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Capitol View

By Richard Borreca

Wednesday, March 22, 2000

Tobacco-suit windfall
fogs budget process

TO live we must have oxygen, food and water; chocolate and the Internet are also good, but technically, we only need food, and water and something to breathe.

For the state of Hawaii to survive it must have a budget that balances. The state won't work if the budget doesn't balance. Not having enough money to pay for workers, buildings and banks who loaned us money causes a lot of problems.

So in an effort to keep Hawaii's budget balanced, the state of Hawaii finds itself at war, with itself.

At least the state's departments of Budget and Finance and Health are urging the Legislature to do exactly the opposite.

At issue is how to spend the state's share of the $246-billion national settlement with tobacco companies. Hawaii is supposed to get $1.3 billion in the next 25 years.

But because no one really believes the tobacco companies are actually going to be around that long, everyone is scrambling to spend as much of the money now.

There is a state law saying that 25 percent will go for tobacco-use prevention, 40 percent for an emergency fund, 10 percent for health insurance for poor children and the rest for the Health Department to spend on health promotion.

The catch is that the state Budget Department wants to use some of that tobacco money to replace existing state funds. The Health Department, fearing that the tobacco money will vanish, wants the money spent on one-time only expenses.

There's a bill chugging through the Legislature to prevent this.

"It would be anomalous for the state to receive a windfall of money intended for health programs if those programs do not benefit with more funding," the Senate Health Committee said.

Speaking in favor of the bill was the Department of Health while the Budget Office was thumbs down on it.

Bruce Anderson, Health Department director, explained that when the budget was being prepared last November, the state needed to cut the budget if it was to balance.

"Our department needed to cut $18 million for the budget to balance," Anderson said.

To do that, they were forced to pay for existing Health Department programs with tobacco settlement money.

REMEMBER, the most important thing about the state budget is that it must balance, at least on paper.

"The governor and his money people don't want the bill, because it would tie their hands," Rep. Alex Santiago, Health Committee chairman, said. "This is a priority bill for me," he stressed.

Health advocates in the Legislature want to see the state's much-praised, but lightly funded, Healthy Start program covered. It targets specific groups that are likely to have problems with starting their families and pours on the social services.

The thinking is that a little prevention early on will allow people to make some smarter choices about their lives, leading to fewer people needing counseling or incarceration later.

Today the money would come from the tobacco settlement, while the Health Department wants the program to come directly from the state treasury, guaranteeing that it will be around long after the tobacco money vanishes in a puff of smoke.

Balancing that may prove to be just as important as totalling up this year's budget sums.

Legislature Directory
Hawaii Revised Statutes
Legislature Bills

Richard Borreca reports on Hawaii's politics every Wednesday.
He can be reached by e-mail at

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