The Senate Ways and Means Committee says the administration must negotiate the payroll lag's implementation with public-workers unions.

The governor is proposing that the paydays for state workers be moved back five days to the fifth and 20th of each month, allowing the state to issue checks after the two-week work period has been completed.

Presently, state employees fill out their timecards before the end of the work period, leading to millions of dollars in salary overpayments.

The lag also would push one pay period into the upcoming fiscal year, giving the state a one-time $51.5 million infusion for the upcoming fiscal biennium.

In amending the bill, the Senate money panel took to heart complaints from union officials that administration officials have refused to discuss how to implement a pay lag.

Ways and Means co-chairwoman Sen. Carol Fukunaga (D, Makiki), said union officials have indicated they are willing to accept a payroll lag if the administration would negotiate with them.

The administration has appealed a Hawaii Labor Relations Board ruling that a payroll lag is a negotiable item under collective bargaining.

In other action, the Senate money panel:

Opened the door to possible steep increases on the surcharge on rental cars and tour buses and vans as a way to help the state balance its budget.

Surcharge increases, particularly on tour buses and vans, could generate between $9 million and $22 million annually, said Fukunaga and Co-Chairwoman Lehua Fernandes Salling.

Presently, each isle tour bus is hit with a monthly surcharge of $65; the vans, $15.

But the monthly surcharges could soar as high as $500 and $100, respectively, said the Senate money co-chairwomen.

The daily auto rental surcharge could go from $2 to $3.

Fernandes Salling and Fukunaga said they would like to hear Cayetano's recommendations on how high the surcharges on tourism-related vehicles should go.

Ways and Means accepted Cayetano's proposal to boost state operating funds by about $22 million annually by transferring the $2 a day auto rental surcharge from the highway special fund to the general fund. But at the same time, the panel negated that by approving the transfer of gasoline tax revenues, also about $22 million, from the highway fund to the general fund.

Passed a bill to have the state's current 5 percent share of the hotel room tax revenues - estimated at $10.9 million during the next two fiscal years - cover the $12 million debt service on the state's convention center that will be due in 1999. Fernandes Salling said the move eliminates the need to tap the counties' share of the hotel room tax, but $1.1 million still needs to be found.

The $350 million convention hall, seen as a a magnet by tourism-industry leaders, could be a significant drain on state coffers, some lawmakers fear, leading to talk about the possibility of privatizing the center's operation.

Fernandes Salling said the convention center's operational costs for the next four years is projected to be $5 million to $13 million above estimated revenues.