Budget: Spend now, pay later
News Release from Office of Sen Sam Slom April 29, 2014
Honolulu - April 29, 2014 — Today, in the Hawaii State Senate the legislators passed HB1700,CD1, aka "the budget." While being the only Senator to vote against the budget, Senator Sam Slom said "It is not a budget, it is a spending bill."
Senator Slom pointed out that Hawaii would run out of cash in 2017. Senator Slom stated "we are gambling with the future of our state, with the futures of our taxpayers." He remarked on the State's continued spending saying "we keep spending, hoping we will find more money from somewhere. Well, guess what, there is no more money." Senator Slom pointed out that Hawaii is a state of 1.4 million people only and there are limits on the money the State can obtain. Senator Slom said "I urge my colleagues and the people to understand where this money comes from." He then admonished his fellow legislators on the Legislature continuing to allow the State to borrow money, leading to an increased debt service.
Senator Slom suggested that, like ordinary people, this state government too should live within its means. Senator Sam Slom went on to say that during the 2014 session "we did not pass one bill, not one, to make this state more hospitable to businesses and investors." He pointed out that the Jones Act was the major contributor to the high cost of living, saying "there is over 50% increased costs from this one piece of legislation." Senator Slom highlighted that while Alaska, Guam and Puerto Rico had taken steps to address the Jones Act, Hawaii has done nothing.
"We need to change direction in Hawaii, and we need to do this now" Senator Sam Slom said.
THE STATE SUPPLEMENTAL BUDGET SADDLES TAXPAYERS WITH MORE DEBT AND LONG-TERM DEFICIT SPENDING
Unlike the Governor, who is constitutionally required to balance the state's checkbook across the state's six year multi-year financial plan, the Legislature is only required to balance the state budget on a two-year basis. On Friday April 25th, the Senate Ways and Means and House Finance committees agreed on the final version of the state budget, which includes $23.8 billion in spending in FY 14 and 15. Although the budget has been labeled by the legislature as "fiscally conservative," the details reveal that the budget is far from conservative, saddling future taxpayers with more debt and long-term deficit spending.
KEY FACTS ABOUT THE BUDGET (HB1700, CD1):
It increases state debt by issuing $1 billion in additional general obligation bonds, saddling future state budgets with an estimated $55M in additional annual interest payments.
Without any further improvements in state tax collections, the budget is projected to run structural annual general fund deficits until FY 2019.
Under the current budget, without any economic improvements, or spending adjustments made by either the Governor or the Legislature, the general fund cash reserves will be depleted as early as FY 2017,
In addition to the $23.8 billion state operating budget, $57 M of spending is authorized through separate appropriations bills.
"A real fiscal conservative budget does not rely on deficit spending and balances current demands and needs with the capacity to sustain them in the long run. This budget does the exact opposite and fails to make the tough but necessary cuts to balance the state's check book in the long-run. Instead taxpayers are now saddled with more debt and unsustainable deficits." – said Senator Sam Slom.
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