Hurricane Fund The Cayetano administration is considering budget cuts of between 1 percent and 3 percent, but no state worker layoffs or furloughs, if lawmakers approve tapping the $213 million Hurricane Relief Fund, according to legislative leaders who met yesterday with the governor.
would save jobs,
lawmakers say
Legislators want to use the
fund to help the state's economyBy Richard Borreca
rborreca@starbulletin.comHouse Speaker Calvin Say and Senate President Robert Bunda said they are faced with either more drastic budget cuts or using the hurricane fund, which according to state law is supposed to go back to the state general fund.
They acknowledged that getting legislative approval to use that money would be tough.
Opponents of the hurricane fund transfer have said the money should be returned to insurance payers.
The state created the fund to insure Hawaii homeowners after losses from Hurricane Iniki in 1992 chased many insurers from the local hurricane insurance market. Now that many insurers have returned to the market, the state fund has been closed and lawmakers are debating what to do with the $213 million in it.
Bunda said if the public insists that it is entitled to a portion of the relief fund, it is likely that insurance companies that also paid into it will also ask for their money back.
Say (D, Palolo Valley-Kaimuki) and Bunda (D, Wahiawa-Haleiwa-North Shore) were briefed by Gov. Ben Cayetano yesterday on the state's plans to deal with the latest downturn in state revenues.
The state Council on Revenues last week predicted that the state's tax revenues would slide 4.8 percent, triggering a loss of nearly $160 million in the state's roughly $3 billion annual budget.
Each 1 percent of the 2001-02 fiscal year budget amounts to about $33 million.
For the first time in his administration, Cayetano would spread the cuts among all state departments, including the University of Hawaii and the Department of Education, the lawmakers said.
Say predicted that the state budget is likely to be reduced by at least 1 percent for this fiscal year; if there is no economic rebound, the budget could be cut by 2 percent the next fiscal year.
Both Say and Bunda stressed, however, that the administration was concerned that layoffs or furloughs would actually hurt the state economy by triggering more unemployment.
Cayetano said he plans a more formal presentation to both House and Senate caucuses next month.
Unemployment rate hits 2-year high at 5.2 percent
The statewide unemployment rate has reached 5.2 percent, the highest in two years, the state Department of Labor and Industrial Relations said yesterday.Officials said the unemployment rate climbed in October from 4.5 percent in September.
Some 3,600 people in payroll jobs lost work, while unemployment in hotels dropped by 2,100 jobs. The business services sector lost 500 positions in October.
However, educational job positions rose by 400 jobs while social services sectors increased by 200 jobs.
Star-Bulletin staff >