 By Kevin Dayton
Advertiser Capitol Bureau Chief
A proposed two-year $7 billion general treasury budget won easy approval in the state House yesterday, with only a handful of lawmakers voting against it.
The House draft of the budget would boost general fund spending by about 11 percent next year and 4 percent the following year, a pattern that prompted criticism from some Republicans.
House Minority Floor Leader Galen Fox said government in Hawai‘i is already too large for the economy that supports it, and warned there are dangerous economic signals from Japan and the Mainland.
"This is not the direction we should be going in to prepare for what lies ahead," said Fox, R-21st (Waikiki, Ala Wai).
House Finance Chairman Dwight Takamine said the House shaved more than 20 percent a year from Gov. Ben Cayetano’s proposed spending plan for the next two years.
"The needs are real, the needs are great, and the needs are many," said Takamine, D-1st (Hamakua-N. Kohala). "Regrettably, our financial resources cannot fully match all of the needs. Therefore, we must do our job in establishing priorities and allocate resources accordingly."
Takamine pointed out that the House made room in the budget for an income tax credit to offset part of the impact of the 4 percent excise tax on food, and an increase in standard deductions that are used to reduce taxpayers’ income tax liability.
The budget includes $423 million in new construction projects over the next two years, including a medical school proposed for Kaka‘ako. It does not include $30 million Cayetano proposed for a Kaka‘ako aquarium.
When all money sources including federal cash and state special funds are figured in, the proposed state budget amounts to $7.1 billion next year and $7.3 billion the following year.
That amounts to an increase of about 12 percent next year and 3 percent the following year. That does not include raises for public employees, which are expected to cost hundreds of millions of dollars more.
Rep. Chris Halford, R-11th (S. Maui-K«¯kea-Kihei), complained the growth in the state budget is outpacing inflation and gross state product.
"This budget has no courage and no uplifting vision," Halford said. "This budget only damages our economy and our people and their spirit."
The budget now goes to the state Senate, which will draft its own version of the bill. The two sides will meet in conference committee next month to work out differences between the drafts.
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