Aloha State News

More than 10,000 workers will be affected by the state budget cuts next year.

Starting Jan. 1, a two-day furlough will be given to executive-branch employees every month to balance the state budget, according to a Dec. 9 release. The decision translates to a 9% pay cut. 

A $1.4 billion budget insufficiency in the general fund is projected each year in the next four years. 

“If the furlough is effective for one year, the state will save about $300 million. This is the last major element of the balanced budget that I am required to submit to the state legislature every December,” Gov. David Ige said in the release. “The pandemic has had harsh economic impacts on our country, and as a result, every state is having to make difficult choices. Hawai‘i is among the hardest-hit states in terms of job loss and lower economic activity, because of the state’s reliance on tourism.”

However, the furloughs cannot be applied to positions that support 24/7 functions and to jobs that are funded through non-general sources. 

The state has been assessing the impact of COVID-19 on the economy for eight months by budgeting new emergency initiatives and addressing tax dollar loss. According to the release, the following steps were executed by the state to save costs:

• Pulled back $197 million of the executive’s FY 2021 supplemental budget request and legislation, and the Legislature further reduced the FY 2021 base budget by $205 million.
• Temporarily suspended pre-funding of the other post-employment benefits (state retiree health benefits) liabilities, saving $390 million.
• Restricted 10% of the discretionary portion of the FY21 budget that was approved by the Legislature and instituted a hiring freeze on 3,000 non-critical position vacancies.
• To provide additional resources to the general fund, the Legislature authorized the transfer of $345 million of rainy-day fund reserves and $303 million from various other funds to the general fund budget.
• The state recently issued $750 million in short-term bonds to cover current operating expenses.
• Going forward, the state is looking at cutting program budgets by $600 million every year starting in FY 2022. 

“We explored all other options for balancing the budget and have tried to avoid furloughs. I know how hard state employees have been working during this difficult period and I realize how much distress this will cause our employees and their families,” Ige added. “However, the harsher alternative to furloughs is layoffs, which has already complicated the lives of thousands of fellow citizens who work in the private sector.”

More details on the implementation of the furloughs will be announced soon.