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Governor declares Gov. Ben Cayetano has declared that his planned executive budget for the next three fiscal years is over the state spending ceiling.
his next budget
will break ceiling
Cayetano declares that
the executive budget for
the next fiscal year will
be3.8% over the capBy Richard Borreca
Star-BulletinAt the same time, the state administration will ask the Legislature to give taxpayers a $1 tax credit, because the state surplus has been more than 5 percent of the budget for two years in a row.
The cap on spending and the tax credit are required by the state Constitution and are designed to check runaway state spending.
It is the first time in a decade that the state has declared that it will go over the ceiling set to limit state spending.
According to Cayetano's budget message to the Legislature, the executive will bust its ceiling by 3.8 percent, or $123 million, next fiscal year, which begins July 1.
In fiscal year 2002, the budget will be $113 million over, and in 2003 it will be over by $200,000.
The spending ceiling was put in the Constitution in 1978 to limit the growth of state spending. It is based on the estimated rate of growth of the state economy. The ceiling can be exceeded, but only if the governor and the Legislature declare that they are exceeding it and give a reason why.
Cayetano's budget estimates that the state will spend $3.34 billion in general fund appropriations in fiscal year 2001. The figure is above the executive budget ceiling, but well below the overall state ceiling of $4.17 billion.
The overall budget also includes budgets for the Legislature and Judiciary. If the whole budget for the state, not just a specific branch, such as the executive, goes over the ceiling, then the budget bills must pass by a two-thirds majority.
Cayetano's declaration wasn't noticed by most legislative leaders during budget briefings. For instance, both Sen. Brian Taniguchi, chairman of the Ways and Means Committee, and Republican House leader Galen Fox were not aware that the state executive was projecting a budget higher than the spending ceiling.
"I can say we will be watching this closely," Fox said yesterday.
Lowell Kalapa, executive director of the private Tax Foundation, called the spending ceiling a "truth-in-spending provision" that alerts taxpayers that the state is spending money faster than the state economy is producing it.
Budget Director Neal Miyahira, however, said the spending ceiling works in conjunction with the state Council on Revenues, which projects how much money the state will have available to spend.
"The spending ceiling is designed to hold down spending, and in general it is a well-thought out system," he said.
Maui Democrat Joe Souki, who was House Finance Committee chairman when former Gov. John Waihee's budget busted the ceiling two years in a row, called the Cayetano budget at this stage "just a wish list."
"He's got a lot of goodies in there and he knows the Legislature has its own priorities," Souki said. "It doesn't mean too much at this point."
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