Lingle restores money to state agencies
| • | Money restored for preps |
By Gordon Y.K. Pang
Advertiser Capitol Bureau
State agencies got good news yesterday when Gov. Linda Lingle lifted spending restrictions that had threatened to cut some programs to the bone.
Bruce Asato • The Honolulu Advertiser
The governor took the action because of rosier state revenue projections, to the delight of political leaders and state agencies, especially those involved in education.
"Our administration will continue to exercise fiscal discipline when it comes to spending," Gov. Linda Lingle said.
Not only will state agencies get full financing for the remainder of the fiscal year, they will be able to get money held back during the first quarter of the year that began July 1, said state budget director Georgina Kawamura.
Various state agencies, chiefly the Department of Education, the University of Hawai'i system, and the Department of Human Services, had warned that the 20 percent spending restrictions on non-fixed costs were having a profound effect on programs.
The public schools spoke of restricting athletic schedules, while university officials warned of cuts in community college courses.
The state Council on Revenues, which makes the forecasts the Legislature uses in formulating the state's biennial budget, on Monday formally issued a forecast showing a 6.2 percent growth this fiscal year. It had lowered its growth forecasts at its two previous meetings.
Kawamura said the revision means the state can anticipate $7.8 billion in revenues over the two-year cycle rather than the $7.6 billion forecast earlier, a difference of $200 million. The $152 million shortfall in revenues that Lingle had predicted during the summer is no longer an issue — for now.
"We will still be very cautious on how we proceed," Kawamura said.
The administration will continue to maintain strict controls over the filling of nonessential jobs, and require that most consultant or personal-service contracts in excess of $25,000 be approved by the governor and Kawamura.
The budget director also said the state is requiring that all capital-improvement projects come under harsher scrutiny before more money is released.
Lingle echoed Kawamura's comments.
"While projected state revenues are expected to increase, they are still just projections, not money in the bank," the governor said. "Therefore, our administration will continue to exercise fiscal discipline when it comes to spending."
Kawamura estimated that about $450 million was held back during the first quarter.
"So that is now all going back out to be allotted," she said. The agencies "have to just send in their plans for the (remaining) three quarters."
The governor's decision won high marks from key administrators and legislative leaders.
Officials with the University of Hawai'i had been struggling to find ways to cut back based on a $10 million restriction, contemplating dire measures to save money — including cutting more than 200 classes throughout the system through the spring semester.
"It's obviously great news for the university, and on the economic front it's great news for us all," said Paul Costello, UH vice president for external affairs.
Today, the Council of Chancellors was scheduled to meet with UH chief of staff Sam Callejo and David McClain, vice president for academic affairs, "to look specifically at how programs will be affected and where the dollars are most crucial and need to go," Costello said.
Pat Hamamoto, public schools superintendent, also was grateful.
"This truly supports what we have to do, which is instruction in the classrooms. This helps move our education system. We are now able to restore all of our programs," Hamamoto said.
She said the DOE held back on $3 million of its operating budget. The department reduced hours allocated to parent-community networking center coordinators and delayed some hiring. It also delayed equipment and instructional materials purchases and consultant and training contracts. Additionally, the O'ahu Interscholastic Association held money for third- and fourth-quarter sports. All will be restored.
"The directive to our budget office is to get that money out ASAP," Hamamoto said.
"This is good news for the Department of Education and University of Hawai'i, as well as hospitals, community health centers and other social service agencies," said Senate President Robert Bunda, D-22nd (N. Shore, Wahiawa). "The uncertainties imposed by the spending restrictions have disrupted planning and operations for the public schools in particular, and we are hopeful that they can continue to do their work without the threat of budget cuts."
House Speaker Calvin Say, D-20th (St. Louis Hts., Palolo, Wilhelmina Rise) said he understands Lingle's rationale for imposing fiscal discipline.
Say said he was encouraged by the strong economic indicators cited by the council, such as an infusion of military spending, a consistently strong construction industry and the rebounding of the west-bound visitor market.
"Those three pillars are holding us up," Say said.
Advertiser staff writer Beverly Creamer contributed to this story. Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or at 525-8070.
