Coronavirus salary cuts delayed to June, could be prevented
An initial May 1 date has been pushed back and federal funds could cover budget shortfall
News Release from HSTA, April 17, 2020
Gov. David Ige said Friday that his controversial idea of cutting state employees’ pay by 20 percent—including that of educators—might not happen after all, and unions have been told even if salary cuts happen, they’ll start later than originally planned.
After unions notified their members of the salary reduction idea Tuesday night, state officials informed union leaders the implementation date of the salary cuts has been delayed by at least one month, to June 1 instead of May 1.
When a reporter asked Ige at a news conference Friday if he planned to lessen or delay the salary reductions, he said, “We are looking at all options. The numbers range from the worst-case scenario to the best-case scenario. It is possible that there would be no salary cuts at all, if there is access to federal funds that would allow us to avoid a salary cut.”
Ige, whose budget officials notified public union leaders Tuesday the pay cuts could start as soon as May 1, told reporters Friday, “The situation is real. We are seeing a dramatic reduction in the revenues that the state counts on to provide critical state services. And it is a balancing act but I am required by law and constitution to have a balanced budget.
“We are looking at all options in terms of getting the resources necessary to continue state government services,” Ige added.
Additional federal aid would prevent pay cuts, Schatz says
Hawaii could get another $4 billion in federal aid, which should prevent pay cuts for state workers being considered by the governor, said U.S. Sen. Brian Schatz.
He said Congress could agree on the proposal by next month.
Schatz said every state in the country is dealing with lack of revenues to run the government, so it only makes sense for U.S. lawmakers, both Democrats and Republicans, to agree on a proposal—and the sooner the better.
“Everybody is expecting that we’re gonna pass another package likely sometime in May,” he told KHON2.
Schatz says the National Governors Association has asked for federal aid to help stabilize the economy of every state, so Congress is making it a priority. In the federal CARES Act package, Hawaii received $1.25 billion.
“The package that the National Association of Governors is asking for is $500 billion. So if we got our share of that, we’d be in the $4 billion range for the state of Hawaii,” Schatz told KHON2.
During Wednesday’s news conference, the governor said he needs to slash $1.5 billion in the state budget. He also said money from the CARES Act cannot be used, but he seemed to change his mind Friday.
“We are also looking at budget reserve funds and federal monies available through the CARES Act. Government employees are extremely critical in this time of crisis,” said Ige.
Ige said cutting salaries is a last resort, and he’s now exploring all options to avoid it, including tapping into the state’s $375 million rainy day fund.
“We are already looking at cost controls on the expense side. We are also looking at what can be done to access the rainy day fund,” said Ige.
Schatz points out that cutting employees’ pay sends the wrong message, and would make it harder for the economy to recover.
“It is not the time to cut the salaries of your teachers and your public health professionals and your nurses and your airport workers and your bus drivers. We’re gonna need everybody to help us guide our way out of this,” said Schatz.
Senators call out Ige's chief of staff for failing to tell them about salary cut proposal
State senators Friday assailed Ige’s chief of staff for failing to brief them on the controversial plan to cut state employees’ pay because of budget shortages expected from the coronavirus pandemic.
Ige's chief of staff, Linda Takayama, received strong criticism from senators at a state Capitol briefing Friday afternoon because senators found out about the salary cuts from the media and union members.
State Sen. Donna Mercado Kim (D, Kapalama, Alewa, Kalihi Valley, Moanalua), told Takayama, “You folks didn't raise it, didn't bring it up to any of us. We met with you. These meetings are being televised, and the very next day or that evening, this information comes out, takes us by surprise, takes the public by surprise.”
Kim said she heard from state workers by phone and email who said, “They’re devastated! These people are devastated! And they're the ones looking out for our children. They're the ones that are working on the front lines, risking their own health. And they hear stuff like this.”
State Sen. Kurt Fevella (R, Ewa Beach, Ewa) complained to Takayama,"These guys are working hard and on the front lines and showing up for work and feeding our kids and teaching our kids online, and we're going to sideswipe them with a 20-percent cut without even having a discussion? You was right here. You could have given us a heads up offline and said that the governor was going to do this, so we don't get caught off-guard.
“We cannot be backdooring each other because we're all one family, one ohana. It hurts everybody when something like this happens,” Fevella said.
An exasperated State Sen. Donovan Dela Cruz (D, Wahiawa, Mililani Mauka, Waipio Acres) told Takayama, "Linda, what I don't get is you're saying you want to work with the Legislature, but then you go and ask the departments not to respond,” to lawmakers’ questions. ”Linda, why don't you understand there's a sense of urgency?
“We all don't want the 20-percent furloughs that was discussed. We want to be able to look to provide options, yet somehow you're determined not to allow that to happen. I'm not sure why,” said Dela Cruz, who chairs the Senate Ways and Means Committee, which oversees state finances.
When Ige was asked by a reporter Friday how he might repair the broken trust with lawmakers who expressed anger that they haven’t been briefed on budget cut plans and haven’t been getting coronavirus-related information they’ve requested from the Ige administration for weeks, he said, “I continue to work with our legislative colleagues to keep them informed.
“Obviously these are difficult decisions that we need to make, and certainly, the level and extent of the conversations have to be contained so that we can have thoughtful discussions and decision-making,” Ige added.
On Wednesday, Senate President Ron Kouchi (D, Kauai, Niihau) and House Speaker Scott Saiki (D, McCully, Kakaako, Downtown) issued the following statement in response to Ige's proposal: “Although Governor Ige has the unilateral authority to impose furloughs and salary cuts, we do not agree with such action. We urge the Governor to obtain better data and analysis before he makes this decision. We also urge him to act on all alternatives, just as the National Governors Association did when it called on Congress four days ago to provide an additional $500 billion to the 50 states to stabilize state budgets due to tax revenue shortfalls.”
More HSTA links
HNN: HSTA: State informs union leaders of delay in possible pay cuts