Hawaii Lawmakers Snip Millions of Dollars Off Governor’s Budget Request
Hawaii lawmakers have trimmed Gov. Neil Abercrombie鈥檚 proposed biennium budget by almost half a billion dollars due to uncertainty over pending contract negotiations with public unions and looming federal budget cuts.
The amended operating budget for next fiscal year, which starts July 1, now stands at $5.9 billion, increasing to $6 billion in 2015. Abercrombie wanted $6.1 billion for next year and $6.3 billion the following year, an increase of 8 percent and 11 percent, respectively, over the previous biennium.
鈥淭he committee has taken a cautious approach,鈥 Finance Chair Sylvia Luke said Friday after her House committee passed the state budget bill.
Hawaii Budget and Finance Director Kalbert Young said last week that the state has identified up to $45 million in direct federal grants that may be at risk if sequestration continues. The budget includes a $25 million contingency and the governor is creating a new task force to help.
The teachers union and several other bargaining units are negotiating upcoming contracts. The budget includes restoration of 5 percent pay cuts they took two years ago, but the cost of future pay raises or better healthcare benefits hasn鈥檛 been determined, state officials said.
The Council on Revenues, which does the financial projections on which the budget is based, meets Wednesday. The council has yet to consider sequestration impacts in its fiscal forecast for the state 鈥 something Young hopes the council will do next week.
Health, Retirement Benefits
The Finance Committee included direct funding to help the state dig itself out of a multi-billion-dollar hole in health and retirement benefits promised to thousands of county and state workers. The budget has $100 million for next year and $105 million for 2015, which is in line with what the governor had requested.
Luke said after the meeting that she thinks lawmakers are serious about addressing unfunded liabilities this session.
鈥淭he members felt strongly or else I would have heard about it,鈥 she said.
One of the key changes the Finance Committee made to the budget was eradicating 931 positions that had been vacant since at least Dec. 31, 2011. But Luke said this move wasn鈥檛 about saving the $55 million budgeted for those jobs so much as making the budget more accountable.
Departments use the funding from vacant positions to pay for employee vacation days and overtime, she said. By eliminating the vacancies, she said the departments will have to ask the Legislature to approve money for these purposes thereby making it a more transparent process.
Highlights
Luke rattled off department-by-department highlights of what鈥檚 in the new draft of the budget, including money to ensure safe water quality, bring inmates back from mainland prisons and help combat rising healthcare costs.
Other highlights include:
- $7.9 million for the state to overhaul its technology infrastructure
- 19 specialists and inspectors to target invasive species
- $12.8 million in discretionary spending for school principals
- $113 million for school improvements
- Eight vector control workers
- Eight food safety workers
- 12 positions and $32 million in bonds to modernize the tax system
Luke said the approach the committee took was not just to restore programs and positions that have been slashed in recent years. She said the budget was analyzed as if the state was still in a period of making cuts.
鈥淚t still comes down to a balancing of interests,鈥 said Luke.
Missing from the latest draft of the budget is money for the early childhood education initiative the governor has been pushing. Bills to publicly fund pre-school passed the Senate.
Luke said funding for the proposed program will be considered after the House has had a chance to vet the legislation.
The only thing Luke said the Finance Committee won鈥檛 consider this session is increasing the general excise tax.
A group of teachers urged lawmakers to raise the GET by 1 percent to help pay for raises and other education costs.
Luke also said that the chances of the House passing a soda tax aren鈥檛 very good.
The budget legislation, , is facing a Wednesday crossover deadline.
See more funding highlights on the House blog by clicking .
