Showing Gov. Linda Lingle and educators that options are available, state lawmakers yesterday moved bills that would dedicate money from the state's hurricane relief fund and rainy-day fund to reduce teacher furloughs.

The negotiations on furloughs are part of the collective bargaining process, so lawmakers are unable to intervene. But the bills indicate that lawmakers are willing to provide state money to help finance a resolution.

Lingle, the state Board of Education, the state Department of Education and the Hawai'i State Teachers Association have the power to alter the two-year contract with teachers that contains 34 furlough days over two school years.

Yesterday, the state House and Senate voted to position the furlough bills and dozens of others for first crossover between the two chambers tomorrow, a significant marker in the 60-day session.

In the Senate, senators passed a bill that would take $86.1 million from the roughly $180 million in the hurricane relief fund to end furloughs. In the House, lawmakers approved a bill to provide $50 million from the rainy-day fund that Lingle wants to use to reduce furloughs in exchange for teachers giving up some of their planning days.

State Sen. Donna Mercado Kim, D-14th (Hālawa, Moanalua, Kamehameha Heights), said senators wanted to move the hurricane relief bill quickly "so that there's no excuses why we can't solve the problem."

State Sen. Clayton Hee, D-23rd (Kāne'ohe, Kahuku), said that while he supported using the hurricane relief money for furloughs, he believes the bill should also require a financial and management audit of the Department of Education.

Hee said the department lacks the "change agents" necessary to make progress. He also said the department and the school board have appeared to align with the teachers union, not the state, in labor talks.

"This is like giving candy to a diabetic," Hee said.

State Sen. Sam Slom, R-8th (Kāhala, Hawai'i Kai), described it as "extortion money" to bail out the teachers' union.

But state Sen. Brickwood Galuteria, D-12th (Waikīkī, Ala Moana, Downtown), said furloughs have brought shame to the state and deprived students of classroom instruction time.

"We're creating a whole new generation of latchkey kids," he said. "Unacceptable."

MINIMUM CLASS DAYS

Lawmakers also pushed through bills to set a minimum number of classroom instruction days or hours at public schools, proposals that have raised concern among public-sector labor unions because of the potential influence on collective bargaining.

Teacher furloughs have left public-school students with the lowest number of classroom instruction days in the nation.

The House and Senate also agreed to advance a constitutional amendment that would give the governor the authority to appoint members of the school board, with advise and consent of the nominees by the Senate. School board members, who set statewide education policy, are now elected.

Lawmakers also kept alive bills to restructure the Department of Education into two main divisions —- academic and administrative —- and to raise the salary cap for the state schools superintendent to attract national interest in the post.

While teacher furloughs and structural changes to public education have been focal points, the larger context of the session has been the state's $1.2 billion budget deficit through June 2011.

The House, which will complete its draft of the state budget this month, moved several tax proposals to help the state generate new revenue and balance the anticipated spending cuts to state programs.

The House opted not to scoop hotel-room taxes that go to counties- — instead capping the amount at existing levels for five years — and would make up the difference by eliminating dozens of general-excise tax exemptions of business activities and imposing a 1 percent GET on the activities.

REVENUE ENHANCERS

The House would raise insurance-premium tax rates and rein in several tax credits —- including deferring deductions for high-technology investments — to save the state money.

"This is a period of time when the demand for services goes up, and we just need the money," said state Rep. Karl Rhoads, D-28th (Pālama, Chinatown, Downtown).

But state Rep. Gene Ward, R-17th (Kalama Valley, Queen's Gate, Hawai'i Kai), described the tax and fee increases as "job killers."

Like last session, the House approved a $1 increase in the barrel tax on oil products to raise money for food security and renewable energy initiatives. This time, lawmakers would exempt aviation fuel to help local airlines and would also divert $10 million from the tax to the state's general fund to help with the deficit.

Lingle vetoed the barrel tax last year, citing concern about rising fuel costs for consumers, and lawmakers failed to override.

Lawmakers also moved a bill to increase a salary reduction for lawmakers, the governor, the lieutenant governor, judges and top state administrators from 5 percent to 8 percent, which would bring their pay cut closer to what many state workers received.

On a potentially controversial policy issue, the Senate approved a bill to allow "compassion centers" to dispense medical marijuana and to tax marijuana sales. The Senate also backed a bill to decriminalize the possession of one ounce or less of marijuana, and would instead impose civil fines.

The Senate also moved a bill to ban the use of plastic bags at larger businesses to help protect the environment, but senators appeared open to amend the bill to exempt counties, such as Maui, that already have tougher prohibitions.

FIREWORKS, FLAGS

The Senate passed bills to increase permit fees on fireworks, with the revenue dedicated to county law enforcement, and to allow state inspections of shipping containers to search for explosives. The House, however, delayed action on an illegal fireworks task force for further review.

Several lawmakers said public complaints about excessive fireworks displays on New Year's Eve and other holidays will likely not subside until the state considers a statewide ban.

Wary of public perception, the House amended a campaign finance bill to preserve a ban on political donations by state and county contractors. The bill would have relaxed the ban for contractors who have smaller government contracts.

State Rep. Barbara Marumoto, R-19th (Kaimukī, Wai'alae, Kāhala), said there should be "no return to pay-to-play in any form."

The House, responding to pleas from military veterans, passed a bill that would allow residents of planned communities to erect flagpoles to display the American and state flags.