Federal gov’s proposed belt-tightening will put huge squeeze on Hawaii’s budget

There is a flood of scary government budget news this month and it is likely to just get worse.

If Republican fiscal conservatives are holding elections-have-consequences parties, others, including those just hanging on, could discover that the consequences for Hawaii are bleak.

Some programs would have their budgets reduced while others, according to President Donald Trump’s new federal budget proposal, would just be eliminated.

Scheduled for elimination is Honolulu’s East-West Center. Also, the dream of the late Hawaii Sen. Spark Matsunaga: the U.S. Peace Institute.

According to USA Today, other programs include the Weatherization Assistance program, Low-Income Home Energy Assistance Program, the National Endowment for the Arts and Corporation for Public Broadcasting.

By the end of the federal budget debate, not all the programs will actually be killed or starved to death. Many will have enough supporters and constituents that the Republican-controlled Congress will not be able to exterminate them all. Instead, it will be a budget fight for existence, certainly not for growth.

In the midst of that comes Hawaii’s own state budget now also facing a time of contraction, not expansion.

If there were a state department of bleakness, it would be known as the state tax office, which reports that the state expects to collect $250 million less in taxes over the next two years.

This comes after expectations were lowered by the state Council on Revenues for two revenue cycles in a row. Less money coming in means that the state House last week had to chop $500 million out of Gov. David Ige’s budget.

To some, just saying the words “cut the budget” brings a smile. Yes, state government wastes some of what it collects, and yes, it is still fond of $250,000 meaningless studies — but not everything can be cut in the state budget.

According to the just- released state budget in House Bill 100, there are three big items that Ige and taxpayers have to pay.

Mostly the tab is for the workers with state government, the Department of Education and the University of Hawaii. But also there is principal and interest on state debts. Paying for state employees’ pensions, Social Security, Medicaid and health insurance for employees and retirees are the parts that increase every year.

The biggest charge is $561,358,083 for state workers’ health insurance. Next year that cost goes to $660,490,415.

The grand total for those three unavoidable bills just for the 2017-18 fiscal year is $2.5 billion. Next fiscal year is even higher.

These are completely pay on demand costs. As Gov. Linda Lingle discovered during the last round of budget cuts, cutting the budget by laying off state workers is almost impossible and equally counterproductive because of union-requiring bumping rights. And you also have to pay principal and interest on all those bonds you took out.

The deal is: You got them, you are going to pay them — and that also goes for when they retire.

So in an act of fiscal cruelty, the GOP and the Trump administration could delete the Department of Housing and Urban Development’s entire $3 billion Community Development Block Grant program, zeroing out the Meals on Wheels feeding program for house-bound seniors and the infirm — but Hawaii is legally and constitutionally bound to keep on paying.

Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.