Joint Committees on Labor get update from DLIR

Rep. Karl Rhoads, Chair of the House Committee on Labor and Public Employment, questions Linda Smith, Governor's Policy Advisor and Darwin Ching, Director of Labor and Industrial Relations.

The Department of Labor and Industrial Relations (DLIR) provided an update this morning on the status of the Department's budget and how it will be affected by budget cuts and restrictions. Here are some main points:

*The Department is funded by general funds, but many employees are funded through federal program funds.The department's general fund portion of the budget in $15.8 million. Of that, they expect about $1.7 million to be restricted in the first year of the biennium.

*Chair Rhoads and Chair Dwight Takamine, Senate Labor Committee, were primarily interested in how these restrictions might impact services to the public, particularly services related to unemployment.

*The department could not immediately share that information with the joint committees, however, it will be provided as soon as possible.

*Director Ching clarified that the Unemployment Trust Fund, which currently has a balance of $280 million, will not be impacted by any proposed furlough plan. It is unknown at this time how the state layoff proposal would impact the fund. The department is contemplating reducing the number of weeks of unemployment benefits.

* Linda Smith said that employees with seniority would be able to bump other state employees so they are not sure how much would actually be saved at the end of the process. As such, they reserve the right to issue another round of layoffs if the savings are not sufficient.

*Chair Rhoads requested that the Governor not furlough employees within the department who are funded with federal funds. He indicated that it doesn't make sense, especially with our budget shortfall, to lose federal funds due to unnecessary furloughs. The Governor indicated in the past that if state workers are furloughed, their federally funded colleagues should be as well, even though there is no savings for the state budget.

*Senator Slom asked how the layoff list that was presented to the unions today was developed. Linda Smith replied that the potential layoff list was developed according to each department director's priorities, with the goal of minimizing impact of services to the public.

*Asked if the Governor is planning to appeal Judge Sakamoto's ruling on the Governor's authority to furlough, Linda Smith replied that they had not seen the Judge's written order yet and could not comment on an appeal until then.

*Chairs Rhoads and Takamine emphasized the need to keep the public informed on what services will be impacted by budget cuts, layoffs and/or furloughs. If programs that the public relies upon are terminated without much advance notice, such as Healthy Start, it creates an even greater hardship for families.

Info Briefing on Labor Issues

The House Committee on Labor & Public Employment and the Senate Committee on Labor will hold a joint informational briefing on Monday. Hearing notice here.

Date: Monday, July 20, 2009
Time: 10:00 a.m.
Place: State Capitol, Room 325

Agenda:

*Department of Labor will provide information on how the funding restrictions will impact the department.

*Department of Labor will also provide update on American Recovery and Reinvestment Act (ARRA) funds and on the condition of the state's unemployment trust fund.

*US Department of Labor is anticipated to make a presentation and provide comments on the Governor's proposed furlough plan.

Public Union Benefit Bills Held in Labor Committee

The House Labor Committee, after giving the following bills a full public hearing this morning and last Friday, voted to hold the following measures, meaning they are dead for the session. The proposals generated heated comments from members of Hawaii's public unions, including members who are currently working and those who are retired. It was standing room only at the public hearings.

As both Speaker Say, who introduced the measures, and Chair Karl Rhoads indicated in their opening remarks, the bills were not meant to target state and county workers. The state faces a severe deficit, and the legislature is required to balance the budget by law. Rather than impose layoffs, the bills were offered as a way to share the burden and help save jobs. Due to overwhelming opposition, Chair Rhoads recommended the bills be held.

They are:

House Bill 1715 RELATING TO RETIREMENT. Increases, for new public employees, the minimum age and length of service for an unreduced service retirement allowance.

House Bill 1718 RELATING TO EMPLOYER-UNION HEALTH BENEFITS. Specifies that the requirement that the State and the counties reimburse retired employees for medicare part B premiums through the employer-union trust fund applies only to the employees who retire prior to 12/31/09.

House Bill 1719 RELATING TO PUBLIC EMPLOYEES. Suspends state and county contributions to the EUTF for all state and county employee-beneficiaries who retire after 7/1/09, regardless of date of hire and years of service, if the employee retires before the employee's medicare retirement age. Resumes coverage after medicare retirement age. Allows employee to retain health coverage through the EUTF by paying the respective state or county share of premiums until medicare retirement age.

House Bill 1723 RELATING TO PUBLIC EMPLOYEES. Makes employer contributions to the employer-union health benefits trust fund non-negotiable under collective bargaining. Establishes employer contributions for active public employees at 55 per cent of monthly cost of the health benefits plan.

House Bill 1725 RELATING TO THE HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND. From 07/01/2009 to 06/30/2015: (1) prohibits health benefits plan of the employer-union health benefits trust fund from providing prescription drug coverage; and (2)allows board of trustees to make prescription drug benefits available through drug coverage plans that are paid for entirely by employee-beneficiaries.

House Bill 1726 RELATING TO THE HEALTH FUND. Prohibits the Hawaii employer-union health benefits trust fund from providing group life insurance benefits if any of the premiums are paid by the State or a county. Allows the trust fund to contract with a group life insurer to make available group life insurance benefits to employee-beneficiaries provided that none of the premiums are paid by the State or any county and the insurer pays a fee to the board of trustees.

House Bill 1727 RELATING TO THE HAWAII EMPLOYER-UNION HEALTH BENEFITS TRUST FUND. Prohibits the health benefits plan of the employer-union health benefits trust fund from providing dental and vision coverage from 07/01/2009 until 06/30/2015. Allows the board of trustees to make dental and vision benefits available to employee-beneficiaries at no cost to the employers.

The Labor Committee also heard House Bill 1106, RELATING TO PUBLIC EMPLOYMENT, and decided to defer this measure. That means that the bill is not advancing through the process at this time but could be resurrected if needed. The bill “protects the rights of public employees by preserving health, retirement, leave, and other benefits if furloughs are implemented in fiscal years 2009-2013.”