Hawaii legislators are preparing for an economic recovery by finding a way to divert any budget surplus that otherwise would be returned to taxpayers. Voters should take the opportunity in November to reject the proposed constitutional amendment aimed at this—and in doing so, remind lawmakers to be frugal.

Gov. Linda Lingle proposed in her address to the Legislature in January that it craft an amendment requiring that 5 percent of the state's balance after two straight fiscal years of that excess be put into a “;fiscal stabilization fund,”; known as the “;rainy day”; fund.

Hawaii receives more than $53 million from tobacco companies as part of Big Tobacco's 1998 settlement with states and one-fourth of that has been transferred to the rainy day fund. Georgina K. Kawamura, Lingle's director of budget and finance, said the governor's proposal “;would ensure that a fiscal reserve would be available to augment tobacco settlement moneys”; in the rainy day fund.

The Legislature has approved an amendment that instead would give legislators the option of directing budget surpluses to the rainy day fund, and rebates or credits to taxpayers would not be required.

While Lingle's proposal would have required the state to save at least 5 percent of a two-year budget surplus, the amendment approved by lawmakers would allow them to decide whether to do so.

Lowell Kalapa, president of the Tax Foundation of Hawaii, has little expectation that the Legislature will decide in favor of it.

From its past record, Kalapa sees “;little hope that future Legislatures will exercise any fiscal discipline in socking away any substantial amount into the 'rainy day' fund. Thus, this proposal is nothing more than patronizing to the idea of 'saving' for a rainy day while doing away with the mandatory refund credit.”;

Kalapa points out that Legislatures commonly refund a token $1 per taxpayer during surplus years. But, he adds, the public at least “;is aware of their state finances”; and is “;reminded of just how much money the state is keeping for itself while maintaining the high burden of taxes.”;

Voters should be leery about constitutional changes originating in the Legislature after approving an amendment creating a commission in 2006 to determine legislators' salaries.

They may not have noticed that four of the seven commission members were appointed by legislative leadership and were justifiably angered when the commission approved pay raises totaling 36 percent for legislators over a seven-year period, reaching $57,852 a year.

In this case, voters should recognize that the proposed amendment would end the constitutional requirement of a tax refund or tax rebate, however small, when excess budget balances are available.