Categorized | Government, News

Administration addresses deteriorating fiscal situation

MEDIA RELEASE

In order to address the unprecedented budget shortfall the state is facing, the state delivered written layoff notices last week to the approximately 1,100 employees who were previously notified their positions could be eliminated. 

“It is unfortunate we must take these difficult steps,” Gov. Linda Lingle said. “Furloughs have always been my first choice to achieve significant labor cost reductions needed to address the unprecedented budget shortfall the state is facing.”

The notices state the positions of the affected employees will be eliminated as of Nov. 13. 

Some of the employees may have the ability to “bump” persons with less seniority, and so it is unknown at this time which of the 1,100 notified individuals will actually lose their jobs. 

Because of these “bumping rights” it is also unknown at this time how much money the state will actually save from the elimination of these positions.

Lingle also announced she has instructed her Cabinet to begin the process of identifying other state employees who may be subject to a second round of layoffs that might be needed in order to realize additional savings in the cost of running state government. 

It is not known at this time how many employees might be in this second wave of layoffs or Reduction in Force (RIF).  FAQs on the RIF policy are available on the Department of Human Resources Development’s and the governor’s Web sites.

“Since the summer of 2008, my Administration has reduced state spending by approximately $2 billion, without significantly reducing labor costs, except through attrition. But the simple facts are that our actual tax revenues for the past fiscal year, combined with the Council on Revenues’ projections for the current fiscal year means the state is still facing a budget shortfall of $786 million through June 30, 2011,” Lingle said.

Current expenses continue to exceed projected revenues and labor costs equal approximately 70 percent of the general fund expenses. 

“Therefore, in order to balance the budget, as the state Constitution requires, we must significantly reduce our labor expenses,” Lingle said.  “I empathize with our employees and realize these layoffs will have a significant impact on the affected employees and their families. I sincerely wish this situation could have been avoided.”

Lingle also announced she will furlough approximately 900 state employees for three days per month effective Sept. 1. These “exempt excluded” employees are all non-union employees, who are not covered by Judge Karl Sakamoto’s order barring the governor from unilaterally implementing furloughs for union employees. 

It is expected that these furloughs will save the state approximately $7 million to $10 million for each 12-month period the furloughs are in effect. 

Lingle will also explore whether there are other employees, not covered by Sakamoto’s order she can also furlough.

These actions by Lingle are based on the state’s current financial projections. The state Council on Revenues will meet Aug. 27 and again in January. If those projections show lower revenues for the state, further cost cutting will be necessary.

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