Gov. Linda Lingle yesterday signed a bill into law that reduces pay for the governor, lieutenant governor, department directors, judges and state lawmakers by 5 percent and freezes their salaries through June 2011.

Lingle and state House and Senate leaders have described the bill as an attempt to lead by example as state workers are likely facing wage and healthcare benefit cuts in collective bargaining negotiations.

The governor signed the bill one day after announcing that, starting in July, state workers would have to take three furlough days a month for the next two years to help close the state's budget deficit. The furloughs are equivalent to a 13.8 percent pay cut for state workers and would save the state $688 million.

In addition to the 5 percent pay cut, the governor, lieutenant governor and department directors would also take furloughs so they would share the same sacrifice as other state workers.

Pay raises for state lawmakers aroused anger on talk radio and newspaper opinion pages during a session when the governor and lawmakers were forced to cut state spending because of the recession.

Lingle initially urged lawmakers to give up a 36 percent raise that took effect in January but backed away from the issue after realizing that executive and judicial branch leaders had already received pay raises, while lawmakers had not.

A state salary commission, approved by voters in 2006, recommended 5 percent raises for the executive branch in July 2007 and another 5 percent in July 2008. Judges received a 10 percent pay increase in July 2007 and a 3.5 percent increase in July 2008.

Lawmakers, who had not had a substantial raise in several years, had to wait for their raises because they are not allowed to accept raises during the two-year legislative session block in which the salary recommendations are made.

The salary commission considered whether compensation for elected and appointed officials was fair and equitable, whether it was sufficient to retain high-quality talent, and whether the raises were prudent. The commission also noted that there had been long periods over the years where other state workers had received pay raises while elected and appointed officials had not.

But the salary commission made the recommendations well before the state's economic downturn, and many critics argued the raises should have been canceled because of the budget deficit.

The bill signed by Lingle yesterday also affects new raises that were scheduled for the executive, judicial and legislative branches in the next two years.

Lingle also signed a bill that provides taxpayers with a $1 tax credit, which satisfies a state constitutional requirement for a tax break after two straight years of budget surplus. The governor and lawmakers have pointed to the tax credit requirement as an example of how quickly state revenues have fallen over the past year.