WAILUKU - West Maui state Rep. Angus McKelvey said he wants the Legislature to go into an emergency special session to deal with the state's $2.7 billion revenue shortfall and Gov. Linda Lingle's plan to furlough state workers beginning July 1.
Lingle said her administration's furlough plan would save an estimated $688 million over the next two years and avoid layoffs of state employees while dealing with Hawaii's $729 million budget shortfall.
McKelvey, a Democrat, said he isn't impressed with the Republican governor's plan and believes that finding the best solutions to this crisis will require much more thought and debate.
"If the governor brought us back in (for a special session) for the Superferry, I think bringing us back for the biggest economic crisis in state history would be very prudent," McKelvey said after Lingle announced details of her administration's furlough plan Thursday afternoon.
In October 2007, Lingle called legislators into a special session to pass a law (later found by the Hawaii Supreme Court to be unconstitutional) to permit Hawaii Superferry to operate while an environmental impact statement for its effects on state harbor facilities was prepared.
However, Wailuku state Rep. Joe Souki said he thought House and Senate Democrats should meet and caucus extensively before calling themselves into a special session.
"I would love to see that (a special session)," Souki said, but "what do you want to do? There's not too many alternatives available."
Other cost-saving measures were put in place, but the $729 million shortfall surfaced after state lawmakers passed a balanced budget and after the state Council on Revenues issued another lower projection, Souki pointed out.
"Are you willing to bite the bullet and raise taxes?" Souki asked, adding that he sees no public outcry for raising taxes. "I don't believe there's the political will to raise taxes at this point."
He said there could be a combination of raising taxes, furloughing employees and laying off others. "All this is not going to be done in two or three weeks," he said.
Souki said Democratic lawmakers need to have a "very long caucus . . . to decide what to do."
For now, it's up to Lingle.
"She needs to make the tough call," Souki said. "Unless we have something better than that . . . then what?"
Souki said that during the last legislative session, he did take the position of raising the 4 percent general excise tax by 1 percentage point, with exemptions for food and drugs.
But now with the economy in such bad shape, "I think the timing (for a tax increase) is extremely bad," he said.
Democratic state Sen. Roz Baker called the Republican governor's plan unwise, a drag on the economy, pedestrian and unilateral.
"She is stubbornly sticking to a severe strategy she's wanted from the very beginning," Baker wrote in an e-mail to The Maui News. "So many of her words ring hollow. No other state is implementing a furlough plan as drastic as this one, and their shortfalls are just as severe."
The Legislature deserves a full briefing by Lingle and her budget director on their calculations and the assumptions they used to derive at this strategy, Baker said.
McKelvey said he has qualms about Lingle's plan to furlough state workers on three Fridays per month, and that the plan is not supported by West Maui constituents he has communicated with.
He said the furloughs could lead to "unintended consequences," such as losing federal funding if some state-federal projects fall behind schedule.
During a news conference, Lingle was asked whether she was considering calling the Legislature into special session. She said she was not, but she pointed out that Democrats control two-thirds of the seats in the House and the Senate and have the power to call themselves into a special session.
McKelvey said he thought legislators should go into special session to develop a plan to cope with the state's fiscal crisis, particularly if the state Council on Revenues delivers more bad news and pushes projections of state revenues down further.
Legislators could propose cost savings, such as moving state offices out of downtown Honolulu offices buildings that charge "exorbitant" rents, he said. If state workers were given the option to "telecommute" and work out of their homes, then state offices could be consolidated and save taxpayers money.
Lingle said her administration has taken a number of steps to close nearly $2 billion of the projected revenue gap, including ordering spending restrictions of 8 percent on all state agencies; eliminating duplicate and inefficient programs; restructuring debt; imposing a freeze on new hires, out-of-state travel and the purchase of new equipment; using special funds; and maximizing federal stimulus funds. But the governor said that still left the state with a $729 million shortfall.
* Staff Writer Chris Hamilton contributed to this report. Brian Perry can be reached at citydesk@mauinews.com.
