HONOLULU — Pay cuts or furloughs for Hawaii public employees are inevitable if the federal government does not provide additional coronavirus relief funding, Gov. David Ige said.
The Democrat said he plans to borrow federal money to navigate the state budget crisis resulting from the pandemic, The Honolulu Star-Advertiser reported Sunday.
Ige has outlined features of a new financial plan developed by his administration to cope with the pandemic, which triggered an abrupt economic shutdown and a steep dive in tax collections.
But he warned more pain is anticipated in the state that relies heavily on tourism revenue.
“The reality is that the European Union just shut down travel from the U.S.,” Ige said. “I mean, nobody wants travelers from the U.S. because the virus is raging, and two-thirds of our visitors come from North America.”
The Hawaii Council on Revenues earlier this year downgraded its tax collection projections because of the pandemic, leaving the state government with a $2.3 billion budget shortfall for the two fiscal years ending June 30, 2021.
The state cannot continue to spend at its current rate, and Ige’s administration must reduce payroll costs, with available options including layoffs, pay cuts or furloughs, he said.
Federal aid is “really the only answer,” he said.
“If the federal government would provide more relief that would allow us more time for the economy to recover,” Ige said.
Hawaii State Teachers Association President Corey Rosenlee said in a statement that the organization with about 13,700 members appreciated the efforts by Hawaii legislators to budget funds that could help avoid state employee pay cuts and layoffs.
Representatives of the United Public Workers and Hawaii Government Employees Association did not respond to a request for comment.