Lawmakers to take Two major issues hanging up the state budget -- increasing the tobacco tax and raiding state special funds -- were tentatively resolved last night.
$140 million from
special funds
State legislators also raise the
Hurricane fund usage plans differ
tobacco tax, resolving 2 key issuesBy Richard Borreca
rborreca@starbulletin.comAfter a closed meeting between House Speaker Calvin Say and Senate President Robert Bunda, the budget conference committee agreed to take $140 million from state special funds and to a series of increases to the state tobacco tax.
Still outstanding was an agreement on how much of the state's $213 million hurricane fund would be used to balance the state budget.
The state budget, which started the year with a $300 million deficit, has been stalled between the House and Senate since the Legislature opened in January.
After last night's agreement on the special-fund raid, Rep. Dwight Takamine, House Finance Committee chairman said "we have done a big part of the financial plan."
Special funds are money reserved for specific programs, such as highway maintenance, and are not included in the state's general budget.
The tobacco tax increase proposal would raise the state tax on each cigarette from 5 to 6 cents starting in October and then increase it a half-cent a year for the next two years.
The total increase is expected to bring another $34 million to the state by 2005.
The full House and Senate must consider the proposals before the Legislature adjourns in a week.
Sen. Brian Taniguchi, Ways and Means chairman, said deciding how much to take from the hurricane fund was the only remaining major issue.
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Senate leaders appear willing to take at least $29 million from the Hawaii Hurricane Relief Fund to balance the state budget. House, Senate differ
on hurricane fund useBy Richard Borreca
rborreca@starbulletin.comBut Senate Democrats balked yesterday when asked by the House to use even more of the fund.
Senate President Robert Bunda (D, Wahiawa-North Shore) said the Senate is willing to use up to $29 million in hurricane funds because that money was not part of the original money paid into the fund, but rather it was interest earnings gathered since the fund stopped collecting for hurricane insurance.
Senators say that difference between interest and principal in the $213 million fund allows them to dip into it without violating a pledge taken by 16 senators not to "use any moneys from the Hurricane Relief Fund."
Other senators, such as Sen. Colleen Hanabusa (D, Waianae-Maili-Makaha), Senate vice president, who did not make that pledge, is urging that the Senate take up to $50 million, which would represent all the interest earned by the fund.
Gov. Ben Cayetano, who originally proposed simply cashing out the fund and using the money to help balance the budget, said Bunda is "grasping at straws."
"Everyone else, the Ways and Means chairman (Sen. Brian Taniguchi), the House, everybody agrees they should at least use part of the hurricane fund," Cayetano said yesterday.
"I feel sorry for Taniguchi. He has been trying to accommodate the Senate president, but the Senate president has been grasping at straws, and all that kind of stuff shows a real desperation to avoid using the hurricane fund," Cayetano said.
The House is continuing to press that the final budget include nearly half of the hurricane fund.
House Speaker Calvin Say worried that because of drastic cuts to social service programs for the poor and the public schools, the state simply needs to spend more.
"Yes, because we are cutting tremendous amount of resources from the budget right now, and the impact has been so devastating on a lot of programs, from the Department of Public Safety to Education, to the University of Hawaii and the Department of Health and Human Services," Say said.
"If I can get the Senate to go 100 percent on HHRF, we'd be in good shape," Say added.
But Bunda called the Senate "solid" in using only $29 million from the hurricane fund.
The governor, meanwhile also criticized the state House, which in private budget negotiations with the Senate has insisted on keeping the entire $61 million appropriation for the Hawaii Tourism Authority.
Cayetano singled out the lobbying efforts of one of the state's largest hotel groups, Outrigger, saying "they speak very loud down there (in the Legislature)."
"How in the world can you keep the HTA at $61 million at a time like this?" Cayetano complained.
Star-Bulletin reporter Pat Omandam
contributed to this report.
Legislature Directory
Testimony by email: testimony@capitol.hawaii.gov
Legislature Bills & Hawaii Revised Statutes
Include in the email the committee name; bill number;
date, time and place of the hearing; and number of copies
(as listed on the hearing notice.) For more information,
see http://www.hawaii.gov/lrb/par
or call 587-0478.
