Hawaii State Budget Not Balanced Without Paying Off Massive Debts

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Photo: Emily Metcalf

By Leighton Loo – Gov. Neil Abercrombie’s $300 million dollar budget surplus is a fake “paper” surplus.

The reality is that the state has a massive deficit of at least $483 million!  The state’s Employee Union Trust Fund and Employee Retirement System both have a $15 billion and $9 billion shortfall, respectively.


Also there is a $461 million backlog in needed University of Hawaii repairs of which only $37.5 million will be made up this cycle. So how do you “create” a “surplus” when state finances are so fragile?  Simple! You just don’t pay your bills!

The state needs to be paying one billion dollars every budget period to eventually make up for those EUTF and ERS shortfalls for about 30 years.  However, it will only pay $217 million this period – by way far too short to address the shortfalls disaster.  This is like shorting your mortgage payment so that you can claim to have savings or a “surplus” of cash.

Also, if you accept that the state has “shorted” the UH by not repairing and maintaining to the full $461 million in backlog, then the deficit rises to $906.5 million (hopefully, no building collapses like the state’s Farrington High School Auditorium did).

The concept is easier to see if compared to a family’s household budget.  You can increase your savings at the end of the year by simply not paying to repair and maintain your home, make only bare minimum and insufficient payments to your credit cards and mortgage.  Quite simply, not paying your bills can temporarily build you a savings account or in the State government’s case – a “surplus”.

However, there will be disaster right around the corner as your home crumbles and your debt goes out of control.

While one can argue that the state should have used the surplus for school supplies that teachers are personally paying for or the proposed $22 million UH faculty pay raise, etc. but definitely the state is in financial trouble.

To very loosely paraphrase Abraham Lincoln, “if you fool enough of the people enough of the time …”

Leighton Loo is a resident of Honolulu, Hawaii





  1. So if I'm reading this correctly, you can make a lot of money by not paying your bills? GENIUS!

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