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Maui county’s state lawmakers say proposed state budget is ‘fluid’

Furloughs and program cuts depend on what federal aid is available

From state worker furloughs to program cuts, Maui County’s legislators said it’s too early to tell what will happen to the state budget as they wait to see what happens when President-elect Joe Biden takes office on the same day the Legislature opens.

Gov. David Ige released his fiscal 2021-23 budget in December, scaling back both the operating and capital improvements program budgets to make up for the $1.4 billion shortfall expected in each of the next two years. Ige had announced that state employee furloughs would begin with the new year, but after Congress passed a $900 billion relief measure, he pushed them back to at least July 1.

“Bascially the term I would use, all the (governor’s) proposals are very fluid, everything is very fluid until we can get to the aid and know what the federal aid package will be,” said Sen. J. Kalani English, the senate Majority Leader who represents East Maui, Molokai and Lanai.

As for avoiding furloughs, he said “it all depends.”

“It’s not the choice of the Legislature to do that. It’s an executive call,” said English, who has a standing meeting every Monday with Ige and other officials. He said Ige has told him he will be making changes to the budget along the way.

English remembers the last time there were mass furloughs under Gov. Linda Lingle starting in 2009 due to the severe economic recession, and called them “a disaster.”

“We are trying to keep as much of society stable as possible and part of that is keeping people employed,” he said. “So furloughs and layoffs are the last, last, last resort.”

On the House side, Maui Rep. Justin Woodson said there are “many creative options that we are reviewing” when it comes to mitigating furloughs, “but we are still waiting to see some of the unknown larger variables that are still outstanding, such as if Congress is going to pass an additional COVID relief package.”

“There is not enough information now to determine if forgoing furloughs is a possibility,” said Woodson, whose district includes Kahului, Maui Lani and Old Sand Hills.

Fellow Maui Rep. Troy Hashimoto expressed hope with the newly elected federal leaders.

“I am very optimistic that with the Democrats taking control of the U.S. Senate and a new incoming president, more federal aid may be available to help balance state and county budgets,” he said. “It is not just a Hawaii concern, but every state is facing similar struggles.”

The lawmaker, whose district includes Wailuku, Kahakuloa and Waikapu, said he hopes that more stimulus funds will arrive by the spring along with a “strong vaccine rollout,” which he hopes will help “us get a better footing on our economy and help us avert some of the major reductions in the future.”

Hashimoto said the legislative session that begins at 10 a.m. Wednesday “will be one of trying to keep as many existing programs intact as possible while trying to balance restarting our economy.”

Top priorities

Keeping funding for critical health care needs and facilities, such as Maui Memorial Medical Center and ambulance services, along with education and the economy are top priorities for many, if not all Maui County legislators who shared their thoughts on the upcoming session this week.

“My priorities are to protect health services including hospital, community health centers, emergency medical services (ambulance) for Maui County,” West and South Maui Sen. Rosalyn “Roz” Baker said via email. “Our services are subsidized by the state and I consider them critical infrastructure and essential services.”

She said another area would be education, noting that “our students need these services and teachers need to be compensated for their work.”

Baker added that it’s important to appropriate federal funds that may be coming into the state to help workers who lost their jobs due to the pandemic, as well as continue the Safe Travels program to safely welcome back visitors to Hawaii.

“This pandemic has demonstrated for everyone how dependent Hawaii is on the tourism sector of our economy,” Baker said.

South Maui Rep. Tina Wildberger, meanwhile, also plans to keep an eye out for programs that could lose funds. She’s particularly concerned about cuts to the Attorney General’s Office, which under the governor’s proposed budget could see a 30 percent reduction, or $700,000 cut in funding, for domestic violence aid for advocacy groups, as well as reductions in the Civil Rights Commission.

Wildberger said she will work on assisting the public through the two new committees she’ll be on – Government Reform and Pandemic Disaster Response – and is excited about trying to again reorganize the state departments and form a Department of Environmental Protection.

Lawmakers also expressed urgency to assist local businesses with the upcoming increase to unemployment taxes.

Central Maui Sen. Gil Keith-Agaran said a bill will need to be passed by the end of March to keep contributions more reasonable.

By law, the unemployment tax rate is scheduled to change, and because the unemployment fund is depleted, rates could move to the highest level, Hashimoto explained.

“Businesses are estimating this would triple their unemployment taxes,” Hashimoto said. “It reassess every March, so if we make changes, it needs to be before that or else it will automatically increase.”

He added that “the Legislature must give relief to businesses since it is a very precarious time and they cannot afford more expenses at a time when they are still recovering.”

West and South Maui Rep. Angus McKelvey agreed, calling the issue one of “the biggest takeaways of the session” and that it could “destroy small businesses in particular.”

Legislators also felt the Department of Labor and Industrial Relations, which handles unemployment insurance, needed more help. McKelvey said he and his office staff spent part of the summer assisting residents with their unemployment claims.

“We are going to be fighting for more funding and positions to DLIR,” McKelvey said.

Rep. Lynn DeCoite echoed the need to help the department, whose unemployment system was outdated already prior to the pandemic. She said the department had to come up with new protocols while dealing with unemployment pandemic issues and that the staff has “just been inundated.”

“My constituents can’t get through to get any information and the website crashes frequently,” said DeCoite, whose district includes Molokai, Lanai and East Maui.

“We need to make sure the Department of Labor and Industrial Relations gets the necessary support to update the system and the needed personnel to carry out all the necessary tasks.”

Boosting the economy

Woodson and Hashimoto said legislators are looking at pushing through capital improvement projects.

“We are currently looking at ways that we can best leverage our state resources, such as expediting capital improvement projects, in hopes to stimulate the economy, as these particular programs typically have positive compounding impacts on the economy,” Woodson said.

Hashimoto explained that these projects are covered with borrowed funds and “will likely be the only spending mechanism where the state may be able to stimulate our economy, since programs paid for cash likely will have to be reduced.”

Wildberger is also looking at ways to boost the economy, including a restaurant assistance bill. The proposal would involve a 1 percent tax that goes back to the restaurant for extra costs associated with pandemic recovery, including but not limited to social distancing supplies, personal protective equipment and employee benefits.

The bill would also require all counties’ Liquor Commissions to allow restaurants to serve liquor at outside tables or to-go.

She is also looking to phase the minimum wage up to $15 by 2024. The bill would also include a “robust sliding scale tip credit for high-tipped employees” so employers would not have to pay more money in addition to base pay in order to comply with the bill. There would also be a system to ensure proper oversight of the tip credit.

Upcountry Rep. Kyle Yamashita could not be reached for comment.

* Melissa Tanji can be reached at mtanji@mauinews.com.

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