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Tuesday, October 21, 2014         

ON POLITICS


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Abercrombie throws curve ball on first budget

By Richard Borreca

POSTED:



Simply put, this just doesn't add up.

Hawaii's new bearer of bad news is Kalbert Young, interim budget director for Gov. Neil Abercrombie.

This week he went before the assembled House and Senate finance committees to broadly explain that we don't have all the money we need, nor do we have any plans yet on how to get more money, but we have a long list of things we want to spend it on, if we do find some more money.

This was not a surprise to the legislators, who are already well-schooled in the state budget vagaries. What was a tad off-putting was Young's admission that he may not be able to pull all the budget pieces together until March.

That's a problem, but we can get to that later. First we have to worry about the budget's inability to add up.

The budget is based on how much money the state takes in from taxes and such. Right now we are supposed to be taking in 3 percent more than last year, but in reality we are continuing to take in less than predicted.

"In order to reach a 3 percent growth rate in FY-11, general fund tax collections must average 7 percent for the period from December 2010 to June 2011," Young said during his Tuesday budget briefing.

So far the tax collections have been running 5.5 percent higher. That means every day we don't collect more we grow further behind.

That's the administration's "we have no money" side of the picture; there is also a "we are going to spend a lot more money" side of the picture.

Right now the Abercrombie administration is planning to exceed the spending ceiling by $529.3 million in fiscal year 2012 and additional $97 million in the next fiscal year.

"The reasons for these excesses are due to the restoration of furlough savings adjustments and funds supplanted by the federal State Fiscal Stabilization Fund program and increases in Medicaid, debt service and fringe benefit costs," Young said in his testimony.

That is only part of the state spending increases that Abercrombie is mulling over. He has also mentioned bringing home those state inmates now in mainland prisons, which could easily add millions more to the state budget.

Add to that the decision by Abercrombie for the state to pick up 60 percent of the medical insurance costs for state workers and you have a growing budget. In total the expenditure ceiling will be busted by 10.5 percent.

In comparison, Gov. Linda Lingle announced in her first budget briefing in 2003 that the expenditure ceiling would be exceeded by 1.4 percent, but just for one year.

History, however, can put a real dent in candor. Lingle eight years ago announced a budget and then spent much of the 2003 session sending down emergency proclamations readjusting the budget. This year, Young started off the year by saying this thing won't "be ready until mid-March."

Bottom line is that the Legislature will start writing a budget in two weeks, the House will have passed a state budget by March and when the Abercrombie budget arrives, it will be in competition with the one being worked on by the Senate.

Much like Hawaii's weather, if you don't like this version of the state budget, wait a while and it will change.

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Richard Borreca writes on politics every Tuesday, Friday and Sunday. Reach him at rborreca@staradvertiser.com.






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