The interim state budget director said today that it could take until mid-March before the Abercrombie administration determines how to close a projected deficit in the two-year budget.
Kalbert Young, the interim budget director, told the state Senate Ways and Means Committee and the state House Finance Committee at an informational briefing that the administration would likely make emergency spending requests to get through the fiscal year that ends in June in the next several weeks. But he said it could take until March before the administration outlines how it will generate revenue or reduce spending to balance the two-year state budget.
Young asked lawmakers for their "patience and continued indulgence" as the new administration revises the budget plan released in December. Gov. Neil Abercrombie announced at that time that the state was facing a $71.6 million deficit this fiscal year and a $771.9 million shortfall over the following two-year budget cycle.
The state Council on Revenues upgraded the state’s revenue forecast last week, so those deficit estimates will likely be reduced. But the state is still projecting a substantial budget gap. Lawmakers will likely open the new session on Jan. 19 without detailed information for how Abercrombie intends to close the gap.
State Rep. Isaac Choy, (D-Manoa), said waiting until March to hear how Abercrombie will balance the two-year budget "really scares me." Choy serves on the House Finance Committee, which will be responsible for preparing a House budget draft based on Abercrombie’s figures by mid-March. The draft then moves over to the Senate Ways and Means Committee for a Senate budget draft. A final budget draft is expected to go back to the governor for approval before the session ends in early May.
State Sen. Donna Mercado Kim, (D-Halawa, Moanalua, Kamehameha Heights), noted that Abercrombie has taken some revenue-generating options off the table. The new governor has said he would not support raising the state’s general-excise tax or scooping the counties share of hotel-room taxes. The governor has also said he would not try to extend furloughs or order layoffs of state workers to help with the deficit.
Abercrombie has instead said he would retool and reconfigure state government. Kim told Young that lawmakers have already substantially reconfigured certain state programs to get through the recession.
Young said there are a few areas left to reduce spending. He said the administration is conducting a review to find revenue-generating opportunities, such as tax credit or fee adjustments.