Letter to the Honorable Governor Linda Lingle

June 30, 2009

Dear Governor Lingle:

As you are aware, I am and continue to be an advocate of collective bargaining. To this end, I have refrained from acts which could be perceived as bargaining for the Administration. Notwithstanding, there are certain issues which I would like to bring to your attention and ask that consideration be given to them.

They are as follows:

1. Judiciary. As you have correctly stated, the Judiciary like the Legislature is your co-equal branch of government; therefore you cannot affect our separate budget but ask that the branches restrict the requisite amount of money. I am sending to you and the Honorable Chief Justice Moon a proposal for your consideration to delay the costs of Judges in a separate joint letter. However, due to the fact that my suggestion could be misinterpreted, I would like to again clarify my intent. I am fully aware that it could be perceived as an attempt to affect either of your appointing authority; that is not my intent. After my review of the process, I believe if we can collectively agree that the Chief Justice has to right to determine the timing of the swearing in of his Judges, once they have been vetted by the Judicial Selection Commission, you, the Chief Justice and the Senate for advise and consent, that he, the Chief Justice, can determine when the Judge shall be seated. Like all of us, the timing will be up to the Chief Justice and he can then have the flexibility with his Budget. When I was Judiciary Chair for the Senate, I recalled how much the staffing and cost of a Judge and support staff can be. If there could be an agreement that the delay is the Chief Justice’s discretion then it can minimize the political criticism.

2. Unintended Consequences of Furloughs. I recognize your desire to have furloughs apply uniformly to all. You have taken the position that even those workers who are paid for by special funds and federal funds should also be placed on furloughs. A furlough is defined by you as a layoff with no pay. Though we may disagree with the legal definition of a furlough, the end result is that the employee will, assuming your furlough plan is sustained, be without work and pay for three days a month.

As you know, I am a labor attorney. One of the areas which I have gone to the Supreme Court on cases is the issue of unemployment benefits. Though the specific area is the benefits available to striking employees, I developed a familiarity with UI benefits. An unintended consequence (or it could be intended) is that for employees who earn approximately $35,000 or less, the furloughs may result with windfall situation for the employee. As the DLIR has probably informed you, when an employee is without work for a portion of a week and the wages lost fall beyond a certain point, the UI fund can be called upon the make up the difference. Add to this the stimulus funds which may automatically add $25 to the amount, a furloughed employee, depending upon qualifications, could receive more than what he/she would have earned for the week. If an employee earns $30,000 a year or $2,500 a month, the windfall grows greater.

The irony is that for those who may not qualify this year and just misses the entitlement amount, they will most definitely qualify next year with a 14% wage reduction. I anticipate that those businesses, especially the small businesses, who have supported the concept of furloughs will be upset with even the thought of having to pay into the UI special fund to keep the adequate reserves. As it is now, those reserves will be affected by the high unemployment in the private sector alone.

In addition, if a bargaining unit calls a strike, then the impact on the UI fund would have to be assessed especially for those bargaining units not part of the strike but unable to work will be entitled to benefits.

3. Budget Consideration. At the heart of the need for furloughs and the number of days is the Budget. I understand that you may disagree with the Legislature’s Budget but it is the law unless you veto the Budge; having said that, we do agree that you have the ability to restrict funds to meet the shortfall. The issue will be what will be the amount of shortfall.

Like many situations, if we can reach common ground as to the following assumptions, we should be able to reach a compromise.

For example: Assumption 1-- all revenue enhancements will become law. I understand that you may not agree; however, will all due respect, if the legislature overrides your vetoes then they will be law. If this is the case then the total ending balance will be $149 million.

Assumption 2—The May Council of Revenue (COR) projections mean an addition $180 million over the March projections for FY 09. Add to this an additional $20 million for each FY10 and FY11. (Again, I do understand that you may not agree with the Legislatures revenue enhancements but for purposes of this discussion, please accept them.)

Assumption 3—You have delayed the payment of $180 or a portion of it by paying it in the next fiscal year. If we continue to pay “late” then we will carry this liability over into the out years when we anticipate that the economy will recover.

Assumption 4—each day of the furlough represents a 4.6% pay reduction for each day for every employee covered. It is anticipated that the three days will represent a 13.8% reduction. I recall a figure of about $10 million a day as the cost when we agreed to shut down the State in anticipation of the natural disaster.

Assumption 5—if the state is shut down for the day, then there will be additional savings in terms of cost of operations. I believe a fair estimate of the operational savings may be between $1 to $3 million a day.

All of these assumptions should result in a savings of approximately $132 to $156 million a year. What is therefore troubling is why you believe it is necessary to take 3 furlough days per months. It would be like satisfying the total deficit in one year.

I understand and can appreciate the need to posture with collective bargaining. However, this is not the time. The Unions have said that they are willing to share in the pain. If a 5% pay cut is shared by all employees, would that not give us approximately $175 million in savings? This would avoid the shutting down of government and furloughs.

Taking into consideration the unintended consequence of the furloughs and how devastating 3 furlough days can be, I ask that you consider the across the board pay cut with the Unions and/or alternatively, take only one furlough day a month.

Shutting Down The Capitol. I must also bring to your attention that the shutting down of the Capitol for 3 days a month will add an additional 12 days to the Session time period and costs to the Legislature. The Senate has, as you may be aware, been working for 2 years to become more efficient and more transparent. We believe we have achieved this with our paperless initiative. We are looking at the restrictions you have requested and stand ready to do our part. However, 12 more days to make up for the furlough days will add great expense to a budget which we have all ready substantially reduced.

On a final note, I also learned that Chair Kane, in the showing of support, has decided to accept furlough days for the DHHL. I would like to point out that DHHL like OHA have fiduciary responsibilities to the beneficiaries. In that DHHL has no general funds for this upcoming biennium, I see the shutting down of a completely special funded organization contrary to its constitutional mandate. Though Chair Kane has done an excellent job of placing beneficiaries on the land, there remains much to do. I would like for you and Chair Kane to re think that symbolic showing of support.

Again, I recognize this is a very difficult time; however, I do believe that consideration must be given to the unintended consequences of an act which may result with disparate treatment among workers, the outcome which you were attempting to avoid. In addition, there must be an alternative to simply furloughing all employees.

Thank you for taking the time to read my letter and I am willing to discuss my concerns if you wish.