Lingle takes hits for lack of details


POSTED: Tuesday, January 27, 2009

Democratic leaders in the Legislature say they welcome Gov. Linda Lingle's pledge to work together to get through this economic crisis, but they were hoping to hear more details of exactly what she plans to propose.





        Some highlights of yesterday's State of the State Address by Gov. Linda Lingle:

» To balance the budget, Lingle is proposing taking $60 million from the state Rainy Day Fund this year and an additional $15 million next year. Also, taking $10 million from the Deposit Beverage Container Special Fund and $9 million from the Wireless Enhanced 911 Special Fund for fiscal year 2010.
» To get more money, Lingle wants to tighten up tax laws, improve tax collection and administration, and reduce excessive tax credits. She says this is expected to add $122 million for fiscal years 2010 and 2011.
» To help farmers and the agriculture industry, Lingle is calling for a 15 percent price preference for locally grown fruits, vegetables, poultry, eggs and meat that are purchased by public organizations such as schools, prisons and hospitals.



And city officials reacted with disappointment to Lingle saying she was open to a bill to redirect funds for Honolulu's rail-transit system to help the state make up its projected deficit.

In her State of the State address yesterday, Lingle highlighted areas that she would focus on to spur economic growth: renewable energy, agriculture, science and technology, traffic improvement and a “;recreational renaissance”; aimed at better utilizing state parks.

“;I was expecting to hear more specifics as to how the budget shortfall is going to be met,”; said Senate President Colleen Hanabusa (D, Nanakuli-Makua). “;We've got a huge deficit for this fiscal year we're in now that's got to have some way of being addressed, and I did not hear any of those specifics. I don't know whether it's still in the works or what, but I was disappointed that we didn't have those specifics.”;

Hanabusa and House Speaker Calvin Say estimated the current-year deficit at about $75 million.

Lingle, at a news conference in her office, said details were still being hammered out among agencies involved.

Say said some of the cost-cutting moves could be related to personnel decisions regarding state workers.

“;You've got the employer on one side, you've got the union on one side and they don't want to divulge their cards,”; said Say (D, St. Louis Heights-Wilhelmina Rise-Palolo Valley).

Lingle previously had discussed the possibility of furloughs—forcing some state workers to take a day off each week without pay to save the state money. Any such move would have to be negotiated with unions because of collective-bargaining agreements.

“;Today she didn't mention furloughs, but she was talking about basically cuts in benefits,”; Hanabusa said, referring to passages in the speech that said everyone would have to make sacrifices.

One area likely to see little or no money is the grants-in-aid that in the past have funded nonprofit social service providers.

“;Many of them are funded through GIAs, which have traditionally been whatever we have left over,”; Hanabusa said. “;Unfortunately, it's become part of their bottom line in terms of their funding, and when we have this crisis, it is those kinds of discretionary funds that are going first.”;

Say said he is waiting to hear whether Lingle plans to tap into the state's Hurricane Relief Fund, which has about $180 million in it, to help make up the current deficit.

“;That particular transfer will allow us the cash flow to address this fiscal year,”; Say said.

Lingle's budget proposal submitted last month called for $40 million from the state's Rainy Day Fund to help end the 2009 fiscal year with a positive fund balance. Lingle has not said whether she would use the Hurricane Fund, but has refused to tap into it in the past.



;[Preview]Governor's Speech Stresses Reductions

Governor Lingle said state government employees will face reductions in pay and benefits and services will be reduced to deal with a nearly two billio dollar deficit over the next two years.

Watch ]


Lingle and the legislative leaders all agreed that every possible option must be up for discussion as the government tries to work through the economic troubles.

“;We have always taken the position that everything is on the table and it's got to be on the table,”; Hanabusa said. “;To understand the impact of this budget crisis that we're in—it's not now, it's not one time, it's over the whole spectrum, it's over the financial plan and everything.

“;So everything has got to be on the table.”;

One proposal, introduced by Hanabusa last week, is to divert tax revenue dedicated for the city's transit project for one year.

In a news conference after her address yesterday, Lingle said, “;We are open to hearing what the Legislature's thoughts are. The idea came from a couple of different legislators, and their concept was that because the city was still in the planning stages, to extend the original time of the tax for a year and use the funding from this year to help balance the budget. I thought it was an interesting proposal and one we are going to stay open to.”;

Kirk Caldwell, the city's managing director-designate, said, “;Any messing around with the project's funding source is going to jeopardize our relationship with the federal government.”;

Mayor Mufi Hannemann, who did not attend Lingle's speech at the state Capitol, was also quick to reject the consideration, calling it a “;harebrained idea.”;