Cayetano signs two-year budget plan

By Lynda Arakawa
Advertiser Capitol Bureau

In what is expected to be his last official act as governor, Ben Cayetano yesterday signed a two-year budget proposal that increases spending for education and allocates $171 million in construction money to develop the University of Hawai'i West O'ahu campus.

Gov. Ben Cayetano signs a two-year budget proposal, which includes increases in spending for education. Cory Lum • The Honolulu Advertiser

But Linda Lingle, who takes over from the Democratic governor Monday as the first Republican governor here in 40 years, will likely propose a number of changes to the budget proposal in accordance with her priorities.

The budget plan provides a blueprint from which Lingle and the state lawmakers can submit amendments and make changes.

Lingle said through her communications director, Lenny Klompus, that she and her budget director, Georgina Kawamura, will need to review Cayetano's budget before commenting on it. But she has publicly rejected tapping the Hurricane Relief Fund, saying that money should be available for the state to enter the reinsurance market should a hurricane hit.

The hurricane fund was created by lawmakers in 1993 after private insurers stopped offering wind-damage coverage in Hawai'i following Hurricane Iniki.

State law requires Lingle to submit a proposed budget to the state Legislature no later than Dec. 16, or at least 30 days before the Legislature convenes. Citing a lack of time, Kawamura said Lingle's administration will submit Cayetano's budget proposal to the Legislature and request amendments to the spending plan later.

Among Lingle's priorities repeated in her campaign — and which are not included in Cayetano's plan — are re-instituting the food tax credit and eliminating or reducing the general excise tax on medical care.

The Legislature will also review the plan and make any revisions during the 60-day legislative session that begins Jan. 15.

Cayetano yesterday acknowledged Lingle's opposition to using money in the Hurricane Relief Fund, but he said not tapping that money would mean cutting areas like public education. "I expressed this to her, but if she feels confident then I think that she may have some ideas that we didn't think about," he said.

Cayetano's budget does not factor in any tax increases or reductions. He is also proposing a $1.6 billion construction budget.

Cayetano's proposed operating budget is $7.5 billion for the coming fiscal year that begins July 1, with $3.8 billion coming from the state general treasury and the rest from federal and other sources. That's a 2.2 percent increase over the current general fund budget.

Another $7.7 billion would be spent the following fiscal year, beginning July 1, 2004, with $3.9 billion from the state general treasury.

The construction budget includes $964 million the first year, and $621 million the second year. That covers $496 million in construction money for the University of Hawai'i over two years for projects such as the UH West O'ahu campus and other UH facilities.

Cayetano also proposed $240 million in construction for public school repair and maintenance projects, and $69 million for projects including two new schools — Maui Lani Elementary and Ocean Pointe Elementary.

With general treasury money, Cayetano proposed increasing Department of Education spending by $30 million in the first year and by another $40 million the second year. That includes $9.1 million over two years for positions, books and equipment for new schools and facilities and $13.4 million for salary requirements in the comprehensive school support program.

Cayetano's budget also includes $3.1 million for positions and expenses to "make Kapolei Library operational."

Cayetano also proposed spending $8.8 million for treatment for drug offenders who are awaiting trial, on parole, or are incarcerated. He also proposed spending $11.2 million for the foster care program, "Child out of home payments."

He also proposed restoring the nearly $1 million the Legislature cut from the governor's office. Last year, state lawmakers failed to put money in the budget to pay for deputy directors and for 54 of 60 staff members in the governor's office.

But Cayetano also said his office has found a savings of $400,000, which would enable Lingle to keep the staffing level he has for at least half a year. He said the savings came from canceling a consulting contract with a Washington, D.C.-based company, attrition and by having prepaid various governor organizational fees.

The budget cut prompted Lingle to explore creating a program where companies and organizations could temporarily loan professionals to work as interns in the governor's office.

Lingle's policy adviser, Randall Roth, said he was delighted by the news but that they had not heard of the extra savings until a few days ago, after she announced the internship program.

Cayetano signed the budget proposal early afternoon yesterday in an office surrounded by emptied shelves and a few remaining boxes — one holding a Japanese doll and another storing a doll he received from the Philippines military academy — that will be taken to his new home in Wai'alae Iki. He jokingly bragged: "I've become very efficient at packing."

He also talked about the road ahead and reflected on politics during his 28-year career in elected office.

"I'm most looking forward to taking a rest," he said with a laugh. He said for probably two months, he'll take it easy, do landscaping at his new home, golf a couple times a week and exercise on his treadmill and Bowflex machine. He said he will also be reflecting on his years in politics and log thoughts down for the historical novel he plans to write.

Then he'll settle down and perhaps do some consulting work.

He doesn't have any interest in returning to politics but has mixed feelings about ending his eight-year tenure in the governor's office.

"You always think about things that you want to do and you're not able to do and things that are kind of left halfway done, and you hope that the next governor comes and picks up the ball, like the medical school for example, which I'm sure she (Lingle) will," Cayetano said.

"One thing about this job, I knew eight years ago it was going to end," he said. "And so we gave it a good run during the time that we had, and I think that when everything is said and done, I think we did things that we felt pretty good about.

"What I'm going to miss most is that this job gives you the opportunity to help people. You win some and you lose some, but when you win and you help people, there's no other feeling like that."

Advertiser staff writer Gordon Y.K. Pang contributed to this report. Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or at 525-8070.