Governor promises minimum cutbacks

By Kevin Dayton
Advertiser Capitol Bureau Chief

Gov. Ben Cayetano plans to impose only modest new restrictions on state spending for the moment that will not cause much disruption for state departments, he said yesterday.

Cayetano also said the state will engage in "good faith" bargaining with the public worker unions, but warned that there is little money available for new public worker raises. Many of the public worker contracts expire next year.

"We will engage in talks, but to be very, very frank, there's no money, and I hope that the unions understand that," he said. "There is no money to give pay raises at a time like this."

Cayetano said the public school system and University of Hawai'i would be "basically spared" from new cuts, but declined to release the details of the latest round of budget cutting. He said the specifics will be announced later.

"It's a plan that's designed not to hurt the different departments any more than they have been hit over the past years," he said.

State tax collections for the fiscal year that ended June 30 turned out to be about $84 million less than expected, and Cayetano has been considering new restrictions on state spending for this fiscal year to make up some or all of the shortfall.

The shortfall does not pose an immediate crisis because the state had expected to end the fiscal year with a cash balance of about $200 million. However, much of that money is spoken for, and lawmakers may be forced next year to either find new sources of money or cut spending.

Cayetano acknowledged that by not imposing cuts administratively before he leaves office in December, he may put pressure on lawmakers next year to dip into to money tucked away in the state's "rainy day" budget reserve fund or the Hawai'i Hurricane Relief Fund.

"They may finally stop playing politics with that fund and deal with the issues realistically," Cayetano said. "Right now, as far as I'm concerned there's no need to rush into restrictions or things like that, because when I look at the financial plan, there are enough revenue sources to cover any shortfall that we have experienced."