Hawaii Lawmakers Pass Illegal and Unfunded Bill

by Matthew Reade, Grassroot Institute, July 27, 2016

During a special session this summer, Hawaii lawmakers passed a bill that is both illegal and unfunded. The bill offers a $60 million severance package to union workers at the Maui public hospital system who will lose their jobs due to privatization, even though all the workers have already been offered their jobs back.

Lawmakers overlooked the fact that the bill is illegal, according to the IRS, and puts the tax status of the public pension system in jeopardy. The tax code prohibits non-profit pension funds from giving out cash settlements such as a severance package.

Another problem with the bill is the lack of money appropriated in the budget. The $60 million giveaway is supposed to draw from the general fund, but since the severance payout is not included in the budget appropriation, any funding for it will have to come from existing appropriations for education, anti-poverty programs, or other state priorities.

Andrew Walden, publisher of Hawai’i Free Press said that the $60 million may have more to do with the ongoing negotiations between the state and the unions. “It’s just a transfer of negotiations from the legislature to the governor,” said Andrew.

Ongoing negotiations and legal battles with the UPW and HGEA have slowed progress for the Maui hospital transition, and the union. Andrew said, “The idea is that somehow this illegal unfunded bill will be enough to get the UPW to drop it’s suit, thus lifting the stay and allowing the privatization to go forward.”

Walden also discussed the possible motivations for the unions’ push for a legally problematic benefits package. “It seems to me that it’s . . . kabuki theater aimed at baffling and confusing union members to make it look like their union bosses are actually doing something for them when they’re not,” he said.

The legislature’s willingness to compromise the financial security of the state’s pension fund to pass this significant benefits package, according to Walden, boils down to the lack of a diverse political discourse in Hawaii. “Many legislators have no opponent,” he stated. “This is the one-party state.”

Dr. Keli’i Akina interviewed Andrew Walden as a part of “The Grassroot Institute with Keli’i Akina,” a radio show which airs on KAOI 1110AM.