BY JIM DOOLEY – Another round of severe budget cuts is being drawn up by Gov. Neil Abercrombie’s administration, with department heads being asked to identify $50 million in “fiscal constraints” by early next month.
The $50 million shrinkage was included in the budget passed by the Legislature last month but lawmakers did not specify where the cuts should be made. Abercrombie signed the budget into law today.
In a memo distributed throughout the administration last week, the governor told department heads they must
make “honest and discerning assessments” of their programs with an eye toward eliminating services which “although well-intentioned, are of marginal benefit, low performing or of lesser priority.”
In signing the budget today, the governor said, “Despite tax increases passed by the legislature, services and programs will still have to be significantly cut.”
He said the administration began those cuts in recent weeks by “discontinuing financial support of programs that are valuable but can no longer be sustained, such as Vanpool Hawai’i and the State Pharmacy Assistance Program.”
In the memo distributed last week to department heads, Abercrombie said that “difficult and painful decisions must be made for this review, but the alternatives are worse—more vacant positions, more deferred maintenance or payments, etc., for every program and service.”
Each department must identify five per cent reductions in spending, exclusive of the five per cent pay cuts already negotiated with the state’s largest public employee union, the memo said.
From that hit list, administration officials will select specific trims that reach the $50 million target figure to be implemented during the next two fiscal years.
The Department of Education must find $66 million in possible reductions – five per cent of its $1.32 billion general fund budget allowance, the memo said.
Abercrombie singled out the University of Hawaii and the Hawaii Health Systems Corporation for special attention in the memo, saying they each must identify between $10 and $20 million in potential cuts.
The five per cent reduction formula did not apply to UH and HHSC “because of their unique abilities” to raise money independently of the state general fund, Abercrombie said.
Abercrombie spokeswoman Donalyn Dela Cruz was asked if the governor was suggesting UH and HHSC raise fees charged students and medical patients.
“UH and HHSC are more autonomous than other state departments; in addition they have more flexibility at funding options,” Dela Crux said. “For example, they might bring in new research dollars, open new lines of business, or reconfigure their operations.”
In addition to finding new revenue or imposing new spending cuts, the UH also must pay some $12 million owed in delayed pay raises to faculty members.
Legislators denied a UH request this year for funds to pay for those deferred raises, telling the university to find the money in its own budget.
UH President M.R.C. Greenwood said this afternoon, “We are in receipt of the governor’s executive memo regarding budget restrictions. We are reviewing it and will respond to the governor as requested on specifics.”
The governor’s memo suggested one method for cutting spending would be to raise the financial eligibility thresholds now in place to qualify for unspecified social service benefits.
Another suggestion was to “reduce the frequency” of government services. One example given was “mowing lawns once a week instead of twice.”
In signing the budget bill today, Abercrombie said it “requires our Administration to operate with hundreds of millions less than we believed necessary to restore core government functions.”
The new cuts “will be difficult but the financial constraints we face allow for no other course of action,” said the governor.