State’s turbid budget scenarios get murkier with city’s pleas for money to finish rail

This is not the year to be in the budget business.

The first legislative pass over Gov. David Ige’s $28.5 billion, two-year state budget drew only catcalls.

When House Finance Chairwoman Sylvia Luke says it is “borderline schizophrenic” and Senate Ways and Means Chairwoman Jill Tokuda says Ige and crew are “padding” the budget with tens of millions of dollars to state departments that didn’t ask for the money, something is askew.

Just because the two chairwomen running the legislative budget committees don’t like Ige’s budget is not the problem; the trouble is the state budget doesn’t add up and as they say in the South, “it is a fixin’ to get worse.”

There are several reasons. First the state is not collecting the amount of tax money it expected to. Tax collections are about $300 million less than planned and budgeted. But, the Ige administration budget doesn’t account for the loss.

Then the state pension fund is losing, not making, money. Latest figures had the pension investments growing at negative 1 percent.

“I think somebody should resign, because that is really, really pathetic,” said Luke during a pension budget briefing earlier this month.

While that was happening, Ige was trying to bail out the canoe by making $725 million in advance payments toward its future pension and health insurance owed to public workers. Although that nearly $1 billion was most of the state’s surplus, Ige reasoned that in the long run the state would save money.

So to summarize: The state budget is either schizophrenic or drastically padded, and it is not expected to grow at anywhere close to predictions and the surplus is mostly already spent.

But wait, that’s the good part of the budget news. Since the first hearing on the pension, the new figures have come out — and the pension doesn’t need $8.77 billion, the gap is actually $12.4 billion.

According to a Star-Advertiser story earlier this month, the pension plan now needs an additional $385 million a year from taxpayers to make up for the shortfall, according to ERS Executive Director Thom Williams. That is not all that’s needed, that’s just the extra — causing Senate budget boss Tokuda to say, “we don’t have that kind of bottom line, we don’t have that kind of carryover, it does not exist in anyone’s budget right now.”

“It can rain money out of the sky, it still cannot account for these kinds of payments,” Tokuda said.

OK, enough sugar-coating, let’s get past the good and bad and get down to the really ugly part of state spending. We know the budget is lousy, the state cannot spend less, it has to spend more, but it won’t be enough.

And, if the city wants its rail project, it will happen only if the state bails out the city. There is no other way to get the continuing millions in extra money without either a long-term or permanent tax increase.

How the Legislature answers the city’s pleas will determine if the rest of the budget is also patched, repaired, mended, made whole or not. To put it in the context of personal politics: If you can do it for Mayor Kirk Caldwell, you can also do it for Gov. David Ige.

Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.