Governor restricts spending
By Gordon Y.K. Pang
Advertiser Capitol Bureau
Citing what is now a projected to be a $152 million shortfall in the upcoming biennial budget, Gov. Linda Lingle is calling for more restrictions in state spending.
Jeff Widener • The Honolulu Advertiser
In a memo to department heads, Lingle ordered agencies to cut nonfixed costs in both general and special funds by 20 percent in the first three months of the fiscal year that begins Tuesday.
"If we continue with the facade that we can somehow continue to spend money while we have a shortfall ... , it's not fair to the public," Gov. Linda Lingle said.
Lingle, speaking to reporters yesterday and on statewide television last night, said the most recent projections by the state Council on Revenues, coupled with what she called bad budgeting decisions by the Legislature, make such restrictions necessary.
"There are times when no more money means no more money," Lingle said in the taped telecast on KITV. She said she wanted to emphasize the continuing need to tighten the $8 million-plus biennial general fund budget and to explain, in part, her reasons for announcing her intent to veto 50 bills from the past legislative session.
The governor said that since taking office in December, she and her staff have come up with $526 million to meet shortfalls, including $175 million necessary to keep the Hawai'i Hurricane Relief Fund intact and more than $300 million to meet adjustments in projections by the Council on Revenues.
Agencies were told at the end of the year to tighten their budgets by as much as 5 percent while the state has worked to meet the shortfall in other ways, such as refinancing much of its debt, but now more needs to be done. Lingle said.
In her memo to department heads dated Monday, Lingle wrote that general and special fund allocations will be authorized only for the first fiscal quarter and at reduced levels. "This will allow your programs to continue essential ongoing operations, while they consider and develop cost-cutting proposals for the rest of the fiscal year," she wrote.
Lingle also ordered restrictions in contracting and hiring, first instituted in December, to continue indefinitely. Those restrictions do not apply to the Department of Education, the University of Hawai'i system, the state hospitals, correctional or sheriff's services, and other high-priority operations
Student hires will be discontinued, the governor said, but there won't be any loss of state employees.
It was not immediately known how much savings the new restrictions would achieve.
The governor warned that although she chose not to exercise line-item vetoes on the main budget, there could be other restrictions based on priority. Lingle said she opted against such line-item vetoes because she wants the flexibility to restore money to certain programs if it should become available.
Budget Director Georgina Kawamura echoed Lingle's comments. "There's more to come — that's just all that's been finalized," Kawamura said. "This is just an immediate step as we review all our programs."
Lingle told reporters: "It's not an insurmountable problem, but it's a serious problem, and it's one we have to pay attention to in all of our spending."
During the weekend, Lingle said the deficit was closer to $230 million. But that figure did not take into account $80 million from federal sources, an infusion flowing in after the Legislature wrapped up its budget, she said.
The $152 million figure, however, does include $45 million that the Legislature stripped from the state hospital system — an amount that Lingle said is essential for the facilities to stay open. Lawmakers have stated they don't believe the money is needed immediately, because the system is supposed to be self-sufficient, and they noted that the hospital system can request the money next year since most of the reduction is in the second year.
Lawmakers have threatened to convene a special session to override some of the 50 vetoes Lingle issued last week, including the line-item trimming of about $3.6 million earmarked for social service agencies such as Kahuku Hospital, youth service centers in Kalihi and sex-abuse services.
The governor said she will talk to lawmakers about what else can be done to reduce the budget.
"If we continue with the facade that we can somehow continue to spend money while we have a shortfall ... , it's not fair to the public, it's not fair to the future generations to put the burden on them," Lingle said.
She said she is optimistic about the state economy, noting that job growth, civilian job count, excise and hotel tax collections and other indicators are on the rise.
Lingle yesterday met with Associated Press member newspaper editors and reporters from all islands to preview her budget package.
The half-hour address in the evening was carried by KITV only, although all four major network affiliates were approached.
Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or at 525-8070.
