House panel The House Finance Committee has approved a $3.56 billion supplemental state budget bill that imposes a 4 percent across-the-board cut to all state departments.
sharpens ax
The Finance Committee's budget
calls for 4 percent cuts and 95 layoffsBy Pat Omandam
pomandam@starbulletin.comThe proposal, which would include laying off 95 state workers, slices the budget more than the 2 percent cut proposed by Gov. Ben Cayetano at the start of the session.
The budget relies heavily on revenues from proposed increases in the state's so-called sin taxes on tobacco and liquor, and on using more than $200 million from state special funds to offset a $300 million shortfall in state tax revenue this fiscal year, which ends June 30.
And the plan includes cutting vacant positions in each department by 10 percent, except in the Department of Education, which would face a 5 percent reduction.
"In terms of the overall House financial plan, there are a number of bills tied to the budget," said committee Chairman Dwight Takamine (D, North Hilo).
House Bill 1800, House Draft 1, assumes the state Legislature will approve at least a $20 million increase in the state liquor tax and a $8 million hike in the state tobacco tax.
The House's version of the budget, which must be sent by Thursday to the Senate, is being balanced by the controversial use of $100 million from the $213 million Hawaii Hurricane Relief Fund and an extra $103 million from a variety of special funds.
Cayetano's proposed budget cut is less than the House's plan because he wants to take the entire $213 million from the fund.
The state started the hurricane fund when insurance firms refused to insure local property against hurricane damage after huge losses from Hurricane Iniki in 1992. The fund has been discontinued, and state Republicans have argued that the remaining money should be returned to homeowners.
The House Finance Committee's budget reflects another House bill, passed last week, that would take $78 million of the $100 million from the hurricane fund to pay for what House Democrats deemed as essential programs, mostly in education, human services and safety.
"As we looked at putting the budget together, there's certain issues that are critically important," Takamine said. "Part of it was trying to be responsive to the general public's concern about continuing to invest in education, and therefore as you will see by the numbers, there are additional resources, additional positions, allocated to education."
The general fund budget does decrease $66 million from what was approved last year: $3.63 billion.
However, the bill creates 1,451 new state jobs, most of which go toward helping the state comply with the Felix consent decree.
Takamine's budget also would have 95 state workers laid off, 86 within the University of Hawaii system and the rest through the elimination of the state Health Planning & Development Agency.
Rep. Charles Djou (R, Kaneohe), House minority leader, was the lone no vote yesterday on the House budget. While he understands the new Felix positions are to help Hawaii's special-needs children, the bottom line is, state government is too big for the Hawaii economy to support, he said.
"What you're left with is, either you've got to dramatically increase taxes, or you've got to cut spending. And unfortunately, with the current budget and the way it's being put together, the Democrats are trying to do neither," Djou said.
Republicans also criticized the exclusion of construction money for the new 12th-grade building at Kapolei High School. The proposed House capital improvements budget includes a little more than a third of the $900 million in construction projects proposed by the governor.
State Rep. Mark Moses (R, Kapolei) said the 12th grade will not have a building for classes in the fall of 2003 if construction of the building is not started by August.
"I guess they'll teach them under the trees in the park," Moses said. "Unfortunately, the trees aren't grown yet because the parks are too new."
Moses acknowledged funding for each phase of the school has been included in the waning days of the session in recent years.
Funding for UH-West Oahu was also left out of the construction budget.
Takamine said his panel had to make some tough decisions that not everyone would be happy with.
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