Legislature and governor
count the ways to balance
a state budget
Say that every month you have $100 bucks in your wallet and you only owe $50 to friends, lenders and family. If you consider that a balanced budget, what do you call it, if you then buy a boat and don't have to make any payments until next summer?
That's the question now bedeviling the Legislature and Gov. Linda Lingle.
A balanced budget is something most assume is part of the state government; but unless you think that the law against passing bum checks is the same thing as a detailed personal financial plan, that's wrong.
Every state except Vermont requires a balanced budget. This differs from the federal government, which can and does spend more than it takes in.
Although Governor Lingle joins the list of other state chief executives to say "The Constitution calls for a balanced budget," the precise definition makes this a tricky piece of financial planning.
"General fund expenditures for any fiscal year shall not exceed the state's current general fund revenues and unencumbered cash balances, except when the governor publicly declares the public health, safety or welfare is threatened," reads Article VII, Section 5.
This requirement is then daisy-chained to constitutional provisions calling for the budget to fit within revenue estimates.
"There is no express requirement for a balanced budgeting either the state Constitution or applicable," a 1997 state attorney general's opinion wrote. But the opinion continues, "in operation, a balanced budget is required."
Basically, Hawaii has a balanced budget requirement because the governor cannot spend money she does not have.
The responsibility for the governor is preparing a six-year spending plan and spelling out how to pay for it.
To share the burden of financial responsibility, Lingle this year proposed changing the Constitution, so the Legislature also had to pass a balanced budget. Soon, the Legislature can proclaim that its figures add up, split town and leave Lingle to hack it into submission.
The Senate Judiciary Committee approved Lingle's proposal and sent it off to Ways and Means, where it was never seen again.
"There are no requirements for the Legislature to balance its spending with estimated revenues," the report by Sen. Colleen Hanabusa (D, Nanakuli-Makua), said, before the proposal disappeared.
The real issue today is not who is balancing this year's budget, but who is responsible for saying the state has enough money to pay its way for the next six years.
For instance, Lingle runs the numbers and says the new pay raise for the Hawaii Government Employees Association will cost $54 million more a year starting in 2006; her legislative critics say her own negotiated pay raises for the university professors will cost the state an extra $51 million starting in 2009.
Democrats are saying "pay now," while Republican Lingle answers "Pay later." The power of the purse belongs with the Legislature, which directs where the coins are spent, but it is Lingle, who, with her power to line item veto the budget, has the final power to say, "You just spent your last dime."
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Richard Borreca writes on politics every Sunday in the Star-Bulletin. He can be reached at 525-8630 or by e-mail at email@example.com