University of Hawaii and Department of Education brace for budget cuts

Millions of dollars in budget cuts to both the state Department of Education and University of Hawaii system are in the works, and while promised federal aid from Washington will be welcome relief, it also adds more uncertainty to Hawaii education.

DOE and UH officials have been planning for a financial hit for months since the COVID-19 pandemic began crippling Hawaii’s economy.

Gov. David Ige said UH will have to make a $70 million cut to its 2022 and 2023 fiscal year budgets; and the DOE would have to cut 70 positions and $165.6 million in programs for both the 2022 and 2023 fiscal years.

The DOE is the state’s second-largest department and represents 21% of the state budget. The DOE has approximately 22,000 salaried employees including about 13,000 teachers. The DOE general fund budget for current fiscal year is $1.67 billion.

Late last year Ige said furloughs for thousands of state workers, which were planned to cut spending, were on hold. The furloughs were originally planned to save $300 million a year and were designed to prevent the layoffs of 4,000 state workers.

Citing a “fluid situation,” Ige’s office said there is no timeline of when the furloughs would begin.

In a statement Ige said, “I know the uncertainty makes things difficult for you and your families. We are continuing to monitor the latest information and will provide an update as soon as we can. With the safe and effective vaccines being administered, I’m hopeful we can limit the number of new cases and see our revenues pick up soon. Nevertheless, the impact to the state’s budget has been severe, and economists predict it will take years to recover. I anticipate that permanent and ongoing changes must be made to state government and ask your help in creating a more resilient way to serve the people of Hawaii.”

Individual school budgets are still being worked on. But a 10% budget cut approved Dec. 3 by the state Board of Education represents the elimination of 102.5 full-time equivalent positions at the state office level and $164.3 million department-wide.

After Ige’s initial announcement of budget cuts and furloughs, schools Superintendent Christina Kishimoto wrote that budget cuts “will result in significant cuts to school operations.”

But they’re “a fraction of the funding being cut from the department’s budget,” she wrote. “In reality, the department is facing insurmountable budget cuts that will devastate Hawaii’s public school system.”

“The vast majority of the proposed $165 million cut are budgeted for position salaries,” Kishimoto wrote. “The $95 million a year cut for Weighted Student Formula is the equivalent of close to 1,500 teacher positions. The $24 million a year cut in special education per-pupil funding is equivalent to more than 350 teacher positions. Altogether, more than 1,800 teaching positions could potentially be eliminated unless we can find a solution.”

Ige said reducing spending for both lower and higher education was difficult because education has been a priority for his administration.

But Ige is required to present the Legislature with a balanced budget, and the state faces a projected annual budget deficit of $1.4 billion in each of the next four years.

Kalbert Young, UH vice president for budget and finance and its chief financial officer, wrote that planned reductions in UH base operating costs equal 15% across the 10- campus system, or over $78 million less than the current $526 million general fund base budget.

Of the overall $78.5 million in original, anticipated cuts, UH-Manoa would take the biggest hit, or $35.6 million.

The next-biggest cut would be seen by all community college campuses combined, or $23 million.

The budget for “UH Systemwide Support” would go down by $8.5 million, followed by a $5.7 million reduction for UH-Hilo and a $2.7 million cut for UH-West Oahu.

“The program review being undertaken now may identify some reductions that may have to be permanent in nature,” Young wrote. The UH “administration is committed to the university’s deliberative process to take on the very difficult challenge of finding opportunities for reform, efficiencies and/or reductions, as necessary.”

Ige previously announced that he and his Cabinet members would take pay cuts of 9.23% starting Jan. 1.

In October, UH President David Lassner announced that 216 UH executive-managerial employees also would have their pay cut by 9.23% starting Nov. 1 for managers who make up to $200,000 annually. Others who are paid more than $200,000 saw their salaries cut by 11%.

The managerial pay cuts are expected to save UH $2.2 million in the current fiscal year and $3.4 million in fiscal year 2021-2022.

Lassner said executive- managerial employees make up about 6% of the approximately $600 million in annual salaries paid to 7,342 employees across the 10-campus UH System.

Lassner volunteered to reduce his own total compensation of $395,004 by 20%.