Budget surplus is rare chance to accomplish needed goals
It’s as if the state hit the jackpot: After closing the fiscal year on June 30, the state has an estimated $1 billion cash surplus — the largest in recent memory.
Although that surely has piqued the interest of those vying for a piece of that $1 billion pie — including public worker unions — prudent steps must be taken to ensure the surplus is spent wisely and for the greater public good.
This is a rare opportunity for the state to make actual headway on a number of longstanding problems.
With $1 billion in its back pocket, the state can’t claim destitution as it goes to the bargaining table to negotiate pay raises for public worker unions, whose contracts expire June 30.
But bargaining units need to recognize there are pressing needs beyond lining their members’ pockets.
What the state can — and must — do is fund reasonable pay raises and use that as leverage toward creating efficiencies in the public workforce via changes in obsolete work rules or other contract provisions.
For instance, the state is in a prime position to tackle the ongoing abuse of sick leave, especially prevalent among corrections officers at prisons and jails. Tightening union-contract requirements — a doctor’s note when returning from a sick day, for example — makes sense, especially when an alarming number of sick days — namely on Super Bowl Sundays — results in overtime paid to employees covering for “sick” coworkers.
The leverage enabled by extra funds also could encourage greater cooperation from the Hawaii Government Employees Association (HGEA) as it battles the state over privatization of the Maui hospitals.
HGEA successfully pushed for a new law that would provide severance pay or retirement bonuses to state workers whose jobs are being privatized — but a judge imposed a temporary restraining order that bars state officials from implementing the law.
The extra cash could be incentive for HGEA to forge a workable agreement with the state that might eliminate the need to evoke the new law, which the Hawaii Employees’ Retirement System says could threaten its federal tax-exempt status.
Despite the $1 billion surplus on paper, Wes Machida, director of the state Department of Budget and Finance, cautioned that some of the largesse is already committed elsewhere: $200 million to be tucked away as cash reserves in the state’s “rainy day” or emergency budget reserve fund, and $81 million to prepay future retirement health benefits for public workers.
Amassing the large cash cushion was achieved by restricting state departments’ spending even as tax collections exceeded the official projections — and the Ige administration’s fiscally responsible approach seems to have paid off.
Figuring out the best uses for the surplus will be no small task. Pay raises aside, the state must revisit a few high-priority projects:
>> Return to the front burner some Department of Transportation “Capacity Program” construction that had been deferred due to lack of funding.
Among them, enlarging Highway 130 on Hawaii island between Pahoa and Keaau; eastbound widening of H-1 Freeway from Waiawa to Halawa; and the $66 million Kahekili Highway widening from Haiku Road to Kamehameha Highway. These would have high impact for easing traffic while increasing road safety.
>> Whittle down the $500 million in deferred maintenance within the University of Hawaii (UH) system, especially at its flagship Manoa campus where aging facilities are deteriorating.
Deferred maintenance at the state’s public university system has been woefully underfunded each legislative session, and it’s time for UH to receive a substantial boost for upkeep at its campuses.
>> Invest in education.
Hampered by a severe teacher shortage, the state Department of Education needs to make inroads in filling hundreds of vacant teaching positions. The shortage is due partly to lagging teacher salaries not in line with the high cost of living in Hawaii. If higher teacher salary increases are provided, the Hawaii State Teachers Association will have to be more agreeable when it comes to comprehensive annual teacher evaluations, among other contractual issues.
>> While it may seem wonky, the state’s outdated information technology (IT) systems would benefit from increased funding.
Think of it as an investment toward a better-functioning state government, which for decades has relied on archaic systems to churn out payroll and complete other important tasks.
IT infrastructure, as well as job descriptions in union contracts, have to be brought into the 21st century.
Hawaii taxpayers need assurances their hard-earned dollars that fueled the hefty $1 billion surplus won’t be blown mainly on pay raises for state workers, with scant investment to fix problems.
The Ige administration — and the unions — must focus on the most impactful projects across the state that will enrich our society with more bang for our one billion bucks.
37 responses to “Budget surplus is rare chance to accomplish needed goals”
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“Budget surplus is rare chance to accomplish needed goals”
The most needed goal is to give a refund to the overtaxed taxpayers, and lower the tax rate for the following year. But of course this newspaper says “Spend the money! Pay raises for the labor unions (teachers and HGEA).” Nonsense.
This is surely a glorified article. The SA is either trying to make the Ige administration smell like roses or they’re just plain gullible to print an article that states that the state has an estimated $1billion cash surplus…the latest in recent history. It doesn’t take an idiot to know that this article is just bias reporting. Whenever known and needed projects are deferred, it’s easy to say, “1 billion cash surplus, the largest in recent memory.” It’s like as if a homeowner’s home needed painting or new flooring but decides to defer the project and banked the money for his families vacation. Federally funded highway projects that the state was too slow to act on wasn’t due to lack of funding. It was all about deferring highway projects and UH maintenance and above all, taking money from taxpayers. Oahu’s taxpayers hard earned salary dollars that fueled the $1 billion surplus was caused by the state robbing the 10% annual take ($millions) of the state’s legislature mandated GET surcharge that is dedicated solely to the city’s rail project. Com-on SA, when doing a report, you have to look at both sides of the coin and not make yourself look ignorant by blowing positive smoke for one side. Surplus money on paper especially for the government looks good but it’s never true to be published as this article has tried to make it with a lot of hidden issues.
Exactly right, Ken_Conklin. When the state’s customers (we, the taxpayers) overpay our bill for services (supposedly) rendered, the difference is expected to be returned, not kept (stolen).
So Ken, what are you going to do with your refund? You think it is going to be $1,000? (billion divided by a million)? Hell, you be lucky if you get $50. Costs big bucks to issue those checks.
You will be lucky if its $1 — the minimum required.
Is this a JOKE ? I mean come on they waste so much money its INSANE. How about giving some back to the taxpayer NOT THE UNIONS !
No doubt that state spending needs to be improved. For example, when my wife was working it seemed like they were using the same systems, I was using during the seventies. The state could use a little updating.
UH maintenance deficit? I can’t believe you’re even considering throwing money at a problem that someone should have been FIRED for mismanaging. Raises or HGEA benefits? The bile is rising to the back of my throat. FIRST – the state had BETTER figure out why there’s money left over. The way we’ve been going, that’s not a good thing and means we probably FORGOT something. I understand we all feel overtaxed – me too – but we should primarily be paying down the DEBT – and throwing some money at our HORRIBLE roads. There is no emergency plan in the world that will work with our primary roads.
There is a reason the roads are not maintained better. Harder to speed when huge pot holes are there. This is the state’s plan to reduce speeding. lol
Partner with the city and complete the rail project, then bring GET back down to 4.16% on Oahu.
The SA, or some responsible journalistic entity or some intrepid TV reporter, should ask each State senator and legislator just one question with all results published or broadcasted:
How do you propose the $1 billion surplus be allocated?
No weasel-worded, general feel-good, we need to look into it answers will be accepted. Oh, and do it *before* the election.
What should be done is to complete the rail correctly. The police department needs to be fixed so that so many are not taken to court. Tax cuts should not be given until pressing needs are taken care of first.
The rail and police are the coty’s responsibility. Not the state.
This is a corrupt state. The police department comes under the city’s jurisdiction but all fines (traffic and parking citation) collected, goes to the state. How you figa?
Forgot one point. IT’S OUR MONEY! GIVE IT BACK! If you give your kid $100 bucks to go to the store, don’t you EXPECT your change? Do you expect your kid to use the surplus to buy what THEY want? It was given under the premise that THAT’S how much the store run would cost. No finder’s keeper’s rules here.
Stop living in a fantasy world, this is the definition of TAX: a compulsory contribution to state revenue, levied by the government on workers’ income and business profits or added to the cost of some goods, services, and transactions. You don’t have a choice but to pay it, so no, its not your money, it belongs to the government.
Well said.
Dear SA: It would be wise to check the State Constitution regarding excess tax collections (Article VII §6) before compiling a wish list.
Unfortunately, the amount mandated to be refunded is not specified.
Hawaii Taxpayers to Get $1 of State Budget Surplus
In other words, waste the money on unnecessary projects.
Pay down the state’s debt.
Just because the State has a surplus the last fiscal year does NOT mean they should spend it on unneeded things, especially raises for the incompetent government employees which includes the DOE teachers and administrators.
I’m wishing for a pay raise. If I get it, I’ll be very happy. My son who’s employed in the private sector received an 11.4% raise last year. In October, he’ll receive ANOTHER 11% raise! In January, I’ll get a 1.59% raise. That’s not fair! I want more!
Not many people in the private sector are getting much in raises. Is he in the construction industry?
No. He’s a young accountant. LOL, I was just kidding about wanting a bigger raise. I was trolling for insults; surprisingly, I didn’t get a bite. I’m happy with what I’m paid.
yah, unnecessary things like having enough teachers to educate our keiki… totally makes sense if you think sticking it to teachers will assist in recruiting for this thankless position.
Doesn’t a student to teacher ratio of 13.3 sound like we have plenty of teachers? Can’t you people do simple math?
The trouble is deciding which government employees are wasteful.
It’s amazing how the editorial staff is acting just as greedily as government bureaucrats and elected officials. Why wasn’t a proposal offered to return the surplus to the taxpayers in order to reduce the already excessive burdens they carry on their shoulders? The editorial staff should be embarrassed for that neglect. AS much as government continue feeding its demands for spending public funds, taxpayers are getting angrier by the day. One day, there could be a tax payer rebellion. They ought not be taken for granted.
A Tax Rebellion? Really? Then why don’t you start first, and see how much people are willing to follow you…yo will be out there by yourself, because most people like you are all talk, no action…so go ahead, put your actions where your mouth is and do it already!
Fact is the US has a relatively low tax rate. Now it may seem high but that is only because we get relatively little for our tax dollar. We get a bloated military and prison industrial complex. Other countries get a better educational system, universal health care, etc.
Contribute a portion to help pay down the underfunded ERS liability. Address it now, while we can, before the downturn in the economy comes. This is a simple and efficient use of the money towards a stated priority and constitutionally required mandate. The unfunded liabilities have been ignored too long.
should go into social programs.
I genetally agree with the SA editors. Spend money on overdue needs and things that have been deferred for years due to a lack of funds.
As a taxpayer, I want my intranets to be properly maintained, not allowed to decay to the point that more expensive tepair or replacement is needed.
Two things come to mind to be fiscally responsible.
1. What would have been done if a large deficit were anticipated? We should lower the same taxes that would have been increased should a large deficit been anticipated.
2. We could set aside a large sum to cover revenue bonds that will be due soon rather than reissuing new bonds. We are quick to issue new taxes or revenue producing bonds, we should be quicker at paying down those debts. It is not as if our State is debt free. Paying down the bonds would be better for future generations.
1. Use most of surplus to pay down existing bond debt.
2. Use some of the surplus to reduce the same taxes that would have been increased to cover a large debit amount.
I’m just waiting for the feeding frenzy to start. Everyone involved with government is not only wanting a piece of this pie, but next year’s budget will balloon with visions of spending increases.