House, Senate leaders House and Senate leaders have asked Gov. Ben Cayetano to consider an immediate 5 percent across-the-board reduction in the state budget to offset any continued downturn in the state economy.
want 5% budget cut
The proposal would apply to all
special, general, revolving and federal fundsBy Pat Omandam and Richard Borreca
pomandam@starbulletin.com rborreca@starbulletin.com
The proposed budget cuts would begin in this second quarter of the fiscal year and would apply to all state special, general and revolving funds, as well as federal funds.
On the first day of a scheduled six-day legislative special session to deal with the economic crisis, state House Speaker Calvin Say (D, Palolo) said yesterday that lawmakers are worried the state Council on Revenues will decide on Nov. 15 that the state economy has slowed significantly and will revise downward its projections for economic growth.
Say said he asked Cayetano on Thursday to consider the budget cut, and expects a response by tomorrow. Lawmakers also have discussed a hiring freeze, but Say did not ask the governor about it yet.
Cayetano said yesterday he is looking at making some cuts, but "not necessarily" as high as 5 percent.
Cayetano's call for $1 billion in state building projects to shore up the economy through an expanded construction industry was left behind by legislative leaders in planning the agenda last week.
In its place is $8 million to plan and design the University of Hawaii-West Oahu campus in Kapolei, instead of the $150 million requested; $100 million for repair and maintenance in public schools and the university; and $150 million in revenue bonds for a UH medical school complex in Kakaako, to be paid off by a share of Hawaii's portion of the national tobacco settlement.
Say said if state economic growth is conservatively lowered to 1 percent from 4.1 percent -- with 1 percent equal to about $30 million in state revenue -- that means $90 million less available in the state budget than was counted on, compounding the situation, he said.
"We're looking at ways in trying to address the financial difficulties we are in," he said.
The Legislature forwarded 17 bills yesterday for a joint House-Senate public hearing today. Already, there are rumblings among lawmakers that some of these measures need to be amended, a process that, because of legislative rules and procedures, would extend the six-day session.
Senate Minority Leader Sam Slom (R, Hawaii Kai) said he believes there is bipartisan support to amend a bill that allows income tax credits for hotel and private residential construction renovation to include commercial construction. An attempt will be made at today's joint House-Senate hearing to do so, he said.
House Republicans also said a bill granting the governor emergency powers is wrong. House Minority Leader Galen Fox (R, Waikiki) said lawmakers would abdicate their responsibility as representatives if they grant the governor the powers he is asking for.
The House GOP is pushing for a suspension of the 4 percent general excise tax on food and a tax holiday on retail sales of purchases under $100 -- bills that were introduced but not referred to the joint committee for a hearing.
"We have just started the special session, and already its bipartisan spirit is damaged," Fox said. "That's one reason why people don't trust government."
Say, however, said the House and Senate agreed to limit the number of bills allowed this session, and that is why those bills were not referred to the committee. He stressed Republicans had ample input in the package of legislation now before them.
House Majority Leader Marcus Oshiro (D, Wahiawa) added that the 17 bills are the "best thinking" of legislators, industry and community leaders to deal with the stalled economy.
"When thousands of our people are suddenly without jobs, robbed of the means to provide for their families, and an uncertain future forced upon them by an enemy's horrific acts thousands of miles away, we must address it," Oshiro said.
Senate President Robert Bunda (D, Wahiawa) said good people are involved in resolving this crisis, and he is confident these measures will help turn around the economy.
"We wanted to invest in the state, and we wanted to see the economy come back," Bunda said. "It is taking a risk, but we wanted to invest in the economy. We are taking this risk to infuse capital into the economy."
Say said he expects all bills will be approved by lawmakers during this session.
Meanwhile, about 200 people from various public and private unions, many unemployed workers, rallied yesterday morning at the state Capitol to remind lawmakers of the importance of their special session.
"We want to make sure that our displaced people are able to continue the health plan they have at work," said Eric Gill, head of the 11,000-member Local 5 of the Hotel Employees & Restaurant Employees AFL-CIO.
The Associated Press contributed to this report.
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