Tuesday, December 22, 1998



‘Austere budget’
offers 2% increase

Cayetano's $13.5 billion
proposal for lawmakers boosts
education funds

By Mike Yuen
Star-Bulletin

Tapa

Gov. Ben Cayetano has sent lawmakers a proposed budget of nearly $13.5 billion for the next two fiscal years -- a 2 percent increase over the current fiscal biennium that ends in six months.

"With limited resources and continued uncertainty about revenues, it is, of necessity, an austere budget," Cayetano said in his budget message delivered late yesterday to legislators, along with his budget for fiscal years 2000 and 2001 and his financial plan for the next six years.

Budget Director Earl Anzai last night said the 2 percent increase was minimal because of budget restrictions. Ten departments are not receiving any increases in their budgets and that will help offset spending increases for education and federally mandated special education for mentally impaired youths, Anzai said. "Lower-education and in (the) Felix (consent decree) -- that's where you see the large increases."

Education, Cayetano's top priority, and Health, Human Services, and Public Safety were the departments spared from cutbacks, Anzai added.

The proposed biennium budget does not include retroactive pay raises for state workers from the blue-collar United Public Workers union and the state's largest union, the Hawaii Government Employees Association.

But, Anzai said, the raises are in the administration's financial plan and can be plugged into the budget if the Legislature authorizes the release of the funds.

The retroactive portion of the pay increases totals $68 million through fiscal 1999, which ends June 30. Some state workers' retroactive pay raises go back four years; for others, two years. There's also another $44 million in raises due these employees in fiscal years 2000 and 2001, Anzai added.

During this year's gubernatorial campaign, Republican candidate Maui Mayor Linda Lingle argued that Cayetano was awash in red ink and would find it difficult to pay for negotiated salary increases.

Proposed budget

Anzai countered: "We have stated previously and we are stating again, the governor would support retroactive pay raises. There is no big puka (in the budget)."

Fiscal 1998, which ended six months ago, concluded with a cash carry-over of $154 million.

Cayetano said funding caps were imposed on "areas of lower priority while directing available resources to areas of highest priority. Additional general revenue and debt requirements have been thus kept to a minimum.

"For the long term, we continue to press for a more realistic correlation between the limited fiscal capacity of government and the public's unlimited demand for services. For while the public's preference is for 'smaller government' and 'lower taxes,' demands for public goods and services have not abated, nor have the legal responsibilities of state government diminished. The contradictions of public opinion must be reconciled before meaningful reform can be implemented."

Here are Cayetano's recommendations for additional general-fund expenditures in priority areas:

Bullet Department of Education: $25.8 million in fiscal 2000 and $12.4 million in fiscal 2001 for the operational costs of new schools; $6.7 million in each fiscal year to fund teachers' pay raises; $2.1 million in each fiscal year to fund workload-related costs of the seven extra school days Cayetano got in return for teachers' raises; and $1 million in each fiscal year for staff and books at Kauai's Princeville Library.

Bullet Felix vs. Waihee and other consent decree settlements: $22.1 million in fiscal 2000 and $34.5 million in fiscal 2001 to the Department of Education; $26.9 million in 2000 and $35.1 million in 2001 to the Health Department; and $200,000 to the Public Safety Department to comply with the consent decrees.

Bullet Human Services Department: $14.8 million in fiscal 2000 and $14.3 million in fiscal 2001 to fund nursing home rates in the Medicaid program, child foster care payments, the aged, blind and disable program and QUEST; $250,000 in each fiscal year to update the Hawaii Automated Welfare Information System; and $500,000 more in each fiscal year to fund federally qualified health centers.

Bullet Public Safety Department: $1 million in fiscal 2000 and $2 million in fiscal 2001 to comply with the federal disabilities act and for prison expansion projects at Maui, Oahu and Waiawa facilities. Cayetano also included in his capital budget request general obligation bond funds for $130 million for a new 2,300-bed medium-security prison.



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