Posted on: Monday, November 18, 2002

EDITORIAL
Got any better ideas than hurricane fund?

Gov. Ben Cayetano has only half a month to submit a state budget and he's again making a pitch to balance it with $200 million from the Hawai'i Hurricane Relief Fund.

That's guaranteed to irk Gov.-elect Linda Lingle, who made a campaign promise not to raid the Hurricane Fund because she wants it left intact for future hurricane-related emergencies.

But frankly, there are not a lot of options right now.

How does Lingle propose to balance the budget without tapping into special funds, laying off government workers or raising taxes?

That's not to say we approve of this constant dipping into special funds. We'd prefer the government exercise fiscal prudence and stop borrowing from Peter to pay Paul.

But the Hurricane Fund began and ended under unusual circumstances. The state established the fund in 1993 to fill the gap after private insurers stopped offering wind damage coverage following Hurricane Iniki.

The fund was built with mortgage recording fees and premiums from insurance policies.

Years later, after no more hurricanes had struck Hawai'i, private insurers returned to offering hurricane coverage, and the state-run relief fund went out of business, leaving a surplus of $200 million. The law called for that surplus to be transferred into the state general treasury.

Now, many have argued that the surplus should stay in the fund in case of another hurricane insurance crisis, or be reimbursed to those who contributed. But that still leaves the dilemma of how we're going to make up any budget shortfall without cutting where it hurts.

Lingle appears optimistic that an audit will expose enough waste, fraud and abuse for a major spending overhaul. But $200 million worth?

Cayetano says he made an honest effort to scale back government spending, and we're inclined to believe him because he's never been shy about taking unpopular stands. Remember the 2001 teachers' strike?

By deciding to push again for the Hurricane Fund, Cayetano is making his final policy stand on the budget. It may not be a popular stand, nor does it speak to the long-term fiscal problems of the state.

But it does accomplish one thing: It asks the question, if not this, then what?