House OKs tapping hurricane fund of $100M
By Kevin Dayton and Lynda Arakawa
Advertiser Capitol Bureau
A plan to spend $100 million from the state hurricane fund won preliminary approval in the House yesterday, steamrolling objections from Republicans and two Democrats who tried to block the move.
House Democrats warned that deep, devastating cuts will have to be imposed on popular state programs unless lawmakers dip into the hurricane relief fund. But Democratic Reps. Ed Case and Mark Takai joined with 19 House Republicans in an unsuccessful effort to stop the transfer and to force budget cuts.
House and Senate lawmakers also advanced bills to overhaul the school system, impose higher liquor taxes and regulate health insurance premiums as the 2002 Legislature neared the halfway point. Tomorrow is the deadline for all bills to win preliminary approval in the Senate or House before being exchanged to the other chamber for another stage of hearings.
Case argued that the state should "get away from credit-card mentality" and cut spending instead of seeking out new pools of cash to spend. Draining the Hawai'i Hurricane Relief Fund will only allow lawmakers to continue spending at levels that are too high, he said.
"Let's be honest, let's be straight, let's be responsible, not only to this generation but to future generations," said Case, D-23rd (Manoa). "Let's not just put this problem off until next year when our next Legislature, there's no doubt in my mind whatsoever, is going to be debating the same basic problem without the resources that we will have spent this year."
Case also protested that the millions in the hurricane fund "should be segregated, walled off, fire-walled, insulated and dedicated to that next disaster."
Lawmakers are struggling to balance the budget after projected tax collections for the next two years abruptly dropped by $315 million since the Sept. 11 terrorist attacks. Gov. Ben Cayetano has proposed spending all of the $213 million in the hurricane fund to balance the budget, while the House has proposed spending $100 million from the hurricane fund and holding the rest in reserve.
To make up the projected shortfall by means of budget cuts, the state would have to cut spending by an amount equivalent to what it spends on the University of Hawai'i, said House Majority Whip Brian Schatz.
"You cannot have it every way," said Schatz, D-24th (Makiki, Tantalus), citing the need for money "for keeping the libraries open," for the A-Plus after-school program, for public worker pay raises and for tax cuts. "It doesn't add up. Two plus two does not equal five."
House Bill 2654 HD2, the bill to transfer the $100 million from the hurricane fund to the general treasury, includes authorization to spend about $80 million on popular programs ranging from Hawaiian immersion education to tuberculosis and AIDS control to drug treatment programs for youngsters.
Packaging the spending authorizations with the hurricane fund transfer meant that if the transfer were voted down, the spending for the programs would also fail.
"There's no money for these programs in the general fund," Schatz said. "Make no mistake and let's be honest with the public: If we don't fund these programs in this bill, they will die."
Others countered that the Democrats are overstating the budget crisis, threatening to cut very popular programs when there are other, less important programs that can be trimmed with less impact on the public.
"I would name this bill the Chicken Little bill, because it does say the sky is falling when it's not," said Rep. Joe Gomes, R-51st (Lanikai, Waimanalo).
Democrats retorted that if there are better places to cut the budget, the Republicans should have pointed them out. House Finance Committee Chairman Dwight Takamine, D-1st (Hamakua, N. Kohala), said that in the "clear absence" of alternatives, the Democrats' bill should advance.
Case and the Republicans proposed an amendment to block the transfer of $100 million from the hurricane fund to the general treasury, but it was voted down 30-21. The 19 Republicans, Case and Rep. Mark Takai, D-34th (Waimalu, Newtown, Pearl City), voted in favor of the amendment.
The measure to transfer the $100 million from the hurricane fund to the general treasury was approved 28-23, with Case, Takai and Democratic Reps. Lei Ahu Isa (Pu'unui, 'Alewa, Nu'uanu) and Terry Nui Yoshinaga (Mo'ili'ili, McCully, Pawaa) voting with the 19 Republicans against the bill. The measure now goes to the Senate.
Senate Ways and Means Committee Chairman Brian Taniguchi, D-11th (McCully, Mo'ili'ili, Manoa), said he has not ruled out the option of tapping the hurricane fund to help balance the budget.
"I think most of us would rather not do it, but I think you kind of have to balance it, like the House is doing," he said. "You have to balance that with the needs that we have ... especially in education."
Bills to overhaul the school system by abolishing the statewide Board of Education and creating local boards to manage campuses in their areas easily won approval in the House and Senate yesterday.
Senate Bill 3018 SD1 proposes that seven local boards be created, while House Bill 2037 HD2 would create 15 locally elected boards.
Schatz said that measure and House Bill 2033 HD3, which proposes a constitutional amendment to abolish the Board of Education's present standing, may be the most important issues of the year. "The basic premise is this: Our schools are underperforming, and no amount of tweaking will fix this problem," he said.
Gomes said he supports the bill in part because he believes it will eventually lead to a dismantling of the Department of Education, with the resources within the agency shoved out to the schools at the local level.
Lawmakers stressed that the bills are a work in progress, with more changes expected in the next two months.
Senate Bill 3018 SD1 would create seven elected regional boards of education, with one member of each board to sit on a statewide board of education. The statewide board would select the superintendent of education and be responsible for statewide education policy.
The Senate voted 16-9 to pass a bill that would raise the liquor tax rate by 50 percent. The tax increase would generate an extra
$20 million for the state, according to the state Tax Department, but opponents said it would burden the already struggling restaurant and visitor industry.
By a vote of 22-3, senators also approved a measure that would authorize state regulation of health insurance rates and a bill that would impose a $10 monthly tax on residents to pay for a state long-term care program.
The House has already approved a health insurance regulation plan, and is scheduled to vote tomorrow on a long-term care financing scheme similar to the Senate plan.
The Senate voted 18-6 to reject a pedestrian safety bill that would require pedestrians crossing a multi-lane road to stop before entering each lane. Other perennial transportation bills — to require passengers younger than 8 to sit in a child car safety seat and setting a curfew for teenage drivers — squeaked by with a 13-12 vote.
Reach Kevin Dayton at kdayton@honoluluadvertiser.com or 525-8070.
