Under governor’s furlough plan, most state workers will see a 9% pay cut in 2021

Under governor’s furlough plan, most state workers will see a 9% pay cut in 2021

HONOLULU, Hawaii (HawaiiNewsNow) - In a dramatic bid to shore up a worsening fiscal crisis, the governor will furlough most state workers starting in January for two days a month.

The unpaid days off, which will continue indefinitely, translate to a 9% pay cut.

Gov. David Ige announced the furlough plan Wednesday, saying it’s expected to save the state approximately $300 million a year and will be coupled with a host of other budget cuts to programs.

He said the furloughs are needed to help address an estimated $1.4 billion general fund shortfall for each of the next four years ― and to avert a layoff of more than 4,000 employees.

“I must take steps now to enable state employees to remain their jobs, that keep the government running and minimize layoffs,” Ige said, adding the furloughs will not apply to nurses, firefighters and other first responders along with employees whose salaries are not paid for by general funds.

House Speaker Scott Saiki, however, doubts the furloughs will take place in January because of legal challenges. “I’m assuming the unions will challenge this very aggressively,” he said.

Some public workers unions said they will sue.

They contend the furloughs, instituted unilaterally, are short-sighted and premature.

The governor, who said he has the legal authority to furlough workers, will also take a pay cut. So will his cabinet members.

While there is no end date for the furloughs, Ige said they will be be halted when the state’s economic picture improves. “I will evaluate the need to continue the furlough on an ongoing basis,” he said.

The state Department of Education and University of Hawaii will not be spared the budget cuts ― or furloughs. The governor added their furlough plans will be different, and are being finalized now.

The governor said he is instituting the furloughs with a “heavy heart” and acknowledges the pay cut comes as families have already weathered a difficult year.

In addition to furlough days, Ige warned of deep cuts elsewhere:

  • Some $600 million will be cut from programs every year, starting in fiscal year 2022.
  • A hiring freeze is in place for thousands of non-critical vacancies.
  • And some $197 million was pulled back from the fiscal year 2021 budget in addition to the $205 million the Legislature slashed.

Additionally, the governor has restricted discretionary spending and transferred money from the rainy day and other emergency funds into the general fund.

In an email to state workers earlier Wednesday, Ige said furloughs were a “last resort.”

“I sorely wish furloughs could have been avoided,” he said.

Earlier on Wednesday, schools Superintendent Christina Kishimoto discussed proposed cuts to education spending, saying the system needs to cut at least $264 million over the next two years.

“This is going to be detrimental to our public school system and I don’t see how we can afford this if we really want to have economic recovery,” Kishimoto told HNN’s Sunrise.

“There will be an impact on students.”

The state budget has been battered by the pandemic, especially during the tourism shutdown. Since October, visitors have been returning ― but the recovery is slow and fragile.

Meanwhile, Hawaii still has the nation’s highest unemployment rate and hundreds of small businesses have closed since March, when a quarantine for travelers and the first stay-at-home order was issued.

For months, the governor has been warning that state public worker layoffs and furloughs are inevitable in the absence of additional federal aid or a dramatic economic recovery.

Hawaii has seen neither.

Meanwhile, economists have warned that furloughs could actually do more damage to the state’s coffers given the number of public sector employees in the islands.

The last time public workers were furloughed was during the Great Recession.

This story will be updated.

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