In early July, Gov. David Ige warned that given the sudden dropoff in tax collections and the collapse of the critically important tourism industry, the state would simply be unable to continue to spend at the rate it has been. Since then, there’s been little public discussion about the upshot, such as steps to reduce state payroll costs by way of layoffs, pay cuts or furloughs.
Even so, in the absence of an infusion of more federal funding — on the heels of more than $1 billion in Coronavirus Aid, Relief and Economic Security (CARES) Act money — Hawaii public worker unions are bracing for some sort of payroll belt-tightening proposal.
So far, no formal proposal has surfaced. However, according to union leaders, the governor last week suggested, in addition to imposing cuts to state departments, the furloughing of many state employees twice a month for a period of four years.
Facing a projected budget shortfall of $2.3 billion over the next two years, the Ige administration must size up potentially painful cuts to balance the state budget. According to the latest University of Hawaii Economic Research Organization forecast, Hawaii should not expect any meaningful broad recovery in the state economy until the middle of next year.
Because of this austere outlook, state workers assisting residents most in need, such as Department of Human Services (DHS) staffers — who help administer a wide range of social service programs including SNAP (Supplemental Nutrition Assistance Program) benefits and Medicaid — should get some protection from cuts that would result in backlogs in serving clients.
Others involved in the ongoing front-line response to the pandemic, including public school teachers, also should be spared a hard hit. In April, the Hawaii State Teachers Association rightly fought back when Ige broached — and then backed off — the idea of pay cuts of up to 20% for state workers. Including teachers in a furlough lineup would further set back students who are now trying to recoup learning losses from last spring, when dozens of in-person instructional days were scrapped due to school closures.
Back in May, the state’s largest public employee union, the Hawaii Government Employees Association (HGEA), responded to murmurs about furloughs by pointing out that such a move could result in financial hardship for many workers and their families, and further hurt the already flailing economy. Among HGEA’s current alternative suggestions: possible incentives to retire for workers already eligible.
As unions prepare for the likelihood of negotiations, they should be brainstorming cost-cutting strategies — and brace for shared sacrifice. The goal must be to avoid a bitter fight at a time when everyone throughout the islands needs to work together toward economic recovery; all involved should be offering up options for leaner-yet-efficient government operations.
On Monday, new DHS Director Cathy Betts told her staff in an email that she had been informed that a “likely 10% furlough will potentially be taking effect” Dec. 1. “The State’s financial situation remains dire. Should Congress act and pass the HEROES bill, then this may be avoided. However, given the current state, we must plan for the furloughs,” she said.
DHS helps clients with high-demand services and programs including: Temporary Assistance for Needy Families; child care; Head Start; employment training; aid to the aged, blind and disabled; Adult Protective and Community Services; case management for elderly victims of crime; adult foster care; Child Welfare Services; foster and adoptive care; and the State Children’s Health Insurance Program.
Lisa Kimura, Aloha United Way’s vice president of community impact, told Honolulu Star-Advertiser reporter Dan Nakaso that Betts’ announcement comes as the need among already furloughed and laid-off workers and other residents continues to grow, due to the state’s stalled tourism and other pandemic-related upheaval.
Kimura said her nonprofit, which had received up to 250 calls per week in February for referrals for help on its 211 line, now gets upwards of that count in a single day, with a significant increase in callers needing help with housing and rent. “We’re getting thousands and thousands and thousands of applications … for rental assistance,” Kimura said.
Last month, Ige said tax revenues coming into state coffers had dropped by 25%, and the state needed at least $1 billion in funding from the federal government to avoid substantial cuts to normal operating expenses. Also, Ige has secured approval from state lawmakers for another option, borrowing some $2 billion in loans from the Federal Reserve’s Municipal Liquidity Facility.
Attrition via retirement and lapsing of state vacancies surely will factor into the budget equation. And when public worker furloughs are tapped as one means to making ends meet — as was used during the Great Recession here a dozen years ago — the state must make those surgically, to maintain social-service safety nets and front-line worker services.
