A proposal to raid special and other state funds to deal with an estimated $400 million in pay raises met with opposition yesterday from a slew of state departments and agencies, including the Hawaii Tourism Authority, which defended its tourism special fund by calling it a "success story." Don’t raid our funds,
state officials sayBy Lisa Asato
Star-Bulletin
For two hours yesterday, testifiers came before the Senate Ways and Means Committee to save their unused funds -- totaling more than $100 million -- from reverting to the state's general fund on July 1.
After the hearing, committee Vice Chairwoman Colleen Hanabusa said the state faces about $400 million in pay raises, based on the latest union proposals.
"This is the only major source of funding that we have instead of cutting warm bodies," she said of the unused special funds.
The budget proposal, drawn up by Hanabusa (D, Waianae-Maili-Makaha) and Ways and Means Chairman Brian Taniguchi (D, Manoa-McCully), would also:
>> Authorize the state Foundation on Culture and the Arts to use $2 million of its art special fund to plan, design and construct a state art museum at the No. 1 Capitol District building.
>> Create a litigation deposits trust fund that would collect all money won through lawsuits in which the state is a plaintiff, and allow a portion of it to be invested.
>> Allow the state to use its emergency "rainy day" fund for education.
The majority of testifiers came to justify their unused portions of various special, revolving and trust funds.
Sharyn Miyashiro, executive director of the Housing and Community Development Corporation of Hawaii, said transferring $24 million from the corporation's funds would hurt its bond rating, resulting in higher mortgage interest rates for first-time home buyers. She said that since 1995, more than $150 million has been transferred out of its housing funds, prompting Moody's Investor Service to place the corporation on a "negative outlook." Moody's cited "the consistent transfer of corporation funds to the state to plug budget deficits," she said.
The Hawaii Tourism Authority's chief executive officer, Bob Fishman, defended the tourism special fund by asking lawmakers to "look at the fund as an investment fund."
"The good thing here is that we're using it for it for what it was intended to do," marketing Hawaii as a tourist destination, he said.
"This was one of the state's success stories. To divert those funds probably wouldn't be a good idea."
Senators also heard an argument against using the rainy-day fund for education. Wayne Kimura, deputy director of the state Department of Budget and Finance, said the fund was set up as a "safety valve" for disasters, not for education.
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