Restoring Furloughs To Cost State of Hawaii More Than $160 Million06/14/2011
About 20 percent of the increase in next year's state budget is tied to the cost of putting people back to work on furlough days.
As part of the $11 billion operating budget lawmakers approved for the 2012 fiscal year, $251 million will fund increased labor costs when twice-a-month furloughs end June 30. The overall budget for the fiscal year that begins July 1 is $800 million bigger than this year's base budget.
That $251 million includes two increased costs stemming from furlough days: salaries and pensions. However, the state expects to achieve $88 million in labor savings in contract negotiations, which would mean a net increase from restoring furloughs of $163 million.
Because furloughs were unpaid work days, they resulted in about a 10 percent pay cut for affected employees. Restoring that pay will also increase the amount of retirement benefits the state owes employees because contributions are calculated as a percentage of payroll.
If the $251 million gross increase were spread evenly across all state employees, restoring furloughs would come out to about $5,600 for every employee next year. If the labor concessions are achieved, the furloughs will cost about $3,600.