State of Hawaii

Lingle relaxes
budget restrictions

An improved outlook for
the isle economy prompts her
to release $450 million in funds

A new round of strong economic predictions has persuaded Gov. Linda Lingle to release $450 million in state funds.

The money had been included in the state's two-year $7.9 billion general fund budget, but held back by Lingle.

The governor released the money yesterday, saying "fiscal discipline" was still the administration's main theme. "While projected state revenues are expected to increase, they are still just projections, not money in the bank," Lingle said.

The state Council on Revenues said on Monday state tax collections were expected to grow 6.2 percent for this fiscal year, which would translate into an extra $35 million.

"In this fiscal year and the next, our task will be to ensure a disciplined and balanced budget that does not impose further financial burdens on the citizens of the state, while continuing to provide essential government services," Lingle said.

Earlier this year, Lingle withheld 20 percent of each state department's first-quarter funding. Lingle called the budget unbalanced, noting a lowered outlook from the Council on Revenues and programs designated by the Legislature without funding, such as the state hospitals.

The spending restrictions set off alarms in state departments forced to cut or cancel discretionary spending.

Yesterday's announcement brought smiles to officials in the Department of Education, for instance, which was facing a $12 million budget cut.

"It is a great restoration of funding for us," said Greg Knudsen, the department's spokesman.

Georgina Kawamura, state budget director, said the departments will get their full allocations.

"With the second, third and fourth quarters ahead they are getting everything back -- 100 percent of what was appropriated," Kawamura said.

The next budget question facing the state will be how much to spend during the second year of the two-year budget cycle.

Kawamura cautioned that the administration was not opening the door to large spending increases.

"We are now discussing with departments the likelihood of them proposing any supplemental issues for the upcoming (legislative) session," she said.

Democratic legislative leaders had pressured Lingle to release the restricted funds, saying the economy was stronger than her predictions.

"It is clear that funding restrictions were not needed in the first quarter," Senate President Robert Bunda said yesterday.


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