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Tuesday, February 04, 2014
Bitter Abercrombie Bickers With 'Irresponsible' Legislators over CAFR Credit
By Selected News Articles @ 4:20 AM :: 3018 Views :: Hawaii State Government, Taxes

Gov Abercrombie remains amongst the most unpopular governors in the USA.  And today his bitterness and defensiveness was on full display as he held a news conference to announce release of the Hawaii CAFR for the Fiscal Year ending June 30, 2013.  What should have been an easy positive news story instead devolved into a nasty back and forth with Senate leaders.  Here are the details followed by the CAFR news release:  

CB: Abercrombie: Annual Financial Report Demonstrates Leadership

Keoki Kerr of Hawaii News Now had this question: “How much credit do you give to the legislative leaders, including the gentleman who’s actually running against you, for helping the state to arrive at such a big surplus?”

The governor had this response: “Well, I’m always pleased to share credit when people realize they can’t avoid their responsibilities anymore, and take it up. All I can say is this: When you want to claim credit when things are going right, I think it’s fair to say, 'Are you also claiming responsibility when thing were going south, when they’re in the negative stage?'

All I can say to you is that when we came into office we started righting the ship. The numbers started going in the right direction. That’s a question of leadership. We went to the Legislature and we said, 'This is where we’re going, these are the decisions we have to make, this is the direction we need to go.' So, they had the opportunity before — they didn’t do it. So, I am quite pleased to be able to say that the Legislature responded positively to the leadership that was exhibited by the people in this administration.

I played the hand I was dealt, when we came in and we had the deficit. When we did not have the comprehensive financial reports done on time. I put my arms around it and said, ‘That’s going to stop.’ I went to the Legislature and I said, ‘This is it. This is what has to be passed, this is what has to be done, this is the direction we need to go in. We cannot avoid irresponsibilities any longer.’ Now, all I am saying to those who want to claim credit, ‘Welcome. Happy to do it. Arms around everybody.’ But by the same token, then, it seems to me that anybody claiming credit also needs to take responsibility when things were going the other way and nothing got done.”

HNN: Surplus impossible unless governor's taxes and spending were cut, lawmakers say

Ige pointed out that lawmakers rejected Abercrombie controversial proposals to raise the hotel room tax last year. In the years before that, lawmakers said no to Abercrombie's plans to create a tax on sugary sodas and pensions.

"I think the fact that we rejected his tax increases, that we cut spending, was a large portion of that.  But there are lots of things that go into managing the fiscal condition of the state," said Ige, who has chaired the Senate's powerful money committee for the past four years.

In the last three years, lawmakers said they have cut about $870 million from Abercrombie's proposed budgets, exceeding the size of the $844 million budget surplus. 

State Senate President Donna Kim headed the Senate's ways and means committee in 2009 and 2010.

"In order to pay for his (Abercrombie's) spending, he had to raise the taxes.  And because we didn't raise the taxes, we had to cut his budget," Kim said.  "And because we cut his budget, we are now in the situation we're in," with a surplus, Kim said.

"We had to ask for those cuts and we made those cuts and if we had passed the governor's budget, we couldn't pay for it. We'd have to have raised taxes, and we weren't about to do that," Kim said.

  *   *   *   *   *

ANNUAL REPORT HIGHLIGHTS HAWAII’S IMPROVING ECONOMIC, FISCAL TRAJECTORY

State Recognized with Award of Excellence for Timely Reporting

News Release from Office of the Governor February 3, 2014

HONOLULU – The State of Hawaii’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2013, has been completed and shows Hawaii’s asset growth has outpaced liability growth for the first time in seven years.

“The report measures the state’s net worth and overall fiscal health, which clearly shows strong positive fiscal growth over fiscal year 2012,” Gov. Neil Abercrombie said. “Our improving trajectory is a reflection of positive trends in our local economy and responsible management of fiscal affairs, which now includes recognized improvements in meeting our obligations for timely reporting.”

PowerPoint Presentation

The state Department of Accounting and General Services (DAGS) in coordination with the Department of Budget and Finance and the Office of the Legislative Auditor completed the CAFR on Jan. 27, 2014. The report shows the State of Hawaii’s net position (assets less liabilities) for primary governmental activities increased for the first time since 2006 by $307.1 million, from $4.5 billion to $4.8 billion. This represents an increase of 6.8 percent over 2012. Assets increased by $1.1 billion, which outpaced an increase in liabilities of $807 million. The growth in assets is attributable to accelerating growth in revenues and slower-paced growth in operating expenditures.

In addition, for the first time in more than five years, the state received the Award of Achievement of Excellence in Financial Reporting from the Government Finance Officers Association for its 2012 CAFR. The award is given to governments for publishing financial reports that are clear, accurate, and delivered in a timely manner. Under the Abercrombie Administration, DAGS along with the Department of Budget and Finance have worked with the Office of the Legislative Auditor and an external auditor to address deficiencies in the timely production of previous CAFRs.

“The CAFR represents a coordinated and truly collaborative effort of all state departments with the Legislative Auditor and external auditor,” said DAGS Comptroller Dean Seki. “For each of the last three years, the CAFR has been delivered in a more timely manner, compared to the state’s delivery prior, and will serve as a helpful guide for anyone who has interest in the financial operations of the state.”

State Finance Director Kalbert Young commended: “Investors and credit agencies expect year-end financial reports to be available as soon as possible after the closing of the fiscal year so that the information is not outdated. We believe the state can continue to improve delivery of future reports.”

The CAFR also identified an encouraging decrease in capital projects fund standing balances from $281 million to $149 million. This reflects an increase in capital improvement project activity as more funds were deployed with improved efficiency into the economy through construction projects.

Addressing Other Post-Employment Benefits (OPEB) liabilities, Young added: “The report illustrates the importance of pre-paying annual required contribution for OPEB liabilities, as Gov. Abercrombie has been advocating over the last three years. The successful passage of Act 268 in 2013 and our intending Annual Required Contribution (ARC) contribution of $100 million in fiscal year 2014 should start to slow and then reverse the increase on the balance sheet and further improve our asset ratio.”

The State of Hawaii’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2013, is available online at: LINK

# # #

HNN: Surplus impossible unless governor's taxes and spending were cut, lawmakers say

CB: Abercrombie: Annual Financial Report Demonstrates Leadership

 

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