BY JIM DOOLEY – Despite slightly improved revenue projections, the overall state budget picture remains very bleak, legislators were told today.

Newly-appointed state Budget Director Kalbert Young said, “In the first few days on the job, it quickly became apparent that the layoffs, severe cuts and strict attrition policy over the last few years have taken a heavy toll on the ability of state agencies to sustain delivery of core services.”

Young told members of two legislative money committees that the administration won’t finalize its updated budget proposal for the next two years until March – much later than normal – and the executive branch spending is expected exceed constitutional limits by $529 million in the coming fiscal year. Legislators would be required to vote by a two-thirds majority to approve the over-spending.

In the short term, the state needs an immediate injection of new money to finish out the fiscal year that ends June 30, Young said.

Abercrombie said in a press conference last week that the administration needed more than $71 million in emergency appropriations to meet immediate deficits in welfare payments called Temporary Assistance to Needy Families, Medicaid obligations and his own office’s payroll.

Young told legislators  the TANF programs has expanded in recent years as more struggling families became eligible for the payments, but he added that costs may be reduced there through “a modification of service levels” between now and July.

Reducing a projected multi-million dollar deficit in Medicaid obligations is more difficult, he said. A recent federal court ruling blocked state plans to cut back on health spending for Micronesians and other Pacific Islanders living in Hawaii.

Young said another emergency money request will be sent to legislators to cover a shortfall in payments owed to the fund that pays health insurance benefits for public employees.

$5,000,000 is needed to cover the current operating budgets of the governor’s and lieutenant governor’s office as well as operations of the state Reapportionment Commission, which must approve new political district boundaries based on the latest federal census findings.

Asked by Sen. Suzanne Chun Oakland, D-13th (Sand Island, Kalihi, Liliha, Nu’uanu, Pauoa, Pu’unui) if it is true that some employees in the governor’s office are now working without pay, Young said, “I’m not sure. I think that was one strategy that may be in place for several workers.”

Donalyn Delacruz, spokeswoman for Abercrombie, said the governor’s staff has been kept to a bare minimum pending resolution of the budget situation and everyone on the payroll has been paid to date.

“We have volunteers who have been helping,” she said.

Normally two receptionists are on the governor’s payroll to answer telephones and greet visitors, but only one has been hired so far, said Delacruz.

“When we don’t have a volunteer to help, the phone rings off the hook,” she said.

The volume of calls is especially heavy because a state telephone information operator position was previously, cut so many phone inquiries are now made directly to the governor’s office, said Delacruz.

Several legislators warned Young that they anticipate additional emergency funding requests to some from other state agencies, including the Hawaii Health Systems Corporation, the Department of Health and the Department of Public Safety.

State Rep. Isaac Choy, D-24th (Manoa, Manoa Valley, University), said was he was troubled by the delay in receiving a proposed budget from the administration.

“You want us to wait until mid-March for the governor’s plan. That really scares me,” Choy said.

Young called that time frame the “outer limits” of the budget submission schedule and said individual money requests from state departments will be submitted by the administration as they are finalized.

Senator Donna Kim, D-14th (Moanalua, ‘Aiea, Fort Shafter, Kalihi Valley, Halawa Valley), said she was concerned by Abercrombie’s repeated statements that he will save money and make budget cuts by “retooling and reprioritizing.”

“The question is where?” Kim said. “A lot of this (cutting) has already been done.”

Rep Gene Ward, R-17th (Kalama Valley, Queen’s Gate, Hawaii Kai), asked Young what “revenue enhancements” the administration is considering.

Young said “possible or potential” enhancements include “tax or fee increases” as well as revisions to tax credit programs now in place.

But he cautioned that such proposals have not been “fully discussed” with the governor.

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Jim Dooley joined the Hawaii Reporter staff as an investigative reporter in October 2010. Before that, he has worked as a print and television reporter in Hawaii since 1973, beginning as a wire service reporter with United Press International. He joined Honolulu Advertiser in 1974, working as general assignment and City Hall reporter until 1978. In 1978, he moved to full-time investigative reporting in for The Advertiser; he joined KITV news in 1996 as investigative reporter. Jim returned to Advertiser 2001, working as investigative reporter and court reporter until 2010. Reach him at Jim@hawaiireporter.com