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Lingle, Aiona to take pay cut starting next month

MEDIA RELEASE

Gov. Linda Lingle and Lt. Gov. James ‘Duke’ Aiona will take a pay cut under a new law that takes effect July 1, as part of a broader effort by the state’s top officials to lead by example during the ongoing fiscal crisis stemming from the global economic downturn.

The new state-mandated pay cuts also apply to legislators, judges as well as other senior officials, and will remain in effect through June 30, 2011.

These pay cuts for state leaders come as furloughs begin July 1 for all state government workers, who would be expected perhaps for the next two years to stay home without pay three days a month.

The furloughs will also apply to Aiona, Lingle and senior officials in the Administration.

The state’s first ever furlough is part of a cash-saving move ordered June 1 by Lingle, who is required by law to balance the state’s budget.

State employees number approximately 46,000 and their wages and benefits account for 70 percent of the state’s budget.

The cash-saving furlough move is intended to help solve the projected $730 million budget shortfall facing the state between now and June 30, 2011. 

The Administration estimates the furlough plan will save the state $688 million over two years. The other $42 million would be saved by scaling back the free health insurance benefits that the state now provides to low-income adults.

The furlough plan was prompted by a projected loss of $2.7 billion in state revenue.  

This is money that the state believed it would receive in taxes this year and in the coming two years that will not materialize, according to the Council on Revenues.

Key steps the Administration has already taken to save about $2 billion include:

* Restricting state general fund discretionary spending by 8 percent.

* Putting a freeze on hiring, travel and purchasing new equipment.

* Restructuring long-term debt and debt payments.

* Transferring excess balances from certain special funds into the general fund

* Using federal stimulus dollars.

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