Lingle’s budget plan boosts construction
The governor bases her spending proposal on modest growth in the state's economy
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Gov. Linda Lingle has included $20 million for a new homeless shelter in Honolulu and $26 million for renovations to Aloha Stadium on her list of spending proposals for the next fiscal year.
Lingle unveiled her supplemental budget request yesterday.
Overall, the plan calls for a $100 million increase in general fund spending and a $1.1 billion increase in spending on construction projects.
The increase in spending comes at a time of moderate economic growth.
Through the first five months of the current fiscal year, the general fund has grown by 3.4 percent, the Tax Department reported last week.
The state Council on Revenues, which makes the quarterly forecast upon which the state's budget is based, predicted in August growth of 5.7 percent. The council is scheduled to meet again next month to determine whether to revise the forecast.
Lingle said she also has left room for some "very targeted tax relief" but did not elaborate yesterday, saying she would provide more details next month in her State of the State address.
Funding proposals in Gov. Linda Lingle's supplemental budget for the 2009 fiscal year include:
» $25 million into the Rental Housing Trust Fund to encourage the development of affordable rental housing projects.
» $100 million to continue the development of Hawaiian homelands statewide to support the goal of delivering about 1,000 more home sites to beneficiaries.
» $7.9 million for repairs to the state Capitol reflecting pools.
» $4.4 million to add 41 jobs to boost security on all University of Hawaii campuses.
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Expecting moderate economic growth in the coming years, Gov. Linda Lingle has proposed a 1.9 percent increase in general fund spending in the next fiscal year along with a tripling of funds for construction projects.
General fund spending in fiscal year 2009, which begins July 1, would increase by $100.2 million, to $5.4 billion. The capital improvement project budget would increase by $1.1 billion, to $1.6 billion.
Lingle unveiled her supplemental budget proposal yesterday, saying she also plans to introduce three proposals for "very targeted tax relief." She declined to give specifics yesterday, saying she wanted to save the details for her annual State of the State speech next month.
"I can tell you it's not in the range that I've been able to propose in previous years, and that's why the very focused targeting of it was so important," she said.
Lingle acknowledged that her budget is based on a "gut feeling" that economic growth is likely to be modest compared with recent years.
The state Tax Department reported last week that general fund revenues have increased by 3.4 percent through the first five months of the fiscal year.
The state Council on Revenues' most recent economic forecast predicted general fund growth of about 5.7 percent for the current fiscal year, followed by 3.8 percent growth in fiscal year 2009.
"I hope they're right," Lingle said, "but I'm operating that my more moderate projection is going to be correct.
"I would expect if we get through this fiscal year '08 at around 4 percent (growth), that would be a good, healthy, steady, moderate rate of growth."
The Council of Revenues is scheduled to meet next month to review its forecast and determine whether any revision is needed.
House Finance Chairman Marcus Oshiro said Lingle's budget proposals would get a thorough public hearing, noting that some of the priorities she outlined -- affordable housing, education, public infrastructure and historic and cultural preservation -- are similar to those of the Legislature.
"I think there's a lot of agreement and consensus on priorities like education, housing, basic essential government services," said Oshiro (D, Wahiawa-Poamoho). "The question is in the quantity of funding for the services."
Oshiro said he also expected a slowing of economic growth.
Lingle and Oshiro also acknowledged that by law, some form of tax refund is required because of general fund growth over the past two fiscal years, but both said it was too early to predict what form that might take or who would benefit.
Lingle said that of the $100.2 million in general funds she is requesting, two-thirds is for fringe benefit increases for government employees, including $57.7 million in contributions to the state Employee Retirement System and an $8.4 million increase in Social Security and Medicare payments.
On capital improvement projects, Lingle said close to half of the additional $1.1 billion is from revenue bonds to finance upgrades to the state's airports and harbors.
Other projects included in the proposal are $20 million for a new permanent homeless shelter in urban Honolulu to replace the Next Step shelter in Kakaako, which opened in May 2006 as a temporary emergency shelter.
Lingle also set aside $26.4 million for repairs and renovations at public-housing projects statewide, $26 million to complete the purchase of Kukui Gardens and ensure it remains as affordable housing, $25.9 million for renovations to Aloha Stadium and $40 million to renovate facilities at the University of Hawaii.
"These are important projects," Lingle said. "Public housing has to be done; we can't let it continue to deteriorate. These are projects that I feel comfortable, at this time, spending money on."
Highlights of Gov. Lingle's 2009 supplemental budget plan
$40 million to renovate existing school facilities, while also planning for new schools to meet the needs of expanding communities.
Establishment of 108 positions (teachers, educational aides, social workers and behavioral specialists) in the Department of Education for autism services, previously handled by contract personnel.
$50 million for the University of Hawaii to meet health and safety requirements, as well as major maintenance needs throughout the UH system.
$4.4 million to add 41 positions to the UH system to strengthen security on all campuses. The funds will enhance emergency communication and surveillance systems and provide necessary equipment and vehicles at UH campuses statewide.
$2.5 million for improvements to the library collection and services at the UH-Manoa campus.
$19.9 million for the Hawaiian language building at UH-Hilo.
$26 million to complete the acquisition of land and construction improvements at the Kukui Gardens Rental Housing Complex to ensure the units remain affordable.
$25 million into the Rental Housing Trust Fund to encourage the development of affordable rental housing projects.
$25 million for the Dwelling Unit Revolving Fund to provide interim financing for affordable-housing development.
$26.4 million for major repairs of public-housing projects statewide, which includes $6.4 million for the completion of elevator repairs at various housing projects.
$24.3 million to continue the state's efforts to assist the homeless, including $4.3 million to provide operating funds for the service contracts for four homeless shelter facilities in Waianae, Kalaeloa, Kakaako and Lihue, as well as facilities in Maili, Kalaeloa and on Kauai and the Big Island that are scheduled to open by June 30. The request includes $20 million for the development of a permanent homeless shelter in urban Honolulu.
$100 million to continue the development of Hawaiian homelands statewide to support the goal of delivering approximately 1,000 more home sites to beneficiaries.
$124.4 million in revenue bonds to implement the first phase of the Harbors Modernization Plan to increase capacity and upgrade facilities at Honolulu, Kalaeloa, Kahului, Hilo, Kawaihae and Nawiliwili harbors.
$250.1 million in revenue bonds to continue implementation of the Airports Modernization Plan, specifically to fund improvements at Honolulu and Kahului airports, including new and expanded parking facilities; improvements to the baggage handling system at Lihue Airport; noise abatement at Hilo Airport; and security enhancements at all major airports.
$33.5 million in special funds and revenue bonds for continued highway operations and to complete current highway projects on Oahu, Maui and Hawaii.
$20 million emergency appropriation request to meet increases in highway operating costs, including special maintenance.
$10 million for adult mental health outpatient services as a result of growing caseloads and escalating costs.
$11.3 million for critical repairs at community hospitals statewide.
$50 million for the first phase of a new public safety complex on Maui.
$25.9 million for ongoing repairs at Aloha Stadium.
$10.5 million to expand energy conservation measures in public buildings statewide.
$15 million to support ongoing efforts to protect and enhance natural and cultural resources, including $10 million to repair small boat harbors statewide and $5 million for improvements and upgrades to state park facilities. The administration is also requesting the addition of 15 positions in the Department of Land and Natural Resources to support enforcement and conservation efforts.
$4.9 million for renovations at historic Washington Place.
$7.9 million for repairs to the state Capitol reflecting pools.
Source: Office of the Governor