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House advances $12.1 billion state budget


The state House approved a $12.1 billion state budget Wednesday for the next fiscal year, meeting a legislative deadline to pass a budget bill on to the Senate.

The chamber was conservative in its approach, said House Finance Committee Chairwoman Sylvia Luke.

The state Council on Revenues said the money the state expects to reel in over the next five years may be lower than expected.

The state had smaller gains in visitor arrivals than it expected, said Rep. Scott Nishimoto.

"A lot of growth occurred at an exceptional rate over the last two years," said State Finance Director Kalbert Young. "And now you’re at a plateau, because nothing grows forever."

The lawmakers crafted their version of the budget without knowing the revised projections. But Luke said they were conservative in their approach, so she stands behind their budget projections.

"This recent approach to the budget will prolong our economic stability," Luke said.

Compared to the governor’s original proposal, the House reduced the state’s operating budget by $53 million dollars.

Gov. Neil Abercrombie said the House did a good job with the budget bills. He commended Rep. Luke for decreasing some spending totals, which he said would help the state handle the lower revenue projections. But the state may still have to make some adjustments to the budget, he said.

"I won’t get into any specifics right now," Abercrombie told reporters in a news conference. "We may have to adjust our priorities, but what that means remains to be seen."

The House voted on two budget bills. The main spending bill (HB 1700) contained the state budget for the executive branch and a second bill (HB 1638) was for judicial branch spending.

Under the proposed budget, the state set aside more than $408 million for school facilities and $75 million to construct and renovate public housing facilities.

The budget also includes $14.5 million to be distributed to schools statewide and $4.7 million for educational programs including Race to the Top.

The University of Hawaii would get $39.8 million for salary increases and restoration of salaries cut during the recession.

The state aims to raise its mental health standards and set aside $1.6 million for the Department of Public Safety to expand those programs.

The state also plans to set aside $187.5 million to buy and conserve agricultural land.

The governor’s office does not want to cut the part of the budget that deals with unfunded liabilities, Young said. The State of Hawaii Employees’ Retirement System has $8 billion in unfunded liabilities, but the situation is improving, he said. The Legislature has allocated $100 million in both the current and next fiscal years, but those payments represent just 20 percent of the annual payment that would be necessary for the state to catch up, he said.

"We’re not looking at shying away from it," Young said.

The budgets for the current fiscal year and for 2015 are balanced, but for long-term sustainability some additional cuts may be prudent, he said.

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