Lingle signals she will
veto spending billThe governor objects to a proposed
change in funding the DCCA
Gov. Linda Lingle says she is "inclined" to veto a key bill the Legislature needs to balance the state budget.
The measure would change how the state Department of Commerce & Consumer Affairs is funded -- from a special fund financed by the businesses regulated to general funds paid with tax dollars.
The change allows the Legislature to grab up to $30 million in special funds from the department's "compliance resolution fund" to balance the budget.
The Chamber of Commerce of Hawaii criticized the special-fund raid. In an e-mail sent yesterday, Jim Tollefson, chamber president, urged the Legislature to leave the compliance resolution fund alone.
"Lingle said she has not had a chance to review the budget bill sent to her on Thursday, two weeks sooner than usual in the 60-day legislative session, and has yet to received the requested six-year financial plan from lawmakers to determine the financial impact in the years ahead," Tollefson said.
Lingle is disputing the way the Legislature's budget was prepared, saying that it does not include a broad financial policy statement and does not consider how new pay raises will be financed in the future.
"I don't call it a budget. It doesn't have the components of a budget," Lingle said.
Lingle repeated yesterday her contention that the budget will not balance after the end of this fiscal year because Democrats are willing to pay the full 8 percent raises won by the Hawaii Government Employees Association.
The governor said state Budget Director Georgina Kawamura has been asked to appear before the Senate Ways and Means Committee on Monday to review Lingle's revised budget plan to give HGEA employees reduced 4 percent pay raises. It was submitted just hours before House and Senate conferees approved the budget bill Monday night.
The extra cost, under Lingle's calculations, would put the budget in a $110 million deficit by 2006. Such drastic overruns could trigger budget cuts and layoffs, Lingle warned.
"It doesn't make any sense to put your entire work force in jeopardy just to pay an increase they know they can't afford," Lingle said.
Lingle added that the budget was passed two weeks early, and she has not had a chance to review it. She said she sent two letters to legislative leaders asking for the Legislature's six-year financial plan.
If Lingle does veto the special-fund raid, it is likely to force the budget to be recalculated because the Senate might not have the needed two-thirds vote to override the threatened veto.
Sen. Brian Taniguchi, Ways and Means Committee chairman, said Lingle does not need to veto the budget bill, because she has the authority to restrict spending.
But, he added, the Lingle budget asked for an extra $120 million in spending, and the Legislature was forced to cut portions of her budget.
Taniguchi acknowledged that the public employee pay raises will trim the state's cash balance next year, but added that "we can make the appropriate adjustments."
The Lingle veto, however, would cause "a hole" in the Legislature's financial plan.
"We would have to regroup -- it would be a net $20 million hole," Taniguchi (D, Moiliili-Manoa) said, explaining that the state would be able to make up $10 million of the $30 million cut.
Lingle, however, says that the Legislature, by speeding the bill to her two weeks early, "makes for some very inferior legislation."
Taniguchi explained that legislators were concerned that Lingle would veto several politically attractive bills, including education reform, cheap prescription drugs and education reform.
But because all those bills require funding, they could not be approved until the state budget bill passed.