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Thursday, April 24, 2014         

OUR VIEW: STATE FINANCES


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Keep public scrutiny on Abercrombie's delayed budget


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A month before last year's election, then-gubernatorial candidate Neil Abercrombie asserted that his "immediate task" as governor would be "to supercharge the economy without delay." The new governor now finds that is easier to promise than to deliver on time: He says his revisions to next biennium's budget proposal crafted by the outgoing Lingle administration won't be ready until March. The later-than-usual time frame is already causing concern among legislators — and it should, as well, for the public. An already complicated budget operation stands to grow more confused, so stronger vigilance must be paid to an open, timely public hearing process.

The new administration's plan to make emergency spending requests to take the state government through the remainder of the current fiscal year is understandable because of the $71.6 million projected deficit covering that immediate period. The actual shortfall should be somewhat less than that without the emergency help, according to the state Council on Revenue's latest prediction of the economy.

However, the projected deficit under former Gov. Linda Lingle's tentative money plans over the following two fiscal years is $771.9 million, and legislators are being asked to wait two months for Abercrombie's plan to fill the gap between revenues and expenditures, with $50 million left over to fund the governor's high-priority programs and initiatives. That's normally the time the House moves a draft review of the budget to the Senate.

Kalbert Young, the state's incoming budget director, has asked legislators to be patient while the new administration "works through the process of developing a revised budget and balanced financial plan, which will require information gathering, analysis, dialogue and open communications among all affected parties."

Legislators must be provided access to the process to avoid being subjected to a March surprise — they adjourn at the end of April. The same transparency must apply to the general public, many of whom will surely be directly affected by shifting budget priorities.

The money crunch is understandable given the predicament most states face in trying to balance their budgets as the nation tries to crawl out of the recession. Campaign promises by Abercrombie limit his choices. He vowed not to raise general excise taxes, dip into the counties' share of hotel-room tax revenues, extend state employee furloughs or invoke layoffs. Finding waste in state government may be difficult to locate following Lingle's cost-cutting attempts.

"All the low-hanging fruit? That's already been picked and eaten," remarked state Rep. Marcus Oshiro, chairman of the House Finance Committee. "It's gone already."

Abercrombie has said he will pursue federal money, but that may be difficult. Stimulus money not yet allocated helps fund specific projects but was not intended to plug holes in state operating budgets. Rep. Kevin McCarthy, R-Calif, the new U.S. House majority whip, has said that "what the states can really hope for is that we turn the economy around so (state) revenues will pick up. But Washington is in very bad financial shape itself."

Without federal assistance, expect the Abercrombie administration to postpone some campaign promises. Instead, the tough chore at hand is of working with the Legislature, in public view, and in adhering to the state constitutional requirement of putting together a balanced budget.






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