Looking at the numbers behind county’s wage, salary increases

Maui County currently employs about 2,600 individuals, and nearly 2,300 are members of unions.

During the past year, the County Council has been presented with resolutions to fund contract settlements for county union employees. Additionally, the council was required to fund salary increases approved by the Salary Commission for department directors and other managers.

The council is the legislative body mandated by Hawaii Revised Statutes Section 89-10 to authorize the funding of these contracts, yet the council plays no part in the actual negotiations.

Representatives of the administrations of the four counties and the state conduct the negotiations with the various unions. If agreements cannot be reached through negotiations, the unions may choose to enter into binding arbitration.

This process can become problematic when negotiated increases for county employees outpace tax increases that the county depends on from the community for revenue.

This fiscal year, union and nonunion members received salary increases from 4 to 15 percent. The total cost of the increases to the county was $8.1 million.

In the upcoming budget, the council will have to fund additional increases of 4 to 25 percent and the amount will grow by another $12 million next fiscal year. This equates to an additional $20 million beyond what was appropriated for the 2013 budget.

In addition to the actual pay increases, the cost reflects the automatic increases in fringe benefits such as premium pay, Medicare, unemployment compensation and leave benefits.

The cost of the increases are $2.6 million for 567 county employees represented by the United Public Workers union, $5.1 million for the 1,093 employees represented by the Hawaii Government Employees Association, $5.3 million for the 287 employees covered by the Hawaii Fire Fighters Association, $5.4 million for 324 employees represented by the State of Hawaii Organization of Police Officers, and $1.6 million for about 300 other county employees.

The overall cost to the county by fiscal year 2017 will be approximately $42 million – an amount greater than the property taxes paid by all residences and businesses in the Wailuku, Kahului and Upcountry districts combined. The total cost over four years will be more than $101 million.

These figures are alarming when most companies throughout Maui County are still recovering from the economic downturn and have not been able to increase wages to the same degree.

It must be noted that these increased costs do not account for any additional staffing or expanded services, nor do they reflect the cost to cover unfunded retirement liabilities for county employees. The council has allocated more than $40 million to address these liabilities and it will need to do the same for many years to come.

The most current information from the Hawaii Department of Labor shows that over a five-year period wages paid by Maui County increased by 24.7 percent, while the combined wages in the rest of the community dropped by 5.5 percent.

While we appreciate the unions looking out for the welfare of our employees, the burden is now on the administration and the County Council to determine the level of financial support that should be asked of the community.

As we prepare for the 2015 budget deliberations, we need to closely evaluate ways to reduce expenses and hope that the administration has a plan to fund the county’s increasing costs without significant tax increases.

* Mike White holds the County Council seat for the Paia, Haiku and Makawao residency areas. He is the chairman of the Budget and Finance Committee. “Chair’s 3 Minutes” is a weekly column to explain the latest news on county legislative matters.