Lawmakers take first step toward reduced state budget

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    HAWAII, USA (KITV) — Hawaii lawmakers take the first step in shaping Hawaii’s financial future, following the latest economic downturn.
A scaled-back state budget is advancing at the State Capitol, but lawmakers still want to spend billions for capitol improvements as they try to balance cost cutting with keeping Hawaii’s economy going.

“We have been shoring up the biggest deficit in state history. All of our efforts have crafted a budget that will continue to serve the community with fiscal certainty in these most uncertain times,” stated Senator Donovan Dela Cruz.

Lawmakers felt they needed to come up with a billion dollars from other sources, to make up for the big drop in revenue from the pandemic.

“One of the things we don’t want to do is impact safety net programs. We don’t more severe cuts,” said Rep. Sylvia Luke.

While they didn’t cut current staffing levels, they did cut new programs from the budget, took millions of dollars that would instead go to fill vacant position and took $400 million of the rainy day fund. Moves not everyone agrees with.

“We have a budget that would avoid cuts and furloughs, that would exasperate our fragile, local economy,” added Dela Cruz.

“The government is spending out our emergency fund. What happens if there is another need for emergency money…it won’t be there,” stated Keli’i Akina, the President of Grassroot Institute of Hawaii.

Akina is also concerned because under the plan, lawmakers would take hundreds of millions in cash from several funds and issue general obligation bonds instead. Money that will have to be paid back later, with interest.

“Whatever is borrowed now will have to be paid by taxpayers. We should tighten our belts, reduce spending and take the hard hit now,” added Akina.

Senators also passed the first reading of a $5 billion Capitol Improvement Plan.

“We are putting in the CIP budget infrastructure funding for additional housing which will be important after the pandemic,” said Sen. Gilbert Keith-Agaran.

In that bill, more than a billion dollars would go toward our roads.

Tens of millions would be spent on gender equity upgrades at a number of high schools.

Millions more would be used for shovel-ready projects, to help jump start the economy.

“By shoring up construction projects now, it will help the economy. Now is the time we should be doing as many construction projects as possible,” said Dela Cruz.

Lawmakers hope action they take now will make the economy stronger in the future, but Akina instead wants less spending now, then an easing of regulations and taxes for businesses and residents in the future.

“The legislature should be doing what households are doing now, looking at cutting expenses and doing it aggressively,” stated Akina.

Even after the budget is passed, there may be more changes next month. Another council on revenues report comes out later this month, and once an economic recovery plan is in place, lawmakers could adjust the budget either up or down…after they return from a recess in June.

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