Thursday, October 14, 1999

Hawaii State Seal

State budget cuts:
‘Sacrifice on all
our parts’

Cayetano says the state must
live within its means, 'like
everybody else'


By Pat Omandam


The state has decided to start cutting some programs now to curb an estimated deficit of $285 million in 2005.

Departmental spending reductions of $28.4 million for fiscal year 2000 were announced by the state yesterday.

The budget cuts, which amount to 0.9 percent of next year's $3.024 billion state budget, were culled from all but two state agencies. They are the result of a comprehensive program review in which department heads were grouped by subject and then given targeted budgets to meet.

Most of the reductions announced yesterday did not involve major restructuring or cuts in core services.

Rather, they were accomplished through savings from postponement of a bond issuance, lower bond interest rates, deferment of new programs and the elimination or freeze of job vacancies, said Gov. Ben Cayetano.

"The future, however, calls for more sweeping changes, and sacrifice on all our parts," Cayetano said yesterday.

The state Department of Commerce and Consumer Affairs faces the largest percentage of cut, at 11.7 percent or $258,000, although the Budget and Finance Department faces the largest reduction in dollars, $10.6 million or 1.5 percent of its $721.1 million budget.

State Commerce Director Kathryn Matayoshi said most of her department's programs pay for themselves through special funds and that the $258,000 cut in general fund money represents the move of public television to a nonprofit entity next summer, as well as the closure of the Hawaiian Home Lands Trust Individual Claims Review Panel on Oct. 31.

"In terms of the amount of the reduction, it does not have an operational effect on us," Matayoshi said.

Hawaiian Home Lands and Transportation find their departmental budgets untouched in the governor's proposal, which must be submitted to the 2000 state Legislature for approval.

The Department of Education must address a proposed $4.6 million shortfall from its $824.9 million budget, while the University of Hawaii faces a $1.5 million cut of next year's $278.2 million budget.

The reductions amount to only 0.6 percent of their respective budgets and are less than what the two departments had planned for.

Still, it is not good news to UH officials, who said there are several programs in the budget that face shortfalls.

"We're pleased that the governor didn't cut us as high as he had indicated he might, because the upper end was considerably higher than that," said Eugene Imai, UH senior vice president for administration.

"We also, however, have other cuts that were separate from this restriction," said Imai, who added the university planned for cuts up to $4 million next year.

Imai said some of the programs that are underfunded are the general counsel's office.

The UH now handles its own litigation but is short on appropriations to fully operate it. And it needs money to pay for workers compensation claims, unemployment insurance and to complete its multi-year payment to Buzzeo Inc., which is installing a computerized student registration system.

But the top priority for UH next legislative session is to recover $6.5 million from the state. The money was used to pay UH faculty after a judge ruled the faculty union did not have to go along with the state's payroll lag.

Budget Director Neal Miyahira said the $2 billion in tax cuts the state will dole out over the next six years will reduce the state's revenue base while public demand for government services continue to grow.

Miyahira said the state is at a point where it must make major, fundamental changes to government operations to bring expenditures in line with revenues.

"Everyone involved needs to realize that priorities have to be set and choices must be made," he said.

"It's simply a matter of the state living within its means like everybody else."


Here is a summary of the departmental reductions proposed by Gov. Ben Cayetano. They are listed by state department, followed by fiscal year 2000 general fund appropriation. The approximate percentages and amounts of reduction follow.

Bullet Accounting and General Services: $103.8 million. Reduction: 1.6 percent or $1.6 million.

Bullet Agriculture: $12.1 million. 6.1 percent or $744,774.

Bullet Attorney General: $20.4 million. 2.1 percent or $421,432.

Bullet Budget and Finance: $721.1 million. 1.5 percent or $10.6 million.

Bullet Business and Economic Development: $19.8 million. 2.9 percent or $576,031.

Bullet Commerce and Consumer Affairs: $2.2 million. 11.7 percent or $258,000.

Bullet Defense: $7.5 million. 1.4 percent or $102,746.

Bullet Education: $824.9 million. 0.6 percent or $4.6 million.

Bullet Public Libraries: $19.6 million. 1 percent or $196,000.

Bullet Governor's Office: $3.3 million. 3 percent or $100,000.

Bullet Hawaiian Home Lands: $1.3 million. 0 percent.

Bullet Health: $296.4 million. 0.6 percent or $1.7 million.

Bullet Human Resources Development: $13.6 million. 3.1 percent or $415,643.

Bullet Human Services: $510.6 million. 0.3 percent or $1.7 million.

Bullet Labor and Industrial Relations: $15.8 million. 2.2 percent or $355,461.

Bullet Land and Natural Resources: $25.6 million. 2.9 percent or $746,722.

Bullet Lieutenant Governor's Office: $3.4 million. 4 percent or $136,852.

Bullet Public Safety: $128 million. 1.6 percent or $2 million.

Bullet Taxation: $16.3 million. 2.9 percent or $471,848.

Bullet Transportation (general fund appropriation not listed): 0 percent.

Bullet University of Hawaii: $278.3. 0.6 percent or $1.6 million.

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