Gov. Neil Abercrombie said he plans to push state lawmakers — once again — to fully fund his administration’s early childhood education initiatives during the next legislative session.
Another top priority involves filling more of the $24 billion hole in Hawaii’s health and retirement pension systems, he said.
“We will end the unfunded liability without raising taxes,” Abercrombie told more than 100 business community members at a Chamber of Commerce function Friday.
The governor and his finance director, Kalbert Young, touted the state’s $1.1 billion fiscal turnaround and highlighted the administration’s goals for the coming years during the hour-and-a-half luncheon at The Plaza Club.
Abercrombie said the state overcame a $220 million shortfall in 2011 thanks to cuts in programs, the emergency reserve funds it drained and the furloughing of workers. Three years later, the reserves have been recapitalized and some programs restored, while public workers have received pay raises. The state’s carryover balance from fiscal year 2013, which ended June 30, was a record $844 million.
Speaking with Civil Beat after the event, the governor said he wants to use some of that surplus to put digital devices in the hands of students and launch a preschool program that will eventually serve all 17,000 of the 4-year-old children in Hawaii. (Interestingly, he didn’t mention the preschool initiative during his presentation.)
During the last session, which ended in May, the Legislature gave the governor far less than he requested for pre-K. It’s hard to say if he’ll fare better in the next session, which starts in January.
Earlier this year, lawmakers approved $8 million to start the digital initiative to buy laptops, iPads and computer-related teaching material for students, among other things. It was enough to get a pilot program going, but far less than the $36.5 million that the Department of Education requested as part of its proposed two-year budget.
The Legislature only appropriated $7.16 million toward the early education initiative last session. The money is slated to go toward expanding the Department of Human Services’ Preschool Open Doors program. Abercrombie had sought $31 million over the next two years for more robust early learning.
The governor said the carryover balance gives the state the capacity to invest in the pre-school initiative. He said he hopes the Legislature recognizes the importance of the program and provides more funding, arguing that it will be hard for lawmakers to justify going against it.
Speaking before members of the business community, Abercrombie and Young emphasized their efforts to create a “sustainable” budget for the state and insisted that they see the state as a “company” with taxpayers as “shareholders.”
The governor acknowledged that it’s not like the state surplus means that there is an extra $844 million lying for the him or the Legislature to simply spend with no strings attached because much of the money is already accounted for.
But the governor said the money will permit the state to move forward in a more responsible way than it has for decades, particularly in relation to unfunded liabilities.
Thanks to key moves that the state and Legislature made the past two years, Hawaii has averted a collapse of its pension system. If they hadn’t, the islands might have become a poster child for poor pension management, like Illinois.
While Young said Hawaii is in “very good fiscal and financial condition,” he acknowledged that Hawaii was still one of the worst-off state’s in the country when it comes to unfunded liabilities.
Young said the administration’s proposed budget for next year, which is being discussed with key lawmakers before a public unveiling that is expected later this month, emphasizes financial responsibility and building on current reserves.
State Sen. David Ige, who heads the Senate money committee and is running against the governor in the 2014 election, told Civil Beat last month that the state may have a sizable surplus, but he said that the economic picture for the next two years isn’t as fiscally rosy as many people think.
Based on collective bargaining agreements and the budget adopted last year, Ige said the state plans to spend $145 million more than it is forecast to bring in the coming year, and $341 million more than it will likely take in the year after that. Hawaii is able to afford these expenditures, he said, thanks to the $844 million carryover balance.
Here’s the presentation the administration gave at Friday’s event: