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Hawaii hopes to avoid furloughs thanks to virus relief bill

HONOLULU — Hawaii’s governor and legislative leaders expressed hope Monday that a new coronavirus relief package being voted on in the U.S. Congress will allow the state to either delay or avoid furloughing state employees.

Gov. David Ige said his staff was going through the 6,000-page bill to understand what help would be heading to Hawaii.

“And clearly, I am hopeful that the funding provided with the federal government will be flexible enough so that we can look at deferring or reducing the furloughs that we have planned,” Ige said.

Word of the relief bill came as Ige met a legal deadline to submit his proposed budget to the Legislature 30 days before lawmakers were scheduled to convene next month. The governor’s budget, which covers spending for the next two fiscal years, included furloughs because Congress hadn’t yet agreed on a new relief bill when his staff drafted it. Then lawmakers in Washington reached a deal Sunday and put it in bill form Monday.

U.S. Sen. Brian Schatz said the federal bill includes about $200 million for Hawaii schools, which can be used to support teacher salaries. Altogether, the Hawaii Democrat said the bill has at least $1.7 billion in funding for the islands, including money for COVID-19 vaccine distribution, hospitals and health care workers.

The governor and state lawmakers had expected to use the state’s general funds to pay for these medical costs. Federal funding will allow the state to use the money elsewhere.

The help is critical for Hawaii, which has suffered a sharp drop in tax revenue as the coronavirus pandemic clobbers the tourism industry, the state’s biggest employer and driver of the economy.

Earlier this month Ige announced plans to furlough most state employees, including teachers, to plug a $1.4 billion hole in the annual state budget. About 10,000 state workers would have to stay home two days a month under the plan, resulting in about a 9% salary cut. The state Department of Education released modified furlough plans for more than 20,000 employees taking into account the academic calendar to minimize the affect the days off would have on student instruction.

State Rep. Sylvia Luke, the chairperson of the House Finance Committee, said the federal relief bill offers the governor an opportunity to reexamine his proposals.

“We will be working very closely with him and departments to reevaluate and then come to some consensus on how we can work together to come up with a balanced budget,” Luke said.

State Sen. Donovan Dela Cruz, chairperson of the Senate Ways and Means Committee, said he hopes the federal funds will change the budget outlook but he wants to see whether Congress may have imposed restrictions on how the money can be used.

More broadly, he said Hawaii’s leaders need to consider how to use the budget crunch to improve government.

“I just think that this is the opportune time for us to look at how we’re going to restructure or reinvent or modify government, especially because we’ve seen how government initially had a very difficult time in reacting to the crisis,” Dela Cruz said.

The governor’s overall executive budget for the fiscal year ending in June 2022 is for $15.4 billion, which includes general fund tax revenue spending and infrastructure investments supported by bonds. He budgeted general fund tax revenue spending of $7.7 billion, down 4.5% from the current fiscal year.

Another factor that may alter the budget outlook is the Council on Revenues, which is scheduled to meet and develop new tax revenue forecasts for the state on Jan. 7. Both the governor and lawmakers are required by law to use the council’s forecasts when drafting their budgets.

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