Hawaii Gov. David Ige has proposed across-the-board cuts to his $28.5 billion spending plan for the next two years due to tax revenues coming in lower than expected.

The biggest budget reductions would come from education and the state pension system but also in programs to protect the environment, boost local agriculture and care for inmates.

The governor proposed $18 million in cuts to the so-called Weighted Student Formula — money that goes directly to schools based on their enrollment.

And he suggested slashing $74 million in pre-funding of health benefits for public-worker retirees, which the governor has said is a priority to reduce the state’s massive unfunded liability.

Gov. David Ige will be working with the Legislature to reduce his overall state budget proposal in light of lower tax revenue. Nathan Eagle/Civil Beat

Nearly $5 million for vacation payouts to state employees would be nixed under the revised plan along with $1.5 million to fight invasive species like Rapid Ohia Death and $704,000 for hepatitis C treatment in jails.

Ige laid out the changes, roughly $220 million in total cuts, in a letter to state lawmakers last week. The Legislature will be working to finalize the biennium budget by May.

On Jan. 4, the state Council on Revenues dropped its general fund growth forecast for fiscal year 2017, which ends June 30, to 3 percent from 5.5 percent after learning that tax collections for the first five months of the fiscal year came in at 0.7 percent.

The panel of economists, accountants and others were unable to pin down whether the growth rate for the beginning of the year was an aberration or an indicator of a slow year.

The council did not change its projections for the subsequent fiscal years, 5 percent for 2018 and 4.4 percent in each of the five years thereafter.

The lower growth rate for fiscal 2017 translates to $155 million less revenue this year, which compounds over time.

The state hauled in $5.7 billion in general fund revenues in fiscal year 2015. That rose to $6.2 billion in fiscal 2016. Fiscal 2017 is projected at nearly $6.4 billion.

Ige said Friday that he anticipates the council will be dropping its forecast again. The governor said he’ll be “working with the Legislature to a get a budget that we can support and support the programs that are most important.”

Read the governor’s message to lawmakers laying out his proposed budget cuts below.

About the Author