Legislators: Need plan to end crisis, furloughs

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WAILUKU - Parents angry about school days lost to Furlough Fridays are pressuring state lawmakers to convene a special session to look for another way to close the state's forecasted two-year budget shortfall of more than $900 million.

While most Maui lawmakers said they're willing to meet in a special session to address the issue, they said it's not simply a matter of bringing legislators together to find a magic bullet to solve the state's budget crisis and return teachers to classrooms.

"I'm willing to be part of the solution," said Central Maui state Sen. Shan Tsutsui, who serves as vice chairman of the Senate Ways and Means Committee. But he said lawmakers need to know what they aim to accomplish before going into an early session about two months before lawmakers would begin their regularly scheduled session in mid-January.

"We need to have a plan," Tsutsui said. "The worst thing would be to say, 'Here we are, but we don't have a plan.'''

To explore what options are available, lawmakers have been meeting in caucuses and in a special committee brought together by Senate President Colleen Hanabusa. That panel is looking for money to keep schools open, trying to determine whether Gov. Linda Lingle would spend the money on education and deciding whether legislative action would interfere with the labor contract between the state and the Hawaii State Teachers Association.

Sen. Roz Baker, who represents West and South Maui residents, said it will be important for the governor to buy into whatever plan legislators propose.

"It would be something we could all do together," she said, adding that even if legislators were to appropriate money to keep schools open, the governor can choose whether to release the funding.

The governor has said she does not support convening a special session of the Legislature, using special funds or raising the general excise tax.

Baker expressed frustration with the governor's position.

"It's almost like the governor wants to get her pound of flesh one way or another. That's unfortunate," she said. "It seems to me that the governor has a bone to pick with the (Department of Education) and the teachers.

"How can we continue to have our students meet yearly annual progress if they don't get the appropriate instruction time?" Baker asked. "The governor doesn't understand that, or there's a point she's trying to make that she thinks is more important than the students."

Rep. Joe Souki, whose district includes Wailuku, Kahakuloa and Waikapu, said he doesn't favor lawmakers convening a special session because the state's budget crisis needs to be attacked "globally," looking not only at schools but the state's budget overall.

"I feel for parents and children," he said. "But there's also many other programs affected."

Souki pointed out that the state's financial mess includes threats to health services for the islands' poor and elderly and the loss of agricultural inspectors at ports of entry, among many other cuts.

"Every aspect of the state is affected," he said. "We need to look at the whole thing."

Souki said there are also several unknown factors, including unresolved labor contracts with United Public Workers and with professors represented by the University of Hawaii Professional Assembly. Also, the Council on Revenues is expected to revise downward its estimates on the state's tax revenues even further, he said.

"There's not much the Legislature can do other than give false hopes at this time, which we don't want to do," Souki said.

Nevertheless, whether the Legislature meets in special session soon or in its regular session in January, lawmakers are considering a variety of options, including tapping the state's hurricane relief or rainy day funds and raising the general excise tax.

Tsutsui said he would support raising the general excise tax from 4 to 5 percent, if the increase were to exempt food, drugs and medical services. Such a measure passed through the Senate this year, but the House of Representatives rejected it, he noted.

Tsutsui said studies of the tax increase proposal showed that an average family of four earning less than $100,000 per year would see a tax savings because of the exemption on food, drugs and medical services. Senior citizens also would see a savings because they spend a higher proportion of their income on items that would be exempted from the tax, he said.

Raising the general excise tax with the exemptions would bring the state an additional $192 million per year, Tsutsui said.

But he urged caution in tapping the hurricane or rainy day funds, which could affect the state's bond rating and its ability to borrow money.

"That's a one-time take," Tsutsui said. "Once you use it, it's gone. There's no next year. . . . We need to be real cautious how we look at those funds."

Sen. J. Kalani English, who represents residents of East Maui, Upcountry, Molokai and Lanai, said the Legislature's role is limited in addressing the school days lost to Furlough Fridays because it's a matter that has been negotiated between the Department of Education and the HSTA.

"Our role is limited to funding the contract," he said.

English said he doesn't believe furlough days off for teachers is the way to address the state's budget shortfall.

"It doesn't reflect my values on education," he said. "We should be supporting our children more."

English indicated he would support raising the general excise tax, pointing out that the last time the state raised the tax was in 1963 when it went from 3.5 to 4 percent.

But he said he would want the additional revenue to go not only to keep teachers in the classroom but also to maintain employment for other state employees facing furloughs and layoffs.

English called for a "fair and equitable" solution that would provide for "distributing the load everybody has to carry."

West Maui Rep. Angus McKelvey said he is among legislators pushing for a special session "so we can look at all the options."

He said he wants lawmakers to take steps as soon as possible to eliminate the furloughs "until we can get a budgetary fix through a regular session."

"It's a stop-gap measure," McKelvey said.

But he acknowledged the need to have the governor's cooperation.

"Without her support or cooperation in working with the Legislature on a possible solution, any special session would be pretty much a waste of time," he said.

McKelvey said he has been hearing an outpouring of anger from parents.

"They're so upset," McKelvey said. "Parents are getting hammered by this. They've got to scramble for day care, stay home from work. Some could lose jobs. It's chaos."

It would cost the public schools system $5 million a day to stay open on what has been planned as 17 furlough days for teachers in each year of their two-year contract, according to McKelvey.

The hurricane relief fund has $160 million, and the rainy day fund has $45 million, he said.

But Lingle has the power to release the money or not, McKelvey said.

"The governor has all the cards in her hands," he said.

Central Maui Rep. Gil Keith-Agaran said he's in favor of convening a special session.

But he said he wants to see how much federal stimulus money might be available to get teachers back in classrooms. He said he understands there's as much as $35 million available to the governor to spend without legislative approval.

Keith-Agaran said legislative leaders are trying to look at the state's budget problem overall, not only the problem of Furlough Fridays.

"We are really looking at dealing with an $800 million shortfall next session," he said. And legislative leaders are "reluctant to just deal with this part of the shortfall without looking at the overall cost of the state budget."

Keith-Agaran said he's troubled that raising the state's general excise tax would hurt those least able to afford it.

Unless the tax increase exempted food and drugs, "I would have a hard time raising it without looking at those issues," he said.

Rep. Mele Carroll, whose district covers East Maui, Molokai and Lanai, said she supports convening a special session.

"It's really because I don't feel we should deprive our kids," she said. "We need to look at ways our children should get the proper education they deserve. We have to put action into place."

Tsutsui said the state's budget crisis has reached the point where he expects controversial proposals to be floated to raise money or cut costs.

He said he's heard proposals for legalized gambling, lotteries and allowing the Board of Education to have its own taxing authority.

"Every viable option is going to be on the table," Tsutsui said. "At the end of the day, (the solution) is going to be a combination of a lot of things, a revenue-increasing measure and some reduction in expenditures. There's no one thing that we can do that's going to solve the problem."

* Brian Perry can be reached at bperry@mauinews.com.