The 2010 state Legislature opened its 60-day session this morning with warnings that painful sacrifices, including tax increases, may be the only way out of Hawaii's financial problems.

Hawaii is not alone, states across the country are starting the legislative season with deficits and service cutbacks.

In Hawaii, every public worker union has agreed to some sort of a reduction in salary—some with fewer working hours, others with unpaid time off, and for University of Hawaii professors, a pay cut with the promise to get the money back plus a raise down the road.

For lawmakers gathered at the state Capitol, the situation is just bleak.

“;Now is not the time to celebrate. Now is the time to work ... confronting the inescapable reality that we must trim expenses and balance our budget again,”; Senate President Colleen Hanabusa said, according to a copy of her opening-day speech.

Hanabusa has the dual challenge of running the Senate while campaigning in the congressional special election.

Both her opponent former U.S. Rep. Ed Case and state Rep. Marcus Oshiro, the House finance committee chairman, have called for Hanabusa to resign her Senate leadership position.

House Speaker Calvin Say said the state is reacting to “;an international financial meltdown unprecedented since the Great Depression.”;

“;The continuation of the Great Recession has caused a state budget gap of another $1.2 billion dollars. The economic and budgetary problems persist, requiring more sacrifices,”; Say warned in his prepared remarks for opening day.

The legislators guided by the public will have to decide what in state government they are willing to pay for and what they can do without, he said.

“;If you want more or better public services or facilities, be prepared to pay for them. 

“;Conversely, if you do not want to pay more taxes or fees, be prepared to receive less public services,”; Say said.

The Republicans urged budget cutting, but also wanted to see more responsibility.

“;Public education must be restructured. The furloughs and loss of instructional days are a black eye and national embarrassment for Hawaii,”; said Sen. Sam Slom, GOP floor leader.

 In the House, GOP leader Rep. Lynn Finnegan said her party would oppose tax increases to balance the budget.

“;Raising taxes penalizes self-sufficiency and success and is completely counterproductive during a recession. It's time that our state government lives within its means and makes sure that we still fund priorities like instruction days for students,”; Finnegan said, according to her prepares remarks.