Saturday, July 26, 2014         

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Governor's budget scrutinized

By Derrick DePledge


State House and Senate leaders questioned Gov. Neil Abercrombie and his state budget director yesterday about a new two-year budget draft, including what would happen if they reject the governor's tax revision and spending cut proposals to close a projected $700 million deficit.

The governor's recommendations to establish a soda tax and end state Medicare Part B reimbursements for retired public workers are in danger of failing at the Legislature. Lawmakers would have to come up with alternative options to balance the budget if they do not go along with the governor's ideas.

"By now you probably realize that there are several initiatives that are listed here that have not gained traction or any support in either chamber, and passage of those measures are questionable at best," said state Rep. Marcus Oshiro (D, Wahiawa), chairman of the House Finance Committee, which held a joint briefing on the budget draft with the state Senate Ways and Means Committee.

"Do you have any idea of how we would make up the revenues lost if those measures fail to pass?" Oshiro asked.

Abercrombie, a former lawmaker, said there is often a "Lazarus effect" in which proposals that appear dead early in the session are resurrected later. He asked lawmakers to keep his recommendations alive as part of the discussion.

The governor defended the soda tax as an option to generate revenue and to help offset the health care costs associated with drinking sugary beverages. He also stood by his call to end Medicare Part B reimbursements and said he is not swayed by legal arguments that it would be unconstitutional.

"I am not persuaded by legal advocates for those who want to keep this going saying, 'Well, this is unconstitutional, I guess you shouldn't take it up.' That's an easy way to deal with anything you don't like — call it unconstitutional," the governor said. "That's nonsense."

Abercrombie said he does not consider Medicare Part B reimbursements an accrued benefit protected by the state Constitution or an entitlement. House lawmakers have moved out a bill that would end Medicare Part B reimbursements only for public-worker retirees after July.

"Moses did not come down from the mountain with Medicare Part B," the governor said. "This is done by human beings. This is a policy question."

Oshiro and state Sen. David Ige (D, Aiea-Pearl City), chairman of the Senate Ways and Means Committee, said afterward that they are preparing alternatives.

"We are definitely having those conversations, because it's clear that in order to balance the budget, if we're going with his basic blueprint and if we're not doing his revenue enhancements, we have to find some others," Ige said.


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