Legislators OK
$8.95 billion budget

Lawmakers yesterday gave final approval to their two-year $8.95 billion spending plan for the state.

Majority Democrats called it a "responsible and prudent" budget that funds priorities set last year in education and the fight against illegal drugs while also providing $296 million in pay raises awarded to public workers through binding arbitration and collective bargaining.

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"If we feel quality of life is important, and if we feel that essential public services have a direct bearing on families and their quality of life, then there is a natural tie into the importance of being able to recruit and retain the best public employees possible," said House Finance Chairman Dwight Takamine (D, Hawi-Hilo).

Republicans criticized the arbitrated raises as a burden that prevented the Legislature from following through on opening-day promises of tax relief to residents.

"We can't pass tax relief, so many people in this state are going without, but we help a favored few," said Senate Minority Floor Leader Bob Hogue (R, Kaneohe-Kailua), who voted in favor of the budget but expressed reservations.

The budget, House Bill 100, Conference Draft 1, passed out of both chambers yesterday with only Republican Sens. Sam Slom and Gordon Trimble voting "no" in the Senate, and GOP Rep. Chris Halford voting against it in the House.

It is now up to Gov. Linda Lingle to approve the budget or use her line-item veto power to strike any items on which she disagrees with lawmakers. Even if she approves the budget as a whole, Lingle still has the authority to withhold or delay the disbursement of funds, which she has done in the past.

Democrats have criticized such moves and this year passed measures requiring the administration to provide more information to the Legislature on why money is withheld and how it spends other funds, including federal dollars allocated to the state under the Temporary Assistance for Needy Families program.

"That's what we're looking at in particular right now: what are those provisos and how do they really curtail the governor's ability to manage the budget," said Linda Smith, Lingle's senior policy adviser.

The budget allocates $4.42 billion in general funds for the 2006 fiscal year beginning July 1 and $4.52 billion in fiscal year 2007. The House Finance Committee noted that lawmakers came up with a plan that was about $34.2 million less than Lingle's proposed spending plan for the fiscal biennium.

"There were many challenges facing the Legislature as we sought to create a responsible and prudent budget for the state of Hawaii," Takamine said.

While most tax-relief proposals -- including a raise of the standard deduction, an adjustment to tax brackets and various tax credits -- were left out of the budget, the fiscal plan includes $40 million in reimbursable bonds for harbor upgrades needed for the proposed interisland ferry system.

Takamine noted that lawmakers also included about $48.6 million in education funds earmarked for student transportation programs, food services, charter schools and resources for special-needs students.

The budget also includes funding for programs and initiatives established last year under the Legislature's sweeping anti-drug bill aimed at fighting the crisis of crystal methamphetamine. Budget negotiators included $13.1 million to the Department of Health for substance-abuse treatment services and prevention programs and an additional $2.4 million to counties for anti-drug campaigns.

Lawmakers also addressed needs in homelessness and affordable housing, funding for the University of Hawaii, improvements for state roads, and homecoming events for Hawaii's military personnel currently serving overseas.