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Governor Lingle Stymied by "The Mayor Factor"

Throughout this year’s state budget debates, Governor Lingle has focused solely on cutting labor costs: the “furlough or fire them” paradigm. Not an iota of her effort has been put into how we can together raise more revenue to promote economic activity so as to minimize the need to cut valuable programs or reduce work hours. Based on her actions, clearly gutting the employee unions was for her the silver lining of this recession/depression.

So why hasn’t Lingle’s scheme gone according to plan? Really she has the optimal situation to destroy these unions: she has the sinking economy and she has wrapped herself in the appropriate rallying banner of “greedy government workers deserve to be fired if they don’t accept my massive furlough (pay) and benefit cut. Well the reason she has not succeeded to date (as I have been preaching since April) is “the Mayor Factor”.

When I say “the Mayor Factor” what I mean is: to give her massive furlough proposal legitimacy, she needed at least one county mayor to sanction her agenda as a good plan made in good faith. But so far not one of the county mayors has agreed with her substantive or procedural approach (in other words, the Mayors do not think her plan is good and do not think her plan is made in good faith.).

To be sure, early this Spring, Lingle thought she had the Mayors between a rock and a hard place. She figured the Legislature would vote to eliminate the Counties’ portion of the TAT hotel tax (which currently amounts to about 18% of Hawaii County’s tax revenues). She knew the prospect of losing these TAT revenues would be a frightening prospect for all of the Counties. She would then have the opportunity to be the Counties “savior”. If you recall her pitch to the Mayors was – you better stick with me against the unions if you want me to veto the dreaded TAT legislation taking away these tax revenues. To implement this plan she stalled all union talks through the winter and spring so she would have them at her mercy (even when County administrations and the Unions wanted to plunge into negotiations). But low and behold, at least for the coming year, the Mayors and citizens from around the state testified and convinced the state legislature to not to take the Counties’ portion of the TAT revenues. Suddenly Lingle no longer had the Mayors backed into a corner.

Bottom line: the Mayor have refused to play her “bad faith/gut the unions" game. Instead the Mayors told the unions, yes you have got to give and give significantly because of these tough times, but we will do all we can to prevent furloughs or firings – which alternatives will only mean further deterioration of our island economy. The unions agreed with the Mayors’ approach and have accepted the basic outline for an agreement. But what about the Queen Bee Lingle– where is our leader? Seething I expect.

The Mayors and Unions are now asking Governor Lingle to come play a “good faith” ball game with them. In fact to make matters worse – the Department of Education, the University, the Judiciary, and the Hawaii Health Systems Corp. have all indicated their support for the Mayors and their negotiations. [SO A BIG THANK YOU TO MAYOR KENOI AND THE OTHER MAYORS FOR WORKING DILIGENTLY AND IN GOOD FAITH TOWARDS A REASONABLE AGREEMENT!]

Lady Lingle still has some weapons in her arsenal. In fact she may start pitching employees off the boat – in a show of power and arrogance. She may even do so with pomp and circumstance. But, you know and I know she is outraged at the Mayors for not kowtowing to her divisive and elitist agenda. In fact I can visualize the flames coming from her nostrils as she plots her next move.

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See other commentary about the State Budget debate in earlier blogs. For example read more about:

JUNE 8 LINGLE SETTING A TRAP: . . . Union reps, I suggest you come up with what is a fair cut in employee salaries and benefits, for example say 8%. (How much are legislators and judges willing to have their salaries reduced by?) Allow that reduction to go into effect for two years, after which period, increase the rate of pay by 8%, plus any cost of living increase --which will probably not be applicable unless the economy bounces back quickly.
Then, figure out what is the fairest way to make that 8% reduction – including the reduction in health care benefits and say reductions in overtime and banking of vacation and sick pay. When I say fair, I mean fair to both the employees and the public served. Reducing the number of workdays is certainly counterproductive to both.
FURLOUGHS; Union reps had better think carefully about a head on attack against the furlough proposal. And it may just be necessary to accept at least one furlough day a month plus reduction in health care benefits – to be balanced with an inheritance tax or some other income generating initiative.
I expect Lingle knows mandatory furloughs is most likely a breach of the union contract, but that stance is but a preliminary move to firing employees, and firing employees is probably not a breach of the union contract. So think of what is going on in terms of chess moves – and not as individual battles.

JULY 4 POST ”JULY 4TH AT GOVERNOR LINGLE’S HOUSE” . . . . . Now I ask you why is it the Mayors have all risked separating from the Governor and are negotiating with County employees on their own? Could it be they really want to work out a fair agreement with the unions – complete with ample “shared sacrifice” – but not based on reduced work days and reduced government services available to the public? . . .

APRIL 29TH POST: LEGITIMATE VERSUS ILLEGITIMATE OPPORTUNITIES DURING A BUDGET CRISIS:. . . . . So now that the State's and the Counties' revenues are sharply down, should the State and Counties simply cut cut cut programs deeper and deeper, and cut and furlough government workers -- many of whom are now also shouldering the work of positions that are already vacant? Certainly that is exactly what is, for the most part, going on here in Hawaii, and it is exactly what President Obama warned will only lead to more bad news.. . . . [the portion of my April 29th blog addressing Labor Costs is as follows See original post for other suggested ways we could bridge the budget gap.]:

. . .3. REDUCE LABOR COSTS WITHOUT GUTTING LABOR CONTRACTS:
a. stop talking “hiring freeze” and “unfunded current positions” and instead use this time to re-evaluate what positions are really needed and what are not, and act accordingly;
b. furloughing: start with voluntary furloughs by work units before considering whether mandatory furloughs may be required at some future date;
c. work with the unions as much as possible and target excesses – replace overtime with flexi-time schedules; eliminate payments for unused vacation or sick time; get rid of any “bumping” policies that are anti-productive (e.g. where those less qualified can "bump" a position based on seniority (seniority yes but only if equally qualified);
d. cutting jobs is the least advantageous, given the amount of unemployment and other benefits that would still have to be paid –and the loss of those services for the public; if some job needs to be cut, provide training for that employee so they can relocated;
e. designate locations of jobs, so that the employee must stay at that same location for some period of time (so that they are not hired in one located and then as soon as opening some place else, they can be transferred to the other location.