Governor’s Message - January, 2014
From Office of the Governor
As we begin the New Year, the State of Hawaii is in a much improved financial and economic position. This achievement is no accident. We all have worked diligently to stabilize and grow our economy and fiscal situation over the last three years.
As a result, our state government ended fiscal year 2013 with a positive fund balance of $844 million. The balance marks a $1.1 billion turnaround since I took office.
In addition, the state Department of Labor and Industrial Relations (DLIR) recently announced that unemployment insurance tax rates for 2014 will be reduced 35 percent on average, resulting in employers paying $130 million less in taxes (which equates to $300 less per employee on average for 2014). The growing balance in the Unemployment Compensation Trust Fund is another positive sign that our local economy is improving. Many small business throughout the state can now consider investing the savings in their businesses and personnel.
As we head into 2014 and another legislative session, I assure you that this Administration will continue our responsible management of state fiscal affairs in order to build upon our state’s $1.1 billion turnaround.
We have a plan to further build the financial strength of the state by recapitalizing reserves to higher than pre-recession levels. A targeted objective has been set to build state reserves to 10 percent of general fund revenues, which will allow the state to weather future economic downturns and mitigate against cyclical public service cutbacks.
This comes as our state embarks on forward funding its Other Post-Employment Benefits (OPEB) unfunded liability, which has gone unaddressed for decades. A landmark payment of $100 million will be made in fiscal year 2014, followed by a payment of $117.4 million in fiscal year 2015.
At the same time, we also recognize that Hawaii’s improved fiscal position allows us to tackle important issues such as early childhood education and development, support for our seniors, environmental protection, and restoration of critical government services like agricultural inspections.
Only with a strong economy and sound financial management can we adequately address these important issues. But fiscal sustainability is essential; to this we remain committed.
View a report on “Hawaii’s Fiscal and Financial Condition” at governor.hawaii.gov (Click on “$1.1 Billion Turnaround” under Useful Links).