State senators, growing impatient with the lack of budget details from Gov. Neil Abercrombie, asked yesterday when the governor plans to fulfill his campaign promise to restructure state government to help with the fiscal crunch.
At a budget hearing before the Senate Ways and Means Committee, senators reminded Abercrombie administration officials that the governor said repeatedly during the campaign last year that he would reconfigure and reprioritize government.
Michael Ng, a policy analyst for Abercrombie, said the governor has been meeting with state departments to look for potential improvements to state programs. But he said structural changes would likely not be ready until next year’s budget proposal. He apologized to senators for the lack of specifics.
The Abercrombie administration has estimated a $1.3 billion deficit over the two-year budget cycle, with a $232 million gap in the fiscal year that ends in June.
The state Council on Revenues, at Abercrombie’s request, will hold a special meeting today to update its revenue forecast. The council’s last forecast, which put the deficit at nearly $1 billion, was issued before the Japanese earthquake and tsunami and the recent unrest in Africa and the Middle East.
While Kalbert Young, the state budget director, has outlined several options to close the deficit this fiscal year, Abercrombie himself has not offered a detailed plan.
In a public message on Sunday, the governor said "sufficient new tax revenues" are necessary to solve the state’s fiscal crisis and prepare the state for economic growth. But the governor did not identify which taxes should be raised.
"We do not have to settle for the status quo," the governor said. "We cannot get bogged down by the petty political story of the day. We can’t be stuck in the weeds, bickering over one detail or another, pointing fingers at each other."
Several senators said they are hearing from constituents that lawmakers should cut or reduce state programs before considering new tax increases. Some suspect that the public is unaware of the depth of state program cuts during the recession, or the extent to which the state relied on federal stimulus money to avoid broader reductions.
State Sen. Gilbert Kahele (D, Hilo-Naalehu) said there needs to be more guidance from the governor’s office.
"We need to get the show on the road," he told Ng.
Young told senators that the options for this fiscal year include tapping the state’s hurricane relief fund, the rainy day fund and several other special funds. The administration will also attempt to restrict spending at state departments by 10 percent.
For the next two years, the administration and lawmakers will have to come up with a combination of spending cuts, new revenue-generating ideas and labor savings to close the deficit.
Sen. Donovan Dela Cruz (D, Kaena-Wahiawa-Pupukea) said the administration appeared to be giving lawmakers no choice but to raise the general excise tax. He said he wants to hear more from the administration about job creation beyond the state’s investment in capital improvement projects.
Dela Cruz, referring to Abercrombie’s "A New Day in Hawaii" campaign theme, said he wants to "see a concerted plan, restructure government, whatever you got to do, create the new day so that the new day doesn’t include a GET tax hike."
Young said that while raising the GET is "somewhat enticing" because it is the largest source of state revenue, it is not yet part of the administration’s requests.
Senate Minority Leader Sam Slom (R, Diamond Head-Hawaii Kai) called the budget discussion a "charade" because he said the state has known for some time that it could not sustain government spending. He asked why Abercrombie’s now-outdated budget draft increases spending.
Young said the state is at a critical juncture and has to decide whether it is prepared to continue with certain state programs.
"The question is, What is the level of service that the public, that the administration, would want and expect of its state government?" he asked. "And right now we feel that the level of service that is being promised is not the level that’s being provided."
Sen. David Ige (D, Aiea-Pearl City), chairman of the Senate Ways and Means Committee, said the committee will likely vote on the Senate’s budget draft next week. The committee will also consider several revenue-generating bills as companions.
Ige said the budget draft is almost complete, so it is unlikely it will be significantly amended if the Council on Revenues was to change the revenue forecast today. He said Senate and House lawmakers could respond to the new forecast in conference committee negotiations on the budget next month.
"I think there is a general consensus by both the administration and at least the senators that we should try and fashion a plan that can sustain us for two years so we’re not looking at trying to do these things and nickel-and-diming the process every year," he said.