With last-minute negotiations still under way, House and Senate leaders say they have finished a budget that is about the same size as the one proposed by Gov. Linda Lingle in December.

But Democrats moved funds around, cut private grants in health and human services and plan a series of tax increases to pay for the $4.9 billion operating budget.

The difference between the Legislature's and Lingle's budgets is the restoration of about 800 state jobs Lingle had eliminated.

Also, the governor balanced the budget by taking all of the $100 million in hotel room taxes from the counties. As of last night the House and Senate were still debating a hotel room tax raid, with Senate Democrats wanting to take $50 million and House members looking at diverting more than $94 million.

  Lawmakers finalize state budget

 

Lawmakers are glad they were able to balance the budget without hiking the state excise tax and that they didn't have to cut as much public education funding as some worried.

 

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Juggling the hotel room tax is important because county officials say the four counties would have to cut services or raise taxes if they lose their portions of the room tax. Lawmakers earmarked the revenues for the counties because of the municipal services they provided for visitors.

State Sen. Donna Mercado Kim, Ways and Means Committee chairwoman, said that to balance the new budget, negotiators will need to approve a series of tax bills, some like the oil barrel tax increase that has already been passed, and others like the delay in high-tech tax credits, scheduled for a vote next week.

“;We're OK for this year and the next; it is in 2013 that we have to watch the balance,”; Kim said, meaning the state's six-year budget projections might still need a revenue increase.

A group of Senate Democrats again pushed yesterday to raise the general excise tax to 5 percent from 4 percent—or to 5.5 percent from 4.5 percent on Oahu—and to offset the regressive nature of the increase with tax credits. The proposal would raise an estimated $320 million.

State Rep. Marcus Oshiro, Finance Committee chairman, argued that an excise tax increase would not work.

“;Even if we pass it, the governor vetoes; we override the veto; she is not going to spend the extra money, and all the increased tax will do is give the state a big surplus and that's not good tax policy,”; Oshiro said.

Kim also said last night the Senate leadership was not willing to increase the general excise tax.

“;There is no GET part in this budget,”; Kim said.

The largest addition to the budget was restoration of 450 state jobs in human services. The positions had been cut by the Lingle administration.

Among the restored jobs are 128 in child and protective services, 121 in case management and 113 in MedQuest, which helps applicants get health care.

The case management jobs are the positions eliminated when Human Services Director Lillian Koller proposed closing welfare offices across the state.

Legislators acknowledged, however, that even if the budget survives a possible Lingle veto, there is a chance the governor would not approve funding for the newly restored state jobs.