With tax revenues on the decline, and after having her plan to issue unpaid furloughs to state employees rejected by a judge, Hawaii Gov. Linda Lingle announced that she will start laying the worker off.

Lingle sought to save money by ordering the unpaid furloughs, but her plan was challenged by state employee unions, which won a court order from a state Circuit Court judge, who ruled that the governor could not implement furloughs without engaging in contract negotiations.

Lingle does have the authority to lay employees off, though, and she announced Tuesday that layoff notices are going out to about 1,100 employees.

“Our current expenses continue to exceed our projected revenues and our labor costs equal approximately 70% of our general fund expenses. Therefore, in order to balance the budget, as the state constitution requires, we must significantly reduce our labor expenses,” Lingle said in a statement.

The Lingle administration plans to appeal the Circuit Court ruling on furloughs. She also announced that about 900 non-union employees would be furloughed three days a month beginning in September.

“It is unfortunate we must take these difficult steps today,” Lingle said. “Furloughs have always been my first choice to achieve significant labor cost reductions needed to address the unprecedented budget shortfall the state is facing.”

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