STATEMENT ON HGEA BINDING ARBITRATION DECISION
For Immediate Release: April 15, 2005
HONOLULU – The arbitrator awarded raises to Hawai`i Government Employees Association (HGEA) employees that will average about 5 percent per year and cost the State of Hawai`i about $97.3 million in general fund monies over the next two years.
Georgina Kawamura, Director of the Department of Budget and Finance, who dissented from the award, noted that the arbitrator’s statement that the total cost was $82 million was in error. If the same raises were given to the other outstanding bargaining units, the total increase in collective bargaining costs to the State would be about $222 million over the next two years, and then approximately another $200 million in the third year out, even if there were no further increases. These numbers do not even include the costs from non-general fund revenues (approximately $29 million for the next two years) or increased state health care fund [EUTF] contributions (approximately $33 million for the next two years). The State believes that the arbitrator, among other mistakes, ignored the plain meaning of the statute by considering wages paid to employees outside Hawai`i.
Governor Linda Lingle made the following statement: “This arbitration award continues a trend of taking almost every single penny of the State’s revenue increases and using it for collective bargaining increases. While revenues have grown by a cumulative total of one billion dollars in the last ten years, appropriations for collective bargaining [increases] have totaled over $873 million during the same time. When increases in expenditures for the health fund and contributions to the retirement fund are added in, the amount is over one billion dollars. The absorption of virtually all revenue growth by these pay and benefit increases has diminished the State’s ability to provide for its people as a whole. Consequently, the State is forced to forego a number of vital priorities for its citizens . . . .’”
“This arbitration award means that our infrastructure will continue to deteriorate, and we won’t have the money we should for our needy, our schools, our harbors, our airports, our environment, new programs and initiatives, and we won’t have the money we should to help those of our citizens who do not work for the State of Hawai`i. The arbitrator says we can afford the raises. While this is technically true – we won’t go broke now – we lose so many opportunities to make Hawai`i a better place and to plan for the future. And, we place ourselves in a very precarious position if we have some event that devastates tourism, even temporarily. While I am pleased that due in large part to the efforts of the private sector and the initiatives of this administration, our economy is strong, that is not a reason to award the entirety of our economy’s growth to our State employees. I value highly those employees – they do a fine job – but we simply shouldn’t be paying these types of raises. It isn’t prudent, and it doesn’t make common or fiscal sense. I say this to the Legislature: Please heed my warnings and the prior warnings of Governor Cayetano – repeal binding arbitration, before we permanently mortgage the futures of Hawai`i’s children.”
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For more information, contact:
Lenny Klompus
Senior Advisor – Communications
Phone: 586-7708
Russell Pang
Chief of Media Relations
Phone: 586-0043
