Hawaii state budget
From Sunshine Review
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Hawaii has had a contentious budget battle between Gov. Linda Lingle and the Hawaii State Legislature. Gov. Lingle proposed in December 2008 a biennium operating budget for fiscal years 2010 and 2011 totaling $22.42 billion, $11.1 billion in FY 10 and $11.3 billion in FY 11.[1]
The Hawaii State Legislature subsequently passed during its 2009 Session a biennium operating budget for fiscal years 2010 and 2011 totaling $24.8 billion, $13.37 billion for FY 10 and $11.4 billion for FY 11.[2] Gov. Lingle objected to raising taxes to close the revenue gap and used her veto powers on $566 million of increased taxes , which the Legislature quickly overrode.[3]
Hawaii’s FY 2010 budget was in deficit before the fiscal year began on July 1, 2009. From March 2008 through August 27, 2009, the Council on Revenues, which forecasts the State’s tax revenues, projected that Hawaii will have nearly $3 billion less revenue than anticipated through June 30, 2011. Gov. Lingle stated in late September 2009, “Through various prudent spending restrictions, the Administration has reduced spending by $2 billion. However, we still face a $496 million shortfall in the next nine months and an additional $529 million from July 1, 2010 to June 30, 2011. That’s a total of $1.024 billion less money we will have in the next 21 months. Because of the huge revenue losses between fiscal years 2009 and 2011, it will take until fiscal year 2012 for our revenues to return to pre-recession levels.” [4]
Governor Lingle announced August 4, 2009 that the State would immediately begin delivering written layoff notices to the approximately 1,100 state employees who were previously notified their positions could be eliminated. In addition, the Governor announced the furlough of approximately 900 "exempt excluded" nonunion state employees for three days per month effective September 1, 2009, employees not covered by a court order barring the Governor from unilaterally implementing furloughs for union employees.[5]
A standoff between Governor Lingle and the public employees unions ensued. The largest public employee union in Hawaii, the Hawaii Government Employees Association, with about 30,000 members will vote in October 2009 on whether to accept a new contract with 42 furlough days over the next two years, which amounts to approximately an 8% cut. [6]
[edit] Budget Background
Hawaii has an annual Legislative session and sets a biennial budget in odd years. In practice the budget is submitted each year. State agencies submit their budget to the Governor in September each year. The Governor submits the budget in December, 30 days before the Legislature convenes on the 3rd Wednesday in January, which meets for 60 working days. The state’s fiscal year runs from July 1 to June 30.[7]
[edit] Budget figures
The following table provides a history of Hawaii's expenditures and gross domestic product (GDP).
| Fiscal Year | Expenditures (billions) | GDP (billions) |
|---|---|---|
| 2000 | $8.2 [8] | $40.2 [8] |
| 2001 | $8.8 [8] | $41.8 [8] |
| 2002 | $9.4 [8] | $43.5 [8] |
| 2003 | $9.6 [8] | $46.4 [8] |
| 2004 | $9.9 [8] | $50.4 [8] |
| 2005 | $10.5 [8] | $54.9 [8] |
| 2006 | $11.0 [8] | $58.7 [8] |
| 2007 | $11.5 [8] | $61.5 [8] |
| 2008 | $12.1 [8] | $64.5 [8] |
| 2009 | $12.7* [8] | $67.7* [8] |
- NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
See Hawaii state budget (2008-2009) for more information.
[edit] Accounting Principles
The Hawaii State Auditor is Marion M. Higa. In May 2008, the Legislature reappointed Ms. Higa to her third 8 year term to start on July 1, 2008. The State Constitution in Article VII, Section 10, establishes the Office of the Auditor. The Constitution specifies that the Auditor be appointed for an eight-year term by a majority vote of each house in joint session. The Auditor may be removed only for cause by a two-thirds vote of the members in joint session. It is the constitutional duty of the Auditor to conduct post-audits of the transactions, accounts, programs and performance of all departments, offices, and agencies of the State and its political subdivisions. The audit reports are published online.[9]
The Institute for Truth in Accounting (IFTA) rates Hawaii “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Hawaii’s CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[10] Hawaii's CAFRs are published online by [http://hawaii.gov/dags the Hawaii Department of Accounting and General Services. Russ K. Saito is the Hawaii State Comptroller.[11]
| Credit Rating | Fitch | Moody's | S&P |
| Hawaii[12] | AA | Aa2 | AA |
[edit] Economic Stimulus Project
Hawaii is expected to receive $2 billion from the $787 billion dollar American Recovery and Reinvestment Plan, or the "economic stimulus." [13] All told, the federal stimulus plan would create or save 15,000 jobs in Hawaii, based on White House estimates.[14]
For more information on how the federal stimulus funds are being used in the state of Hawaii, visit the state recovery website.
According to preliminary reports, Hawaii is expected to receive:
- $125.7 million for state and county highway improvement projects [15]
- $76.5 million for improvements to Kahului Airport and Honolulu International Airport [15]
- $43.8 million for county bus transit systems improvements [15]
[edit] Error in ARRP
On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.[16][17]
The ARRP contributed $2,284,000 to Hawaii in federal stimulus funds for the 11the Congressional district, $40,903,941 million for the 15th Congressional district, $1,651,811 for the “00” Congressional district, and $799,656 in the 99th congressional district creating a combined “3.4” jobs or $13,423,355 per job. Hawaii has just two congressional districts.
The federal website reports that those districts received $592,211,484 million and $174,075,308 respectively creating combined total of 1,541.5 jobs.[18]
[edit] Budget transparency
[edit] Legislation
House Bill 122 was enacted on July 11, 2007 by the legislature without the signature of the Governor. This bill mandated creation of a searchable grant and contract sight for state expenditures over $25,000.[19] However, the site failed to launch by the established deadline of January, 2009, and it has since become apparent that there are no plans to launch a transparency database.[20] New transparency legislation, (Hawaii Senate Bill 659 (2009)), was enrolled to the Governor on May 8, 2009.[21]
[edit] Government tools
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
| State Database | Searchability | Revenue Source | Expenditures | Contracts | Employee salary |
|---|---|---|---|---|---|
| None | n/a | n/a | n/a | n/a | n/a |
[edit] Limitations and Suggestions
HB 122 limits disclosure to recipients of $25,000 or more. The federal-level legislation set the same limit, so surely a single state such as Hawaii should have a lower threshold. The Legislature should act to reduce or remove this barrier.
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[22]
- It is estimated that Hawaii will receive at least $650 million in federal funding.[23]
- The economic recovery website for Hawaii is available here.
[edit] Support for creation of a database
The National Taxpayers Union, Citizens Against Government Waste, and the Grassroot Institute of Hawaii supported transparency legislation (House Bill 122 and Senate Bill 1689).[24]
Hawaii Senate Bill 659 was introduced by Senator Les Ihara.[25]
[edit] Public employee salary information
None.
[edit] See Also
Hawaii taxpayer-funded lobbying
[edit] External links
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Grassroots Institute of Hawaii
- Hawaii Department of Budget and Finance
- Hawaii government spending
- FB 2007-2009 Executive Biennium Budget
[edit] Additional reading
[edit] References
- ↑ Gov. Linda Lingle's Office, "Governor Unveils Two-Year Budget, Six-Year Plan," December 22, 2008
- ↑ Hawaii Legislative Reference Bureau, "Supplemental Information Relating to Bill Passed by the Hawaii State Legislature Regular Session of 2009," June 4, 2009
- ↑ Hawaii Free Press, "Governor to Veto $566 million in new taxes," May 7, 2009
- ↑ Hawaii Reporter, "Dealing with the State's Unprecedented Budget Shortfall," September 28, 2009
- ↑ Committees on Economic Development and Technology and Economic Revitalization, Business, and Military Affairs, “Informational Briefing,” October 15, 2009
- ↑ Honolulu Star-Bulletin, "Furlough agreement will not avert layoffs, governor warns," October 16, 2009
- ↑ National Association of Budget Officers, "Budget Processes in the States," 2008
- ↑ 8.00 8.01 8.02 8.03 8.04 8.05 8.06 8.07 8.08 8.09 8.10 8.11 8.12 8.13 8.14 8.15 8.16 8.17 8.18 8.19 US Government Spending,"Hawaii State and Local spending," retrieved April 15,2009
- ↑ Hawaii State Auditor Web site, retrieved October 16, 2009
- ↑ Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
- ↑ Department of Accounting and General Services Web site, retrieved October 16, 2009
- ↑ California State Treasurer, “Comparison of Other States’ General Obligation Bond Ratings”
- ↑ KITV,"Stimulus Plan's Include $2B For Hawaii," January 28,2009
- ↑ American Recovery and Reinvestment Act,"Impact," retrieved April 15,2009
- ↑ 15.0 15.1 15.2 State of Hawaii,"Hawai'i' to receive $246 million in federal stimulus funds for highway, airport and bus transit improvements," March 16,2009
- ↑ $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
- ↑ Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
- ↑ Four Hawaii Phantom Districts Receive $45,639,408 Million in Stimulus Funds for 3.4 Jobs, Hawaii Reporter, November 17, 2009
- ↑ govtech.com, "Taxpayer Group Applauds Hawaii's Passage of Spending Transparency Bill," July 16, 2007
- ↑ Honolulu Advertiser, "Web site to track spending shelved," January 28, 2009
- ↑ Measure history, Senate Bill 659 (2009)
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal, "Stimulus Spending by State," April 9,2009
- ↑ National Taxpayers Union, "Taxpayers Support Creating Grant and Contract Database in Hawaii," April 13, 2007
- ↑ Measure history, SB 659 (2009)
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