Key senator After taking testimony in public hearings around the state, Sen. Brian Taniguchi knows the public is against balancing the state budget with money from the Hawaii Hurricane Relief Fund.
expresses willingness
to raid fund
The governor has said he'd like to tap
the hurricane fund to balance the budgetBy Richard Borreca
rborreca@starbulletin.comBut Taniguchi, chairman of the Senate Ways and Means Committee, said he doubts that the Legislature will be able to balance the budget without touching some of the $213 million fund.
Gov. Ben Cayetano's $3.6 billion budget for fiscal year 2002 would be in the red by $156 million if it had not been for money left over from last year's budget. Cayetano is calling on using all of the state's hurricane relief money to balance the budget.
Taniguchi (D, Manoa) said given the strong public sentiment to not touch the excess funds in the fund, it will be difficult for the Legislature to tap it.
But, he added, it may come to that in order to keep the budget in the black.
"We are waiting to transfer some of it, although we want to keep the fund intact as much as possible," Taniguchi said.
"When you look at the math, it becomes hard to avoid the fact that we may have to do something with the hurricane relief fund," he said.
The state's budget is in such precarious shape that he and Rep. Dwight Takamine, House Finance Committee chairman, have asked state departments to prepare alternative budgets with reductions of 3 percent, 4 percent or 5 percent.
Those figures, Taniguchi said, would be used only if the state's economy, now stalled in a recession, fails to improve.
"Right now we have taken lots of restrictions, cutting vacant positions and that sort of thing," he said.
"It is a 1 percent reduction, and it kind of hurts, but is doesn't mean actually cutting an existing position (laying off actual state employees)."
Takamine was unavailable for comment. Last week, Cayetano informally proposed using the hurricane funds to float bonds that would be sold in case another hurricane struck Hawaii and the losses prompted insurance firms to move out.
The present hurricane fund was started when insurance firms refused to insure local property against hurricane damage after Hurricane Iniki in 1992 because their insurance groups, called reinsurance firms, would not protect their liability.
State Republicans have launched a campaign to have the hurricane money returned to homeowners. The fund administrators, however, say the money from the ratepayers has actually all been spent, and the remaining surplus is from other accounts.
Taniguchi is also considering again asking that money from the hurricane relief fund be transferred to the state rainy-day fund, so that it could be counted as a state reserve and used to help with the state's bond rating.
"It is basically a cash flow problem," he said. "If it is in the rainy-day fund, the bond guys say they will look more favorably at the state's ratings."
The Senate budget chairman explained that the Senate will try to balance the state budget by dipping into the excess cash in various state special funds, cap the amount of money given to the Hawaii Tourism Authority and approve only a portion of the $900 million Cayetano is requesting for construction projects.
Finally, Taniguchi said he is also hoping that the Council on Revenues, which makes the projections of how much money the state will collect in taxes, will add a little to their economic growth predictions when they meet in March.
"That would give us some slack," Taniguchi said.
State of Hawaii
