Cayetano orders
lean budgets

Education isn't spared as departments
are told to look to cut spending
by as much as 10 percent

By Mike Yuen

Gov. Ben Cayetano and House Finance Chairman Calvin Say, in separate moves, have asked state department heads to propose spending cuts as high as 10 percent.

The recommendations would be the first step in erasing an estimated $245 million shortfall that looms over the next fiscal year, which begins July 1.

The Senate Ways and Means Committee is not making a similar request. It will eventually learn details of Cayetano's budget-cutting plans, said Co-Chairwoman Rosalyn Baker (D, Lahaina).

"We have asked the departments to identify their core services, the services they think we absolutely need for the public and to identify the services that perhaps are not as important," Cayetano said.

That directive has become virtually an annual exercise for Cayetano's department heads, as they cope with the state's fiscal woes.

But what makes this year's order different is that the Department of Education and the University of Hawaii - for years spared deep cuts - are being asked to make greater budgetary sacrifices, Cayetano said. This time it amounts to cutting spending by as much as 5 percent.

Cayetano emphasized that he is not aiming for across-the-board cuts, which would weaken all programs, but instead wants departments to set priorities.

Baker said her panel is exploring with various departments the concept of "clustering" - having, for example, the Labor and Business, Economic Development and Tourism departments centralize their statistical work in one agency so that there is one strong statistical unit rather than two or three different state statistical units wounded by downsizing.

Departmental officials contacted for this story declined to identify programs that they are recommending for reduction or elimination.

Cayetano said: "For all the educators out there, I hope they understand that over the past two years we've given lower education the highest priority.

"This time, the DOE and the university are going to have to spend smarter and they are going to have to set their own priorities like we've asked everyone to do."

Cayetano and Say (D, Palolo) said the Department of Education might mull consolidating some of its older schools to provide funds for new schools built in areas where the population is growing, Cayetano said.

It might mean increased class size, Say conceded.

Cayetano also pointed to the state Judiciary, saying it needs to look harder for ways to save money, such as capturing some $20 million in uncollected traffic fines.

The Judiciary should also consider eliminating the Land Court, which duplicates the state Bureau of Conveyances' services, Cayetano said.

Given the state's lower tax revenue projections, Cayetano believes there will be some "changes in the figures" in the state economic revitalization task force's tax initiatives, which include lowering income taxes but raising the general excise tax from 4 percent to 5.35 percent. The numbers might be lowered, but the tax concepts will remain before the Legislature, Cayetano predicted.

The tax package is expected to cost the state $100 million in annual revenues.

Say said if department heads and various community advocates want certain programs spared from the chopping block, they should offer and get behind revenue-generating ideas. The proposals could include a tax hike of some sort, Say added.

"I'm not going to lead that charge if nobody's following me," asserted Say, who, like all House members and 13 senators, is up for re-election.

The bottom line

Here, for selected departments, is what an order by Gov. Ben Cayetano means in terms of dollars:

Human Services $56 million

Education $35 million

Health $26.2 million

University of Hawaii $13.5 million

Public Safety $10 million

Labor $1.6 million

Business, Economic Development and Tourism* $ 1.4 million

Attorney General $ 1 million

* Does not include tourism spending

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