that public employees including teachers would need to take furloughs that would amount to a 20% pay cut to help offset the budget shortfall. He later backtracked on that proposal, saying there is “no immediate need” for furloughs or pay cuts.
Meanwhile, lawmakers have authorized Ige to borrow up to $2.1 billion from the federal Municipal Liquidity Facility to help balance the state budget until tax collections significantly recover, money that must be repaid within three years. Perreira has also endorsed that idea.
Ryker Wada, director of the state Department of Human Resources Development, said it is Ige’s responsibility to negotiate new contracts with the public-sector unions and then submit them to the Legislature and the City and County Councils. In the end it is the Councils’ and the Legislature’s responsibility to decide whether to actually fund the pay increases.