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Lingle plan to use BOE funds attacked


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POSTED: Thursday, March 26, 2009

Board of Education members reacted with anger yesterday when told that the governor would strip $90 million from this fiscal year's budget with the anticipation of restoring it when the federal State Fiscal Stabilization Fund money pours in.

Superintendent Pat Hamamoto said the governor's strategy might force Hawaii's public schools to shut down on May 6 — 26 days before the end of the school year.

Hamamoto told the Board of Education yesterday that department coffers would run dry on that date if the governor strips the $90 million from this fiscal year's budget.

“;If the money doesn't come in, we can't make the payroll, from superintendent on down.”; Hamamoto said “;We are not agreeable to using next year's money for this year's shortfall.”;

Board members voted unanimously to ask the Hawaii congressional delegation for assistance in ensuring that the money reaches the education system as intended in the law.

The members, meeting yesterday as the Committee on Budget and Fiscal Accountability, expressed indignation at the governor's intention to target funds intended for education to plug financial holes in the overall state budget.

“;I think it is morally wrong, if not illegal,”; said board Chairwoman Donna Ikeda.

Kim Coco Iwamoto said, “;The schools are being used in a form of Ponzi scheme, where they are using the Department of Education to convince the federal government to release the money. There is no assurance that if the money is taken now, that the federal government may not withhold release as a punishment consequence.”;

Lingle told reporters at the news conference, “;You may have read that we took something away from education. That is not a true statement in any way.”;

Lingle announced that the action would result in requiring the Legislature to restore $30 million it cut from the Department of Education biennial budget for fiscal years 2010 and 2011, and $35 million cut from the University of Hawaii budget.

Hamamoto said that the governor's plan would shortchange Hawaii students for the next two years. “;The total $113.2 million we planned to use for the biennium would be depleted.”;

Of the total $192.2 million available to Hawaii under the American Recovery and Reinvestment Act, 81 percent — $157.2 million — was specified to be split between higher- and lower-education systems, and 18.2 percent — $35 million — for capital improvement, public safety or government services.

State Rep. Marcus Oshiro, House Finance Committee chairman, warned that timing could be a problem because Lingle wants to withhold $90 million in state funds from the Education Department during the next three months in hopes that the federal funds will backfill the same amount.

That could damage the department's ability to function for those months if the federal money does not arrive in a timely manner, Oshiro (D, Wahiawa-Poamoho) added.

The U.S. Department of Education, which is due to release guidelines next week for the use of the education portion of the stabilization funds, also might object to the plan.

How states spend the first installment of stabilization fund money intended for education “;will affect their ability”; to obtain additional dollars from that pot, said agency spokeswoman Sandra Abrevaya.

The governor's plan also attracted criticism from state Democratic Party Chairman Brian Schatz.

“;The point of the education funds from the federal government was to sustain our public schools and to prevent harmful cuts, but now it's being used to plug a puka (hole) in this year's state budget,”; he said.

Hawaii Democratic Reps. Neil Abercrombie and Mazie Hirono, and U.S. Sen. Daniel Akaka also voiced concerns about the proposal.

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The Associated Press also contributed to this report.