State budget still looking for bailout
By Lynda Arakawa
Advertiser Capitol Bureau
State Senate President Robert Bunda, adding a new wrinkle to the Legislature's budget talks, yesterday proposed using the $22 million settlement from the state's price-fixing lawsuit against the oil industry to help balance the budget.
But Gov. Ben Cayetano called that a bad idea because the gasoline settlement money is needed in the state highway fund to build and repair roads.
Taking gas settlement money was just one of several ideas floated by Bunda yesterday as senators continued searching for ways to balance the $3.5 billion state operating budget for 2002-03 without taking money from the Hawai'i Hurricane Relief Fund.
Bunda also proposed taking:
- $10 million from the so-called "rainy day fund," an all-purpose emergency fund made up of tobacco settlement money.
- $10 million from interest on the hurricane fund.
- An additional $16 million from the state dwelling unit revolving fund.
- $16 million from a surplus in accounts set up to pay for state service contracts.
Bunda said he will talk with Senate Ways and Means Chairman Brian Taniguchi, D-11th (McCully, Mo'ili'ili, Manoa), before the proposal can be put on the table at House-Senate negotiations.
Bunda's proposal amounts to an extra $74 million, more than enough to fill the $65 million hole in the Senate's budget. But whether other lawmakers will support the proposal is unclear.
Senators have been searching for money in various areas since rejecting proposals to take $55 million out of the hurricane fund and to raise liquor taxes by 25 percent to generate an extra $10 million. But some lawmakers and Gov. Ben Cayetano are strong advocates for using the Hurricane Relief Fund and say not doing so would mean government layoffs and deep cuts in state programs such as education and human services.
"We're trying to be responsible in our approach to balancing the budget," said Bunda, D-22nd (Wahiawa, Waialua, Sunset Beach). "Other Senate members feel that we should try to balance the budget without using the Hurricane Relief Fund, so any other approach to what is on the table today is a welcome change and it's something that most of the senators really want to consider."
Cayetano said gasoline settlement money should stay in the highway fund.
"The Neighbor Islanders in particular who have problems with getting enough funding for building new highways or fixing the highways and roads ... should take into account the impact that this would have on any kind of new projects on the Neighbor Islands," he said.
House Finance Committee chairman Dwight Takamine said taking more money from the dwelling unit revolving fund would paralyze the state's affordable housing program. That money is used to help finance the development of affordable housing projects.
"Certainly we want to look at resources so that we don't have to cut in the areas of education, human services, health, given the budgetary situation we face," Takamine said. "Yet at the same time if we want to act responsibly, we need to make sure that those programs that we establish have the necessary resources to carry out their mission."
Bunda said the dwelling unit revolving fund had $90 million in cash as of last year, and that the state spent only $13.6 million from the fund in the last fiscal year.
Cayetano had proposed using the $213 million surplus in the Hurricane Relief Fund; the House proposal uses $100 million. Tapping the fund has been plagued with controversy after Republican lawmakers and others argued the money should either be refunded to those who paid in, or should be held in reserve for the next hurricane.
Bunda outlined the latest Senate proposal as the budget conferees determined yesterday they would have to close in on an agreement on the revenue bills before deciding what cuts will have to be made to cope with a projected $330 million revenue shortfall in the two-year budget approved last year.
As talks opened yesterday, the House agreed with the Senate's proposal to raid a variety of state revolving and special funds for $120 million.
The Associated Press contributed to this report.
Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or at 525-8070.
