BREAKING: Most State Workers to be Furloughed Two Days Per Month Starting in New Year
Governor David Ige announced today that state employees will be furloughed two days a month starting Jan. 1 of 2021, to balance the state budget. The state is projecting a $1.4 billion budget shortfall in the general fund for each of the next four years.
The furloughs will not apply to positions that support 24/7 functions, nor will they apply to jobs funded with non-general fund sources. This includes about 4,600 employees who are first responders, medical and public safety personnel, and employees at the departments of Commerce and Consumer Affairs and Transportation.
About 10,160 employees will be subject to the furlough.
“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,” said Gov. Ige. “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.”
Over the past eight months, the state has been closely assessing COVID-19’s impact on the economy, addressing the loss of tax dollars and the need to budget for new emergency initiatives.
State officials say the following cost-saving steps have already been taken:
Pulled back $197M of the executive’s FY 2021 supplemental budget request and legislation, and the Legislature further reduced the FY 2021 base budget by $205M.
Temporarily suspended pre-funding of the other post-employment benefits (state retiree health benefits) liabilities, saving $390M.
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 $345M of rainy-day fund reserves and $303M from various other funds to the general fund budget.
The state recently issued $750M in short-term bonds to cover current operating expenses.
Going forward, the state is looking at cutting program budgets by $600M 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. 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,” Ige said.
Details on how the furloughs will be implemented, will be announced soon.