HONOLULU (AP) — Hawaii Gov. David Ige on Wednesday announced plans to furlough more than 40,000 state workers to balance the budget as tax revenue takes a hit during the coronavirus pandemic.
The furloughs will take effect Jan. 1 and cut worker pay by 9.2%, Ige said. The governor said he and members of his Cabinet would take the same percentage salary cut.
The economic effects of the pandemic have been particularly hard on Hawaii, its workers and tax revenue, Ige said. The state has had the nation's highest unemployment rate for months as travelers stayed home to avoid getting infected. Strict quarantine and testing requirements on those arriving in the islands also depressed demand for Hawaii vacations. The jobless rate in tourism-dependent Hawaii stood at 14.3% in October.
“As the state’s largest employer, how can we not share in the pain when so many of our fellow citizens are experiencing economic hardship?" Ige said during a news conference. “Many of them have been furloughed for months, have lost their jobs or have seen their businesses fail.”
The furloughs will save the state $300 million over a 12-month period. It's a portion of the $1.4 billion in spending cuts that Ige said Hawaii will have to make each of the next four fiscal years.
The state's executive branch spent $8 billion during the last fiscal year.
More than 10,000 state employees at executive agencies will be furloughed two days a month.
About 22,000 state Department of Education employees, including teachers, and more than 9,000 University of Hawaii workers will also be subject to furlough, but they will be on a different schedule because of the academic calendar. Ige said the department and university would explain their plans later.
Another 4,600 workers will be exempt from furloughs, including nurses, firefighters, prison guards and others whose jobs involve around-the-clock operations.
The governor said he will rescind the furloughs as soon as they are no longer needed.
The state's biggest unions slammed the plan, calling it “drastic and rash.” In a joint statement, they vowed to "pursue all legal avenues to stop the unilateral implementation” of the furloughs.
“Cutting pay for at least tens of thousands of government workers impacts their ability to meet financial obligations and spend in support of local businesses," they said.
The statement was issued by the Hawaii Government Employees Association, the Hawaii State Teachers Association, the Union of Public Workers and the University of Hawaii Professional Assembly.
Ige said he did everything he could to avoid furloughs, including suspending contributions to state retiree health benefit funds, which saved $390 million. He said he transferred $345 million from rainy-day fund reserves, which had a balance of about $400 million.
The state also has issued $750 million in short-term bonds to cover operating expenses, and Ige plans to cut program budgets by $600 million every year starting the next fiscal year.
Ige said without furloughs, he would have to lay off more than 4,000 workers across executive agencies, the state Department of Education and the University of Hawaii to save the same amount of money.
Ige said he couldn't count on federal help, given the last time Congress appropriated coronavirus relief funds it specifically said the money could not be used to cover budget shortfalls.
But Corey Rosenlee, the president of the Hawaii State Teachers Association, said the governor has more options. He said the latest version of the stimulus bill being negotiated in Congress now includes $82 billion for education. He said the state could also raise taxes.