Three agencies that provide legal, educational and social services to Native Hawaiians are warning that their operations could take a big hit under a state Senate plan to trim $3 million from the budget of the Office of Hawaiian Affairs.

The agencies potentially affected are: the Native Hawaiian Legal Corp., which provides legal services, particularly in land and water law, as well as traditional and customary practices; Na Pua No'eau, which provides programs for gifted and talented students; and Alu Like, which provides a variety of social services.

"At this time, and in this economy, safety net services are important and they need to be shored up, not cut down," said Mervina Cash-Ka'eo, executive director of Alu Like. The Senate cut would result in reductions to its intake staff, she said. While some might suggest money could come from elsewhere in Alu Like's $17 million budget, many of its programs receive funds that are restricted to specific purposes, she said.

Mahealani Wendt, executive director of the Native Hawaiian Legal Corp., said half her 20-person staff may have to be cut if the Senate plan is approved. "Half of our cases may have to be reassigned or ... I don't know what's going to happen," Wendt said. Nearly all of her agency's funding comes from OHA, she said.

Senate leaders think OHA can absorb the loss of the entire $3 million it would receive in general fund monies, which is separate from the $15.1 million the agency receives as its share of annual revenues derived from ceded lands. House leaders are proposing a 20 percent cut, which they feel is more comparable to what other state agencies are being forced to take.

The potential loss of funding for the agencies has spurred more than 300 calls and e-mails, said Rep. Mele Carroll, D-13th (E. Maui, Moloka'i, Lana'i).

OHA's original operating budget called for about $40 million in each of the next two years so the $3 million cut would amount to about a 7.5 percent loss. But OHA officials argue that's not a fair comparison because the majority comes from its own revenues. They are more agreeable to the House proposal calling for an annual cut of about $600,000, or 20 percent of the $3 million.

Richard Pezzulo, OHA chief financial officer, said that of the $3 million, $1.1 million funds OHA administrative staff. Na Pua No'eau gets about $790,000, the Native Hawaiian Legal Corp. about $644,000 and Alu Like about $505,000.

Each of the agencies traditionally also get a 100 percent match from OHA's own trust fund, which currently has about $300 million, Pezzulo said.

OHA believes the state is obligated to pay the $15.1 million annually as ceded land revenues, and that it should not be lumped with the $3 million in additional funding it receives.

"Why are we being singled out to take a 100 percent cut?" Pezzulo said. "We're fine with taking a cut that everybody is taking."

Sen. Clayton Hee, D-23rd (Kane'ohe, Kahuku), said OHA gets a combined $18.1 million, so the cut amounts to about 16 percent. "But that's not the full story," he said.

Under questioning, OHA officials admitted they had received $2.03 million from the Native Hawaiian Legal Corp. in attorney fees that were returned in the wake of the controversial Hokulia land case, Hee said, money that rightfully belongs in state general fund coffers.

OHA disagrees, Pezzulo said.

The three agencies "are good agencies that do good work," Hee said. But with the state facing layoffs, pay cuts and tax increases for consumers, OHA is in a better position to deal with meeting its budget because it has a $300 million portfolio.

"Even under the best of economic situations, they ought to be giving more money so that these guys can expand their good work," Hee said.

Pezzulo, however, said OHA board policy mandates it spend no more than 5 percent of its trust on operating funds annually.

Carroll said she wants to take a better look into who is right in the dispute over the $2.07 million brought up by senators. Otherwise, she said, the House stands by its 20 percent cut.

OHA and the agencies say they've already done their own cost-cutting measures.