Governor’s Statement on Veto Override of SB 2077

Gov. David Ige, image and graphics by Wendy Osher.

Governor David Ige on Thursday night issued a statement in response to the legislative override of his earlier veto of Senate Bill 2077 relating to the management transfer of three state run Maui hospitals to Kaiser Permanente.

The bill, now a state law, authorizes severance benefits or early retirement incentives for employees who would be directly affected by the impending privatization of state hospital operations on Maui and Lāna‘i.

Governor Ige responded to the news with the following statement:

“Our primary concern is and always has been the health and well-being of Maui’s residents and visitors as we work to privatize Maui region hospitals.

We are committed to a successful transfer and transition to a new Maui health care system for all stakeholders, which includes our employees.

However, this transaction must be done correctly for the common good. The concerns expressed in my veto message have not changed. Three areas of concern remain:

The bill jeopardizes the Employees Retirement System’s tax exempt status.
The bill does not appropriate funds for lump-sum cash payments for affected employees.
The bill adds an additional unfunded liability of about $17.2 million to the ERS and $18.4 million to the Employer Union Benefits Trust Fund (EUTF). This puts the state’s long-term financial position, along with its bond ratings in jeopardy. Bond ratings determine what the state pays in interest on borrowed funds.

The next steps for my administration include:

Conferring with the attorney general to assess and evaluate the impact of the veto override.
Continuing to work in good faith with the UPW to bring resolution to the federal court injunction and to finalize the details. We are close to an agreement.
Continuing to work on a smooth transition in order to provide a new system of health care for Maui.

This is an historic, complex multi-stakeholder transformation and we are optimistic that we will resolve all unforeseen issues.

In the interim, I am confident that the existing Maui hospital staff and operations team will continue to provide quality health care services to the people of Maui.”