Governor's budget lays down gauntlet for legislators

Taxpayers can anticipate that cries of "not enough" surely will come. The biggest battles likely will be about funding for education, public employee salaries and possible tax cuts, as well as the refunds or credits that law dictates residents are due.

The Republican governor's budget plans call for $20.78 billion to run government through 2009 and another $2.1 billion for capital improvements, which includes $300 million for public schools and close to $200 million for the University of Hawaii system.

Lawmakers -- most of whom are Democrats and whose codependent relationship with public worker unions has been continually criticized -- were quick to point out that Lingle's money bill does not contain provisions for possible employee pay increases. At the same time, the governor has laid out an additional $60 million to add to the university's teaching staff, whose political endorsements she has enjoyed.

The proposals emphasize the governor's intention to mend Hawaii's problems with homelessness and a depletion of rental housing at prices people at the lower end of the income spectrum can afford. Her budget directs $13 million to shelter services, $10 million in funds and $40 million in bonds to repair and maintain long-neglected public housing projects, and $50 million toward a state trust fund that can be used to leverage federal and private money to create rental units.

Allotments for public school operations, about $4.8 billion over two years, already have been deemed too little and will again be contentious as Lingle and legislators attempt to put their own imprints on improving education.

The governor provided little indication in her funding proposals about how she intends to move the state's economy away from land development, as she declared in her inauguration address. However, the capital spending package, including $65 million for work at the Honolulu Airport, $21 million in upgrades at Hilo's facility and harbor improvements, will help to keep the construction industry afloat as the housing sector statewide begins to slow.

Closer to taxpayers' pocketbooks are possible adjustments on income taxes Lingle says she'll seek.

In addition, because the state Constitution requires that the government give back money when the general fund exceeds revenues by more than 5 percent for two consecutive years, the governor and legislators will have to figure out how much of a credit or refund taxpayers will receive.

These issues should make for lively debate in the coming months and taxpayers should be keenly interested in how their collective wealth, generated by a healthy economy, is distributed by their leaders.