GOVERNOR LINGLE ORDERS TWO FURLOUGH DAYS PER MONTH FOR CABINET ADMINISTRATION

Governor, Lt. Governor, Chief of Staff, Department Directors and Deputies Lead by Example

HONOLULU — Governor Linda Lingle today issued an executive order (see attached) to furlough herself, the Lt. Governor, her chief of staff, and all executive branch directors and the deputies or assistants to the directors. The two-day furlough takes effect August 1, 2009 and continues through June 30, 2011. It is expected that the furloughs, along with the legislatively mandated pay cut, will result in more than $1.2 million in salary savings over the next two years.

The executive order affects 42 executive branch officials who are already taking a 5 percent salary reduction under Act 85 which the Governor signed into law in June.  The two-day furlough, combined with the 5 percent reduction which took effect on July 1, is equivalent to an approximately 13 percent salary reduction for this fiscal year, and approximately 13.7 percent for the fiscal year beginning July 1, 2010.

“My cabinet, the Lt. Governor and I firmly believe closing the state’s unprecedented budget shortfall requires a shared sacrifice,” said Governor Lingle.

“Today’s action reaffirms we will do what we have been asking of all state employees. We will continue to negotiate in good faith with the public employee unions to achieve the labor savings we need to address the current fiscal crisis.”

The reduction is similar to the amount the Governor, Lt. Governor and the cabinet would have taken under the Governor’s original furlough plan for all executive branch employees under the Governor’s jurisdiction.

“Furloughs will have an impact on these individuals and their families who took a 5 percent pay cut and also lost pay raises they were statutorily scheduled to receive, pursuant to the Administration's requests to the Legislature. But without hesitation, they all stepped forward to do their part in dealing with our current fiscal crisis,” the Governor said. “My cabinet realizes that every day we do not close the budget gap, we continue to lose money and we simply cannot wait one more day. I am proud of their accomplishments and their willingness to lead by example.

“While the savings from this two-day furlough is small compared to the hundreds of millions of dollars we need to close the budget gap, it is an important step on the road to reducing our labor costs and achieving financial stability in State government,” the Governor added.

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; restricting hiring, out-of-state travel and the purchase of new equipment; using special funds and maximizing federal stimulus funds. None of these actions included any labor savings.

Actual year-end tax revenues for fiscal year 2009 coupled with Council on Revenue projections means the state is still facing a budget shortfall of $786 million through June 30, 2011 and must seek additional savings.

The budget shortfall could become worse when the Council meets again on August 27 and in January.

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