Posted on: Friday, September 20, 2002

Cayetano forecasts budget problems

By Bruce Dunford
Associated Press Writer

Lawmakers will have to use the $200 million in the Hawai'i Hurricane Relief Fund to balance the two-year budget being drafted for the next governor, Gov. Ben Cayetano said yesterday.

The Legislature this year refused to touch the fund despite a $300 million revenue shortfall, but to avoid making cuts in public school and university programs and to maintain social services in other areas, that $200 million will be needed, the governor said.

"These guys have been playing politics with the Hurricane Relief Fund and this (2003) session is going to be a test to that as to whether they want to continue to play politics with it," he said.

It's also a call that the next governor will have to make.

"I can tell you this, that if they don't use the Hurricane Relief Fund there'll be a lot of pain inflicted on the state system," Cayetano said.

Leading Republican gubernatorial candidate Linda Lingle and Democratic candidate Ed Case have opposed using the hurricane fund to balance the state budget, while Democratic candidate Mazie Hirono has indicated she would consider using the money.

Opponents to using the hurricane money to balance the budget say it should be returned to homeowners forced to buy state-sponsored insurance in the wake of Hurricane 'Iniki 10 years ago.

Because the next governor doesn't take office until Dec. 2, and the 2003 legislative session begins Jan. 15, the departing administration prepares a draft of the two-year budget. By law, it must be delivered to the Legislature by Dec. 16, giving the new governor only 14 days to made changes.

State lawmakers in the 2002 session went back and forth on whether to raid any or part of the then estimated $213 million in the hurricane fund to balance the state budget. They settled on tapping interest from the hurricane fund and taking $140 million from various special and revolving funds, to help balance the budget.