After two years running the House Finance Committee, state Rep. Sylvia Luke has become not so much an economic pessimist as a realist.
Because the House introduces the state budget, Luke, a Makiki-Pauoa Democrat, gets first crack at Gov. David Ige’s no-frills $13.3 billion, two-year general fund budget.
She is not looking to spend any more.
State departments are going to be expected to either hold the budget line or cut something out if they want a new program, Luke warns.
"Unless they are willing to justify what agency they are willing to curtail or trade off, we will continue to spend more than we bring in (in) revenue," Luke said.
Last year Luke and her Senate counterpart, then-Sen. Ige, showed that saving, not spending, contributed to budget growth.
In an interview last week, Luke explained that her accomplishment with Ige during the last budget cycle was to take $300 million in state money and tuck it into the Hurricane Relief Fund, the Rainy Day fund and start to pay down the public-employee unfunded liabilities.
If that $300 million had been added to the budget, it would be like a 6 percent increase in state revenues, Luke figured.
"The reality is the state needs to look at not just the next two years, but the next 10 years and how we can sustain our current rate of growth," Luke said.
Just like Ige has been preaching statewide, Luke is most concerned that even though the state revenues are growing, it still spends more than it takes in.
When Wesley Machida, the state’s newly named budget director, briefed the Legislature last week, he explained that the state’s "status quo" budget is going up 4.7 percent this fiscal year and 9.9 percent the next.
The reason is because of the already signed public-employee pay raises, paying to borrow money (debt service) and increasing payments for Medicaid.
Machida warned that even with a "no do nothing new" budget, the state’s ending balance shrinks from $665 million during this fiscal year to $36 million in fiscal year 2018.
"Any significant increase in spending above the established parameters in this fiscal year or the upcoming biennium could result in a negative ending balance," Machida said.
Among all this executive and legislative branch agreement, however, is that if everyone already sees eye to eye, will there really be any cross-examination of the Ige administration?
"Even during the campaign I told David, even though you and I are friends, it is not as if you are going to get a pass; we will scrutinize your departments as much as I have done in the past," Luke said.
But, Luke added, she is ready to talk.
"We want to have a discussion about where the administration wants to go. It is much harder to be antagonistic when you are sitting in a room trying to work things out. Our commitment is for three of us — the governor, Ways and Means chair and me — to continue to meet during the session," Luke said.
As it stands, the table talk is going to be about who gets a bigger budget knife.
Richard Borreca writes on politics on Sundays, Tuesdays and Fridays. Reach him at rborreca@staradvertiser.com.