Lingle submits last
Cayetano budget to
Legislature but
plans to change it

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By Bruce Dunford
Associated Press

The Lingle administration delivered to state lawmakers yesterday a two-year, $15 billion state budget -- a day late and potentially more than $340 million short.

The three volumes totaling some 1,600 pages of budget details were drafted by former Democratic Gov. Ben Cayetano before he left office two weeks ago.

In her letter accompanying the document, Lingle said she would work with lawmakers to make changes reflecting her administration's priorities.

The House Finance and Senate Ways and Means Committees have yet to post a schedule for pre-session budget briefings from the various departments because Lingle has yet to name all her department directors.

Under state law, the budget was supposed to have been delivered to the Legislature on Monday, 30 days before the 2003 legislative session, which begins Jan. 15.

Budget Director Georgina Kawamura said equipment problems at the Halawa Prison's printing plant caused the one-day delay.

The Cayetano version of the budget is based on state revenues growing by 6.1 percent this fiscal year, a forecast set by the state's Council on Revenues, a panel of economists. The council meets again Jan. 10 to review that forecast.

If the current revenue growth rate of less than 1 percent in the first five months of the year continues, there will be a shortfall of about $160 million. Meanwhile, the Cayetano version of the budget anticipates using $187 million in the Hawaii Hurricane Relief Fund, something Lingle has promised she will not do. Combining the shortfall and the lack of hurricane fund money, the state budget would be about $347 million short.

During her gubernatorial campaign, Lingle said she would ask lawmakers to end the state's 4 percent excise on medical services and products, restore the food tax credit for the poor and provide other tax breaks, something the Cayetano administration said would cost the state $100 million in annual revenues.

Senate Ways and Means Committee Chairman Brian Taniguchi said he wonders where Lingle will find savings in the budget sufficient to allow the tax cuts she promised.

Lingle said she will be announcing spending changes to the second half of the current fiscal year's budget to cut spending, possibly including a freeze on new hires. The fiscal year ends June 30.

"It's important to get a handle on this year's budget to make sure any spending is absolutely critical" because "anything you save now can be used to balance next year's budget," Lingle said.

The proposed budget increases state spending by $80.6 million in the first fiscal year and $214 million in the second, mostly for contracted pay raises, increases in Medicaid and retirement payments.

Cayetano's version provides nothing for pay raises for state employees in contracts being negotiated.