Budget deal still not
done in Legislature

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By Richard Borreca
rborreca@starbulletin.com

Legislative leaders remain unable to agree on a plan to balance the state budget.

So far, they are considering grabbing the $35 million rainy-day fund, using a portion of the $213 million hurricane fund or dropping more than $125 million in proposed tax credits.

The latest plan last night involved tapping the state's rainy-day fund, a special fund created with more than $35 million in funds from the federal tobacco suit settlement.

Sen. Robert Bunda, Senate president, suggested last night that he and House Speaker Calvin Say would explore using the rainy-day funds to offset some of the budget deficit, pegged at least $300 million.

Gov. Ben Cayetano questioned why the Legislature would favor taking money from the rainy-day fund but would not touch the hurricane fund.

"One can only wonder why they are so willing to use the rainy-day fund," Cayetano said.

Cayetano has called for using the entire $213 million in the state Hurricane Relief Fund, because that money was scheduled to lapse into the state treasury anyway.

But legislators, fearful of a public backlash, have refused to take the whole fund, although there are proposals from the House to borrow up to $100 million from the fund and a Senate plan to take only the interest gleaned from the fund.

Bunda (D, Wahiawa-North Shore) has tried to avoid using the hurricane funds, saying there is extra money in the state budget that is not being spent.

But yesterday the Hawaii Government Employees Association, the state's largest public employee union, called for the Legislature to use all of the hurricane fund.

"Many important public service programs are at risk, and state workers will lose their jobs if the Legislature does not use the fund to balance the budget," Russell Okata, HGEA executive director, said in a letter to Bunda.

Bunda denied that the Senate budget plan would result in state worker layoffs.

"We are not cutting jobs and we are not cutting positions," Bunda said.

But Senate Vice President Colleen Hanabusa (D, Waianae) challenged Bunda, saying that as the budget discussions continue, it will "be clear that cuts to the programs will require the cutting of positions."

"People will re-evaluate their position on the hurricane fund," Hanabusa said.

She said using a portion of the fund, including the interest earned from the fund, will "be more acceptable."

Rep. Dwight Takamine, chairman of the House Finance Committee, said the House still wants to use at least $100 million of the fund to resolve the budget problems.

"You need to protect our resources, including education and public schools," Takamine (D, North Hilo) said.

Finally, Sen. Les Ihara said he and other Senate Democrats would be willing to forgo the $125 million in tax credits that are being proposed as an economic stimulus program.

Ihara also said the Senate would be willing to extend the session, which is scheduled to adjourn on May 2, if it can forge a new agreement with the House.

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