State of Hawaii

Gov’s 2-year budget
taps hurricane fund

Lingle says that she will not use
the fund to make up shortfalls

By Pat Omandam

In one of his final acts as governor, Democrat Ben Cayetano has proposed a two-year, $7.6 billion general-fund state budget that once again taps the Hawaii Hurricane Relief Fund to stave off cuts to education and social services.

Republican Gov.-elect Linda Lingle, however, has repeatedly said she will not use money from the $213 million fund to make up shortfalls in state revenue.

That is one of many changes in the proposed budget she is expected to make when she is sworn into office Monday.

"It's a clear understanding that is not an option," Lingle said this week. "That money has to be available for Hawaii to enter the reinsurance market if we find ourselves in a similar situation. We have to make sure our homeowners and businesses can get reinsurance."

Cayetano signed the executive budget yesterday and sent it to the printers so state legislators can receive it by Dec. 16. State law requires that the Legislature receive the executive budget 30 days before the session begins. The session begins Jan. 15.

The timing is such that the outgoing governor has the responsibility for submitting the executive budget to the Legislature. Once Lingle takes office, she can propose changes to the budget via state lawmakers.

Cayetano's proposed financial plan calls for a $3.7 billion general-fund budget in 2004 and a $3.9 billion budget in 2005. The two-year budget is a 2.2 percent increase from this current biennium, with much of the increase going to recently negotiated pay raises for public workers.

The governor added that the budget does not have any funding for new state contracts and includes no money for a new prison.

It does, however, provide $171 million in general obligation bonds for a new University of Hawaii-West Oahu campus in Kapolei, $69 million for a new UH film school and $240 million for public school maintenance and repair.

There is also $3 million to renovate Washington Place, and $8.3 million to replace the Fieldturf at Aloha Stadium.

On the revenue side, Cayetano said the plan does not call for an increase or reduction in any state taxes. It also does not tap the state rainy-day fund or most other special funds, except the hurricane fund.

This year, the Legislature authorized use of about $29 million in interest payments from the hurricane fund to help balance the fiscal 2002 budget.

Cayetano does not see how Lingle will avoid cuts in education or social services if she does not use money from the hurricane fund.

He stressed other fiscal issues she will have to address that the state does not have money for include rising contributions to the state Employees' Retirement System and future collective-bargaining pay raises for state workers.

"We know that Gov.-elect Lingle has a position that may be different from this. However, from our standpoint, it was difficult to balance the budget, as we are required by law, without using the hurricane relief fund," Cayetano said yesterday during his last news conference in the Governor's Office.

"Can it be done? Sure, it can be done. The question has always been at what price and at what cost."

Meanwhile, Cayetano did leave Lingle a welcome present.

Cayetano said his office has saved $400,000 this year, which will allow Lingle to restore funding for some 60 positions in the Governor's Office next year for six months.

Lingle will need to seek emergency appropriations from the Legislature to keep her office staffed for the rest of the year. She found out that the state Legislature -- despite Cayetano's objections -- funded only six positions in the Governor's Office for 2003.

State of Hawaii

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