House lawmakers completed their first attempt at closing a $1.2 billion budget deficit, passing a supplemental operating budget that trims $41 million from the governor's proposed spending plan.

The proposal now goes to the Senate, which should know by Thursday whether the budget hole will get deeper.

Thursday is when the state Council on Revenues meets to issue its quarterly general fund forecast, the prediction on which the state's spending plan is based.

At its last meeting in December, the panel of economists predicted general fund revenues for the fiscal year that ends June 30 would be 2.5 percent less than last year — putting the budget hole at its current level of $1.2 billion in the fiscal biennium.

According to the state Tax Department, revenues for the first seven months of the fiscal year are down 5.4 percent. (Every percentage point equals about $45 million.)

At best, House Finance Chairman Marcus Oshiro says, the council might keep its forecast unchanged.

In January, council members briefed lawmakers on the state's economic situation, saying the recession for Hawaii appears to have bottomed out but that recovery would come slowly.

State Sen. Shan Tsutsui, vice chairman of the Senate Ways and Means Committee, said he and colleagues are “;trying to just prepare for the worst and hope for the best.”;

To make up any additional shortfall, all options are still on the table, he added.

“;I think if the revenue forecast is lower, then that may force us to do more of those revenue enhancement type of measures,”; said Tsutsui (D, Wailuku-Kahului). “;It kind of depends on the severity of what the downgraded forecast is.”;

Oshiro said the House's budget, House Bill 2200, takes care of core services and maintains the safety net for the poor and needy.

The House proposal also includes $50 million to be used to halt public schools' Furlough Fridays in the new fiscal year.

    House tackles school furlough problem for next year

 

 

State Senate still has to approve the plan, and the teachers union and the DOE would have to agree on a new contract

 

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The House already passed another bill to take $50 million from the Rainy Day Fund to also pay teachers to halt Furlough Fridays for this fiscal year.

The bill cuts the budgets of five other state departments, including Accounting and General Services, Defense, Health, Land and Natural Resources, and Transportation, as well as the Governor's and Lieutenant Governor's offices.

House Republicans say they are looking forward to further debate on how Democrats plan to pay for the budget.

“;Where is the money going to come from?”; said state Rep. Gene Ward (R, Kalama Valley-Hawaii Kai). “;HB 2200 says nothing about that, but it references vaguely that there will be some tax increases.”;