Cayetano endorses plan to
borrow from hurricane fund

The governor supports balancing
the budget with a short-term loan

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By Richard Borreca
rborreca@starbulletin.com

Gov. Ben Cayetano is recommending a budget balancing plan offered by announced gubernatorial candidate D.G. "Andy" Anderson that would borrow money in the Hawaii Hurricane Relief Fund with a promise to pay it back with interest.

Anderson unveiled the plan earlier this week after sending a copy to Cayetano.

The governor yesterday said he thought enough of the idea to send it to leaders in the state Legislature.

"He has come up with a pretty sensible common-sense approach to the hurricane relief fund," Cayetano said yesterday during an interview. "His paper was quite thoughtful."

Anderson said the $213 million in the hurricane fund should be borrowed to use for "justified classroom educational program."

The money borrowed would have to be paid back with three or four years with interest.

"Only the funds would be borrowed. The hurricane program as is on the book would stay intact," Anderson said.

He said the state's budget problems cannot be solved "cutting burning or slashing as proposed by the Republicans."

Cayetano originally called for taking the $213 million in hurricane funds to help balance the state budget. The fund was set up to provide reinsurance funds for insurance companies that did not want to cover hurricane-related losses in Hawaii after Hurricane Iniki 10 years ago.

Cayetano has said that if another hurricane strikes Hawaii and insurance companies again leave, the state could set up the reinsurance company again and borrow money to restart the fund.

In Anderson's plan, the hurricane money would be borrowed as an interim solution to the state's budget deficit.

"This position would protect the fund and at the same time, allow the state to use this money ... to preserve the current level of education," Anderson said.

Senate President Robert Bunda (D, Wahiawa-North Shore) said Anderson's plan was one of several budget plans under consideration.

"It is worthy of discussion and it is something for us to consider," Bunda said. "We are not going to leave anything out of this debate."

Anderson is running this year as a Democrat. He has run unsuccessfully twice before for governor as a Republican, including in 1986, when Cayetano was on the Democratic ticket as lieutenant governor.