House sets prudent spending, planning goals

At the midway point of the 2012 legislative session, the House passed a budget that reflects a new normal after the Great Recession of 2008.

It reprioritizes programs fundamental to public safety and welfare, immediately creates hundreds of jobs in a variety of key industries, and squarely addresses long-term debt.

It also charts a course to grow our economy based on long-term financial stability and starts to implement our vision for Hawaii’s economic potential.

The budget bill appropriates $5.6 billion in general funds and $13.6 billion in all means of financing, including capital improvements. This is the first year since the recession that the Legislature is not forced to close a deficit over $1 billion.

On March 7, the Council on Revenues revised its projection for fiscal year 2012 upward from 11.5 percent to 12 percent growth. While this means more revenue is available, to spend money simply to restore programs is not the right thing to do. To incur debt because interest rates are low is shortsighted. To do so means that we haven’t learned the lessons of the recession from which we are emerging.

Instead, the House budget is prudent and reprioritizes, rehabilitates and renews government services for the years ahead. It includes $2.2 million for 29 agriculture inspectors to curb invasive species and assist farmers with crop shipments. We provided $15 million for the most vulnerable, including abused and abandoned children, to hire 15 additional Medicaid eligibility workers to reduce the backlog of applications, and $23.4 million for Temporary Assistance for Needy Families services aimed at helping people achieve self-sufficiency.

Creating jobs now is at the forefront of our plan for economic recovery. The construction industry suffered greatly through the recession. There is a backlog of repair and maintenance projects for state facilities in excess of $1 billion. Recognizing these facts, the House appropriated $2.4 billion in bond-funded capital improvement projects for the coming year.

We are working with the governor to upgrade our information technology capacity; $30 million was approved for statewide initiatives by the chief information officer to streamline state government and create higher levels of transparency and accountability. This includes $1.4 million for the Hawaii Broadband Initiative to fund pilot programs to increase the state’s broadband capacity.

Beyond the budget, House lawmakers are focusing on a matrix of economic initiatives through emerging industries such as aerospace, digital media and renewable energy.

The state’s financial future also depends on tackling long-term debt. As of July 1, 2009, the Employer-Union Health Benefits Trust Fund (EUTF) had a total unfunded liability of more than $14.5 billion, with the state responsible for more than $11.5 billion. The House Finance Committee started the process of setting aside monies toward annual required contributions, appropriating $50 million for this purpose in fiscal 2012-2013. Due to the complexity of the issue, we propose a study on how to implement reforms and improve the fiscal health of the EUTF.

We believe that a steady and deliberative approach to the budget is the best way to achieve our goals. The budget passed by the House ensures that the most basic needs of Hawaii’s people are met, particularly in human services and agriculture. It also supports long-term planning and accountability that will fundamentally change the character and delivery of government services.