grip on budget
The governor says her
Cabinet will continue with
spending restrictions, despite
expecting higher tax revenues
Gov. Linda Lingle is planning a second year of state spending restrictions, even though she expects state revenues to increase more than expected.
Lingle told reporters yesterday her Cabinet should expect spending restrictions with the start of the fiscal year on Thursday.
At the same time, Lingle predicted that Hawaii's revenues from taxes and fees could come in about 1 percent higher than expected, giving the state an additional $30 million to $35 million.
Lingle declined to say how the spending restrictions for the $3.9 billion state budget would be applied.
The state Council on Revenues, which is charged with setting the official state tax revenue prediction, estimates that the state will take in 5.2 percent more than it did last year.
But Lingle said tax collections are stronger and will grow 6.2 percent.
"We are right on track, but we have a long way to go because we have taken on such a large amount of ongoing expenses that we didn't have the revenue to pay for," Lingle said.
Lingle said the increase will not be enough for higher payments on state debt and increased contributions to the state retirement system.
Republican state Sen. Sam Slom (Diamond Head-Hawaii Kai) said he had expected Lingle would continue with state spending restrictions, but hoped that they were not large.
"I don't think it will be as dire as some people have projected," Slom said.
Last year, Lingle cut discretionary spending 5 percent, which officials estimated saved the state $24 million.
This year, the Hawaii Government Employees Association complained that Lingle's possible restrictions to the Office of Community Services' $3 million budget might jeopardize needed programs, although no specific programs were mentioned.
Sen. Brian Taniguchi, Ways and Means Committee chairman, said the expected increase in revenues should mean no restrictions.
"With the economic numbers we have now, the financial plan should have enough money to accommodate the additional costs," Taniguchi said.