Governor asks $439M for new spending plan

The Abercrombie administration, in its budget proposal to the state Legislature, is calling for $439 million in new spending in the next fiscal year, with an emphasis on early childhood education programs and upgrading the state’s antiquated computer systems.

Funding would also be increased for senior care programs and for dealing with the state’s long-term liabilities associated with employee and retiree health benefits. The budget also restores the 5 percent taken from public employee paychecks to help close the deficit.

As required by law, Abercrombie released his budget draft to the Legislature on Monday.

But he declined to discuss specifics out of respect to his longtime friend U.S. Sen. Daniel K. Ino­uye, who died Monday of respiratory illness at Walter Reed Army Medical Center in Washington, D.C.

"I want to indicate that we will take this up in a couple of days, when it’s appropriate," Abercrombie said at the start of his news conference on the budget, before shifting to talk about Inouye.

The administration previously said it would seek some type of revenue enhancement — similar to the tax adjustments made during the past few years — to help finance the state’s priorities, but there was no discussion of such measures Monday.

"This balanced budget will build upon sound strategies that will continue to stimulate our local economy while moving forward on (information technology) transformation initiatives to better prepare Hawaii for an increasingly technological age," Abercrombie said in a prepared statement.

Sen. David Ige, chairman of the Senate Ways and Means Committee, said Monday he had not yet been briefed on the specifics of the proposal.

"We’ll go through it," Ige (D, Pearl Harbor-Pearl City-Aiea) said. "Obviously, we are committed to work with the administration to fashion a budget that meets critical needs and is something that we can live with.

"We’ll have to see as we go through the session what the needs are and what available funds are. At the end we’ll make it all balance."

Lawmakers are expected to begin next month the annual round of budget hearings in preparation for the opening of the 2013 legislative session Jan. 16.

Also next month, the state Council on Revenues will meet to set the revenue forecast for the coming fiscal year, giving the state an idea of how much money will be available for use.

The most recent revenue forecast, in September, predicted a 4.9 percent increase in tax revenues for the upcoming fiscal year, which begins July 1. Through the first four months of the current fiscal year, state tax collections are up 11.3 percent from the same period a year ago, but Ige cautioned that collections could dip next year as homeowners and businesses begin to file tax returns and claims for renewable energy tax credits.

The Council on Revenues raised concerns at its September meeting about the effects of the credits on the state’s tax coffers. The state offers a 35 percent state income tax credit for homeowners and businesses that install photovoltaic systems.

"It’s hard to get a sense of what that impact would be and how it would show up," Ige said.

Abercrombie’s overall budget proposal of $11.8 billion from all sources of revenue is about 5 percent more than the $11.2 billion budget adopted by the Legislature last year for the fiscal year ending June 2013.

The governor’s budget increases to $12.1 billion for fiscal year 2015, the second year of the two-year budget cycle.

The budget includes about $59 million in each fiscal year for information technology initiatives and improvements to the state’s aging computer systems, $44.9 million over two years for the Executive Office of Early Learning and early childhood education and health initiatives, and $29.3 million over two years for digital curriculum for school Common Core State Standards.

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GOVERNOR’S BUDGET PROPOSAL

Highlights of Gov. Neil Abercrombie’s two-year budget presented Monday to the state Legislature, covering the period from July 1, 2013, to June 30, 2015:

>> About $59 million per year for information technology initiatives and improvements

>> More than $7.1 million in FY 2014 and $22.2 million in FY 2015 for digital curriculum for school Common Core State Standards

>> More than $9.6 million in FY 2014 and $35.3 million in FY 2015 for the Executive Office of Early Learning and early childhood education and health initiatives

>> More than $5.6 million in FY 2014 and $5.9 million in FY 2015 for the Executive Office on Aging, Aging and Disability Resource Centers, and kupuna care programs

>> More than $118.1 million in FY 2014 and $172.8 million in FY 2015 for health premium payments and other retiree benefits

Source: Office of the Governor