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Wednesday, April 16, 2014         

ON POLITICS


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Abercrombie glances down the budget hole, and it's deep

By Richard Borreca

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This is the week Gov.-elect Neil Abercrombie finds out:

A) There is no Santa Claus.
B) No Tooth Fairy either.
C) Easter Bunny never was.
D) The state budget doesn't balance unless you furlough workers, raise taxes or start cutting programs.

Outgoing Budget Director Georgina Kawamura spent Wednesday morning briefing Abercrombie's transition team on the upcoming state budget. She told the new folks that while she is drawing up each department's budget ceilings, making it balance will be up to Abercrombie.

Asked if the budget balances, Kawamura said "No."

"The budget is based on assumptions. There are a lot of decisions that have to be made before this document can be sent to the Legislature," Kawamura told me.

For instance, the upcoming state budget does not include furloughs; they end June 30, 2011. With no furloughs after July, millions more will be needed for worker salaries. That puts at least a $170 million hole in the state budget, according to state Rep. Marcus Oshiro, who has guided the House Finance Committee for the last four years.

Add to that the expectation that the state workers health insurance program will need an extra $63 million because of an unpaid carryover from 2009. Also coming due are outstanding bills for Medicaid of $143 million in 2012 and $175 million in 2013.

Both Oshiro and state Sen. Suzanne Chun Oakland foresee an additional $100 million in increased Medicaid payments because more people will be using the system.

Wait, it gets worse.

Unless all the Republicans in Washington go away for the weekend and leave the federal checkbook with the Democrats, there is not going to be another stimulus bill, which means the state won't get any more stimulus funds, which Oshiro estimates is a $60 million loss.

Finally, the Lingle administration postponed tax refunds into the new fiscal year, so unless Abercrombie wants to do that again next year, he will have to pony up another $275 million.

Abercrombie campaigned on "hope and change." He hoped to change the state budget by halting $24 million in cuts made by Gov. Linda Lingle, who chopped the money going to programs for the poor, disabled and mentally ill. If he decides to restore the money, add that to his tab.

During the campaign, Abercrombie said "Our plan does not increase taxes." Instead, Abercrombie said, he was willing to "prioritize" state spending. The ranking he discussed was more complicated than someone deciding to pay the electric bill this week and ignore the credit card balances for another month. Abercrombie was talking about making real choices, saying that education was the most important thing to fund, for instance. Now he will also have to say what is the least important and what just won't get any money.

Late next month Abercrombie will send a budget to the Legislature, and then the Abercrombie priorities will be in black and white.

Richard Borreca writes on politics on Sundays, Tuesdays and Fridays. Reach him at rborreca@staradvertiser.com.

 






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