Sunday, July 14, 2024
Hawai'i Free Press

Current Articles | Archives

Monday, May 11, 2020
Legislature must rein in state budget
By Grassroot Institute @ 5:25 PM :: 3216 Views :: Hawaii State Government, Taxes, COVID-19

Legislature must rein in state budget

Grassroot testimony outlines the problem and suggests some reforms

News Release from Grassroot Institute

HONOLULU, May 10, 2020 >> If Hawaii legislators hope to rescue our state from the deep economic damaged caused by the statewide coronavirus lockdown implemented March 16, they must pare state spending and expand economic freedom.

That is the message of testimony submitted by the Grassroot Institute of Hawaii to the state Senate Ways and Means Committee, which meets tomorrow, Monday, May 11, at 10:30 a.m., to consider the proposed Supplemental Appropriations Act of 2020, aka SB2200, HD1.

Joe Kent, institute executive vice president, says in the testimony that the institute "recognizes the need to shrink the state budget, as tax revenues have fallen sharply. … State planners will need to focus on cuts, just as businesses and workers struggling in the private sector already have had to do."

Kent points out: "Hawaii’s fiscal 2021 general fund budget is $8.72 billion. In fiscal 2015, the budget totaled $6.98 billion, adjusted for inflation, which means today’s taxpayers are paying an extra $1.74 billion annually to provide public services for fewer people. This suggests that there is plenty of room to reduce spending, since even the fiscal 2015 budget could’ve been trimmed, as we noted at the time."

He continues: 

"Had Hawaii’s state government been cutting in previous years and saving for a rainy day, which we have recommended many times, the savings would have enabled the state to better cope with the current coronavirus crisis. Instead, the state whittled away a $1 billion surplus on growing department budgets, payroll increases and other nonemergency items.

Kent noted that, "Spending advocates are arguing to borrow up to a maximum of $4 billion dollars from the federal government and repay it over two years by implementing temporary additional future taxes on Hawaii residents."

But this, Kent says, "would only swell Hawaii’s already dangerous total of $88 billion in unfunded liabilities over the next 30 years — as well as put billions of dollars of additional weight on the backs of struggling Hawaii taxpayers, discourage entrepreneurs from doing business here, and possibly prompt more residents to flee for the mainland because of the state’s ever-increasing high cost of living."

Kent notes that there is a legislative plan in the works that would "scrounge up about $1 billion from special funds, vacant positions, the state’s rainy day fund and by borrowing to fill the budget shortfall. However, this strategy relies on the rosy assumption that the economy will bounce back quickly, and that Hawaii’s government can continue its bloated operations during a recession."

Instead, "Hawaii’s tourism economy is likely to recover slowly, which is why lawmakers should pare spending, such as by reducing department budgets and payrolls and contracting more with the private sector to deliver public services.

"Reducing spending could also create wiggle room for lawmakers to reduce taxation, which could provide relief for Hawaii’s struggling taxpayers and breathe new life into the economy."

Kent concludes: 

"It’s time for Hawaii’s government to face the hard fact that cutting government spending is the only way to put money back into the economy without saddling taxpayers with extra burdens.

"Shrinking Hawaii’s government spending by 20% would still allow for satisfactory public services for residents — especially if private contracting of public services were encouraged — while keeping enough money in taxpayer pockets to sustain economic growth now and in the future."



TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii