Governor Neil Abercrombie came before the Senate Judiciary Committee to testify on bills that would overhaul how some public worker benefits are handled."This is a question of whether the very stability of the state, our capacity to pay a pension at all, to pay medical premiums at all is at stake," said Abercrombie.
That's because the state's unfunded pension liabilities have topped $7 billion and the deficit is more than $840 million between now and the next two fiscal years. Senate Bill 1268/HB1041 eliminating Medicare Part B reimbursements for retirees would save about $40 million a year -- retirees would lose between $96 and $353 dollars every three months. The governor says he and others are willing to give it up.
"It had absolutely nothing to do with my state service," Abercrombie explained. "I did not earn it. I did not have it as a benefit; it is not anything that I can look you in the eye and tell you I deserve to have."
Retirees and unions at the hearing took a different view.
"He's got a job though, you know? And he's got multiple pensions," said HGEA President Randy Perreira.
"I'm a retiree, a Honolulu police department retiree, 32 years of service, and unlike the governor I earned my pension, and all the benefits that come with it," said Charles Duncan.
The governor also testified on a measure that changes what compensation will be included when calculating retirement benefits, such as excluding overtime. Many who testified including the state's attorney general said any changes are likely to see court challenges over diminished contractual benefits.
"As soon as you hear somebody talking about constitutionality it means they know I'm right, they just don't like the answer," Abercrombie said.
After the hearing the governor went to meet with state workers he says are supportive of the changes and have offered other ideas too. today's bills will be revisited next week, and measures that would tax pension income like most other states do {SB1319/HB1092} await hearings.
