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Finance director urges caution about state budget

  • ” his 11-point action plan.

On the first day of the state’s legislative session, lawmakers heard about a flurry of financial requests pouring into Gov. David Ige’s office.

State finance director Wes Machida said Wednesday at a finance committee hearing that requests for more than 1,000 new state government positions were made since Ige took office on Dec. 1.

The departments were asked to revise their requests, but some appeals would be granted, including funding for pesticide inspectors, tax department positions, invasive-species control and new libraries, Machida said.

The Council on Revenues had predicted an improved financial situation in mid-January, but the anticipated bump in revenues will not be enough to cover the $893 million in new funding requests that poured in for the fiscal years 2016 and 2017.

“We still have to be cautious because we are spending, as I’ve said before, more than we take in,” Machida said.

Instead, the governor asked the Legislature to consider granting about a quarter of that amount — an additional $117 million in fiscal year 2016 and $120 million in 2017 — to fill some of those needs, Machida said. “A number of those were for mandates or shortfalls, just to maintain operations,” Machida said.

Senate Ways and Means Chairwoman Jill Tokuda asked whether there would be additional requests for money from the governor’s office, and Machida replied that there would not be such requests.

But Tokuda said she’s concerned that those state agencies whose requests weren’t fulfilled would be returning to ask for money throughout the legislative session. For example, the Hawaii Health Services Corporation and the University of Hawaii’s Cancer Center were not granted what they requested, she said.

“I think there’s a lot to be concerned about,” Tokuda said. “Where are we going to get those funds?”

In the current fiscal year, the governor is requesting $28.9 million in emergency funds for issues that need immediate attention, including expenses for ongoing legislation, a deficit in the emergency revolving fund, and vacation payouts and operational shortfalls in the governor’s office, Machida said. Emergency funds for the Hawaii Health Connector and Hawaii Health Systems Corporation are also on the list.

Over the next four years, expenses are expected to exceed revenues, Machida warned. “That eats into the carry-over balances,” he said.

Ironically, the state may have to pay a refund to taxpayers because in 2013 and 2014, general fund revenues exceeded expenses, Machida told lawmakers. “It could be any amount. But as you well can see from the financial plan, anything that is given any year impacts that financial plan,” he said.

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