Vetoes throw state budget
into uncertainty
Hawaii's state budget became law last night, but the state's financial picture is still not clear as Gov. Linda Lingle vetoed portions of another bill that took money from special funds to balance the budget.
"We won't know the total price tag of the budget until the end of the session," Lingle said.
She warned that "not everything in this budget will be funded," which raises the possibility that Lingle will restrict spending to keep down expenses.
"2005 will be a year of restrictions," she said. "It will be a year of not releasing funds that everyone wants, and it will be a year for our departments to get very creative in fulfilling their mission but holding the line."
Yesterday, she allowed the $3.9 billion state general-fund operating budget to become law without her signature. She had threatened to veto the bill, but did not because of a compromise.
House and Senate conferees agreed yesterday morning to reverse some budget measures, including the elimination of 48 vacant federally funded positions and a $20 million raid on the state Compliance Resolution Fund.
Lingle had said eliminating the cuts were key to her approving or vetoing the budget bill.
Senate Ways and Means Chairman Brian Taniguchi (D, Moiliili-Manoa) said the Senate remained one vote shy of an override of Lingle's veto of the raid on the compliance fund that pays for regulating Hawaii's businesses.
Because Democrats did not have the votes for the override, the state budget and its accompanying spending bills were thrown into doubt because of a resulting deficit in revenues.
Lawmakers said last night they were not sure if they had the votes to override the veto of $17.2 million from the state special funds, including the state Highway Fund.
Predicting deficits in the coming years, Lingle warned yesterday that the cost of paying for money borrowed under previous administrations is going to soar.
She said that in the 2006-2007 fiscal year, debt payments will rise to $518 million from $353 million and hit $639 million in 2008-2009.
"The Legislature has acted without a comprehensive, multiyear financial framework," Lingle said.
"Continuing in the vein is simply not the responsible thing to do," she charged.
A key piece of the state's financial puzzle is the 8 percent pay increase won for state white-collar workers by the Hawaii Government Employees Association during binding arbitration. Lingle says the state can afford only 4 percent, which is in line with what university faculty and public school teachers are getting.
The Legislature has approved the $32 million HGEA appropriations bill, which Lingle has until midnight Monday to approve, veto or let become law without her signature.
Lingle hinted yesterday she would veto the measure, sending the state and the union back to square one at the bargaining table, although HGEA officials have said they might challenge the action in court.
"Clearly in the law, it's so specific in that a binding-arbitration award is not final on the Legislature, that they have the right not to fund it, that the governor has the right to veto it," she said.
Taniguchi, however, said he thinks, and hopes, the Legislature would vote to override if Lingle vetoes the HGEA bill.
The Associated Press contributed to this report.
