Hawaii Gov. Neil Abercrombie came out with his own budget Monday, and this time he called for spending $730 million more over the next two years.

He stressed that the budget he presented Dec. 20 was created by his predecessor, Linda Lingle. The new budget calls for spending $491 million more in the year beginning July 1 and $238 million extra in 2013. That would be a 5 percent increase for 2012 and 2 percent for 2013, over his initial budget.

He proposed paying for the increases with about $530 million in new revenue over the next two years, relying on proposals currently before the Legislature such as the soda tax and taxing pension income. The total budget for the next two years would be $22.7 billion.

Abercrombie said that even with the spending increases and the state’s $844 million shortfall, his plan would put the government in the black. He listed a number of “potential” revenue sources, including the Rainy Day Fund and the Hurricane Relief Fund, if revenues don’t pan out.

The revised budget also calls for an additional $1.2 billion for capital projects in 2012 and $500 million in 2013. The governor said he believes this added construction spending on schools, Aloha Stadium, prisons and the university will help spur jobs.

Abercrombie will present this budget Tuesday morning to a joint meeting of the Senate Committee on Ways and Means and the House Finance Committee.

Here’s a Q&A his staff prepared.

“This represents more than numbers on a piece of paper,” Abercrombie told reporters. “What we’re trying to do is put together a restructuring plan that will enable us to invest in ourselves and our human capital.”

When asked about the more than $700 million increase from the December figures, Abercrombie said he could not comment on what the previous administration had budgeted.

“If you look at what the previous administration did — that’s hopeless, that wasn’t a budget, that’s a fiction,” Abercrombie said. “This is reality … This is no time for gimmicks, this is not new spending, this is honest spending.”

Kalbert Young, director of the Department of Budget and Finance, added: “A lot of the additions were not included in (December’s) base budget because they were not accounted for or known when the previous administration put the budget together, and we pointed them out early on.”

The additional dollars will go such as areas as pensions, health care, assistance to needy families, Medicaid. The budget also includes an additional $99 million to cover higher budgets for almost every state department — $42 million in fiscal 2012 and $57 million in 2013.

“Nearly every department has some form of additional budgeting requirements,” Young said. “These are not expansions of government … it’s getting back to providing core, critical services to the public.”

Fiscal Year Total Operating Budget Shortfall
2011 $10.2 billion $71.6 million
2012 $11.4 billion $410.1 million
2013 $11.3 billion $361.8 million

To help offset the $71.6 million shortfall for the current year, the governor’s budget is relying on $20 million in new revenue (described as the “state’s share of Medicaid settlement”). He also proposes $5.3 million in additional spending (for the TANF welfare program — Temporary Assistance for Need Families). That would reduce the shortfall to $46 million for the year.

In fiscal 2012, to help offset the projected $410 million deficit, the budget estimates $233 million in new revenue, mostly from proposals to repeal the state income tax deduction and taxing pension income. It also calls for $193 million in additional spending, mostly for TANF and Medicaid increases, as well as higher costs anticipated when furlough savings end June 30. That would result in a $15.4 million surplus for that year.

In fiscal 2013, to help offset an estimated $362 million gap, the budget estimates $278 million in new revenue. It also projects $212 in additional spending, again tied mostly to increases for TANF, Medicaid and the end of furlough days. That would result in a $128 million surplus for the year.

Young acknowledged that while some of the administration’s revenue proposals are advancing at the Legislature, others haven’t.

For example, last week, a Senate committee slashed the governor’s plans to tax pensions. Lawmakers also backed off the governor’s proposal to eliminate Medicare Part B for current retirees, and dramatically cut back his proposal to save $32 million by ending the use of overtime in figuring retirement benefit.

“It’s a big if, and we respect that and recognize that,” he said. “We are working with the Legislature on every single measure to address what amendments will result in what expenditure savings.”

Abercrombie ended the press conference repeating his oft heard line: “Everybody has to contribute their share.”

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