Legislature battles to avert $1.8B deficit


POSTED: Thursday, January 22, 2009

Just in case the assembled 76 legislators missed it during yesterday's opening day pageantry, Gov. Linda Lingle summed up their mutual problem.


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  “;There is no good way to find $1.8 billion,”; Lingle said.

The Republican governor was talking to reporters, but she was acknowledging that the state's top problem is a budget deficit that would run to $1.8 billion if nothing is done to cut the existing budget.

“;One thing is clear: You can't spend or operate the way you did before if you have $1.8 billion less,”; Lingle said.

Perhaps the most dramatic proposal was offered by Senate President Colleen Hanabusa, who urged the Legislature to consider taking the city's yearly transit tax collected from the state general excise tax and either using it to pay down the deficit or give it back to taxpayers.

From July 2006 to June 2007, the state gave the city $53.8 million for the transit fund.

Acting city Transportation Director Wayne Yoshioka said he was “;surprised”; by Hanabusa's proposal, adding that “;they didn't confer with us before they made that comment.”;

Managing Director-designate Kirk Caldwell called it a “;terrible idea.”;

“;The timing couldn't come at a worse time,”; Caldwell said, claiming that it would jeopardize federal funding for mass transit.

Councilman Gary Okino, one of the strongest rail supporters on the City Council, called Hanabusa's proposal “;shortsighted.”;

“;The city needs the rail system,”; Okino said. “;It's an essential piece of infrastructure for the city and the state's economy.”;

In her opening-day speech, Hanabusa also kept aloft the trial balloon floated last week by Sen. Donna Mercado Kim to legalize gambling.

Referring to the transit tax proposal, Hanabusa said, “;It is my guess that it probably has more support than gaming.”;

Hanabusa said the Senate has in the past explored various ways of either halting or scooping portions of the transit tax.

Mayor Mufi Hannemann successfully lobbied to get the state to allow the city to raise the GET to 4.5 from 4 percent for Oahu taxpayers two years ago. Hanabusa contends the city does not need the money until it starts building the $4 billion transit system. Hannemann had said the tax was needed to show the federal government the city was serious about funding mass transit.

Kim, chairwoman of the Ways and Means Committee, said after Hanabusa's speech that she also thought the city “;is not ready to use the money.”;

Senate sources have said Lingle is also in favor of a transit tax grab, but the governor refused to commit yesterday.

“;Once you take a hard and fast position, it makes it difficult to have a meaningful discussion,”; Lingle said.


Star-Bulletin reporter Laurie Au contributed to this story.