The Senate Ways and Means Committee Monday morning voted to reject the appointment of state Director of Finance Craig Hirai, the second time in a week that one of Gov. David Ige’s cabinet appointments has been jeopardized by Senate push-back.
Hirai, who was appointed as interim budget director by Ige six months ago, served as executive director of the Hawaii Housing Finance & Development Corp. from 2013 until he was named state budget director last December. He is a certified public accountant, and has also worked as a tax attorney in private practice.
Hirai told senators last week he has spent much of his tenure so far in the state Department of Budget and Finance “putting out funding fires” after the coronavirus pandemic erupted, but senators questioned him Wednesday and Monday about spending and budget-cutting recommendations he has made to Ige.
One specific complaint involved the administration’s handling of negotiated raises for tens of thousands of state and county workers who are members of the Hawaii Government Employees Association and the University of Hawaii Professional Assembly.
The state is trying to cope with an anticipated $2.3 billion budget shortfall, and many thousands of private sector workers have lost their jobs. To give raises to public workers in that situation could be politically dangerous, especially with an election just weeks away.
Lawmakers voted last month to appropriate more than $150 million in general funds and an additional $50 million in federal and other funds to pay for raises for those public workers, but Sen. Kurt Fevella made it clear during Hirai’s confirmation hearing last week he was unhappy to have that issue dropped on his desk.
The governor and his staff negotiated most of the HGEA raises last year before the pandemic, although some of the pay increases were awarded through binding arbitration. Ige then submitted the pay increase packages to the state Legislature for funding.
Fevella (R-Ewa Beach-Iroquois Point), who is the only Republican in the 25-member senate, asked Hirai if he saw a letter from the Senate urging the governor to meet with the unions to ask them to defer the raises. Hirai said he did not believe he had, and Fevella asked how he would advise the governor on the issue.
“I think he should address those things as soon as possible, yes,” Hirai said.
Fevella continued: “As we went on the Senate floor and voted for this, it was as you can tell, it was very heart-wrenching and emotional, and all kinds of things that was happening there, even when we had stressed to the governor to make a decision, we didn’t hear nothing, and then we hear nothing from you, you was there, you say you was part of that advising to the governor.”
Hirai said he has a role in the decision making on public workers raises, but “I’m just part of it.” Hirai said he has to work with Ige and the state Department of Human Resources Development on the issue, and said the administration will “look at it now that the bill is passed.”
“Before the bill even came to the floor, sir, this could have been addressed before it came to the floor for the vote,” Fevella said. The issue of the raises “was put on the senators’ lap,” and it presented a dilemma, he said. “If I pass this, I gonna hurt the state. If I don’t pass ‘em, I’m gonna hurt the guys who deserve the raise,” he said.
Fevella said the Senate would not have been put in that position if Ige had “stepped up” and told the unions they would not get the raises this year. Instead, “right now we got people that’s not working, and we giving other people raises,” he said.
“That’s the kind of position that I don’t think we should have been put in if we have somebody strong, like you sir. You supposed to be strong in budgeting and worrying about the people, and not worrying about what the governor is thinking in a bargaining aspect,” Fevella said. “So, I think you should have had a little bit more say on behalf of the people, knowing that we didn’t have the money, because you’re the head of budgeting for the state. $150 million is not a small piece of change, that’s a lot of money.”
The Senate voted 21-3 in favor of the raises on June 26, with Fevella among those voting in favor of the pay increases. The House also voted to approve the raises.
Four members of the Ways and Means Committee voted in favor of Hirai’s nomination this morning, and seven voted against it. Those opposing the nomination were Fevella and Sens. Donovan Dela Cruz, Kai Kahele, Michelle Kidani, Sharon Moriwaki, Gil Riviere, and Maile Shimabukuro. Sen. Brian Taniguchi was absent.
Hirai’s nomination now goes to the full Senate for further consideration and a floor vote.
Last week interim state Tax Director Rona Suzuki announced she had asked Ige to withdraw her name from consideration after learning the Ways and Means Committee planned to recommend that she not be confirmed to the permanent post.
Ige did not actually withdraw Suzuki’s name from consideration, and the Ways and Means Committee is scheduled to question her this afternoon about her job performance.
In another sign of tension between the administration and senators, Department of Business Economic Development & Tourism Director Mike McCartney refused to testify before the Senate Special Committee on COVID-19 last month, and said he planned to file a complaint with Senate leadership.
McCartney said in an email to Senate President Ron Kouchi that he would allow DBEDT employees to testify before the committee “only when I (as the Director) can be assured that DBEDT employees will no longer be subjected to bullied, harassment, intimidation and threats which have created a hostile work environment.”
McCartney also refused to allow his staff to participate during a May 21 during a joint hearing of the Ways and Means Committee and the Senate Committee on Energy, Economic Development and Tourism.
A number of the Ways and Means Committee members also serve on the COVID committee, which has been scrutinizing the Ige administration’s response to the pandemic.