HONOLULU (HawaiiNewsNow) - The Hawaii Government Employees Association has reached a tentative contract agreement with the Hawaii state government and the state's four county governments, including 5% base wage reductions.
The proposed two-year contract would start July 1, the same day as the state government's new fiscal year.
"We talked about shared sacrifice," Gov. Neil Abercrombie said in a statement. "We approached bargaining differently. We put the state's challenges in front of us and worked collaboratively."
HGEA agreed to 5% base pay reductions in return for an end to furlough days and layoffs, the governor's office said. Furlough days have saved an estimated 10% of wage expenses, but at the cost of diminished state services.
The union also agreed to 50/50 distribution of health care premium costs. Taxpayers currently pay more, taking the larger share of a 60/40 cost split.
The agreement was announced Wednesday afternoon while members of the Hawaii Legislature were still considering a variety of budget-balancing proposals, some of which are now at odds with the agreement that was reached.
Ratification is required for the contract to talk effect. Still to be negotiated are contracts with the United Public Workers and unions represented police, firefighters and teachers.
The Hawaii state constitution requires a balanced budget but the economic slump created a shortfall of hundreds of millions of dollars. State lawmakers are considering ending the pension tax exemption for six-figure earners, raising the liquor tax, capping revenue sharing with counties, and raising the general excise tax, which provides the state with the lion's share of its revenue.