HONOLULU - Gov. Linda Lingle on Thursday warned Hawaii residents of a ''fundamental restructuring'' of state government, including layoffs and cuts to public assistance benefits, because of the state's continuing budget woes.
The governor said in a webcast that she plans to decrease payments to social service program beneficiaries and eliminate programs that can effectively be provided by federal or local agencies, or by volunteers.
Lingle said some state offices must be closed and some administrative duties consolidated in areas of government she oversees, which include health and welfare, business and economic development, transportation, and land and natural resources.
More layoff notices for state workers also are likely in coming months, Lingle said, adding to the nearly 1,200 employees who already have received such letters.
Her proposed changes are aimed at shoring up the state's budget, which is now $884 million in the red for the biennium that runs through June 2011.
''Even with all of the prudent cuts in spending we have already made, we are still facing a budget shortfall because we are spending at a rate that exceeds our actual and projected income,'' she said.
However, Lingle offered no specifics, including when the proposed restructuring would occur. ''As we make specific decisions, I will share them with you and the reasons for them,'' she said.
Hawaii's constitution gives the governor wide discretion over state spending that falls under her purview. The Legislature, which isn't scheduled to meet again until January, could call a special session and attempt to block or revise her actions, but that would take time and create a messy political fight.
The governor's Internet speech, which was marred by technical problems, came less than 24 hours before the start of binding arbitration hearings that will decide the next labor contract between the state and the Hawaii Government Employees Association. The union has nearly 30,000 members.
Lingle's timing annoyed Rep. Marcus Oshiro, D-Wahiawa-Poamoho, who charged that she was making an ''insincere and disingenuous attempt'' to sway the neutral member of the three-person arbitration panel toward siding with labor proposals from the state.
''It was more like an opening statement that one makes before the trial begins,'' said Oshiro, chairman of the House Finance Committee. ''When you hold these kinds of media events on the courthouse steps, it tells you that you may be uncertain about your case.''
Still, Oshiro said he welcomes a discussion about ending or shrinking state programs while defining what core services the state should provide.
Randy Perreira, executive director of HGEA, refuted Lingle's assertion that union leaders favor layoffs instead of furloughs.
''HGEA and its negotiating teams recognize that the members prefer furloughs to across-the-board pay cuts, and to that end have proposed furloughs effective in October,'' Perreira said in a statement.
Lingle had wanted to unilaterally furlough 15,600 state workers under her direct control for three days a month to help close the budget gap. But a state judge ruled that unconstitutional, and private talks on furloughs between state officials and the union have been fruitless.
The governor also reduced appropriations to the university system, the Department of Education and the Hawaii Health Systems Corp. by 14 percent in recent months.
In Thursday's address, Lingle said she will ''attempt to avoid'' more cuts to public schools and the University of Hawaii system. But she said she would urge educators to find other money to finance nonessential programs.
Lingle added that tax increases would hurt an already ailing economy, and draining the hurricane and other special funds would not fill the budget gap.
''These actions we must take are not unlike a business that loses one-third of its income and therefore must reprioritize its budget by scaling back on certain expenses and activities, and focusing on its core business,'' she said.
By HERBERT A. SAMPLE, The Associated Press
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