Legislature seeks shovel to dig out of $290M hole

Last year, state lawmakers wrote a $10.5 billion check to run the state for two years. This year, they are finding out they are $290 million short.

How to chop the state budget will be the most controversial item before the Legislature when it starts its 2008 session Wednesday.

The shortage isn't in real dollars, but in revenue estimates, but it means that money promised for programs all over the state, from $3 million for the University of Hawaii's Academy for Creative Media to $20,000 for burial grants for decreased World War II Filipino veterans has been withheld.

"We have the projections for '08 and it is a scary scenario," said House Speaker Calvin Say.

"I am a little concerned and worried," said the veteran Democratic leader.

Already, Say is rejecting calls from Republican Gov. Linda Lingle for tax cuts.

"I am going to disagree with the governor on tax cuts, she can't take care of basic services and you want to do tax cuts, come on," Say said.

Lingle in her budget presentations has said the budget has room for specific, targeted tax cuts.

To get more money, Senate President Colleen Hanabusa wants the Legislature to look at the so-called streamlined sales tax, which would let Hawaii collect the 4 percent tax on items bought over the Internet by Hawaii residents. But Hanabusa said it is viewed as a tax increase and is not likely to pass.

"It is something that has not made its way through and I don't anticipate support," Hanabusa said.

Instead, Hanabusa predicted that the Legislature "will have to cut the budget."

"My calculation is that we are $280 (million) or $290 million short," she said.

Still both leaders acknowledge there will be pressure to add new items to the budget. Hanabusa said last week's discussion about repair and maintenance at the University of Hawaii points out the problems.

"We are just going to have to look at it and see what we can cover," Hanabusa said.

Say, who was House finance chairman during the state's last downturn in the 1990s said the state should have used a lower revenue projection last year.

"I said take the conservative approach ... don't say the rate of growth will be 6 percent, say 4.5 percent.

"Now we don't have the money and our hands are tied," Say said.

The state's prison system, with $52 million a year spent to keep 1,300 felons in a private prison in Arizona, continues to concern legislators.

Rep. Will Espero (D, Ewa Beach-Honouliuli-Ewa Beach) worries about a new state prison planned for Maui.

At hearings last week, the Department of Public Safety changed its estimate for building a new Maui prison from $50 million to $200 million and doubled the size from 300 to 600 inmates.

"It was made clear that they are going to have to come up with a less expensive prison," Espero said.

Say is also backing a resolution for the state to sell the Oahu Community Correctional Center site on Dillingham Boulevard in Kalihi and move the prison to vacant state land near the airport.

"The prison is sitting on prime industrial land, isn't it possible to find another parcel at the airport like the federal detention center?" Say asked.

"Every day we don't do this, it is going to cost us more, we have to be realistic," Say said.

As the Legislature gets ready for its 60-day session, one question remaining is who will lead the tiny Republican caucus in the senate.

With the switch of Sen. Mike Gabbard (D, Kalaeloa-Makakilo) to the Democratic Party, the GOP was left with only four senators. The leader is Sen. Fred Hemmings, but he is opposed by Sens. Sam Slom and Gordon Trimble.

Hemmings said he has the backing of Big Island Sen. Paul Whalen, who has not been available for a caucus.

But Hemmings said he won't call a Senate GOP meeting until the entire caucus is there, fearing Slom and Trimble will vote him out.

"The situation is pathetically humorous. It has gotten so bad I am afraid to go to the bathroom myself because I am afraid Trimble and Slom will show up and call for a caucus," Hemmings joked.