Legislature 2002

State says extra
funds don’t exist

The Senate had said millions
in unspent funds could relieve
a huge budget shortfall

By Richard Borreca

The Cayetano administration yesterday questioned the state Senate's latest plan to balance the budget, saying the extra money identified by Senate President Robert Bunda does not exist.

On Tuesday, Bunda took the unusual step of rounding up 15 other senators to oppose using $55 million from the Hurricane Relief Fund to help balance the state budget, which is projected to have a $300 million shortfall. Instead, Bunda said, his staff had found millions in unspent appropriations in past state budgets that could plug the holes in the budget.

But Neal Miyahira, state budget and finance director, said yesterday that there was actually little money for the state to tap.

The money in question is listed in the state's general-fund balance sheet as "un-liquidated encumbrances" that Miyahira said is money promised or reserved for specific contracts or projects but is not yet spent.

"There is no pot of gold here. This money is to assure our vendors that they will get paid," Miyahira said. "This is called an encumbrance; this is not hiding money."

Bunda, however, said the administration has used the money in past years to help balance the budget.

"It is my understanding that they have been using this to balance the budget without legislative knowledge," Bunda said. "It is about time we start to untangle some of these things and see if we can recapture some of these dollars."

A closer review of the funds, however, forced Bunda to acknowledge yesterday that the $90 million he thought he could take from the unspent money was actually $45 million.

Still, Bunda insisted that money was needed to help balance the budget without tapping the politically sensitive hurricane fund.

The Senate's last-minute search for money is complicated by the paper signed by Bunda and 15 other senators pledging not to use the hurricane fund and by the concern that whatever money is found still will not balance the budget.

Sen. Colleen Hanabusa, vice president and Ways and Means vice chairwoman, who did not sign the "no hurricane fund oath," said the decision by the other senators could be politically dangerous.

"After signing it, it would be very difficult to backtrack -- those who signed it would have to expect that there will be questions why they signed it and then un-signed it," she said.

Also, Hanabusa said, there is a fear that balancing the budget by using unspent funds that are reserved for unfinished projects will quickly result in an unbalanced budget.

"I am hoping that we as an institution don't say, 'Let's just balance the budget for two years and forget about the six-year budget plan," Hanabusa said.

She said she fears that the administration will come back this summer and restrict funds more than anticipated, which could cause state worker layoffs at the beginning of the fall campaign season.

"People campaigning for re-election are going to have a difficult time anyway. This will just add another bottle of gasoline to the flames.

"When people are worrying about what this Legislature will stand for, it may be a question of whether this Legislature can do its fundamental job of just balancing the budget," Hanabusa said.

Bunda, meanwhile, maintained that the question is whether the state administration is fully disclosing how much money is available, or if it wants to keep the money to keep control of the budget process.

He said his research into the budget comes from the administration's own documents. "How can you discredit your own numbers?" Bunda said.

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