Gov. Ben Cayetano has returned to a familiar refrain: There would be no need to raise taxes or make "Draconian" budget cuts to offset an $88 million revenue shortfall if the Legislature taps the controversial Hawaii Hurricane Relief Fund. Gov eyes hurricane
fund againHe says the money could help
offset the tax revenue shortfallBy Crystal Kua
ckua@starbulletin.com"We could use a combination of the Hurricane Relief Fund and maybe some money from the Rainy Day Fund. This is certainly a rainy day," Cayetano said yesterday. "I think we're getting to the point right now where whether you're Republican or Democrat, they need to stop playing politics with that fund and address the situation at hand."
This past legislative session, the governor urged lawmakers to offset a $300 million shortfall with the fund, which was started when insurance firms refused to insure local property against hurricane damage after Hurricane Iniki in 1992. But Cayetano met with resistance. Legislators eventually allowed the governor to use $29 million in interest from the fund to shore up revenues.
Cayetano is raising the possibility of using the $213 million Hurricane Relief Fund again as a budget-balancing solution after word this week that tax revenues paid to the state over the past year dropped $88 million more than projected.
Cayetano said he still has not decided how he plans to attack the shortfall. But he will be out of office in December, and the new governor would have to deal with the problem.
"We're still analyzing the information, and at this particular point we have not determined what exactly we're going to do," he said. "I intend to meet with my Cabinet (next week) after I get a briefing from the Budget & Finance Department about the proposals for the new financial plan."
"We're not just going to jump into it and begin to impose Draconian type of restrictions which may just continue to hurt people," Cayetano said. "I don't think there's any need to raise taxes. I think there's money there that's sitting there that we can use. If they stop playing politics with this issue, then we can deal with it."
Cayetano said that he does not think it is necessary to call the Legislature into special session to deal with the shortfall, and the state can "ride through" to the next session.
The hurricane fund has been discontinued, and state Republicans have argued that the remaining money should be returned to homeowners.
The Rainy Day Fund, or the emergency and budget reserve fund, contains a portion of the settlement from a lawsuit filed against tobacco companies.
House Minority Leader Galen Fox (R, Waikiki) said Cayetano's plan does not surprise him.
"No, I'm not surprised in that he tried to get $200 million out of that fund," Fox said.
Fox said that the public was clear about not wanting to use the fund to balance the budget. He thinks the governor has not done enough to cut waste out of government.
"He can do it through restrictions," Fox said. "Government is too big. We need smaller, efficient government."
Fox said it does not matter what Cayetano comes up with because what course to take will be up to the next governor.
"Thanks for the advice, but ..." Fox said. "It's clearly not up to him."
State of Hawaii
