Millions in cuts House Finance Chairman Dwight Takamine is forcing the state bureaucracy to contemplate the unthinkable: $300 million in budget cuts that would result in no security at many state buildings, closed libraries and laid-off workers.
projected by House
The Finance chairman warns
Consequences dire, UH official says
of $300 million less in the budget
if the state takes no actionBy Richard Borreca
rborreca@starbulletin.comThe chopping would be necessary, Takamine and others say, unless the Legislature agrees to use the state's $213 million Hurricane Relief Fund and raise the state liquor tax to help balance the budget.
Without any action, the state's $3.4 billion annual budget would be out of balance because the Sept. 11 terrorist attacks triggered a recession that left the state with fewer tax collections than expected.
One budget veteran, Attorney General Earl Anzai, who as budget director in 1995 and 1996 presided over a budget when more than 400 state workers had to be laid off and tax credits rescinded to balance it, says this budget is in trouble.
"The problem is much harder than it was two or three years ago," Anzai said.
"When I was director, I thought there was fat in the state budget. It was a time of successive budget increases," he said.
He said pay raises for public employees have been the only part of the budget to grow in the last eight years.
"With only collective bargaining increasing and everything staying the same, we have had a 25 percent decrease in terms of money available," Anzai said.
Takamine said the budget-cutting exercise would show members of his Finance Committee that if the budget is to be balanced, the state needs either to take in more money or cut the budget.
"If the only way we can address lessening the cuts is by taking down services, the question is, Is this the best way to reassure the public?" Takamine said.
His Senate counterpart, Ways and Means Committee Chairman Brian Taniguchi, called the hearings "a painful exercise" but did not dismiss the potential cuts. "We have a situation where the members of the Legislature are not supporting additional sources of revenue (the hurricane fund and liquor tax increase), so if we don't want to go there, budget cuts are the only way," Taniguchi said.
But cuts as planned by state agencies would be difficult.
The existing state budget already plans cuts of 1 percent this year and 2 percent next year. Increasing the cuts to 5 percent next year would mean reducing the Future Homemakers of America, Industrial Arts Fair and School to Work Transition Centers.
School mediation programs, comprehensive positive peer prevention and the Momilani Elementary At-Risk programs would be cut.
The A+ after-school program would have to increase fees or be canceled. Also cut would be the computer education programs, enrichment programs and marine education.
Finally, the Department of Education would also have to consider closing the state summer school program. "These cuts will severely impact our ability to deliver the student of the 21st century," schools Superintendent Pat Hamamoto said.
"This severely compromises the educational integrity of our school system," she said.
Other state officials were equally glum. Walter Ozawa, state Judiciary administrative director, said he was alarmed by the proposed budget cuts.
"They will devastate the state Judiciary's programs and eliminate 56 jobs," he said.
Ted Sakai, state public safety director, said the proposed cuts would mean withdrawing security from the state Health Department, including the mental hospital. Security at all libraries would also have to be curtailed, he said.
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After a decade of budget cuts, the University of Hawaii already operates on the leanest of budgets, and further cuts threaten survival of various programs, according to UH's chief financial officer, Wick Sloane. UH official paints
dire scenarios of
deeper budget cutsBy Treena Shapiro
tshapiro@starbulletin.com
Sloane presented state lawmakers with grim scenarios of the university's fate if it were forced to cut its budget by an additional 3 percent or 5 percent: layoffs, course cancellations and enrollment declines, which in turn would lead to a loss of revenue, extramural funding and perhaps accreditation at the professional schools.
All state departments were asked to submit budget reduction scenarios as lawmakers grapple with a $315 million budget shortfall.
At the Manoa campus, a 3 percent cut would mean eliminating jobs, primarily those held by nonunionized lecturers, graduate assistants and untenured faculty, who teach 24 percent of the classes each semester, Sloane said.
"These have to be considered real people, real desks and real jobs," he said. "We don't have that many open positions."
Consequently, some classes would be canceled and some limited, increasing the time it takes to graduate. Class size could be increased, but only by compromising quality, he said.
Future enrollment would have to be reduced by about 610 students, resulting in a loss of $2 million in tuition revenue.
Extrapolating from the university's impact on the state, Sloane said, "A 3 percent budget contraction will result in a $23 million reduction in business sales, a $16.4 million decrease in employee earnings, a $2.8 million decrease in state and local tax collections and a loss of 487 jobs."
A 5 percent cut would have a similar impact, only worse, Sloane testified. "Due to provisions in the collective-bargaining contracts, it may not even be possible to meet the entire reduction in (fiscal year) 2003, as tenured faculty cannot be immediately terminated."
At 5 percent, budget cuts could jeopardize accreditation for the medical, law, architecture and engineering schools because the schools must meet minimum faculty-student ratio requirements.
"In any case, a 5 percent reduction would require us to ask over 1,000 full-time students to stay home this semester, resulting in a loss of tuition revenue of $3.5 million and an incalculable human toll," he said.
University of Hawaii
