Sunday | August 20, 2017
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Hawaii needs responsible budgeting

Public workers are on track to receive 2 to 4 percent pay increases, and Mayor Harry Kim recently proposed increases to property taxes and gas taxes to balance out the extra spending. The county is planning to spend $29 million more next year, with large sums going toward public employee raises and related benefits.

Unfortunately, the increased spending on public worker wages and benefits is somewhat out of the hands of the County Council, as much of the negotiations are handled at the state level, and Hawaii County only gets one local voice, Kim, at the state-unions negotiation table.

Hawaii’s public pension and benefits funds also are managed at the state level and require state action to fix the pension system’s current dire problem of being significantly underfunded.

Public employee wage hikes might cost the county at least $5 million extra, with police and fire pay raises alone accounting for $1.8 million in additional costs.

Hawaii County police and fire salaries total more than $90 million, which makes up more than half of the county’s budget salary expenses. Thanks to those negotiations at the state level, the county’s 433 firefighters were awarded a 2 percent raise this year, which will bring the average fire worker salary on the Big Island to $88,507, not including benefits. This ranks among the highest firefighter pay in the nation, even when adjusted for the state’s high cost of living.

Meanwhile, Big Island police, numbering about 564, are on track to average more than $80,000 per officer next year, not including benefits. This dwarfs the average private sector pay on the Big Island, which is only $30,066.

Salaries in the public sector during the past decade have risen five times faster than in the private sector.

However, these salary boosts pale in comparison to the costs for public employee pension and health benefit plans, which will cost Hawaii County an extra $11.7 million.

The state’s ever-increasing unfunded liability for pension and health benefits, now at $12 billion, soon will devour core government services for police, fire, the elderly and affordable housing.

However, the county is still planning to increase total spending next year, and planning to take more money from taxpayers to pay for it. This means taxes might increase while services are being cut.

Unless counties can achieve more autonomy and less top-down control from state leaders, they will continue to be stuck with bigger bills for public employment and benefits.

Hawaii lawmakers should practice responsible budgeting and align public worker costs with what taxpayers can afford.

Joe Kent is vice president of research at the Grassroot Institute of Hawaii, a think tank working for individual liberty, the free market and limited, accountable government.

 

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