FOR IMMEDIATE RELEASE
April 27, 2001
Contact: Rep. Marcus Oshiro
Tel.: 586-8505




CONFEREES APPROVE PRIVATIZATION, RESTORE RIGHT TO STRIKE

Bill to reform public employee health fund also passes



House and Senate conferees today punctuated the Legislature's intent to reform and modernize State government by approving measures to privatize government services and to slow the ballooning costs of providing health benefits to employees and retirees.


"This could very well be the hallmark of this Legislative Session," said House Majority Leader Marcus Oshiro. "We've been laying the groundwork to modernize government for a number of years now and I commend both the House and Senate for taking these major steps forward."


Senate Bill 1096 gives the governor the choice of privatizing government services or undertaking a form of privatization called managed competition. Under managed competition, unionized public employees would be given the opportunity to compete against the private sector to provide services.


"The goal is to lower the cost of providing government services and to make the services that are provided more effective," said Rep. Scott Saiki, conference committee co-chair.


A separate section of the bill also repeals binding arbitration and restores the right to strike for all public employee unions except for police, firefighters, prison guards, licensed nurses, and emergency medical personnel.


House and Senate conferees also agreed to reform the Public Employee Health Fund (PEHF) under Senate Bill 1044. The bill, which goes into effect two years from now, would create a single Hawaii employer-union health benefits trust fund to negotiate health benefits for some 81,000 active and retired government employees.


Currently, PEHF basically competes for members with the individual union plans. But the union plans don't cover retirees, Oshiro said, leaving PEHF to cover them at a higher per person cost. The State and counties, as employers, pay into both PEHF and the individual union plans as part of collective bargaining agreements.

According to State Auditor Marion Higa, the State's contribution to PEHF in 2013, if no changes are made, will be $1 billion or more. In the next three years alone the State would see an increase of 40 percent, so we have to stop the bleeding now, said one conferee.


"This is not about taking away benefits from employees or retirees," Saiki said. "It's making sure the State is solvent enough to continue providing those benefits to 2013 and beyond. Those employees retiring in 10 or 15 years will thank us for acting now."


Under S. B. 1044, a board representing the employers, unions, and retirees would actively take control and negotiate for health benefits. Costs can be kept down by spreading the risk over the trust's 80,000-plus members, Oshiro said.


"These were very difficult decisions that could not be rushed," Oshiro added. "I'm very proud of the leadership shown by Democrats in the House and Senate, and I'm especially gratified that we met our dual responsibilities -- as elected leaders of the people and as employers of the public workers. "


Other related measures passing conference today included S. B. 1046, which places a ceiling on employers' contributions to PEHF, and S. B. 1058, which eliminates the practice of porting to individual union health plans.


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