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Tuesday, December 20, 2011
Abercrombie Schemes to make Legislators do Heavy Lifting, Introduces Budget with More Spending, No Tax Hike
By News Release @ 1:13 AM :: 5326 Views :: Energy, Environment

Bogus CoR Numbers Underlie Abercrombie Budget

CB: The plan introduced Monday is based on the most recent (utterly ridiculous) Council on Revenues forecast of 14.5 percent general fund growth. It will serve as the starting point for lawmakers when the Legislature convenes Jan. 18….

Ige did note, however, that he feels the Council on Revenues' forecasted 14.5 percent growth is too high. "We're planning — at least in our preliminary planning — using a lower number," he said.

Total tax revenues into the general fund were up nearly 18 percent1 through the first five months of the fiscal year compared to the same period last year, according to preliminary numbers released Monday by the Department of Taxation. (At the footnote you learn that the real number is 5.8% not 18%, but hey what’s 12.4% between pals, right Gov?)

The $120 million in added general fund expenses will be offset with about $86 million in savings from things like debt payments and health care premiums for public employees. (Is that the ‘savings’ from going back to 50% from 60%????) The net increase to the general fund would be $34 million.

read … Hawaii Gov. Proposes Bigger Budget For Next Year — With No Tax Hikes


  *   *   *   *   *

Governor Submits Balanced Budget Aimed at Funding High-Priority Programs and No Tax Increases

News Release from December 19, 2011

Honolulu – The Abercrombie Administration submitted its budget this afternoon with a renewed commitment to providing a secure and promising future for Hawai'i. The balanced budget seeks to achieve a healthy surplus, incorporates savings achieved through solid fiscal management, funds high-priority programs, and does not rely upon any tax increases. Governor Neil Abercrombie and Budget & Finance Director Kalbert Young announced that a number of New Day priorities will move forward due to the solid foundation laid in the past year.

“One year ago we faced a daunting $1.2 billion deficit forcing us to make tough decisions to rebuild our fiscal situation,” said Governor Abercrombie. “We worked to make the best use of limited resources, asked for certain but temporary sacrifices, and improved efficiency in every department. Now, I submit this budget, which is in the black, for the Legislature’s consideration to build on our New Day agenda, which will result in stimulating the economy and creating jobs.”

Through a combination of cost savings on public employee health plans, better management of state finances as exemplified in the state’s recent bond sale to reduce interest costs, and a retooling of state departments, the state entered the new fiscal year with a positive general fund balance for the first time in three years.

The fiscal year (FY) 2012 - 2013 Executive Supplemental Budget includes proposed amendments that total $119.9 million, an increase of 1.7 percent. However, the Administration is also identifying $85.9 million in savings, the result of which will be a net request for general funds totaling only $35 million. This net request is less than 1 percent of the general fund budget. Although the budget is balanced in consideration of the Council of Revenues’ projection for a 14.5% increase in revenues during the current fiscal year (FY 2012), the budget takes a conservative view of these projections.

“While we appear to be turning the corner fiscally, it does not mean that we can ignore our obligations such as paying our bills on time, paying taxpayers what they are owed, nor obviate our responsibility to fund those core services that the public relies upon,” said Director Young. “We must continue to be fiscally prudent in our management of funds and expenditure of monies. Our goal is to continuously achieve positive cash balances at the end of each year going forward.”

In alignment with his New Day Plan, the Governor’s FY 2013 Supplemental Budget proposes to do the following:

  • Restore the Safety Net
  • Provide for Education
  • Maintain Essential Services
  • Execute New Day Initiatives

The Governor’s Budget proposes to restore $174 million to the Hurricane Relief and Rainy Day funds during the current biennium with $75 million in the current fiscal year. Contrary to the misunderstanding of some, this repayment is not through bonds, but by premiums buyers paid to the state in the recent sale of its highly-sought bonds.

“This is another example of our financial prudency and conservatism,” noted Director Young. “The bond transaction enables us to begin recapitalizing the reserves. To be clear, this is not by assuming more ‘debt.’”

The Budget also includes additional Capital Improvement Projects (CIP) that would require another $300 million of General Obligation Bonds.

The CIP projects address critical infrastructure needs that are shovel-ready and will provide the most immediate impact and job creation.

In his first year in office, Governor Neil Abercrombie set forth a comprehensive plan, “A New Day in Hawai'i, to invest in education and rebuild our economy; sustain our Hawai'i for future generations; and to restore public confidence.

“It will take time to restore faith in government but we are working hard to make things right and move Hawai'i forward,” stated Governor Abercrombie. “We now have a clear understanding of our finances and have established unprecedented collaboration to initiate projects that have immediate impact and solve various issues including homelessness, education, and social services.”

The Executive Supplemental Budget can be viewed at



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