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Budget proposal cuts $400 million

Lingle's two-year plan would result in no loss of public jobs

STORY SUMMARY | READ THE FULL STORY

Government spending would be cut by about $400 million over the next two fiscal years, but no public-sector jobs would be lost, under the budget proposal unveiled yesterday by Gov. Linda Lingle.

The $22.4 billion two-year budget proposed by Lingle assumes no raises for public employee unions whose contracts expire next year.

One union leader said the budget assumption was no surprise, noting that Lingle has touted the idea since summer, and members of her administration have been meeting with union members since then.

Lingle's budget proposal also assumed no further reduction in state revenues, which are predicted to be about $50 million less than last year. But that revenue projection could change next month, when the state Council on Revenues meets to issue its next quarterly revenue forecast.

Lingle said her administration will be prepared if the forecast is lowered, but she declined to provide details of any contingency plans.

Her proposal also includes tapping the state's rainy day fund to help balance the budget. In the past, Lingle has rejected the idea of using such special funds for that purpose.

— B.J. Reyes



FULL STORY >>

By B.J. Reyes

POSTED: 01:30 a.m. HST, Dec 23, 2008

(Single Page View) | Return to Paginated View

Public workers would not suffer any layoffs, but they also would not receive any pay raises under Gov. Linda Lingle's proposed state budget.

FINDING WAYS TO SAVE

Gov. Linda Lingle's proposed budget includes:

» A 14 percent reduction in nonessential spending for state agencies.

» No pay raises for public employee unions.

» Refinancing of debt.

» Tightening of certain tax laws and stricter enforcement of tax collections.

Two programs to be cut:

» Healthy Start at the Health Department

» Adult dental service in the Medicaid program at the Department of Human Services

Lingle unveiled her proposal yesterday to cut $395 million in government spending for the next two fiscal years.

Although contracts with the state's public employee unions are up for renegotiation, the freeze on wages is necessary to avoid any job cuts, Lingle said at a news conference announcing her $22.4 billion budget for the fiscal biennium that begins July 1.

"If there are any kind of raises of any size, because of the large number of government employees, it almost by definition means that you're going to have some extremely deep cuts to pay for it," Lingle said. "That's likely to result in people being laid off from their jobs, so there is some kind of a trade-off."

Lingle first mentioned the wage freeze this summer, as the global economy worsened and the state's revenue picture became bleaker than originally predicted.

Randy Perreira, executive director of the Hawaii Government Employees Association, the state's largest public worker union, said Lingle's budget came as no surprise.

"She's just following through with what she has suggested for the last couple of months. Given the economic picture as her administration sees it, they weren't in a position to budget for wage increases," Perreira said. "From our perspective, there is a process by which we continue and conclude negotiations, and we're not going to get involved in any kind of public conversation about the negotiation process."

[Preview] Lingle Asks State Leaders To Reject Raises
[Preview]
 

Governor Lingle says she is doing her best not to lay off any state workers during a billion dollar budget crisis.

[ Watch ]

 
In partnership with KITV.com
The $395 million in cuts represents a 14 percent reduction in the nonessential spending budgets for all state departments.

In addition to freezing public employee wages, Lingle's budget also envisions cuts of some state programs, refinancing of debt, tightening of certain tax laws and stricter enforcement of tax collections.

Lingle said her administration's three main goals in crafting the budget were to maintain essential services, avoid public-worker layoffs and provide funds for priorities such as the state's renewable-energy goals and investment in the technology sector.

The governor met yesterday with majority Democrats in the Legislature to discuss her budget proposal.

Democrats and Republicans have vowed to work cooperatively in the coming legislative session to help save an economy that has crashed along with those of mainland states because of global financial crises.

"I really appreciate her coming forth," House Finance Chairman Marcus Oshiro (D, Wahiawa-Poamoho) said of the Democrats' meeting with the Republican governor. "It gave me the impression that she does realize the seriousness of where we are today and the need to set aside politics and really work together."

Lingle's budget also assumed no further decline in state revenues.

In October the state Council on Revenues, which forecasts how much money will be available in the fiscal year, projected a decline of 0.5 percent in state funds for the current fiscal year, which means the state is expected to end the 2009 fiscal year on June 30 with about $50 million less in the general fund than when it started.

The latest figures from the state Tax Department indicate that through the first five months of the current fiscal year, tax collections are down 2.6 percent.

Lingle said her administration would be prepared if the council lowers its economic forecast for the 2010 fiscal year when it meets again Jan. 9, but she declined to provide specifics of any contingency plan.

To help deal with the current shortfall, Lingle plans to seek a transfer of $40 million from the Emergency Budget and Reserve Fund, also known as the "rainy day fund," to help the state end the fiscal year with a positive general fund balance.

In the past, Lingle has rejected calls to raid special funds to balance the budget.

She has consistently refused to tap into the Hawaii Hurricane Relief Fund for that purpose. The fund has a balance of about $180 million.

Lingle repeatedly refused yesterday to say whether she would consider using the hurricane fund.

"We don't know if this will be an issue or not be an issue," she said. "I'm not going to speculate at this time. We've been reviewing a lot of contingencies. We have a commitment to work collaboratively with the Legislature, and I'm going to be talking to them before I talk to you about it."

Public workers would not suffer any layoffs, but they also would not receive any pay raises under Gov. Linda Lingle's proposed state budget.

“At a time when many Hawaii residents are losing their jobs or seeing their salaries frozen or reduced, it would be inappropriate for state leaders to accept pay raises.”
Gov. Linda Lingle
On pay raises for state lawmakers,
judges and top administrators

FINDING WAYS TO SAVE

Gov. Linda Lingle's proposed budget includes:

» A 14 percent reduction in nonessential spending for state agencies.

» No pay raises for public employee unions.

» Refinancing of debt.

» Tightening of certain tax laws and stricter enforcement of tax collections.

Two programs to be cut:

» Healthy Start at the Health Department

» Adult dental service in the Medicaid program at the Department of Human Services
Lingle unveiled her proposal yesterday to cut $395 million in government spending for the next two fiscal years.

Although contracts with the state's public employee unions are up for renegotiation, the freeze on wages is necessary to avoid any job cuts, Lingle said at a news conference announcing her $22.4 billion budget for the fiscal biennium that begins July 1.

"If there are any kind of raises of any size, because of the large number of government employees, it almost by definition means that you're going to have some extremely deep cuts to pay for it," Lingle said. "That's likely to result in people being laid off from their jobs, so there is some kind of a trade-off."

Lingle first mentioned the wage freeze this summer, as the global economy worsened and the state's revenue picture became bleaker than originally predicted.

Randy Perreira, executive director of the Hawaii Government Employees Association, the state's largest public worker union, said Lingle's budget came as no surprise.

"She's just following through with what she has suggested for the last couple of months. Given the economic picture as her administration sees it, they weren't in a position to budget for wage increases," Perreira said. "From our perspective, there is a process by which we continue and conclude negotiations, and we're not going to get involved in any kind of public conversation about the negotiation process."

[Preview] Lingle Asks State Leaders To Reject Raises
[Preview]
 

Governor Lingle says she is doing her best not to lay off any state workers during a billion dollar budget crisis.

[ Watch ]

 
In partnership with KITV.com
The $395 million in cuts represents a 14 percent reduction in the nonessential spending budgets for all state departments.

In addition to freezing public employee wages, Lingle's budget also envisions cuts of some state programs, refinancing of debt, tightening of certain tax laws and stricter enforcement of tax collections.

Lingle said her administration's three main goals in crafting the budget were to maintain essential services, avoid public-worker layoffs and provide funds for priorities such as the state's renewable-energy goals and investment in the technology sector.

The governor met yesterday with majority Democrats in the Legislature to discuss her budget proposal.

Democrats and Republicans have vowed to work cooperatively in the coming legislative session to help save an economy that has crashed along with those of mainland states because of global financial crises.

"I really appreciate her coming forth," House Finance Chairman Marcus Oshiro (D, Wahiawa-Poamoho) said of the Democrats' meeting with the Republican governor. "It gave me the impression that she does realize the seriousness of where we are today and the need to set aside politics and really work together."

Lingle's budget also assumed no further decline in state revenues.

In October the state Council on Revenues, which forecasts how much money will be available in the fiscal year, projected a decline of 0.5 percent in state funds for the current fiscal year, which means the state is expected to end the 2009 fiscal year on June 30 with about $50 million less in the general fund than when it started.

The latest figures from the state Tax Department indicate that through the first five months of the current fiscal year, tax collections are down 2.6 percent.

Lingle said her administration would be prepared if the council lowers its economic forecast for the 2010 fiscal year when it meets again Jan. 9, but she declined to provide specifics of any contingency plan.

To help deal with the current shortfall, Lingle plans to seek a transfer of $40 million from the Emergency Budget and Reserve Fund, also known as the "rainy day fund," to help the state end the fiscal year with a positive general fund balance.

In the past, Lingle has rejected calls to raid special funds to balance the budget.

She has consistently refused to tap into the Hawaii Hurricane Relief Fund for that purpose. The fund has a balance of about $180 million.

Lingle repeatedly refused yesterday to say whether she would consider using the hurricane fund.

"We don't know if this will be an issue or not be an issue," she said. "I'm not going to speculate at this time. We've been reviewing a lot of contingencies. We have a commitment to work collaboratively with the Legislature, and I'm going to be talking to them before I talk to you about it."

(Single Page View) | Return to Paginated View



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