Posted on: Tuesday, June 29, 2004

Arts cuts part of state's overall savings

By Gordon Y.K. Pang
Advertiser Capitol Bureau

State Budget Director Georgina Kawamura said yesterday that the decision to withhold $500,000 in support to the state Foundation on Culture and the Arts is part of an overall plan that's needed to ensure the state budget is fiscally sound in future years.

The state Legislature approved $1.2 million in what's known as the Biennium Grants Program be distributed by the foundation, in the form of grants, among more than 100 nonprofit organizations who apply for the money.

Gov. Linda Lingle's administration will release about $700,000.

"We have to create efficiency savings because as we look forward to creating the next biennium budget, we have a looming deficit of about $160 million (in the state general fund)," Kawamura said. Reducing expenditures now, she said, "will make the shock less devastating later on."

The restriction is part of a statewide budget-cutting plan. Lingle last week issued a statewide memorandum informing all state agencies that when the new fiscal year begins Thursday, they will get 1 percent less in non-fixed costs than had been appropriated by the Legislature while other "targeted restrictions" are also being made.

Kawamura said her office has received calls asking that the state restore the money.

"I can appreciate them wanting to make their case and, hopefully appeal to us, to not make this drastic a decision," she said. "It just puts us in a difficult situation because if not here, then we'd have to identify another place where we'd have to have some efficiency savings."

Susan Killeen of the Hawaii Consortium for the Arts, a nonprofit organization dedicated to supporting culture and arts programs, believes the cuts will have serious impacts on the budgets of many programs. Killeen noted that state support has declined steadily since 1994, when there was about $6 million in state funds distributed.

Responded Kawamura: "We have a lot more obligations than we did in the late '80s and early '90s."

Killeen said she was told $730,515 was being trimmed from the budget. Kawamura, however, said that was a preliminary figure that had been discussed previously.

Kawamura said part of the restriction's impact will be blunted by dollar-for-dollar federal matching grants.

Although the foundation will be getting more money than she originally thought, Killeen said it will still not be enough. The original budget for the year was "very small a budget to begin with," she said.

Ronald Yamakawa, foundation executive director, said he and his staff are looking at different alternatives to make up the funding such as establishing its own nonprofit fundraising arm.

Yamakawa said he hopes that the administration will reconsider the restriction if the Council on Revenues, which makes the cash projections on which the state must base its budget, paints a rosier economic forecast when it next meets in September.

"We're hopeful that when the Council on Revenues meets again, that their projections will come in high and it will be positive enough to restore the funds for the state's culture and arts organizations," he said.

Kawamura said she did not know of any scenarios under which the restriction would be lifted.

Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or at 525-8070.