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The Honolulu Advertiser
Posted on: Friday, March 30, 2001



Rainy-day fund must not be used unwisely

Hawai'i lawmakers are feeling a terrible squeeze as their 2001 session comes to a close.

On one side is a state treasury that is still feeling the impact of a shaky economy. Tax revenues, already projected to grow only modestly, are likely to slow even more as the impact of Mainland and Japan economic problems wash ashore in the Islands.

At the other end, there are pending public worker collective bargaining agreements that will come smashing into the budget at the last minute. A UPW contract has been reached, an arbitrated award to the Hawaii Government Employees Association is on the table and at some point raises for public school teachers and University of Hawai'i faculty must be dealt with.

Since a tax hike is the political choice of last resort, legislators are looking once more for bookkeeping gimmicks or budget-shuffling schemes that will — at least temporarily — get them out of their bind.

While the temptation to go to these off-the-budget-books solutions is understandable, it must be resisted. As painful as it will be, lawmakers must find ways to fund ongoing obligations out of ongoing sources of revenues.

That is, if they agree to pay union raises, the money must be taken from a recurring source.

That's why the latest plan to make use of some of the so-called "rainy-day fund" to relieve the budget squeeze is a poor idea. The fund, which is built out of a portion of Hawai'i's share of the tobacco suit settlement, was specifically designed as a set-aside for emergencies.

Ongoing raises for state workers may be expensive, but they do not qualify as an emergency by any stretch of the imagination. A true emergency is a one-time, unexpected expense for the state that could not have been anticipated or budgeted.

Salaries do not fall into this category.

By relying on these one-time remedies, lawmakers are simply cheating the future. They shouldn't do it.