HONOLULU – Governor Linda Lingle today issued an executive order to furlough, effective July 1, 2009, all state employees in the State Executive Branch under her jurisdiction (not including, for example Department of Education and University of Hawai`i employees) to help close the unprecedented $2.7 billion revenue shortfall projected between now and June 30, 2011.

The executive order, issued under the Governor’s executive authority (including Articles V and VII of the Constitution of the State of Hawai‘i, the provisions of Chapters 37, 89, and 89C, Hawai‘i Revised Statutes and all other applicable authority), details which state employees are affected by the furlough, the number of furlough days/hours, the effective time period of the furlough, the responsibility of individual departments for developing and implementing furlough plans for their departments, and other conditions and requirements relating to how and when furlough days/hours may be taken by employees.

“This is not something we want to do, but something we have to do to balance the state budget and address the unprecedented fiscal emergency we are in due to the projected $2.7 billion revenue shortfall,” Governor Lingle said.  “I appreciate the understanding of the State employees who will be affected by the furlough and admire the cooperation they have demonstrated in helping to ensure that state services will continue to be provided when the furlough plan begins on July 1.”

The executive order refers to the furlough plan announced on June 18, 2009, which describes furlough schedules of specific departments and agencies, and includes furlough calendars.

The statewide furlough plan and restrictions on the budget of those departments like the Department of Education over whom the Governor does not have furlough authority will save an estimated $688 million over the next two years, 25 percent of the budget gap the state needs to close, and will avoid having to lay off many state employees at this time.  Furloughs will allow the state to continue to provide public services, and will allow employees to maintain their benefits and avoid recruitment and training costs for new employees when the economy recovers.

Since last summer, the Governor has taken a series of steps to close nearly $2 billion of the projected revenue gap, including ordering spending restrictions of 8 percent on all state agencies; eliminating duplicate and inefficient programs; restructuring debt; imposing a freeze on new hires, out-of-state travel and the purchase of new equipment; using special funds and maximizing federal stimulus funds.

On May 28, the Council on Revenues revised its forecast by an additional $730 million shortfall for the remainder of fiscal year 2009 which ends on June 30, 2009, and the two-year budget that begins July 1, 2009 and ends June 30, 2011, requiring the Administration to identify further savings.

Because employee salaries and fringe benefits account for roughly 70 percent of the State’s operating budget, it is now necessary to impose furloughs on state workers to help close the remaining gap in the State’s budget.

The detailed furlough plan can be found on the Governor’s Web site (www.hawaii.gov/gov).  In addition, each department will post modified hours of operations for their respective divisions and attached agencies on their web sites. 

SB: Lingle signs order to start furloughs in July

####