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Economic forecast could trigger special legislative session

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After concluding a grueling legislative session of tax raising and budget cutting, Hawaii lawmakers still may have more work to do.

Gov. Neil Abercrombie will call them back to the Capitol for a special session if the state’s economic forecast significantly worsens this month.

That would also give lawmakers an opportunity to take care of important business they left unfinished: spending $2.3 million for security at this fall’s Asia-Pacific Economic Cooperation meeting, paying $2.7 million for legal settlements and appropriating about $4 million to the University of Hawaii medical school.

These measures appeared to have enough support to become law, but they were left to rot on the Legislature’s bargaining table amid tense negotiations between House and Senate leaders. Only a handful of bills, mostly raising money instead of spending it, survived end-of-session political wrangling.

A special legislative session would be warranted if the Council on Revenues on May 26 lowers its revenue growth prediction for the current fiscal year from negative 1.6 percent to negative 3 percent or worse, said Abercrombie spokeswoman Donalyn Dela Cruz.

“We won’t come back unless there’s this fiscal emergency,” she said.

It’s unclear whether tax collections will be sufficient to sustain government spending before the fiscal year ends June 30. Collections surged in April, but they were still off by 2.3 percent through the first 10 months of the fiscal year, according to the Department of Taxation.

The money for security at the November APEC summit in Honolulu — mostly planned overtime for state sheriffs — must be found somewhere, Lt. Gov. Brian Schatz said. Unless the Legislature acts, the governor’s administration intends to spend the money from the budget of the attorney general’s office and ask for lawmakers to reimburse the funding next year.

“Why the Legislature failed to pass such a simple measure is inexplicable, but we’ll be able to move forward and ensure we’ll do our part for a safe and successful conference,” said Schatz, who said he’s confident the federal government will later pay back the state spending. 

Meanwhile, clients awarded court settlements are waiting for the government to pay them to resolve 17 pending cases.

The cases include $900,000 for a man who suffered severe injuries during a collision with a state dump truck that had made a U-turn, $250,000 for a former public high school special education student who was sexually assaulted by a special education class assistant, and $83,000 for a man kept in prison 83 days beyond his release date.

The Abercrombie administration is considering options of where it could find funding, Dela Cruz said.

Among medical programs, the University of Hawaii John A. Burns School of Medicine was counting on an appropriation of tobacco settlement money to develop a school of public health, a medical doctor loan program and a rural interdisciplinary residency program at the Hilo Medical Center.

“We should be committed to increasing our capacity to train local kids to become physicians,” said Sen. Josh Green, D-Milolii-Waimea, a Big Island emergency room doctor. “I definitely want a special session because I don’t think we’ve done our job yet. There’s still work to be done.”

Abercrombie could call for a special session, or the Legislature could reconvene itself if at least two-thirds of lawmakers in both the House and Senate approve.

Requests for a special session probably won’t sway the Council on Revenues when it makes its economic forecast. The council crafts its prediction based on a variety of economic indicators, and then government leaders use the forecast to estimate tax collections by the state.

“The forecast is the forecast, irrespective of which period it is or which decisions have or haven’t been made,” said Paul Brewbaker, the council’s chairman. “Decisions that have not been made are not incorporated into the forecast.”

A special session could convene in June, and Speaker of the House Calvin Say, D-St. Louis Heights-Wilhelmina Rise, said he’d like to reconsider a total of nine bills that Abercrombie wanted passed before the end of this year’s regular session.

In addition, Rep. Angus McKelvey, D-Olowalu-Kapalua, has said he’d ask Abercrombie to support a proposal for movie production tax credits that failed to pass previously.




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