Ige is ‘overspending,’ key lawmaker says

Senate Ways and Means Committee Chairman Donovan Dela Cruz criticized Gov. David Ige’s proposed budget for next year as an example of “overspending” as Dela Cruz released his own budget proposal Thursday totaling $14.3 billion.

Dela Cruz said the Ige administration submitted “a budget balanced on deficit spending and carryover funds,” and warned the administration’s financial plan for the next five years would significantly deplete the state’s budget surplus.

“Simply put, the state is overspending and not living within its means,” said Dela Cruz, who is supporting U.S. Rep. Colleen Hanabusa in this year’s Democratic primary for governor. Dela Cruz said the new Senate draft of the financial plan seeks to cut costs and incorporates tax increases and other changes that would raise more money for the state.

The Ige administration reported a projected general treasury surplus of $956 million for the current fiscal year that ends June 30, which is close to an all-time record .

However, the most recent financial plan made public by the Ige administration a month ago called for the state to spend upward of $200 million more each year for the next three years beyond what the general fund is expected to collect in taxes and other revenue. That deficit spending is projected to whittle down the budget surplus in the years ahead.

Dela Cruz told members of the Ways and Means Committee on Thursday that the Senate budget plan includes a one-time $79 million injection of revenue in the year that begins July 1, and an additional $120.7 million in “recurring revenue” in the years ahead. He was unavailable after the committee hearing to explain exactly where that extra money will come from.

Earlier this month Dela Cruz advanced a package of tax bills he estimated would raise an extra $72 million a year by taking steps such as increasing conveyance taxes on sales of high-end residential investment properties, increasing taxes on timeshares and collecting state excise taxes for online retail purchases that generally go untaxed today.

“These measures will bring the state out of the red for fiscal year (2019) as well as bring the overall state’s financial plan in the black by fiscal year 2022, one year earlier compared to the current state financial plan,” Dela Cruz said Thursday.

The bills seeking to increase taxes or collect various taxes that are already owed were approved by the Senate earlier this month and are now pending in the House.

Dela Cruz said his proposed Senate budget draft for the year beginning July 1 would increase general treasury spending by $70.7 million, but said $65 million of that extra spending is for one-time costs.

The other $5.6 million in additional general treasury spending will go to programs for “an aging population and to pay for programs like Kupuna Care, Medicaid and adult dental programs,” he said.

A news release from the Senate on Thursday said the new budget draft includes $3.9 million in funding for the Kupuna Caregivers Program, which was created last year to support working families that also care for a family member who is 60 or older.

That program provides families with up to $70 per day to help pay for services such as home health care workers or adult day care costs.

The Ways and Means Committee did not publicly release the details of Senate’s proposed new construction budget for the state Thursday, so it is not yet known what major projects such as new schools, highways or correctional facilities the Senate proposes to fund.

The budget bill is House Bill 1900, which now goes to the full Senate for further consideration. Negotiators from the House and Senate will meet later in conference committee to iron out differences between their budget proposals.