Published Online: May 26, 2010

Deal Reached to End Hawaii School Furloughs

Gov. Linda Lingle and the state's political leaders ended the state's infamous school furloughs Tuesday, grabbing hold of a serendipitous deal that involves a $10 million loan from local banks and that forced no one to give ground.

The accord eliminates 17 furlough days that were scheduled for the school year that begins in September.

Hawaii's more than 170,000 public school students lost 17 instructional days to furloughs during the current school year, which ends Wednesday, giving the state the shortest academic year in the nation.

"The bottom line: The furloughs are over," Lingle said to applause at a Capitol news conference crowded with lawmakers, parents and others.

The agreement capped months of acrimony that last month saw several parents stage a days-long sit-in at Lingle's office that attracted national attention. Four adults were arrested for trespassing, and several more were issued citations.

Those parents, members of an ad hoc group called Save Our Schools, expressed relief at Lingle's announcement.

"We're really happy it's over," said Clare Hanusz, a parent who participated in the sit-ins and attended Tuesday's news conference.

The accord has four parts, two of which have been on the table for weeks: The governor will release $57.2 million to the state school system, out of a total of $67 million the Legislature allocated from a special state hurricane relief fund; and teachers will hold classes on six of the 11 non-instructional days their labor contract previously required.

"We are gratified that the agreement we worked hard to reach with the Board of Education will be implemented," Wil Okabe, president of the Hawaii State Teachers Association, said in a statement. "This represents a first step in getting our schools back to a normal academic year."

The third part is $2.2 million in federal economic stimulus funds that Lingle will direct to 31 charter schools.

The fourth and newest aspect of the deal is a $10 million interest-free loan that First Hawaiian Bank, the Bank of Hawaii and possibly other local banks will provide the state. The money will be available to the state Department of Education if needed but can't be used for salaries.

"I feel good about ending furlough Fridays," said Donald Horner, First Hawaiian's chairman and chief executive officer.

State Board of Education President Garrett Toguchi hailed the accord but said the loan ultimately may not be necessary because the next governor may decide to allocate state funds next year or the school system may be able to operate without it. Lingle leaves office in December, having completed her second term.

"If we borrow $10 million from the banks, we'd still have to repay it even if it's basically with no interest," he said.

The loan spanned what had become hardened positions. School officials and the teachers union had agreed to spend $67 million to end the next school year's furloughs, and legislators voted to provide the money. But Lingle wanted to spend only $57 million, saying the schools did not need to bring back all non-teaching employees on those days.

The loan idea, the governor said, was brought to her late last week by a top economic development aide, Ted Liu, who had conducted preliminary talks with banking leaders.

The accord "would not have been possible without this good idea and the banks stepping up," Lingle said. "This was a way to make both sides correct or both sides able to stay with their position."

It ended furloughs without a tax increase, teacher layoffs, increasing class sizes or "blowing a hole in our budget," she stressed. "It took us a while, but I think we did it in a good fashion."

While the furlough controversy appears resolved, state schools Superintendent Kathryn Matayoshi warned that her system has sustained millions of dollars in budget cuts.

"We're still going to be facing restrictions, people, so don't get your hopes up too high. We still have a lot of challenges ahead," she said.

Marguerite Higa, one of the parents arrested during the sit-in, said she is "really grateful that it's over."

But, she added, "Everyone that we know would have gladly paid a reasonable tax increase to have avoided the furloughs....We are waiting to see education prioritized."

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