State budget: Focus is on essentials
Modest economic growth forecast sets frugal tone
Facing what is expected to be more moderate economic growth than in recent yeas, lawmakers begin today the process of crafting the supplemental budget for the upcoming fiscal year with an eye on essential services.
Those services include health and safety programs and some much-needed fixes for public infrastructure.
"We're going to try to look at the things that absolutely need to be funded," said Senate Ways and Means Chairwoman Rosalyn Baker (D, Honokohau-Makena). "Are there some areas that maybe are not as essential and can maybe get deferred?
"I think everything is going to have to be justified."
Over the next two weeks, the Lingle administration, state agencies, the counties, libraries, the University of Hawaii and others will present their financial wish lists to lawmakers.
Lingle already has presented the Legislature with her supplemental budget request for fiscal year 2009, which begins July 1. It calls for an increase of $100.2 million in general fund spending and a boost of $1.1 billion on capital improvement projects.
"We want to be as cautious as we can and as thorough as we can during the review, but that's what we use these budget briefings for," Baker said.
Lingle also has included provisions for what she calls "very targeted tax relief," although she has not divulged details, saying they will be revealed in her State of the State address later this month.
Like last year, lawmakers will be tasked with providing some type of tax refund or credit under a constitutional mandate that requires it when tax collections show at least 5 percent growth in two straight fiscal years.
Policy makers say it is too early to say what form those refunds might take.
"We're just beginning the process," Baker said. "We're going to take as much time, and talk with the departments and meet with them as often as we need to get a good sense of where we want to move in terms of looking at the supplemental budget request."
She also noted that the Council on Revenues, the panel of economists that sets the tax revenue forecast on which the budget is based, meets next week.
The most recent forecast, in August, predicted general fund growth of about 5.7 percent for the current fiscal year, followed by 3.8 percent growth in fiscal year 2009.
Lingle said she expects more moderate growth, adding that she would consider 4 percent growth to be healthy. The state Tax Department reported last month that general fund revenues have increased by 3.4 percent through the first five months of the fiscal year.
"It's too early to commit to anything," Baker said.
The 2008 Legislature opens Jan. 16.
The Legislature's money committees will be holding informational briefings starting today to hear supplemental budget requests from the Lingle administration, state agencies, the University of Hawaii and others.
» Today: Office of the Governor, Lieutenant Governor to Senate Ways and Means Committee
» Monday: Department of Budget and Finance to House Finance Committee
» Jan. 11: Council on Revenues briefing on state revenue picture to joint House-Senate meeting
» Jan. 14: University of Hawaii to Senate Ways and Means
» Jan. 15: County governments to joint House-Senate meetings