KEN IGE / KIGE@STARBULLETIN.COM
Senators gathered around colleague Cal Kawamoto yesterday after lengthy talks over campaign spending reform.
Session ends,
budget balancedBut lawmakers fear the
outlook is bleak for next session
After flirting with raising taxes and cutting tax credits to hotels and high-tech businesses, the Legislature wrapped it up last night, saying the major accomplishment was a $7.5 billion budget balanced without any drastic tax changes.
Democratic leaders in both the House and Senate also agreed that one of their new challenges was learning how to work with a Republican administration, the first in 40 years.
House lawmakers said they did not know what to expect at the onset, but the relationship turned out cordial.
"For the most part, we needed to get the kinks out, and next session we'll have a better relationship to work together," said Sylvia Luke (D, Nuuanu), House vice speaker.
"She (Lingle) was tasked with the role of setting up an administration, appointing the directors and deputy directors, so she had a lot of work that she needed to do," Luke said.
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The last days of the Legislature saw threats to kill the hotel renovation and commercial construction tax credit extensions withdrawn by the Senate, which unanimously approved the bills.
Also, attempts to reduce the Act 221 high-tech tax credit, a move supported by Gov. Linda Lingle, failed in the House. Last night, GOP members wanted to debate the stalled measure one last time, but there was no opportunity on the agenda to do so.
The state budget, passed earlier this week, calls for spending $3.7 billion in the 2003-2004 fiscal year and $3.8 billion in 2004-2005. The new budget represents a 4.8 percent increase over the 2002-2003 budget. The 2004-2005 budget is 7.9 percent more than the 2002-2003 budget.
Most of the increases are due to previously agreed-to state worker salary increases.
"We started off recognizing we weren't going to increase any taxes, and we didn't," said House Speaker Calvin Say (D, Palolo).
"We recognized we weren't going to address the hurricane relief fund, and we didn't. And the fact of the matter is, we came up with a balanced budget," Say said.
As they concluded the session that started Jan. 15, lawmakers worried last night that next year's budget would be bleak.
Sen. Brian Taniguchi (D, Manoa), Ways and Means Committee chairman, is predicting that the Council on Revenues will lower the state's revenue estimates, which would mean that the state budget would have less money to spend next year.
"If they don't lower it now, they are likely to do it in September," Taniguchi said.
Taniguchi tried to push through a 12.5 percent increase to the 4 percent general excise tax this year, but he said he would not try again next year.
"If they aren't willing to do it this year, they are not going to do it in an election year," Taniguchi said.
Senate President Robert Bunda (D, Wahiawa), who also had supported a tax increase, added that the budget will dominate next year's Legislature.
The extra money, Bunda said, would have gone for needed public school repairs and more teachers to improve education.
"What we wanted to do was be responsible, to put everything on the table, because we knew our funds were going to be marginal, so we wanted to make sure we had enough," Bunda said.
In the House, Majority Leader Scott Saiki said members set the groundwork to address issues next year, such as weighted student funding for public schools, campaign finance reform and more environmental issues, he said.
House members defended a $10-a-month tax on most residents for a state long-term care insurance program, and urged Gov. Lingle not to veto the measure.
"The bill that we just passed two days ago was a great, bold proposal, and we're hopeful that the governor will consider it very carefully," Saiki (D, Moiliili-McCully) said.
"If she vetoes it, then we will be back to the drawing board."
Also, House members lauded the House Committee on War Preparedness, which convened this session and issued a dozen recommendations on how the state could counter the economic impact on Hawaii of the U.S.-led war on Iraq.
Meanwhile, the Senate Democratic majority rejected two of Lingle's six nominees to the University of Hawaii Board of Regents, but they pointed out that 159 out of Lingle's 161 appointees were confirmed.
