POSTED: 05:54 p.m. HST, Jul 03, 2013
LAST UPDATED: 05:54 p.m. HST, Jul 03, 2013
Hawaii Gov. Neil Abercrombie signed bills to repay $100 million to the state's hurricane and emergency reserves and set plans to fully fund future health benefits for state employees.
Abercrombie said Hawaii is no longer a "pay-as-you-go" state.
The bill to pay unfunded liabilities requires an actuary to determine the amount Hawaii pays toward employer contributions starting in fiscal 2018-2019. The payments will phase in starting next year.
The bill also supplements deficient payments of county governments toward future employee health benefits using general excise or hotel taxes.
Abercrombie said better fiscal management will help Hawaii's reputation in the eyes of financial institutions and others who invest here.
The plan would prevent Hawaii from turning to bookkeeping tricks and other measures to make it seem like the state is in better financial shape, Abercrombie said.
"No tricks, no smoke, no mirrors. This is the real thing," he said. "We've ended all those practices and we're going to make our payments on time and in amounts that show we're serious."
The state borrowed from the reserve funds to help sustain Hawaii through the Great Recession, which particularly hurt tourism and construction, leading to job losses and less tax revenue for the state. That led to furloughs and pay cuts for state workers, along with hiring freezes.
The Legislature in 2011 set payments to replenish the funds; the laws signed today accelerate that.
Finance Director Kalbert Young says the payments will help Hawaii compare favorably with other state governments.
"It provides proof to the pudding that we are willing and have demonstrated fortitude to commit to addressing those financial shortfalls," Young said.
As of July 1, liabilities on future health benefits for state and county employees are $18.9 billion, Abercrombie said.
"We're not talking about chump change here. We're talking about serious numbers," he said.