Gov. Neil Abercrombie said today that the state has a $71.6 million budget shortfall for the fiscal year that ends in June and a substantial $771.9 million deficit for the following two-year budget cycle.
The governor said he would ask the state Legislature in January for emergency appropriations to cover Medicaid and welfare costs over the next six months. He will also ask for money to operate the governor’s and the lieutenant governor’s offices, which lawmakers purposely left with little funds.
Abercrombie said he would not delay state income tax refunds, like Gov. Linda Lingle did this year, to get through the fiscal year.
Over the next several weeks, the Abercrombie administration will outline how to close a projected $410.1 million budget shortfall in fiscal year 2012 and a $361.8 million deficit in 2013. The budget shortfall is based on the September forecast by the state Council on Revenues and state spending projections. The council is expected to update its forecast next week, which could alter the deficit estimates.
Abercrombie said he would reconfigure state government services and pursue federal money to help with the deficit.
He repeated campaign promises not to increase the state’s general excise tax, extend furloughs or order layoffs for state workers, or scoop the counties’ share of hotel-room taxes.
Overall, Abercrombie is proposing a $10.8 billion budget for fiscal year 2012, a 6.1 percent increase over this year’s $10.2 billion in spending, and an $11 billion budget for fiscal year 2013, an 8.2 percent increase. The general fund portion of the budget, over which the governor and lawmakers have the most control, is $5.5 billion in 2012 — a 12.6 percent increase — and $5.7 billion in 2013 — a 16.4 percent increase.
Abercrombie described the two-year budget, which was mostly based on Lingle’s budget figures, as a starting point that will be revised during the next session of the Legislature that begins in January.
The new governor met privately with state House and Senate leaders earlier today to discuss budget issues.
State House Speaker Calvin Say, (D-St. Louis Heights, Palolo Valley, Wilhelmina Rise), called the promise not to raise the general excise tax "a Christmas gift" to the people of Hawaii. Say said, however, that lawmakers will likely consider lifting tax exemptions and tax credits to help balance the budget.