Welcome to Capitol Watch. The Hawaii Legislature is in full swing and Gov. Neil Abercrombie is delivering straight talk that’s not always welcome. Civil Beat is reporting on all of it.

3:58 p.m. Shield Law Moves Forward

The House Judiciary Committee this afternoon heard testimony on two bills that would make extend Hawaii’s shield law, which sunsets this summer.

House Bill 194 and House Bill 1376 would make permanent the law that allows journalists in Hawaii to protect the confidentiality of their sources.

Among those who appeared to testify in support of the bills were local lawyer and incoming Honolulu ethics commissioner Jeff Portnoy, the American Civil Liberties Union, and University of Hawaii Professor Gerald Kato.

The final decision on any proposed extension of the law could ultimately lie with Gov. Neil Abercrombie. We’ve noted that he was the only Democrat in the U.S. House to vote against a bill that would have protected the confidentiality of reporters’ sources in most federal court cases.

—Sara Lin

3:21 p.m. Aila Confirmation On Hold

William Aila‘s appointment to run DLNR was scheduled to be voted on by the full Senate tomorrow.

Instead, Clayton Hee asked for a deferral on the matter until March 3, which is the first day back from a recess.

It’s unusual. Aila received a 7-0 vote from Senate Water, Land and Housing Feb. 12 and there has been little opposition to his nomination.

Now, Aila has to wait a week for a vote.

By contrast, Richard Lim zipped through his confirmation hearing today to lead the Department of Business, Economic Development & Tourism (DBEDT) and will soon receive a full Senate vote. With the exception of Aila, all of Abercrombie’s Cabinet picks have (so far) been smoothly confirmed.

2:10 p.m. Budget Deficit: $844M or $700M?

How much is the state’s budget deficit over the next two-plus fiscal years?

According to the administration, it’s $844 million.

According to the editorial board of The Honolulu Star-Advertiser, it’s also $844 million.

According to the Star-Advertiser’s Political Radar blog, however, it’s $700 million. As reporter Derrick DePledge explains, he uses the figure that the Council on Revenues released in December.

But the administration, as DePledge noted, prefers the $844 million figure, which was COR’s September estimate. Kalbert Young says the December number does not take into account November tax collections; he prefers to be more cautious.

(The Council will release new figures in March.)

Civil Beat, it should be noted, uses the figures provided by the governor of the state of Hawaii.

1:35 p.m. GOP Disses Administration’s Budget, Defends Lingle

Hot on the heels of the governor’s submittal of the biennium budget, Gene Ward released a statement today:

“The budget released today by the Abercrombie Administration is two months late and multi-million dollars short. The Abercrombie budget adds $500 million total spending on top of the estimated $700-$844 million budget gap.

The Governor’s proposal will require Hawaii citizens, particularly our seniors to fork over more than $100 million, at a time when their families are struggling to make ends meet. In total his budget will increase taxes by over half a billion dollars in the next two years. He proposes these tax increases at the worst possible time when our economic recovery is still fragile.

We tend to forget that this governor is faced with a relatively small budget deficit when compared to the Lingle-Aiona Administration which had to close almost a $3 billion budget gap without increasing taxes on the public. The Abercrombie Administration is not making hard choices and continues to blame an administration that fared very well when compared to the other states on the mainland during the global economic crisis.”

And here is what the Hawaii Republican Party had to say:

Instead of reducing state spending to address the $700 million state budget deficit, Governor Abercrombie is proposing to now increase spending even more in his latest budget draft. Furthermore the Governor continues to propose tax increases to close the budget deficit even though many of them are clearly facing stiff opposition in the legislature and are unlikely to pass. After calling the former administrations budget “fiction,” he seems to miss the fact that his own plan is light on reality itself. The reality is, Governor Lingle dealt with a $3 billion budget deficit without across the board tax increases.

12:20 p.m. Gov’s Budget Welcomed (Mostly) From Money Committees

For two hours Neil Abercrombie and Kalbert Young shared a single podium to present the biennium budget to Senate Ways and Means and House Finance.

David Ige set the tone early by thanking the administration for the “extra effort” to get the budget to them “post haste.” And Abercrombie set his tone by cracking jokes about envying the full head of hair of Senate Sergeant at Arms Ben Villaflor.

But there were some tense exchanges too, especially between GOP members and the gov. Highlights of the hearing:

• The governor and his budget director gave the same song and dance they gave to reporters a day earlier — i.e., crafting the budget has taken a lot of work but they believe it is the best roadmap for Hawaii’s long-term sustainability. But the governor said he came not to “lecture” the Legislature but rather to work closely with them. He praised lawmakers for the tough decisions they have had to make over the past few years. He also said unions must be treated with “honesty, respect and fairness,” and that “civic courage” was required by all. Translation: The governor is still a pro-union Democrat — even if he’s proposing cutting pay by 5 percent and ending Medicare Part B reimbursements.

Marcus Oshiro pointed out that many of the administrations proposals to curb spending and seek revenue — e.g., a soda tax, Medicare Part B reimbursements — have had no “traction” thus far. Abercrombie and Young said they would continue to work with the Legislature on those measures and others, and would also welcome any ideas from lawmakers. But the governor, alluding to the biblical Lazarus, said what is “dead” can rise anew. In another biblical reference, he said “Moses did not come down from the mountain with Medicare Part B. …. I am not persuaded by any legal advocates saying (taking reimbursements) is unconstitutional. … We need to consider this a policy issue.”

Donna Mercado Kim questioned why the administration had to add 236 positions in a time of fiscal austerity. The governor replied that the positions were mostly restored jobs that were essential to delivering key public services. Kim also nitpicked — $150,000 for an office of international affairs, for example. Abercrombie carefully responded, saying these things could be worked out in committee. Kim, who ran Ways and Means prior to the current session, clearly feels she understands the budget inside and out and is rightly skeptical on the new administration’s numbers.

• In a heated moment, Barabara Marumoto and Abercrombie clashed over pensions. Marumoto, a Republican, suggested that the governor’s proposal was “cruel.” That set the governor off. He immediately accused Marumoto of not having her facts correct. “It’s very important that you be accurate when responding to people and not maneuver to score political points,” he said, obviously angered. “Let me tell you, this governor will not put up with it.” Marumoto backed off.

• Abercrombie also clashed with Republican Sam Slom, who pointed to state legislatures across the country that were broke and facing tough decisions. Slom said Abercrombie’s proposal actually expands the budget and increases the debt level. “How does that change the status quo?” The governor responded, in a measured tone, that Hawaii had to make “adult” decisions about unprecedented expenses like health-care costs and that his plans will stimulate not just growth in the government sector but in private jobs as well.

Kalbert Young in Capitol Hot Seat

The governor’s director of Budget and Finance will present the proposed biennium budget for fiscal years 2012 and 2013 in a joint committee hearing of Senate Ways and Means and House Finance at 9 a.m. in the Capitol Auditorium.

The budget, you’ll recall, is late, but Kalbert Young and Co. have managed to deliver it to lawmakers before March, as previously had been scheduled. March is when the House must submit the budget to the Senate.

BTW, Twitterers can follow WAM at @HI_Senate_WAM Senate Ways and Mean, and House Democrats (which has been know to cover Finance hearings) at @hihousedems.

(UPDATE: Word is that Gov. Abercrombie will attend the hearing today.)

Lim Confirmation

Set for 1:15 p.m. in Conference Room 224 is a confirmation hearing for Richard Lim, director of DBEDT.

Neil Abercrombie‘s Cabinet appointments have encountered virtually no opposition so far, and perhaps that will be the case with Lim.

But it will be interesting to see what Donna Mercado Kim, a persistant critic of management of DBEDT during the last administration, may ask of Lim, who will be questioned by both Kim’s Tourism Committee and the committee on Economic Development and Technology.

Shield Law, Prostitution, Gender Identity

House Judiciary has a full plate of bills to be heard beginning at 2 p.m. in Conference Room 325.

They include House Bill 194, which makes permanent shield laws protecting journalists from disclosing sources and unpublished information. That is the intent as well of House Bill 1376, which does the same thing.

(The latter bill is Blake Oshiro‘s, the former primarily from House Republicans.)

Another Oshiro bill, House Bill 546, would prohibit discrimination on the basis of gender identity and expression “as a public policy matter and specifically with regard to employment.”

And House Judiciary will also hear bills addressing pornography, the penal code, child custody and temporary restraining orders.

Animal Cruelty, Plastic Bags

Senate Judiciary and Labor will hear at 10:15 a.m. in Conference Room 016 two measures on animal cruelty laws — Senate Bill 1068 concerning killing animals belonging to other people and Senate Bill 1069 on fighting dogs.

Also scheduled is Senate Bill 1059 that prohibits “certain businesses” in the state from distributing single-use plastic checkout bags.

Tourism and Gays

Tom Brower, who represents Waikiki, has called an impromptu meeting at 10 a.m. in Conference Room 312. The topic is tourism and “the gay community,” presumably the impact of civil unions on gay visitors coming to the islands.

Several studies have indicated that civil unions will not significantly impact Hawaii businesses but will have a positive effect on tourism.

Catch up on our previous week’s coverage:

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