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Revenues up; Don't ask for a bigger budget unless you first see what you can do with what you have.
budget hopes
restrained
The state sees revenues grow
10.5 percent but requests plans for
'zero growth,' frustrating hopes
for the public schoolsTax revenues 10.5% ahead
in fiscal year's first 2 monthsBy Crystal Kua
Star-BulletinThat's the message to all state agencies, despite a 10.5 percent increase in state revenues in the first two months of the fiscal year. The "no growth" budget doesn't sit well with the state's largest department -- the Department of Education -- which was hoping to restore funding cut during leaner years.
"The schools are not in a situation in which zero is good enough for them," said state Schools Superintendent Paul LeMahieu.
Those budget instructions come during preparation for the first biennium budget in several years in which the state's economic outlook is forecast to bring higher-than-expected revenue.
State Budget Director Neal Miyahira says just because the state is expecting more money, it doesn't necessarily mean increased spending.
As for the DOE, Miyahira notes zero growth doesn't literally mean zero growth.
He also points to DOE budget increases to accommodate any rise in enrollment, new facilities coming on line or costs associated with court-ordered mandates such as in the case of the federal consent decree covering special education.
Miyahira also said money would be set aside for items that the governor and the superintendent have been talking about for schools, including more computers, electrical upgrades and repair and maintenance.
"We are expecting growth in those areas," Miyahira said.
Miyahira said departments tend to say "we need more money" without first going back to their base budgets to see where they can move resources around.
"What we're asking (the departments) to do is look at their spending, evaluate what you're doing now, make an assessment, take resources from lower-priority items for higher-priority items so you can accommodate within the resources," Miyahira said.
Board of Education member Karen Knudsen, chairwoman of the board's Budget and Fiscal Accountability Committee, said the Department of Education is already doing that.
The department is scrutinizing all instructional and support programs to determine whether they should continue to be funded, she said.
"I think by doing that, it gives us a solid indication of what programs need to be phased out or strengthened," Knudsen said.
"Hopefully, that gives us budget flexibility."
However, the program review is not expected to be completed until February and may not make much of an impact on current budget preparations, Knudsen said.
Miyahira says the increased revenue will provide some cushion for spending.
"It will give us more latitude in the review," Miyahira said.
Knudsen said it's frustrating for all departments to be told to create "zero growth" at the same time they hear the state is expected to gain in revenues.
"So, it's not realistic to think that we're not going to get more," Knudsen said.
The board and the department will likely do what they have done in the past, abiding by the instructions of the governor in submitting their proposed inclusions into the executive budget, but also submitting a separate budget request directly to the Legislature.
Knudsen's committee is scheduled to take up the department's biennium budget, the administration's budget instructions and an update on the Department of Education program review on Friday.
State tax revenues for the first two months of the fiscal year are running 10.5 percent ahead of the previous fiscal year. Tax revenues 10.5%
ahead in fiscal year’s
first 2 monthsAssociated Press
Tax Director Marie Okamura said tax revenues in August totaled $279.3 million, an increase of 1.8 percent over August of last year.
Okamura said this represents significant growth, since August 1999 revenues included some of the July taxes that became due on a weekend.
Tax collections for the first two months of the fiscal year totaled $519.4 million, nearly $50 million more than during the same period last year.
General excise tax revenues declined slightly in August, but totals for July and August are still up more than $32 million, a 12.9 percent increase over the same period last year.
The August general fund total was boosted by a $3.1 million deposit from the transient accommodations tax. This represents the share of the room tax revenue that previously went to the Convention Center special fund.
Also benefiting the general fund in August was a $2.6 million jump in deposits for the corporate income tax, which saw an increase in estimated tax payments coupled with a decrease in refunds, Okamura said.
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